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Analytical Review of Bangladesh’s M i P fMacroeconomic Performance in Fiscal Year 2011-12(Third Reading)(Third Reading)

04 June 2012

CONTENTS

Introduction

The Macroeconomic ScenarioThe Macroeconomic Scenario

Investment Situation

On Crop Production and Food Securityp y

Employment Generation

Review of Policy and Reform Initiatives

Analytical Review of Bangladesh’s Macroeconomic Performance in FY2011-12: Third Reading 2

IRBD FY2011-12 Team

D b i Bh tt h M t fi R hDebapriya Bhattacharya Mustafizur Rahman

Fahmida Khatun Khondaker Golam Moazzem

Md Ashiq Iqbal Towfiqul Islam KhanMd. Ashiq Iqbal Towfiqul Islam Khan

Nafisa Khaled Hasanuzzaman

Kishore Kumer Basak Mazbahul Golam AhamadKishore Kumer Basak Mazbahul Golam Ahamad

Md. Zafar Sadique Mehruna Islam Chowdhury

Mashfique Ibne Akbar Meherun Nesa

Shameema Nasreen Ahsan Mallik Marziana Mahfuz Nandita

Nepoleon Dewan Nusrat Jahan Tania

Saifa Raz Samina Hossain

Dwitiya Jawher Neethi Shouro Dasgupta

A H M Ashrafuzzaman Md. Hamidul Hoque Mondal


Acknowledgment

The team would like to appreciate the valuable support it has received inThe team would like to appreciate the valuable support it has received in accessing relevant data and information from concerned officials belonging to a

number of institutions including Bangladesh Bank, g

Bangladesh Bureau of Statistics (BBS),Bangladesh Energy Regulatory Commission (BERC),

Bangladesh Export Processing Zones Authority (BEPZA), Bangladesh Power Development Board (BPDB)Bangladesh Power Development Board (BPDB),

Bureau of Manpower, Employment and Training (BMET), Chittagong Port Authority,

Department of Agricultural Extension (DAE), Dhaka Stock Exchange (DSE), Export Promotion Bureau (EPB), Ministry of Commerce (MoC), Ministry of Finance (MoF)Ministry of Finance (MoF),

National Board of Revenue (NBR), Petrobangla, Power Cell,

Pl i C i i dPlanning Commission and, Roads and Highways Department (RHD)


Expert Group

The CPD team is grateful to all of those presented at the consultation for sharingThe CPD team is grateful to all of those presented at the consultation for sharing their views, insights and comments on the draft report. A list of the participants

of the meeting is provided below (in alphabetical order)

Member General Economics Division (GED)Dr Shamsul Alam

Member, General Economics Division (GED)Planning CommissionGovernment of BangladeshExecutive Director

Dr Mahabub HossainExecutive DirectorBRAC

Dr Akbar Ali KhanFormer ChairmanRegulatory Reforms Commission (RRC) andDr Akbar Ali Khan Regulatory Reforms Commission (RRC) andFormer Advisor to the Caretaker Government

Dr Ahsan Habib MansurExecutive DirectorPolicy Research Institute of Bangladesh (PRI)y g ( )

Dr Rushidan Islam RahmanResearch Director Bangladesh Institute of Development Studies (BIDS)


Dr Hassan ZamanSenior Economic Adviser to the GovernorBangladesh Bank

INTRODUCTION

1. INTRODUCTION

Throughout FY12, issues relating to quality of macroeconomic management,particularly questions relating to government borrowing, foreign aid utilization,implementation of the annual development programme (ADP) and revenueimplementation of the annual development programme (ADP) and revenuegeneration figured prominently in the economic discourse.

Extreme volatility in the capital market;Hi h l l f iHigh level of consumer prices;The sorry state of infrastructures – transport and communication as well asgas and electricity supplies;Reluctance of the World Bank to disburse funds for the Padma Bridge;Reluctance of the World Bank to disburse funds for the Padma Bridge;The Indo‐Bangla transit controversy;Fallouts of the euro zone crisis.

