Bangladesh : Strategy for Sustained Growth, Volume 2. Main Report

Abstract

The premise of the report on a strategy for sustained growth is that Bangladesh, could join the ranks of middle-income countries (MICs) within a decade by 2016 or some time soon after. It has the necessary assets: much-improved economic fundamentals; success in implementing many first-generation reforms; a young, rapidly growing labor force; and an established entrepreneurial culture. To pick up pace in the development marathon, Bangladesh will need to deepen its industrial base, further its economic integration with global markets, and unleash the growth potentials of its major urban centers, Dhaka especially. Reform measures essential to these objectives include continuing macroeconomic stability, with emphasis on strengthening tax mobilization and tackling energy sector losses; deepening financial sector and external trade reforms; and rebalancing the policy focus toward hitherto neglected structural areas - economic governance, urban management, infrastructure (especially power sector, ports, and transportation), and labor skills - that are especially important for strengthening factor productivity. Progress in these and other areas can bring the kind of sustained, rapid growth which the government has put at the center of its poverty-reduction strategy. The report stresses that economic growth has proven to be the most potent force in the fight against poverty. Despite serious weaknesses in governance, corruption most notably, Bangladesh has achieved good growth since 1990. The study concludes that Bangladesh's challenge is not to jumpstart growth but to maintain and, to the extent possible, accelerate it.