Is Bangladesh's growth understated?
Mamun Rashid
Good God, not many people did pay attention, while this humble writer mentioned at the Ministry of Finance recently that Bangladesh GDP growth this fiscal could be almost 7 per cent. My observation emanated from buoyant domestic sector growth evident from the performance of most of my clients in medium and large enterprises, estimated increase in boro harvest, large increase in financial sector revenues as well as product offerings, growth in micro-credit (almost 40 pct overlapping credits), rise in private sector education, health, cell phone subscriber and phenomenal growth in transport sector, i.e. service sector in its entirety, despite reported problems with power, gas and infrastructure.
I have heard economists and, more importantly, development partners being quite happy with Bangladesh food security issues, especially banking on good boro harvest and almost agreed with Ms. Matia Chowdhury and her officials on a 4 plus percent possible agriculture growth.
Take it or leave it, most of our friends operating in the food processing, manufacturing, including garments, textiles, pharma and chemicals, construction and power increased their capacity during last 12-18 months and contemplating to go further to attend increasing domestic demand. Though there are some issues with regard to small enterprises, overall manufacturing sector growth is expected to be around 10 pct.
Now comes the question of service sector. Our external sector with huge increase in export and import would reach USD 52 billion this year, almost 50 per cent of the USD 107 billion economy. Now as a humble student of Economics, I could possibly ask myself, if not someone else, while almost 80 plus per cent of our imports are capital machinery or industrial raw materials or equipment for service sector including telephony & transport, and most importantly, financial institutions earnings from international trade has increased manifold, is our service sector growth estimates are okay?
I have my doubts. In an economy with 50 per cent contribution from service sector and, more importantly, rise of consumerism and urbanization; I think we are missing out on the service sector growth estimates. One does not need to go to a remote centre in the rural Bangladesh, go to city's Apollo Hospitals, Square Hospitals, North South University, BRAC University or even any private schools or colleges or visit any transport hub, you would easily see the growth momentum in the domestic service sector.
Not to talk about the five or four star hotels, beauty parlors or boutique fashion stores. Sales are up everywhere and each one of those institutions has something to import. Therefore growth in external sector is pushing our service sector to go up and the overall growth impetus is being witnessed everywhere. And with this momentum going around everywhere including in the districts, I also don't think our domestic investment figures also to be right.
Yes, we need more growth, more importantly, equitable growth. Qualitative change in life, especially for the teeming millions at the bottom of the pyramid. We need 'distribution Economics' to work with better justice. However, above everything we should help maintain the growth momentum, drive poverty down, generate employment and wholeheartedly support national wealth creation. Continuous efforts to divert surpluses to the hungry streams should continue for this nation's journey towards a middle income economy.
(Mamun Rashid is a banker and economic analyst. He can be reached at mamun1960@gmail.com)
Mamun Rashid
Good God, not many people did pay attention, while this humble writer mentioned at the Ministry of Finance recently that Bangladesh GDP growth this fiscal could be almost 7 per cent. My observation emanated from buoyant domestic sector growth evident from the performance of most of my clients in medium and large enterprises, estimated increase in boro harvest, large increase in financial sector revenues as well as product offerings, growth in micro-credit (almost 40 pct overlapping credits), rise in private sector education, health, cell phone subscriber and phenomenal growth in transport sector, i.e. service sector in its entirety, despite reported problems with power, gas and infrastructure.
I have heard economists and, more importantly, development partners being quite happy with Bangladesh food security issues, especially banking on good boro harvest and almost agreed with Ms. Matia Chowdhury and her officials on a 4 plus percent possible agriculture growth.
Take it or leave it, most of our friends operating in the food processing, manufacturing, including garments, textiles, pharma and chemicals, construction and power increased their capacity during last 12-18 months and contemplating to go further to attend increasing domestic demand. Though there are some issues with regard to small enterprises, overall manufacturing sector growth is expected to be around 10 pct.
Now comes the question of service sector. Our external sector with huge increase in export and import would reach USD 52 billion this year, almost 50 per cent of the USD 107 billion economy. Now as a humble student of Economics, I could possibly ask myself, if not someone else, while almost 80 plus per cent of our imports are capital machinery or industrial raw materials or equipment for service sector including telephony & transport, and most importantly, financial institutions earnings from international trade has increased manifold, is our service sector growth estimates are okay?
I have my doubts. In an economy with 50 per cent contribution from service sector and, more importantly, rise of consumerism and urbanization; I think we are missing out on the service sector growth estimates. One does not need to go to a remote centre in the rural Bangladesh, go to city's Apollo Hospitals, Square Hospitals, North South University, BRAC University or even any private schools or colleges or visit any transport hub, you would easily see the growth momentum in the domestic service sector.
Not to talk about the five or four star hotels, beauty parlors or boutique fashion stores. Sales are up everywhere and each one of those institutions has something to import. Therefore growth in external sector is pushing our service sector to go up and the overall growth impetus is being witnessed everywhere. And with this momentum going around everywhere including in the districts, I also don't think our domestic investment figures also to be right.
Yes, we need more growth, more importantly, equitable growth. Qualitative change in life, especially for the teeming millions at the bottom of the pyramid. We need 'distribution Economics' to work with better justice. However, above everything we should help maintain the growth momentum, drive poverty down, generate employment and wholeheartedly support national wealth creation. Continuous efforts to divert surpluses to the hungry streams should continue for this nation's journey towards a middle income economy.
(Mamun Rashid is a banker and economic analyst. He can be reached at mamun1960@gmail.com)