Indeed new dimensions were added to economic management as theIndeed, new dimensions were added to economic management as thegovernment contracted a loan under a IMF programme towards the end of theyear.


1. INTRODUCTION

CPD i it fi t di f th t t f B l d h i d t d itCPD, in its first reading of the state of Bangladesh economy carried out under itsIndependent Review of Bangladesh’s Development (IRBD) programme, released on 3November 2011, highlighted the following four critical concerns for FY12.

Implications of the new wave of global economic crisisImplications of the new wave of global economic crisisDeepening stresses in public finance managementUnabated price inflationIncreasing pressure on the balance of payments (BoP)g p p y ( )

The evolving state of the economy during FY12 was captured by the secondreading of economic development in FY12 under the IRBD, which was publishedon 11 March 2012. This review emphasised the following five areas of concern:

Adverse spillovers from the uncertainties in the global marketsPublic finance emerging on the weakest link of macroeconomic managementMonetary policy slowly going off the trackThe trust deficit underpinning the capital market stabilisationThe balance of payment increasingly coming under seize

Thus, the present review, which is the third and last reading of the state of theeconomy in the current fiscal year while puts it focus on its defined scope buteconomy in the current fiscal year, while puts it focus on its defined scope, butalso needs to be looked at as a product in a continuum.


1. INTRODUCTION

Th t l dd i it ti i fThe present volume addresses in its section on macroeconomic performance anumber of important issues along with the necessary updates.However, the main value of the present volume lies in three other core sectionswhich discuss three themes of key importance for the Bangladesh economy atwhich discuss three themes of key importance for the Bangladesh economy atthis present juncture: namely investment, employment and reforms.Admittedly, a stagnating, if not faltering, investment, is holding back theeconomy from achieving higher levels of economic growth.Basic objective of all public policy is generating additional gainful employmentopportunities but there is hardly any evidence‐based real time picture of this thatis available for scrutiny.Th i f th f i iti ti f th t t h bThe review of the reform initiatives of the present government has beenundertaken to deepen our understanding about the institutional impediments toaccelerating economic growth.The present review also contains a note on the state of crop production and itsThe present review also contains a note on the state of crop production and itsimplications for food security.Indeed, as the incumbent government finishes the third year of its tenure, thepresent review intends to highlight the goalposts of the bigger picture of theeconomic canvass.


THE MACROECONOMIC SCENARIOSCENARIO

2.1 ECONOMIC GROWTH SLOWS DOWN

BBS i di t d th t GDP th t t f 7 0% ill t b t i FY12BBS indicated that GDP growth target of 7.0% will not be met in FY12

6.3% i.e. 0.7 percentage point lower than its target

A setback for government’s plan to move towards a higher growth trajectoryg p g g j y

Propelling Bangladesh to a higher growth trajectory would definitely requiremuch more in the areas of inter alia, economic reforms along with betterinvestment in physical infrastructure and human capital formation

Per capita GNI also increased to USD 848 in FY12 (i.e. USD 32 increase)

Indeed, a faster depreciation of Taka against USD (by 9.9%) restricted growth ofper capita income in USD terms in FY12per capita income in USD terms in FY12


2.1 ECONOMIC GROWTH SLOWS DOWN Sources of Growth: Agriculture Holds Backg

Of 6.3% of overall growth in FY12 ‐Agriculture ‐ 0.5% (1.0% in FY11)Crop – 0.1% (0.5% in FY11)p ( )Fall of agriculture’s contribution (0.5%) is more than overall fall in GDPgrowth (0.4%)Industry‐ 2.8% (2.4% in FY11) – highest in history!

