No ‘Wait And See’ Mood Among Foreign Investors

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Planning Commission’s Shamsul Alam terms 7% growth target realistic, foresees a knowledge-based economy

By Khawaza Main Uddin

Expansion of the middle class will enhance the demand for good governance that includes more participation of the civil society in the state affairs, says Member of General Economics Division at the Planning Commission Professor Shamsul Islam. He thinks improving education quality at every tier, industry-oriented skills development and influx of foreign investment will lead to a knowledge-based economy to attain the middle income country status.

‘Mud slinging is not a new phenomenon in our political arena and that should not bother entrepreneurs much. If gas and electricity supply can be increased, local investors would come forward with increased zeal,’ he told ICE Business Times in an interview. Referring to the foreign direct investments and foreign aid flow, he said there is no ‘wait and see’ among foreign investors and development partners.
The Agriculture University Professor, who joined the government to help set development targets, also justified the relevance of Planning Commission in Bangladesh context, at the age of free market economy and globalisation. Asked about his reaction to Indian premier Narendra Modi’s decision to dissolve the Planning Commission, he said ‘Perhaps, this decision has been the first blunder of Prime Minister Modi in India in the second decade of the 21st Century.’

As the government is pursuing higher growth, what kind of steps the Planning Commission would suggest to increase investment by 5% or so within a short span of time and thus attain the targeted growth of over 7%?

All our efforts have been undertaken to attain energy sufficiency to spur private investment including increased bank credit to the private sector. Exports and remittances, two influential growth drivers, are continuously increasing trend. Efficiency in labour productivity is improving, use of built-in capacity, we have resilient business class, all these will lead to around 7% GDP growth in current fiscal year.

How will the government see off a prevailing ‘wait and see’ mood among the businessmen and investors – both local and foreign – and bring back confidence? Will you please share your ideas?

Mud slinging is not a new phenomenon in our political arena and that should not bother entrepreneurs much. If gas and electricity supply can be increased, local investors would come forward with increased zeal. Increased FDI are coming during last couple of years. We received US$ 2.80 billion foreign aid in last fiscal year. So, there is no ‘wait and see’ among foreign investors and DPs.

Are we as a nation ready to achieve the middle income country status by switching from replication to innovation, from lower skills to higher skills? Do you foresee a knowledge economy soon to overcome the so-called middle income trap in course of time?

We will be a middle income country by all its definition by 2021, no doubt on that. We first need to pass the stage of efficiency led growth stage then to innovation led growth paradigm. We are passing through replication state dominantly and rapidly transforming to efficiency-led growth. Improving education quality at every tier of education, industry oriented skills development, influx of FDI for technology transfer at the end will lead to a knowledge based economy.

If the proposed Sustainable Development Goals (SDGs) are endorsed, Dhaka will have to promote ‘peaceful and inclusive’ society, provide ‘access to justice for all’ and build ‘effective, accountable and inclusive institutions at all levels’. What do you think of these politically sensitive targets?

Our development goal is peace and people-centric. Expansion of middle class and elite groups will continuously exert demand for good governance, the element of which are access to justice for all, accountable and effective institutions, more participation by civil societies in the state affairs. Nowadays, any Government must have to pay heed to that demand. For this, democratic process of change in government must have to be ensured.

Have you as a focal point of development goals taken into account the implications of SDGs for Bangladeshi businesses? Will you please shed light on proposed goals on energy, growth and employment and infrastructure and industrialisation?

Development goals/targets will be devised in the 7 FYP considering attaining social cohesion, economic growth and environmental compatibility for sustainable growth. For a sustainable and accelerated growth we have to eradicate poverty and create decent employments towards an industrialised economy.

How will you connect the role of the private sector and entrepreneurship development to the overall national development? What is your view of the public sector in promoting growth and public welfare?

Role of Private Sector and Public Sector is complimentary to spur economic growth. Public spending is growing to facilitate Private Sector with required infrastructure, regulatory framework and providing skilled and healthy manpower. The Government has an exclusive role in monitoring product and input markets where producers, consumers and middleman are the stakeholders. People’s welfare can be maximised if markets function efficiently. For efficient markets, efficient governance is needed.

India’s Prime Minister Narendra Modi has dismantled the Planning Commission terming it an outdated and socialist concept? Where is the standing and relevance of our Planning Commission in the pursuit of prosperity and economic emancipation of the people?

Consequence of Mr. Modi’s decision has yet to be seen and for that we may have to wait for some time. Perhaps, this decision has been the first blunder of Prime Minister Modi in India in the second decade of the 21st Century. India has been blessed with a long tradition of planned economic management and attained highest ever growth up to 7-8% GDP during recent years. A federal democracy, of course, can cover up the non-existence of a central planning organisation, the case is different for us though. The end outcome is yet to be seen.

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