Divisive politics, red-tape, rent-seeking key challenges: WB

The World Bank has identified confrontational politics and bureaucratic red-tape as key challenges for Bangladesh to speed up growth and promote itself as a middle-income country by the early next decade.

Sharing views with the newsmen at the WB office at Agargoan on Monday, WB country director Johannes Zutt said divisive and confrontational politics could bring uncertainty in policy decisions, reports the New Age.

Uncertainty affects the process of addressing critical problems, he added.

He said bureaucratic red-tape as well as widespread rent-seeking impedes economic growth and investment.

wbHe presented a paper on the ‘Priorities for Accelerating Growth and Poverty Reduction during the programme which was mainly attended by the members of the development journalists’ association.

Zutt who has already stayed here for more than one year noted that many public institutions were not adequate for a country approaching middle-income status.

The institutions were established when the country was at much lower levels of income, he noted.

The WB country director also focused on the country’s rickety infrastructure, ailing banking and oversight institutions where higher focus should be given for an overall improvement.

He said the state-owned commercial banks had recently been plagued with financial scams in the absence of an integrated financial management information system.

The WB suggested improvement in the area of economic governance and strengthening of key oversight supervision by judiciary, anti-corruption and election commission. It also suggested improving record-keeping system, especially the land administration sector.

Zutt assessed that a substantial increase in the rate of investment from the present level of 28.7 per cent of GDP was needed for acceleration of the growth rate. He viewed that much of the higher investment would be needed to reduce the infrastructure constraint, primarily in the power and transport sectors.

He said Bangladesh would achieve partially the Millennium Development Goals for poverty reduction and primary school enrolment. He viewed that gender parity in education, child mortality, maternal health, HIV/AIDS and tuberculosis were on track.

He said Bangladesh has done well in GDP per capita income, but other Asian countries did even better.

GDP per capita income of Bangladesh rose to US$ 1851 in 2012 from only US$ 319 in 1980 with 5.6 per cent compound annual growth rate (CAGR), while that of China increased to US$ 9083 from only US$ 253 with the highest 11.8 per cent growth rate, South Korea to US$ 30,011 from US$ 2,398 with the second highest 8.2 per cent CAGR, India at US$ 3 870 from US$ 425 with 7.1 per cent CAGR.

WB lead economists Zahid Hussain and Salman Zaidi were present on the occasion.