Stagnant private investment a big headache

[Black_cats]

12:45 AM, June 14, 2018 / LAST MODIFIED: 12:48 AM, June 14, 2018
Stagnant private investment a big headache

https://www.thedailystar.net/business/stagnant-private-investment-big-headache-1590958



Ahsan Habib

Private investment, job creation and narrowing income inequality are the major challenges for the country between 2018-19 and 2020-21, according to the government's medium-term macroeconomic policy statement.

Besides, the economy's structural transformation into one dependent on the manufacturing sector and bringing in discipline in the financial sector are also needed to attain the targeted level of development.

There are external tensions too: oil and commodity prices are on the rise and exports are not growing fast enough.

“We don't see any measures to meet these medium-term challenges in the budget,” said MK Mujeri, a former director general of the Bangladesh Institute of Development Studies.

Private investment is a major issue for the economy: it has been about 23 percent of the GDP for the last several years.

“To create jobs and sustainable growth we have to ensure massive private investment. But it is almost stagnant now,” Mujeri said.

Attracting adequate foreign direct investment (FDI) also remains an insurmountable task despite the ease of regulatory framework.

“Unfavourable business climate is the main reason behind the low investment in the country,” Mujeri added.

By 2021, the government aims to raise private investment-to-GDP ratio 26.1 percent to achieve the targeted growth rate and employment.

“The government must ensure an investment-friendly environment to bump up private investment,” said Selim Raihan, a professor of the University of Dhaka's economics department.

To ensure a favourable environment and lower the cost of doing business, the government will build 100 special economic zones as soon as possible. It is also implementing 10 mega infrastructure projects and formulating one-stop service for entrepreneurs.

As a result, public investment is soaring every year. However, it is not having any effect on private investment as the quality of government investment is very shoddy.

“Mismanagement in the implementation of the annual development programme in the last few months of a fiscal year leads to poor quality output, which is just not good enough to raise private investment,” Raihan said.

The Centre for Policy Dialogue (CPD) also emphasised quality infrastructure.

The think-tank said private investment would jump if the government implements the mega projects within the stipulated time and ensures quality ADP implementation.

Creating sufficient decent jobs for the growing labour force has become another key challenge for the government as every year about 20 lakh youths enter the job market, according to the policy statement. Bangladesh needs to look beyond the garment sector and diversify its export basket to create more and better jobs opportunities, it said.

There is no indication in the budget that the government is working to create quality jobs, Mujeri said. “People want to see measures.”

One way the government can create jobs is by expanding the cottage, micro, small and medium-sized enterprises. The sector could offer decent income opportunities if a better business environment can be ensured through removal of regulatory barriers and enhanced access to finance.

The outflow of workers will also reduce the pressure on the domestic job market.

This could be done through the diplomatic channel as well as reducing the cost of migration, easing the migration process and providing skills development programmes. Now, most of the incremental labour force is being absorbed into the low productive agriculture and informal sectors.

“In this backdrop, concerted effort will be there to enhance the share of the manufacturing sector to ensure massive employment generation,” said the policy statement.

When an economy moves forward, it is most desirable that the manufacturing sector's growth substantially surpasses the growth in the agriculture sector to help consolidate and sustain the growth momentum, it said. The share of agriculture in the GDP is declining, while the share of the industry is rising. The share of the services sector though remains relatively stable.

Yet, the contribution of the industry to the GDP has not matched its contribution to job creation as 40 percent of the labour force is still employed in the agriculture sector.

Income inequality remains a key challenge even though poverty is reducing.

Bangladesh's Gini coefficient, which is the gauge of economic inequality, increased from 0.41 in 2010 to 0.48 in 2016. The coefficient ranges from 0 (or 0 percent) to 1 (or 100 percent), with 0 representing perfect equality and 1 representing perfect inequality.

Furthermore, the income share of the lowest 10 percent of the households has declined from 2 percent in 2010 to 1.01 percent in 2016.

Another pressing task in the medium-term is to bring in discipline in the financial sector, given the current high non-performing loan ratio, capital inadequacy in some banks and the high interest rate on lending. Moreover, the capital market has not developed yet that it could serve as a solid alternative for raising funds.

