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The government's recent emphasis on large and costly infrastructure projects should ultimately be aimed at ensuring increased foreign investment in the country, experts said at a seminar in the capital on Tuesday.
At the same time, increasing workforce productivity as well as presence of appropriate policies and institutions is vital, if the country wants to catch up with other peer countries like Vietnam and China, they opined.
Such views came at a book-launching seminar titled - "Economic and Social Development of Bangladesh: Miracles and Challenges." The Bangladesh Institute of Development Studies (BIDS) organised the programme.
"The key thing is improving productivity," eminent economist Dr Wahiduddin Mahmud said at the seminar.
"If you want to go to the next stage of development, you have to go for latest technology, more skilled labourers and higher labour productivity."
"Unless you can graduate to higher productivity, only the expansion of ready-made garments sector, based on low-wage female labourers, cannot lower poverty rate further," he cautioned.
Noting the government's recent focus on large infrastructure projects, he observed that these costly projects should ultimately ensure higher investment inflow to the country.
"We are now graduating to a situation, where we need to have much costlier and larger infrastructure projects. Here we have to be a bit cautious about setting our priorities in choosing the projects."
"Why do we invest in costly infrastructure? The purpose is to create environment for higher investment," the eminent economist pointed out.
"About 60 to 70 per cent of Vietnam's export comes from the products, made either by foreign-owned enterprises or joint venture entities there. But Bangladesh is lagging far behind in that area."
Dr Mahmud also called for ensuring that the large infrastructure projects do not experience the usual time and cost overrun (scenario).
"We need to see that those infrastructure projects are part of a comprehensive plan, implementation process of the projects is efficient, and they do not incur additional time and cost overrun."
Experts at the event pointed out that despite making notable economic progress in the recent years, Bangladesh has fallen behind many of the peer countries in the region, like China or Vietnam.
"We should not overlook the fact that some of our peers, starting from very similar or even worse initial conditions, at around the same historical juncture, have done much better in growth and poverty reduction," said Lead Economist of the World Bank (WB) Zahid Hussain.
"The gross national income (GNI) per capita of Vietnam and China were lower than that of Bangladesh even in 1984. But in 2017, China's GNI per capita was 315 per cent higher than Bangladesh, and Vietnam's GNI per capita was 59.3 per cent higher."
"Bangladesh reduced extreme poverty from 27 per cent in 1981 to 14.8 per cent in 2016. But China reduced extreme poverty from 95.6 per cent in 1981 to 0.73 per cent in 2015, and Vietnam reduced it from 78.3 per cent in 1981 to 1.96 per cent in 2016," he noted.
"We need to ask ourselves what they did which we missed or did not do enough of."
"But at very general level, it is plausible to hypothesise that policies and institutions have a lot to do (in this regard), rather than geographical, cultural or historical excellence," he added.
However, Wahiduddin Mahmud, in his speech, also observed that Bangladesh has entered into a phase of "one party-dominated system of governance" in the recent years.
"But it is important to see how we ensure a transparent, efficient and credible economic management in such a system," he opined.
"There is at least one silver lining even in a one party-dominated democratic system, which is that you no more need either crony capitalism or patronage politics."
"The government does not need to extend support to a group of private sector entrepreneurs, as the entire business community is supporting the government," he added.
Speaking on the occasion, Planning Minister M A Mannan highlighted the government's various initiatives for poverty reduction as well as development of energy sector and infrastructure.
"I think we have a chance of reaching a level of respectable economic development, which will provide a sustained level of descent living for the millions around us."
"We think that the way we are addressing things like poverty reduction, infrastructure or energy, the desired goal of good governance will arrive at our door," he added.
Country Director of the Asian Development Bank (ADB) Manmohan Parkash and Chief Economist Yasuyuki Sawada, Chief Representative of the Japan International Cooperation Agency (JICA) in Bangladesh Hitoshi Hirata, and Director General of BIDS K A S Murshid also spoke on the occasion.