POSITIVES IN THE ECONOMY
Almost without exception, on reading daily newspapers in Bangladesh, one will be persuaded to accept the view that the economy has been going from bad to worse in recent years. But looking objectively at the economic scenario, one may find that the economy on the contrary has been doing rather well.
First of all, let us look at the economic growth rate. The growth rate is pivotal in determining so many aspects about any economy. Economic growth rate crossed the 6 percent mark in recent years from a feeble 4 percent or below in the 1980s and 5 percent plus in the second half of the 1990s.
The recorded growth in fiscal 2011-12 was 6.7 per cent. Under a business as usual scenario, reaching the target of 7 percent growth rate does not seem to be difficult. By and large, the per-capita income grew roughly at 4 percent per year in a situation of falling population growth rate.
Even after absorbing the setbacks caused by hartals, blockades and various types of politically induced violence and disruptions, the economy of Bangladesh grew above 6 per cent as the assessment was done in 2014
The foreign currency reserve of a country is a major indicator of the state of its macro economy. This reserve has never been formidable for Bangladesh as it always had to struggle to allocate resources among too many competing priorities.
But even in this situation, the reserve has been steadily rising in the last couple of years. It hit the highest ever recorded level of over $ 21 billion recently– enough to comfortably meet over six months of import operations.
Other indicators of the macro economy also reflect no deterioration in conditions but notable gains. For examples, in the last ended fiscal year Bangladesh’s export earnings increased to over $ 22 billion.
Higher export earnings suggest also new investments or expansion of export-oriented enterprises that create additional employment and income. Indeed, this has been happening as the country’s premier labour intensive export-based garments sector added to capacities to be able to export more.
Remittance from our overseas workers is considered as another major source of strength for the macro economy. The inflow of such remittance was recorded at $ 24. 176 billion in 2013, which was up by 16.8 per cent from the previous year. And this actual attainment followed the earlier deluge of forecasts in the media that tended to create the impression as if remittance earning was certain to hit an all time low from badly squeezed manpower export.
The management of the macro economy also improved significantly from the operation of two monetary policy stances (MPS) by Bangladesh Bank. The rate of inflation crossed the double digit in 2011. But the inflation rate on point to point basis declined to a single digit and fell to 7.93 per cent in August 2012 from 8.03 per cent in the earlier period. The inflation rate has remained in the single digit since that time and is currently at 6 per cent.
It is not a hollow claim that the actual purchasing power of different sections of people have gone up notably in this period. The same have been adequate to cope with the earlier inflationary spurts plus leaving some extra purchasing power in many cases.
The increased purchasing power impacted favorably by helping new demand creation for plenty of goods and services which in turn contributed to expansion of economic activities locally.
As for infrastructure building or more particularly achieving progress in the all too important energy sectors, the scenario has not been dismal. Power production almost doubled from four years ago. Significant improvement was also achieved in producing more gas and its effective supply to consumers.
After meeting in a much better way the needs of existing consumers of power and gas, it was possible to give power and gas connections to a huge number. There are understandable different perspectives particularly about the manner of power production-from quick rental plants burning growing costly fuel oils or permanent such plants to produce power inexpensively.
But there can be no denying it that the level of the gross domestic product (GOP) could not maintain its uptrend without the stepped up power production. The improved supply of power helped specially the export-oriented garments sector to use optimum capacities to take export earnings to highest recorded levels.
Work on big infrastructures have either taken off or are about to start in different places. Construction of new-flyovers is being speed-ed up for inauguration in Dhaka in the next year that would likely play a big role in easing the capital city’s chronic traffic jams.
Work on construction of the Padma Bridge, a mega project with the country’s own resources is well underway. So, there are also bright spots in the economy to see and write about only if one cares to do so.
NOVEMBER 27, 2014