 

[asgur]

বর্তমান আওয়ামী আমলের অনেক গুলো কাজ বাংলাদেশ রাষ্ট্রের বিগত ৪০ বছরের সলিড যে পিলার গুলো ছিল, তাকে ধ্বংস করে দিয়েছে। এর মধ্যে কোনটাকে ফেলে যে কোনটাকে সব চেয়ে ভয়াবহ বলবো জানিনা। কিন্ত একটা পারটিকুলার সেক্টরের মিসম্যানেজমেন্ট এবং এবিউজ ভয়াবহ- সেইটা হচ্ছে সরকারের ফাইনান্সিয়াল সেক্টর।

এই কথাটা বার বার মনে হচ্ছিল, বিআরটিসির একটা নিউজ পড়ে। যে, ২০১৬ সাল থেকে বিআরটিসি লাভজনক প্রতিষ্ঠান থেকে লোকসানি প্রতিষ্ঠানে পরিণত হয়, তার মূল কারণ, সরকারী কর্মচারিদের বেতন বৃদ্ধি।

গত দুই বছরে, সরকারী কর্মচারীদের বেতন প্রায় ডবল করে ফেলা হয়েছে। কিন্ত দেশের অর্থনৈতিক পরিস্থিতি ভালো না হওয়াতে প্রাইভেটে সেই ভাবে বেতন বাড়েনাই। ফলে সরকারের খরচ বেড়ে গ্যাছে। অন্য দিকে সেই খরছের জোগাড় দিতে সরকার আবার প্রাইভেট সেকটরকে এবং জনগণকে চিপা শুরু করেছে। ফলে, অতিরিক্ত ট্যাক্স এবং ডিউটির কারণে জনগণের ইনভেস্টমেন্টের সুযোগ সংকুচিত হয়েছে সরকারের এই লাগাম হীন খরচকে জোগাড় দিতে- যেইটা দিয়ে সরকারী কর্মচারিদের বেতন বাড়ানো হয়েছে। ফলে তারা পরিণত হয়েছে অলাভজনক প্রতিষ্ঠানে।
অথচ বাংলাদেশের মত দেশে, ট্রান্সপরটে ব্যবসা সরকারের জন্যে সিকিউরড মনোপলি ব্যবসা অনেক রুটে যেখানে লস হওয়ার কোন কারন নাই।

সরকার প্রতি বছর বাজেট বাড়ায় ২০০৮ সালের এক লক্ষ কোটি টাকার বাজেটকে নিয়ে গ্যাছে, ৪ লক্ষ কোটি টাকায় যার বড় অংশ ঋণের টাকায়, আয় নয়। আমাদের বাজেটের প্রধান খাত এখন হয়েছে ঋণ পরিশোধ।

এই ঋণের আরেকটা সেক্টর খোলা হইছে, সেইটা হচ্ছে সঞ্চয়পত্র।
সঞ্চয়পত্র থেকে গত কয়েক বছরে, ৭০/৮০ হাজার কোটি টাকার ঋণ নেয়া হয়েছে। সঞ্চয়পত্রের ঋণ হচ্ছে, সিকিউরড লোণ যেখানে কোন রিস্ক নাই। সিকিউরড ঋণের সুদের হার কম হতে হয়।

কিন্ত, সরকার সঞ্ছয়পত্রে ব্যাপক মজা পেয়ে গ্যাছে।

পাব্লিকের টাকায় পাবলিক ইনভেস্ট করে কিছু কামাইতে পারবেনা। কারন দেশের ব্যবসা পরিস্থিতি, সিকুরিটি পরিস্থিতি, বিনিয়োগ বাণিজ্য ভালো না।
সেই টাকা সরকার সঞ্চয়পত্রের নামে নিয়ে, নিজে খরচ করলো। এবং তাদেরকে যে ইন্টেরেস্ট দিবে সেইটাও দেবে কে ? পাবলিক ?

এর ফলে যেইটা হছে, তাতে আবার ব্যাংকের লিকুইডিটি টান পড়ছে। কারন পাবলিক দেখতেছে, ব্যাংকের ঋণের সুদের হার ভালো না। (সুদের হার ভালো না কার, ব্যবসা সংকুচিত হওয়াতে বিনিয়োগ হচ্ছেনা) তাই তারা সঞ্ছয় পত্রে টাকা রাখতেছে। যেইটা দিয়ে সরকার বার অতিরিক্ত ব্যয় মেটাচ্ছে।
ফলে ব্যাংকের লিকুইডিটিতে টান পরার কারণে, ব্যাংক গুলোকে ইন্টেরেস্ট রেট বাড়াইতে হইছে। কিন্ত, সেইটা স্বাভাবিক ডিমান্ড, সাপ্লাই থেকে হয়নাই। হইছে, সরকারী মিস ম্যানেজমেন্টের কারণে,

