THE prediction by the Asian Development Bank (ADB) about a relatively robust economic growth during the current fiscal (2005-06) would provide the nation with something to cheer about, no doubt. This is particularly because of a looming political crisis and deteriorating security situation following a series of bombings by the so-called Islamist 'jehadis'.
The ADB in its quarterly Update released Sunday in Dhaka indicated a satisfactory growth performance of the agriculture sector that had suffered much during the last the fiscal due to devastating floods. The industrial and services sectors are also expected to perform satisfactorily, if not up to the levels of the last fiscal. The export, according to the ADB forecast, is likely to experience a moderate growth, mainly because of the decline in outside demand for Bangladesh woven garments. The balance of payments (BoP) situation that has come under pressure due to rise in petroleum prices in the international market and increase in food grains import is now otherwise stable primarily due to a 'robust' growth in remittances. The BoP situation is unlikely to come under any severe pressure in the coming months because of the possible disbursement of a handsome amount of credit by the multilateral lending agencies.
The ADB officials in Dhaka, while describing the current rate of inflation not 'alarming', offered a few words of caution. They suggested a tight control over money supply to help ease pressure on exchange rate and price situation. The central bank of the country by some of its actions has made it clearly known that it is not oblivious of the need for keeping a firm control over money supply. A report published in this paper Monday said the Bangladesh Bank (BB), on behalf of the government, is considering a hike in the rates of bonds and treasury bills to mop up excess liquidity from the banking system and tame inflation. Moreover, the prices of essentials, particularly those of rice, fish and vegetables, are expected to mark a decline in the current winter season, leaving a soothing effect on the inflationary pressure. However, the central bank also needs to be watchful that it does hurt the strong growth performance of the manufacturing and construction sectors and some other sub-sectors by its contractionary monetary policy.
The ADB forecast about macroeconomic indicators would be greeted as welcome sign. But the people have reasons to be saddened by the failure to tap the vast potentials for achieving higher economic growth that is essential to cut poverty substantially. The reasons for the failure are not unknown. Poor governance and inadequate infrastructure are at the top of the lists of factor that are holding back the nation from achieving higher economic growth. Achieving a 7.0 to 8.0 per cent GDP growth would not have been that difficult a job, had the men in power been truly committed to their tasks.
The growing acts of terrorism have emerged as yet another major problem having the potential to affect the economic growth substantially. There is no scope to play it down. This is evident from the concern expressed by all quarters, including the country's leading chambers and business associations. The ADB has expressed its optimism that political parties would address the problem through consensus. However, the response from the leaders across the political divide does not make one that much optimistic about such a possibility. Still, the entire nation will hoping that the political leaders would rise to the occasion and show that they are one when the country faces a grave crisis.