BANGLADESH has a mission to strike 8.0 per cent growth rate and wants to be known as a middle income country by 2021. But it is very difficult to achieve this mission under the present situation. According to the latest observation by the International Chamber of Commerce and Industry (ICC), the economy of Bangladesh is now facing some serious challenges. It will be difficult to maintain the pace of economic development if the government does not take necessary steps immediately. To graduate into a middle-income country within the given time, a rapid increase in economic growth is needed. ICC president Mahbubur Rahman said that the current rate of GDP is from 5.0 per cent to 7.0 per cent and this rate will be increased to 8.0 per cent. Economists have also agreed to this stated fact. However, there are some serious obstacles on way to increase the growth. According to the information provided by ICC there are mainly two challenges. First, stagnation in private investment and secondly lack of institutional capacity to implement development projects.
The stagnation in investment is one of the major problems facing the economy which is adding to unemployment in the country. More investment is needed in order to narrow the income inequality gap among people. While land price in the country is increasing constantly, the industrialists of the country face administrative difficulties in purchasing new lands. Lot of time and money is spent to obtain government permission to register new industries. Besides, the government does not allow tax rebate for new industries. Expatriate income or remittance is also decreasing, whereas the amount of non-performing loans is rising. Money laundering from the country is indeed worrisome.
According to the president of ICC, by 2020 the annual investment will have to increase by at least 5.0 per cent of the GDP. But according to industry-entrepreneurs, the biggest barrier to investment is the shortage of energy. Many entrepreneurs are unable to set up new industries due to the lack of gas and electricity. Many again are unable to expand their existing industries due to the same reason. All these problems need to be looked into seriously in the light of the adverse conditions of the economy.
Department of Business Administration
East West University