ফলে হাই ইন্টেরেস্টে রেটের কারণে, ইনভেস্টমেন্ট আবার বাধাগ্রস্ত হয়েছে।

এইটা ছাড়াও শেয়ার মার্কেট ধ্বংস করা এবং ব্যাংক লুট বাদ দিলাম। পৃথিবীর যে কোন রাষ্ট্রে এই লেভেলের লুট হলে, সরকারকে জনগণ গদি থেকে লাথি দিয়ে নামিয়ে একটা একটা জেলে ঢুকিয়ে আজীবনের জন্যে পুরে রেখে দিতো। চায়নার মত দেশে তোঁ ফাসি দিয়ে দেয়।

কিন্ত এদের এই লুটেরারাই প্রতি বছর এই ভাবে আমাদের চল্লিশ বছরে গড়ে তোলা ম্যাক্রো ইকনমিক স্ট্যাবিলিটকে ধ্বংস করে দিলো মাত্র কয়েক বছরে। এবং তার ফলে এখন বিনিয়োগ স্থবির।

বাংলাদেশ অর্থনীতি সমিতির হিসেবে বছরে ২২ লক্ষ তরুন কর্ম বাজারে আসছে।তাদের মধ্যে চাকুরী পায় সর্বোচ্চ ৭ লক্ষ। এবং বিনিয়োগের বড় অংশ এখন সরকারী প্রজেক্টের দুর্নীতির খরচে চলে যাচ্ছে যা প্রাইভেট সেক্টর থেকে শুষে নেয়া হচ্ছে।

ফলে বাংলাদেশের ফিনান্সিয়াল সেক্টরে যে স্ট্যাটাস কো ছিল, সেইটা ধ্বংস করে ফেলা হয়েছে।

এই খানে আমি শেয়ার মার্কেট বা ব্যাঙ্ক লুটকে এক লাইনে উল্লেখ করলাম, কিন্ত সেই খানেই আছে ধ্বংসের বীজ এবং বিস্তার। কোন মতে মরু শ্রমিক আর পোশাক শিল্পিদের ঘামে যে মাক্রো ইকনিমিক স্টাবিলিটি সেইখানে দের জন্য সামান্যতম প্রতিদান না দিয়ে, উন্নয়নের জঘন্য কোরাসে ব্যস্ত শিয়ালেরা।

কিন্ত, মুর্গি একটা একটা করে কেটে খেয়ে ফেলার পরে এক সময়ে আর দেখানোর মত কিছু থাকবেনা।
তখন কি হবে এই রাষ্ট্রের ?

--জিয়া হাসান

https://www.facebook.com/video.php?v=2555516698007161

 

[bluesky]

-google translation of the well thought out facebook comments-

Many of the Bangladesh's solid pillars, built during the previous 40 years were destroyed during the current Awami periods. I do not know which one would be the worst, but the mismanagement and abuse of a precursor sector is terrible - that's the government's financial sector.

It seemed to me repeatedly, read a news of BRTC, that, since BRTC has become a loser institution from the profitable institution since 2016, its main reason, the salary increase of government employees.

In the past two years, the salary of government employees was almost double. But the country's economic situation is not good because private pay increases in the same way. As a result, the cost of the government increased. On the other hand, the government has started privatizing the sector and the people have started squeezing the cost. As a result, due to excess tax and duty, the scope of public investment has narrowed down the government's untimely cost-by which the salaries of government employees have been increased. As a result, they have become non-profit organizations.
But in a country like Bangladesh, Transparency business is the government's monopoly monopoly on many routes where there is no reason to be lost.

The government raises the budget of one billion crores in 2008, raising the budget of Rs. 4 lac crores, which has a large proportion of debt, income, not income. The main sector of our budget has now been debt repayments.

Another sector of this loan has been opened, that is the savings certificate.
In the last few years from the savings certificate, a loan of 70/80 thousand crore has been taken. The savings loan is a secured loan where there is no risk. Secured loans have lower interest rates.

However, the government has got a lot of fun.

Public money can not do anything by earning public money. Because of the business situation in the country, the situation of securities, investment trade is not good.
The money was spent by the government in the name of the savings certificate itself. And who will give them the interstest? The public?

