WB Country Director Temple says: Bangladesh's growth rate must be at least 6 pc to eliminate poverty

The Independent (London), 17 May 2000

World Bank (WB) Country Director Frederick T. Temple yesterday said Bangladesh's growth rate must be at least 6 to 7 per cent per annum if it is to eliminate poverty substantially within two decades, reports BSS.

“Bangladesh succeeded in raising its average annual growth rate from around 4 per cent during the 1980s to an average of about 5 per cent during the 1990s,” he said while addressing a luncheon meeting here, hosted by American Chamber of Commerce (AmCham) in Bangladesh.

The growth at this rate is quite a good achievement for a poor country, but it is not good enough to reduce the incidence of poverty by at least 2 per cent a year, he said, referring to the Bangladesh 2020 study.

The study was prepared by a group of leading Bangladeshi scholars with support from the World Bank.

President of AmCham Forrest E. Cookson also spoke at the function which was attended by office-bearers of AmCham and business leaders of the country.

Temple said although there is some potential for continued agricultural growth through higher productivity and diversification, lifting the growth rate on a sustained basis will depend on strong industrial performance, with growth averaging 8-10 per cent annually, and supporting service sector growth.

A breakthrough is necessary now if Bangladesh is to achieve its poverty reduction objective and become a lower middle income country in the next two decades, he said, adding this would require accelerated implementation of Bangladesh's agenda of financial and structural sector reforms.

Temple also stressed the need for modernisation of the public sector, including privatisation and civil service reform for accelerating the growth rate.

Temple said the Foreign Director Investment (FDI) is critical to accelerate Bangladesh's growth rate. Bangladesh's domestic economic base is simply too limited to provide the investment funds necessary to accelerate the growth to the levels necessary to eliminate poverty.

This will require both an open economy and governance condition which gives investors confidence, he said.

Mentioning the probable sectors for attracting FDI, Temple said gas export provides the best near-term opportunity to provide the foreign exchange necessary to enable Bangladesh to maintain sustainable external balances while increasing the foreign investment necessary to accelerate growth.

He said information technology may be a potential growth sector but even more important it is fundamental infrastructure essential to link Bangladesh to external markets and knowledge in a globalised world.

Temple said this is an area which can attract enormous amounts of foreign investment and technology but the government must open the sector more fully to private participation, establish a sound regulatory framework and curtail BTTB's privileged position which impedes private participation. He underscored the need for privatisation of BTTB as soon as possible.