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Govt's vision-2041 eyes big jump in investment

Economists scepitcal about success

| Updated: September 10, 2020 15:00:15

Govt's vision-2041 eyes big jump in investment

The government has set a target of raising the gross investment-GDP (Gross Domestic Product) ratio to 46.88 by the year 2041, officials said on Wednesday.

The target is 15.13 per cent higher than the current base.

The government has to ensure investments at an average rate of 40.87 per cent annually for achieving the goal.

Currently, the country's gross investment-GDP ratio is 31.75 per cent, Bangladesh Bureau of Statistics data showed.

The General Economics Division (GED) has recently devised the Bangladesh's development strategy--Perspective Plan FY2021-FY2041.

Economists termed the target ambitious and challenging one, considering the present investment situation.

The government wants to raise the investment-GDP ratio to 33.58 per cent within a year, a 1.83 percentage points higher than the estimates of FY2020.

To raise the gross investment, the private sector investment to GDP ratio will have to be raised to 25.20 per cent at the end of this fiscal year.

By FY2041, the private sector investment needs to be lifted significantly by 12.73 percentage points to 36.36 per cent of GDP in FY2041 from current weak base of 23.63 per cent.

Similarly, the public sector investments will need to be increased to 10.52 per cent of GDP in FY2041 from the current base of 8.12 per cent.

According to the plan, it has prepared a strategy for boosting the investment-GDP ratio to 37.44 per cent in FY2025, 40.60 per cent in FY2030, 43.41 per cent in FY2035 and 46.88 per cent in the terminal FY2041.

GED officials said if Bangladesh wants to raise the investment to GDP to 46.88 per cent by 2041, it needs to increase gross investment by 0.756 percentage points on an average every year.

The new target has been set when the private sector investment has almost stagnated over the last one decade.

In last nine years, Bangladesh's gross investment to GDP had gone up by only 3.49 percentage points from 28.26 per cent in FY2012.

By FY2041,Bangladesh wants to achieve the developed nation status when its GDP will grow at 9.90 per cent rate and the Gross National Income per capita at US$17,229.

Word Bank's former lead economist Dr Zahid Hussain said the target should be ambitious in the perspective plan. "But the investment target set at the vision paper 2041 is so much ambitious that it might be difficult even to go closer to it", he said.

"Bangladesh has even failed to enhance its investment-GDP ratio by half percentage point on an average in the last one decade. Then how will it raise the investment by more than 15 percentage points in 20 years," he questioned.

Executive director of the local think-tank Policy Research Institute (PRI) Dr Ahsan H. Mansur said that the ambitious investment target is difficult to achieve with poor business environment in Bangladesh.

" Private investment in Bangladesh over the years has remained almost stagnant. With this low base, it's not possible to attain the target," he said.

"China had been growing at more than 10 per cent rate and its investment-GDP ratio had been over 50 per cent for more than a decade. So, the country is now on track to be a developed economy", Dr Mansur said.

Massive reform and conducive environment for local and foreign entrepreneurs and quality physical and human capital productivity are inevitable to bump up investment scenario in the country, the PRI executive director said.


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