As a result of this, the bank's liquidity is being pulled again. Because the public is watching, the bank's interest rate is not good. (Interest rates are not good, because the business is not being invested in the contracting), so they keep the money in the appropriate letter. Which is the government's time to spend extra expenditures.
As a result of the bank's liquidity tension, the banks have to increase the interest rate. But, that is normal demand, not from the supply. Due to the official Miss Management,

As a result, due to high interest rates, the investment was again interrupted.

Apart from this, the stock market was destroyed and the bank looted. If any of the world's people were looted at this level, the government would have put the government out of the mattress and put it in a jail and kept it for life. In the country like China, it is falsified.

But these looters destroy our Macro Economic Stabilitas in our 40 years in this way every year only in a few years. And as a result, now the investment stops.

As a Bangladesh Economic Association, 22 lakh youths are coming to the market every year. Among them, maximum employment is 7 lakh. And a large part of the investment is now going on the cost of the government project, which is being absorbed from the private sector.

As a result, the status of the financial sector in Bangladesh was destroyed.

In this case, I mentioned the shares or market loots in one line, but in that area there is destruction seeds and spread. In no way, due to the lack of minimum compensation for macroeconomic stability in the sweat of the desert workers and the garment workers, the foxes engaged in the heterosexual chorus of development.

But, after eating a chicken one by one, there will be no more time to show.
What is the state of this?

- Jia Hassan

 

[Homo Sapiens]

It is unlikely that private investment will rise in the next 2-3 years.Election related uncertainty will remain for the next 1 year. Much needed mega project will need for at least 2-3 years, LNG Gas supply will require some times.One big relieve is that, electricity connection in industrial plants can be given in short time now. Within 28 days instead of previous average 400 days.Once gas, electricity connection problem sorted out, our business environment will improve substantially. Big Tax reform can be expected after the election, some measures in this budget will already help in increasing the Tax collection as stated by PwC. But big worry remain in Banking sector.

 

[Mage]

গত দুই বছরে, সরকারী কর্মচারীদের বেতন প্রায় ডবল করে ফেলা হয়েছে। কিন্ত দেশের অর্থনৈতিক পরিস্থিতি ভালো না হওয়াতে প্রাইভেটে সেই ভাবে বেতন বাড়েনাই। ফলে সরকারের খরচ বেড়ে গ্যাছে। অন্য দিকে সেই খরছের জোগাড় দিতে সরকার আবার প্রাইভেট সেকটরকে এবং জনগণকে চিপা শুরু করেছে। ফলে, অতিরিক্ত ট্যাক্স এবং ডিউটির কারণে জনগণের ইনভেস্টমেন্টের সুযোগ সংকুচিত হয়েছে সরকারের এই লাগাম হীন খরচকে জোগাড় দিতে- যেইটা দিয়ে সরকারী কর্মচারিদের বেতন বাড়ানো হয়েছে। ফলে তারা পরিণত হয়েছে অলাভজনক প্রতিষ্ঠানে।

I think increasing salaries of govt employees would've been a good thing if it could curb down bribe taking....unfortunately the system is rotten to the core. Govt employees can't sleep without taking bribes.

 

[Bilal9]

উন্নয়নের জঘন্য কোরাসে ব্যস্ত শিয়ালেরা।

Well - we will find out soon enough if AL folks are trumping up 'development stories'.

But if everything going on right now (ten mega projects) is being worked on (the three bigger ones such as Metro, Dhaka Expressway and Padma bridge ARE visible already) then where is the doubt and why are people raising them?

 

[bluesky]

I think increasing salaries of govt employees would've been a good thing if it could curb down bribe taking....unfortunately the system is rotten to the core. Govt employees can't sleep without taking bribes.

I was quite surprised to read the newspaper report about the increase in govt. employee salaries. The increment was too much and not matched with the growth of economy and income of non-govt people. Bribery did not come down at all. Rather, it increased proportionately with the salary increase. I had to go to many govt. offices to know bribery is rampant in every office. Govt. has kept us hostage to its employees. This govt. is a total failure.

@UKBengali

 

[UKBengali]

I was quite surprised to read the newspaper report about the increase in govt. employee salaries. The increment was too much and not matched with the growth of economy and income of non-govt people. Bribery did not come down at all. Rather, it increased proportionately with the salary increase. I had to go to many govt. offices to know bribery is rampant in every office. Govt. has kept us hostage to its employees. This govt. is a total failure.

@UKBengali

The increase in government salaries is a sign of a healthy and growing economy.
We shall also see the AL government at least doubling the minimum wage for garment workers from 5,300Tk this year.

