Good governance in banking crucial to increase investment: Economists

Eminent economists of the country stated on Saturday that although there has been a slight decline in growth, the country's economic situation is not alarming. They said that economic growth could be achieved by securing more investment.

At a roundtable, "Is the economy coping with the current situation?", organised by the Editors' Guild at Dhaka Gallery in the capital, they said that ensuring good governance in the banking sector is crucial for increasing investment since this sector invests the most in the country.

They also emphasised the importance of increasing investment and creating a skilled workforce in order to achieve economic growth and reduce inflation.

Economist Dr AB Mirza Azizul Islam, former advisor to a caretaker government, said, "As per the latest Moody's forecast, Bangladesh's growth has dropped slightly. But by 2023, it will increase to 5%. This figure, considering the ongoing global economic crisis, including many developed countries suffering from inflation and recession, is not very bad."

He said, "Inflation in Bangladesh has seen a slight drop in the past two-three months. The marginalised population living close to the poverty line has now been forced below it. The lives of the ultra-poor have become extremely difficult."

"We can have discussions on how inflation can be controlled. But when it is happening due to external factors, it is quite difficult to make changes with local policies. If we try to manage inflation by controlling overall demand, it will have a negative impact on our growth," the economist noted.

Pointing to the banking sector of the country, AB Mirza Azizul Islam said, "There are many questions about governance in the country's banking sector. The number of defaulters is increasing."

"Our stock exchange is still not able to play its proper role. So if there is a lack of good governance in the banking sector, our investment will not grow."

He said, "Our working-age population is proportionally higher compared to our overall population. Appropriate initiatives should be taken to build skilled manpower."

Mustafizur Rahman, distinguished fellow of the Center for Policy Dialogue (CPD), noted that Bangladesh has immense potential for financial growth.

"We need to do some homework quickly to actualise the possibilities," he said.
"Low- and low-income people are being affected by the high inflation. But income and wealth are being accumulated in the hands of only some people in the country. As a result, income inequality and wealth inequality are increasing," said the economist.

He urged policymakers to make economic growth more inclusive. "It cannot be covered by the Social Safety Net programme. There is no alternative to developing skilled manpower," he added.
Mustafizur Rahman blamed the use of hundi for the recent decline in remittances sent by migrant workers from abroad.

"Hundi has created a huge difference in the dollar exchange rate. Those involved in hundi should be found out and appropriate action should be taken against them," he stated.

Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh (PRI), said, "We have come a long way towards financial growth but we are also at a crossroads. Various organisations and media around the world have mentioned corruption as one of the reasons for the decline in our growth. We have to think about it."

He said, "The rate at which our inflation has increased, it must be stopped here. The economic policy of the country should also be reformed."

Syed Ishtiaq Reza, chief executive officer of Global Television and executive member of the Editors' Guild, moderated the round table.