CONTRIBUTION TO GROWTH (%)

Service – 2.9% (3.0% in FY11)Import duty – 0.1% (0.3% in FY11)

Sector FY06 FY07 FY08 FY09 FY10 FY11 FY12Difference

(FY11 and FY12)

Agriculture Sector 1.1 1.0 0.7 0.8 1.0 1.0 0.5 -0.5Crops 0 6 0 5 0 3 0 5 0 7 0 6 0 1 -0 5Crops 0.6 0.5 0.3 0.5 0.7 0.6 0.1 -0.5

Industry Sector 2.6 2.3 1.9 1.8 1.9 2.4 2.8 0.4Manufacturing 1.7 1.6 1.2 1.1 1.1 1.6 1.7 0.1Construction 0.7 0.6 0.5 0.5 0.5 0.6 0.7 0.2

Service Sector 3 0 3 3 3 1 3 0 3 1 3 0 2 9 -0 1Service Sector 3.0 3.3 3.1 3.0 3.1 3.0 2.9 -0.1Import Duty -0.1 -0.1 0.5 0.1 0.1 0.3 0.1 -0.2GDP 6.6 6.4 6.2 5.7 6.1 6.7 6.3 -0.4


2.1 ECONOMIC GROWTH SLOWS DOWN Investment and Savings: Stagnation Continuesg g

GDP of FY12 overwhelmingly dominated by private consumption (80%)

A stagnating investment with a distinctive fall in private investment share

An optimistic projection from the share of public investment

Various proxy indicators suggest that the public investment‐GDP ratio mayhave to be revised downward from 6.3% to 5.7 %

Initial estimate of aggregate investment rate stood at 25.4% of GDP in FY12which may be revised downward

The investment target for FY13 has been set at 29.6 % of GDPg

A rise in investment‐GDP ration by more than 4.2 percentage points.

Private investment, in this case, will have to rise to 22.7% of GDP from 19.1%

ICOR increased from 3.7 in FY11 to 4.0 in FY12

According to the SFYP target, ICOR is expected to be at this level (4.1) in FY13

In absence of fast accumulation of investment from private sector andI abse ce o ast accu u atio o i est e t o p i ate secto a dimproved implementation of government investment plan (ADP), achievingthe GDP growth in FY13 will remain a far cry


2.1 ECONOMIC GROWTH SLOWS DOWN

Revision of GDP (FY12) Estimates: What to ExpectRevision of GDP (FY12) Estimates: What to Expect

Provisional GDP for FY12 is expected to be revised at a later date

Public investment will be revised downward as at least 10% of RADP mayremain unrealisedremain unrealised

Construction sectors growth in the final estimate is expected to be lower

Manufacturing growth may also require some downward adjustment

QIP (large and medium) data is available for Jul‐Feb (11.8% growth)

Export in Mar‐Apr declined by (‐) 7.2% ‐ production is also expected to decline

E t i d li i ti l l f k it hi h l dditi (GDP) lExport is declining particularly for knit ‐ a higher value addition (GDP) loss

Containing manufacturing growth needs higher domestic demand

It took a 17.7% production growth for a growth of 10.9% GDP growth for largep g g g gand medium manufacturing sector in FY11

In contrast, the growth in agriculture sector may be revised upward in view ofhigher than expected production of Boro

Combining all these recent developments, a downward adjustment of GDPmay be reasonably expected in the course of time


2.2 PUBLIC FINANCE: WEAKEST LINK

Fi l t i FY12 t d i i i f thFiscal management in FY12 was put under serious pressure in view of thesoaring revenue expenditure and mounting subsidy demand.

Lack of support from foreign and non‐bank sources of financing did not help.

As it appears from the targets and the actual scenario, the fault line, to a largeextent, originated from the unfounded targets for FY12 resulted largely from theuncoordinated fiscal planning in relations to other sectors.

Subsidy projections particularly were totally out of line with the government’splan for the power sector including the establishment of rental power plants andthe associated rise in fuel demand.

MISMATCH OF TARGETS AND ACTUAL DEVELOPMENTS IN FISCAL SECTOR

TargetsActual Growth

FY11Target Growth

FY12AActual Growth (July to

latest in FY12)NBR 28.0 15.7 18.1Revenue Expenditure 17.5 12.0 32.5

MISMATCH OF TARGETS AND ACTUAL DEVELOPMENTS IN FISCAL SECTOR

ADP 26.8 40.0 8.6Subsidy Expenditure 52.1 18.5B 69.8 C

Foreign Financing -50.6 293.5 163.0Bank Borrowing - -24.8 80.3


Non-Bank Borrowing -72.2 65.8 Net negativeNote: A Budgetary targets for FY12 over actual FY11. B Growth target over revised budget. C Revisedbudget growth over revised budget.