Corruption in a low income country like BD is very common and it will come down as BD slower gets richer.

If you have made up your mind and are looking for "evidence" to match this narrative then you shall almost certainly find it.

 

[bluesky]

Corruption in a low income country like BD is very common and it will come down as BD slower gets richer.

You are now coming with the excuses for institutionalizing bribery in the country. When Bd will become rich no one knows and no one knows when the bribery will be stopped. Can you give us a few arbitrary dates, please?

 

[Bilal9]

The increase in government salaries is a sign of a healthy and growing economy.
We shall also see the AL government at least doubling the minimum wage for garment workers from 5,300Tk this year.

Corruption in a low income country like BD is very common and it will come down as BD slower gets richer.

If you have made up your mind and are looking for "evidence" to match this narrative then you shall almost certainly find it.

As salaries increase, it may be possible alongside to clamp down corruption a little tighter. A few 'showcase' cases (as well as public humiliation) and people will welcome these measures because they will have less sympathy for govt. looters.

Salary increases should always be followed by these clampdowns. No reason anyone should hold up signatures or paperwork for bribes. There is a camera and voice recorder that comes with every smartphone. Evidence will not be hard to find to warrant dismissals.

 

[Nilgiri]

-google translation of the well thought out facebook comments-

Many of the Bangladesh's solid pillars, built during the previous 40 years were destroyed during the current Awami periods. I do not know which one would be the worst, but the mismanagement and abuse of a precursor sector is terrible - that's the government's financial sector.

It seemed to me repeatedly, read a news of BRTC, that, since BRTC has become a loser institution from the profitable institution since 2016, its main reason, the salary increase of government employees.

In the past two years, the salary of government employees was almost double. But the country's economic situation is not good because private pay increases in the same way. As a result, the cost of the government increased. On the other hand, the government has started privatizing the sector and the people have started squeezing the cost. As a result, due to excess tax and duty, the scope of public investment has narrowed down the government's untimely cost-by which the salaries of government employees have been increased. As a result, they have become non-profit organizations.
But in a country like Bangladesh, Transparency business is the government's monopoly monopoly on many routes where there is no reason to be lost.

The government raises the budget of one billion crores in 2008, raising the budget of Rs. 4 lac crores, which has a large proportion of debt, income, not income. The main sector of our budget has now been debt repayments.

Another sector of this loan has been opened, that is the savings certificate.
In the last few years from the savings certificate, a loan of 70/80 thousand crore has been taken. The savings loan is a secured loan where there is no risk. Secured loans have lower interest rates.

However, the government has got a lot of fun.

Public money can not do anything by earning public money. Because of the business situation in the country, the situation of securities, investment trade is not good.
The money was spent by the government in the name of the savings certificate itself. And who will give them the interstest? The public?

As a result of this, the bank's liquidity is being pulled again. Because the public is watching, the bank's interest rate is not good. (Interest rates are not good, because the business is not being invested in the contracting), so they keep the money in the appropriate letter. Which is the government's time to spend extra expenditures.
As a result of the bank's liquidity tension, the banks have to increase the interest rate. But, that is normal demand, not from the supply. Due to the official Miss Management,

As a result, due to high interest rates, the investment was again interrupted.

Apart from this, the stock market was destroyed and the bank looted. If any of the world's people were looted at this level, the government would have put the government out of the mattress and put it in a jail and kept it for life. In the country like China, it is falsified.

But these looters destroy our Macro Economic Stabilitas in our 40 years in this way every year only in a few years. And as a result, now the investment stops.

As a Bangladesh Economic Association, 22 lakh youths are coming to the market every year. Among them, maximum employment is 7 lakh. And a large part of the investment is now going on the cost of the government project, which is being absorbed from the private sector.

As a result, the status of the financial sector in Bangladesh was destroyed.

In this case, I mentioned the shares or market loots in one line, but in that area there is destruction seeds and spread. In no way, due to the lack of minimum compensation for macroeconomic stability in the sweat of the desert workers and the garment workers, the foxes engaged in the heterosexual chorus of development.

But, after eating a chicken one by one, there will be no more time to show.
What is the state of this?

- Jia Hassan

Dayum! My bengali translation skills are awesome!

 

[Mage]

Salary increases should always be followed by these clampdowns. No reason anyone should hold up signatures or paperwork for bribes. There is a camera and voice recorder that comes with every smartphone. Evidence will not be hard to find to warrant dismissals.

I want most of the 45+ govt employees sacked. And their properties confiscated.