Prof. MA Taslim emphasises substantial improvement in investment climate for higher growth
By Khawaza Main Uddin
It is extremely important to take urgent steps to upgrade skills and productivity of the workforce to stay competitive in the global market, says economist Mohammad Ali Taslim, as Bangladesh is set to graduate out of the league of Least Developed Countries (LDCs) in a decade or so and lose duty-free access to advanced countries.
He feels that the sorry state of infrastructure and serious governance related problems, makes business investments expensive and hence unattractive. ‘Investment depends both on the cost of investment and business expectations about the future state of the economy,’ Prof. MA Taslim, former chairman of Tariff Commission and currently the chairman of Economics department at Dhaka University, told ICE Business Times in an exclusive interview. He blamed the domestic political uncertainties for deterring investments.
Also a former Chief Executive Officer at Bangladesh Foreign Trade Institute, the economist expressed his views that those who represent the country must be able to project an image of Bangladesh that encourages overseas business to source merchandise and invest here. He mentioned that the country’s education, which is ‘in shambles’, cannot supply a competitive workforce for world class enterprises.
Asked about how to support entrepreneurs, Prof. Taslim said the government could perhaps ensure that entrepreneurs are nurtured by means of business-friendly policies. ‘Successful entrepreneurs and trade bodies could initiate programmes to incubate entrepreneurship and sustain fledgling entrepreneurs.’
- Business outlook not very bright
- Uncertain politics engender negative expectations
- Apparel and footwear should carry the economy forward
- Aggressive salesmanship may help Dhaka achieve East Asian momentum
- Increase in investment in education is needed to build manpower
- Entrepreneurs are born, not created, so they need nurturing
- Civil society voice important in society
How do you look at the current trends of business in Bangladesh?
The downturn in economic activity seems to be persisting. The private sector has not picked up. The private sector credit growth has suffered some reduction on both year-on-year basis and during July-October period. Banks are beleaguered by ever increasing non-performing loans. Export is almost stagnant (July-November) and there is minimal growth in imports (July-October) suggesting weak industrial growth. Agricultural output is also likely to be stagnant. Business outlook does not look very bright.
What would you suggest to bring improvement in investment climate?
Investment depends both on the cost of investment and business expectations about the future state of the economy. The sorry state of infrastructure and serious governance related problems makes business investments expensive and hence unattractive. The uncertainties regarding the domestic political situation and the general break-down in law and order engender negative expectations about the future of business and deters investment. Substantial improvement is needed to attract large volume of investment.
Where are, in your views, the country’s strengths and weaknesses in terms of external trade?
A vibrant private sector producing relatively less expensive labour-intensive products such as apparel and footwear should carry the economy forward during the next decade or so. Generous trade preferences (GSP) granted by most developed countries are an important factor in making our products competitive in the external market. However, these may become a handicap in the future unless urgent steps are taken to upgrade skills and productivity of the workforce. This is extremely important in view of the fact that Bangladesh will graduate out of the LDC league in about a decade or so, and consequently lose its duty-free status.
How would you define the role of economic diplomacy in promoting trade and attracting investment?
Economic diplomacy is another name for salesmanship. Those who represent the country must be able to project an image of Bangladesh that encourages overseas business to source merchandise and invest here. Bangladesh is yet to achieve the momentum of the East Asian countries in their formative years. Aggressive salesmanship to project the strengths of the country will help to build that momentum.
What is your assessment of the state of regional cooperation, especially the connectivity, for promotion of national interests? How do you evaluate Bangladesh’s geo-strategic location in building bridge between SAARC and ASEAN and between economic powerhouses?
Just about every country regards itself as having a geo-strategic importance, and each country has the capacity to build itself as an important partner of other countries. But this requires internal strength which can be derived from having a strong thriving economy and a stable political and macroeconomic environment. The real danger is always within.
How do you see the current education for making Bangladesh a strong player in the international arena? What are your thoughts in this regard?
Our education is in shambles. It cannot supply a competitive workforce for world class enterprises. Uncalled for political interferences in educational institutions must cease. Appropriate policies must be deployed to select, employ and retain the right kind of teachers and trainers. Students must have the right incentives to work hard to do well. These will require a large increase in investment in education and a sincere political will. Given the background of our politicians and elite, they have not yet woken up to the need for proper education. They have the illusion that grades and certificates are true measures of education.
Would you please share your thoughts of entrepreneurship and how youths could be promoted for taking up business initiatives?
It is said that entrepreneurs are born, not made. The government could perhaps ensure that entrepreneurs are nurtured by means of business-friendly policies. Successful entrepreneurs and trade bodies could initiate programmes to incubate entrepreneurship and sustain fledgling entrepreneurs.
What are the sectors or groups outside of the government and business community that could play important role in bringing changes in business environment for ensuring maximum welfare gains?
The civil society could forcefully voice public demand in order to prevent excesses by either group.