Economists say, recommend mid-and long-term reforms

Economists suggest mid-and long-term reforms to overcome persisting macroeconomic strains in Bangladesh as they think there is no quick-fix remedy for the major problems the growing economy currently faces.

Speaking at a roundtable Sunday in Dhaka, they also called upon the policymakers to take immediate measures to address setbacks related to financial account of the balance of payments (BoP) through intensifying efforts in a structured way to attract more FDI (foreign direct investment) inflow and remittance by enhancing skills of the remitters in line with demand of the time.

Titled 'State of the Global, Regional and Bangladesh Economic Outlook', the meet was hosted by MasterCard Economics Institute at a city hotel.

David Mann, Chief Economist, Asia-Pacific and MEA, at Mastercard Economics Institute, was the keynote speaker at the event which discussed the post-pandemic challenges of high inflation, fixing volatility, and a higher debt burden that have impacted emerging markets severely, especially those with twin-deficits.

Speaking at the dialogue, executive director of Policy Research Institute of Bangladesh Dr Ahsan H. Mansur said the current-account deficit in the BoP narrowed down significantly in recent times but the financial account emerged as a "serious challenge" for the economy.

He rated the country's export, import, FDI, tax, assets, M2 (broad money) and remittance as percentage of GDP or gross domestic product as poor. On the other hand, savings and investment remained "stagnant".

"There is a fundamental long-term rebalancing of the economy needed. We don't have short-term problems but mid-and long-term ones. Short-term problems did not happen overnight. It's a result of the long-term problems," Dr Mansur, who had once served the IMF, told the meet.

Country Director of the Asian Development Bank (ADB) Edimon Ginting viewed that the growth in export at 6.70 per cent is good under the current context of the global macroeconomic situation while remittance grew over 2.0 per cent which is not bad.

He said the country managed to bring down currency-account deficit significantly in recent months but there is a challenge in financial account and FDI could be a solution where more attentions need to be paid.

"The country needs to go beyond short-term solutions. Long-term reform is needed," he said, suggesting proper skill-upgrading programme for the remitters to earn more forex in the days to come.

Former deputy governor of Bangladesh Bank and CEO of Bangladesh International Arbitration Centre (BIAC) Dr Muhammad A (Rumee) Ali, Managing Director of PricewaterhouseCoopers (PwC) Mamun Rashid, Shah Md. Ahsan Habib, Director, Training, Bangladesh Institute of Bank Management (BIBM) and managing director of Dutch-Bangla Bank Limited, among others, also spoke on the economic problems and remedies.

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