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Commentary

Ignoring facts and quoting figures justifies nothing

By Editorial Desk
09th-Jan-2017       
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In releasing its report on the state of Bangladesh's economy, the Centre for Policy Dialogue (CPD) yesterday identified the robust GDP growth and rebounded investment in fiscal year 2015-16, low inflationary pressure, rising foreign exchange reserve, manageable fiscal deficit and positive capital market are comfortable spaces for Bangladesh economy. In our view, this findings prove reliance on figures ignoring facts on the ground. If a country's economy can be in "comfortable spaces" when the country is sinking under an ocean of corruption, administrative mismanagement, no country needs accountability of the government and fight corruption for economic growth and development. Mr Tawfiqul Islam said excessive sale of savings tolls, rising non-performance loans, weak governance amid new scams in banking sector, capital inadequacy in banks and lower remittance inflow are the major areas of concern for the economy.

 Nobody will know where lies the truth to steer the economy to the right direction.  So how independent CPD is for it to decide? But like the CPD Bangladesh Bureau of Statistics has claimed the economy showed resilient growth and expanded by more than 7 percent in fiscal 2015-16. It has crossed the threshold of 6 percent growth after nearly a decade and set to achieve 7.11 percent in 2015-16.

Finance Minister AMA Muhith made the disclosure saying  final estimate of last year's growth actually showed higher growth over initial estimate at 7.05 percent. But economists have sounded skeptical about the claim. Even the World Bank has openly expressed doubt it as a senior economist has questioned the claim saying it lacks consistently supporting figures.

In his view political stability is not the only factor, there are other major challenges like good governance, drastically cutting back corruption and quick development of energy and infrastructure to give business the pace for growth.  

The finance minister's claim has essentially highlighted the controversy over the growth figure to ignite further debates. 

The Planning Minister's claim has also invited similar rebuttal. Indeed we just see a situation where the government is trying to show its big success by highlighting higher GDP growth to which economists in the first place don't disagree but what they want to say is that such claims are too big and not sufficiently supported by the reality in the ground.

For instance they said the agriculture sector registered 2.79 percent growth during last fiscal year, down from 3.33 percent in earlier 2014-15. The services sector registered 6.25 percent growth in 2015-16, up from 5.8 percent a year earlier.
 
But CPD economist Dr Moazzem Hussain is of the view that the 7-plus growths may basically result from investment in the service sector rather than contribution from the manufacturing sector. Such success is not visible in terms of job creation that essentially needs more investment in manufacturing to make development visible.

"You will not see investment but there will be growth. We will have to switch to a scenario where a lot of investment will take place and jobs will be created." This is what he said important to bring benefits of development to common people. In his view there is no alternative to new private investment in the manufacturing to create income-generating job for workers and develop business chain for others.

Experts held the view that the country should increase investment-GDP ratio by at least 2 percentage points for the private sector to bring the desired spurt in GDP growth at a time when liquidity in the banking system is only soaring. Credit expansion to private sector declined during last year when banks were sitting over Tk120,000 crore excess liquidity without demand for investment.

Economists believe that there must be a new surge in domestic investment to encourage foreign investors to Bangladesh. But the country is now rather losing huge funds annually as many business houses are laundering it to make investment abroad instead of opening way for massive foreign investment in the country.
Our development and high GDP growth are now based on higher government spending to pay bureaucracy and implement some mega projects, which have no bearing on the life of the common people. Development in Bangladesh means development of higher echelons of the society, growth means growth for the rich. 
   
Indeed huge growth potentials remained underutilized and unless the government shows the leadership competence to mobilize resources and put it to efficient use for real development in the ground mere higher GDP figure will make no difference.

Indeed we need institutional capacity building, efficient bureaucracy and major policy reforms along with wiping out corruption and mismanagement to bring about real growth. 

The outgoing year saw annual remittance plummeted by around 2.5 billion from 15.50 billion in previous 2014-15 when outward migration hit all time high to 7 lakhs. Yet why remittance fell so drastically has no clear answer. But it is no secret that powerful quarters are running hundi business and diverting foreign exchange to third country destinations.    

The World Bank Chief economist in Dhaka office Mr Zahid Hussain said, "The question is whether the official estimate is consistent with other growth-related indicators." In his view ten out of 12 indicators saw less success during the period to create doubt on higher growth.

We are in a vicious cycle of lies by those who live in highly comfortable spaces when the country is in the midst of oceans of corruption (parliamentary proceedings) and mismanagement in every sector of public life. We need no ''independent think tank'' for telling us that we are having "robust growth" and good and honest governance is unnecessary for economic development. 

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