RMG to remain a key driver of higher economic growth
A stable garment sector, the main foreign currency earner, will continue to remain the key driving force behind the country's future economic growth, Rodrigo Cubero, chief of an IMF mission, said yesterday.
Political unrest and recurrence of factory disasters like the Rana Plaza building collapse will hamper growth of the sector and the economy of the country as a whole, he said.
For a stable economic growth, he suggested improving the infrastructure, power and transport sectors.
Cubero also called for increasing efficiency of the Chittagong port and elevating the Dhaka-Chittagong highway to four lanes.
The official of the International Monetary Fund was speaking on Bangladesh's macroeconomic management at the monthly luncheon meeting of American Chamber of Commerce in Bangladesh (AmCham) at Ruposhi Bangla Hotel in Dhaka.
Cubero also expressed concern over low productivity of Bangladeshi factory workers compared with their peers in other countries.
The workers' productivity is measured by Standard Allowed Minutes (SAM). For example, if 100 minutes is given to complete a task, a Bangladeshi worker is able to use only 35 minutes, to give the country a SAM score of 35 percent, one of the lowest in the world.
In contrast, its competitors in global apparel trade such as China, Vietnam, India and Pakistan score upwards of 80 percent.
Wages are also lower in Bangladesh than what its competitors offer, which is a major reason behind low productivity, Cubero said.
He also suggested Bangladesh maintain a good currency exchange rate by increasing productivity in the garment sector, as higher productivity can ensure higher profit.
Cubero said political uncertainty in the run-up to the next parliamentary election will slow economic activities.
“Hartal is another reason for slowdown,” he said. “We hope the situation will improve and the economy will become stronger after the election.”
The deteriorating health of the state banks is another concern for the economy, according to Cubero. Among the external risk factors, he cited the slump in eurozone growth, which he said may curb the flow of garment orders to Bangladesh.
AmCham President Aftab ul Islam moderated the programme.