Countries like Bangladesh usually want to hear words of praise from foreigners. Kaushik Basu, Chief Economist of the World Bank is not a foreigner of the Western stock but he more than makes up for the lacking by heading the multilateral bank's economic cell as the second person to do so from a developing country and the first from India. This country has reasons to rejoice in his Bangalee identity.
Had he not visited in the capacity of the bank's chief economist, the optimism he exuded about the prospect of Bangladesh could be taken with a grain of salt as a few pats on its back. Or, maybe, some room would have been left to doubt the Washington-based bank's actual intention, particularly so in the context of the recent strained relations between it and Bangladesh. Doubt would have deepened further following the country's undertaking of the Padma Bridge construction with its own fund and its graduation into a lower-middle income economy.
However, all such doubts get dispelled when it is made clear that before coming to Bangladesh, Basu meticulously went through facts in order to be correct in his observation. Nothing less would have been fitting for a man of his stature to appreciate the progress made by Bangladesh on different fronts as well as to cite where things are not up to the mark and how the country could further add to its gains from here onwards. On that score, he spoke as a Bangalee, like one who feels some sort of close affinity with the people in Bangladesh.
His observations should, therefore, be taken very seriously. Credit goes to the WB chief economist for highlighting the achievements in the country's economic and social indicators. When the Economist, a highly esteemed weekly magazine published from London, ran a story on Bangladesh zeroing in on its success that, it observed, defied economic theories, others took note of the fact. Whereas the Economist was clueless about a plausible explanation about the success story, Basu seems to have a more or less clear idea about it.
It is because of this he can claim that the country now stands on the cusp of take-off with remarkable achievements already under its belt. He draws everyone's attention to the fact that Bangladesh with 29 per cent of its gross domestic product (GDP) has been maintaining an annual economic growth above 6.0 per cent for a number of years. This year its economy is projected to grow by 6.5 per cent and 6.7 per cent the next year. Kaushik Basu compares this rate of investment on a par with some of the East Asian nations.
However, at the same time, he reminds the policymakers and planners here that there is a need for raising the investment ratio to 33-34 per cent in order to take the GDP growth rate to 8.0 per cent. Quite rightly, he indicates a number of way out for doing so and cautions about the problems the country will face as a follow-up with its closer global link. He is fully aware of the poor tax ratio to the GDP. Not in favour of increased tax, he advises efficient and broadening of the revenue base.
In this context, one could not agree more with his suggestion for more investment in education and skill development. Bangladesh is favourably poised to take over from China in many areas of manufacture and services because of the latter's enhanced labour costs. What however remains so galling is the slow and cumbersome process of doing business. Without naming the sluggish bureaucratic structure, he has proposed easing procedural hurdles and cost of doing business in the country in order to draw investment. To encourage private investment, this is a sine qua non. This must be complemented with matching infrastructure. These are prerequisites for making investors sufficiently interested in investment. Private investment in infrastructure development should also be made a reality.
Clearly, this brings the argument to good governance, sound policy formulation and execution. His suggestion to replicate the readymade garments (RMG) model in another three or four sectors is worth considering. Pharmaceutical sector is one he mentioned. Then he did not elaborate. To go by the potential, the most outstanding candidate seems to be the information and communication technology (ICT). Already the indication is that the sector with the dynamism exhibited so far on its own has the potential to supersede the success of the RMG. Until recently, ICT received not much attention from the government but now that more and more youths have been enrolling themselves for higher studies in computer science and engineering, this sector will have a large number of highly qualified graduates to take up the challenges of turning Bangladesh digitised in the true sense of the term.
In doing so the government patronage will prove crucial. Faster internet service, gadgets and components of the technology have to be made easily available and at a low cost. If the knowledge of this technology kick-starts with an explosion, the manpower resource will grab the opportunity to reap ICT benefits to the full. So, the prediction that Bangladesh, now better placed than many other nations, will emerge as the next Asian Tiger is not at all misplaced.