R E iRevenue Earnings

NBR: surpassing targets, yet again

Thanks to rising import duty, VAT (local) and income tax, NBR surpassed itsg p y ( ) pannual growth target of 15.7% during Jul‐Mar, posting a growth of 18.1%.

NBR could exceed its annual collection by about Tk. 1,500 crore.

Non‐NBR Tax and Non Tax Revenue – more needs to be done

Non‐tax revenue component also performed well during Jul‐Jan period with animpressive 61.8%, underwritten by spectrum and license renewal fees.


p y p

However, non‐NBR tax slowed down quite considerably during the first sevenmonths, posting only 11.1% increase compared to the annual target of 18.7%.


R dit d f i li itRevenue expenditure: defying limitsDuring Jul‐Jan of FY12, augmented revenue expenditure posted 32.5% growth,defying the original growth target of only 12.0%.

d b d f f d kMajor rise in expenditure was observed for acquisition of assets and works(879.9%), interest payments (27.0%) and subsidies and current transfers (38.0%).Almost 50% of the incremental revenue expenditure (excluding acq. of assetsand works) came from subsidies and current transfersand works) came from subsidies and current transfers.

Expenditure on Subsidies: the Built‐in destabiliserAmajor destabilizing feature of the fiscal management in FY12.With (surprisingly) unforeseen subsidy demand rising, several measures taken:

rental capacity maintained unutilised, price adjustment of fuel and powerEven then, total requirement went up to about Tk. 40,000 crore (4.4% of GDP!)It is now decided that Tk. 10,000 crore subsidy will be transferred to FY13

this could result in an inbuilt instability in the budget for FY13Government is expecting significantly lower subsidy next yearp g g y y y

based on full‐fuel price adjustment expectation (ECF conditionality)? Whatabout its impact on inflation?



A l D l t P (ADP) t h i t tiAnnual Development Programme (ADP): poorest show in recent times

In stark contrast to the revenue expenditure, the spending on the ADP, the moreproductive part of public expenditure, remained dismally low during the firstthree quarters of FY12three quarters of FY12.

The ADP was revised downward by Tk. 5,000 crore to Tk. 41,000 crore.

During July‐April, only 55.4% of the RADP implemented

the lowest implementation rate in the tenure of the current government.More critically, aid utilisation rate has been even lower, at only 47.6%.

According to CPD estimates projected shortfall in overall ADP implementationAccording to CPD estimates, projected shortfall in overall ADP implementationthis year may amount to about Tk. 9,300 crore.

Implying 79.8% ADP (original) implementation; or 89.5% of the RADP.If the projection comes true the ADP/GDP ratio for this year will go down to 4 0If the projection comes true, the ADP/GDP ratio for this year will go down to 4.0%, a reversal of the improving trends observed after FY08.

At the same time, if the current financing composition of project aid and localresources remain it is estimated that this year’s ADP will end up with the lowestresources remain, it is estimated that this year s ADP will end up with the lowestaid utilisation rate since FY01 (61.7%).



Sorry state of the largest 20 projects taken by the current government

Project NameProject

Duration

Project cost (lakh Taka) Cumulative implementation up to

Nov FY12 (%)Total Aid

Construction of Padma Multipurpose Bridge (rev) 2009-2015 2050720 1624952 4%C i f 820MW ki l ( ) 2009 2012 695986 52%

Sorry state of the largest 20 projects taken by the current government

Construction of 820MW peaking power plant (rev) 2009-2012 695986 52%Priority based important rural infrastructure development project 2010-2013 469113 12%Bheramara Combined cycle plant (360MW) development 2010-2014 414048 322108 1%

Revitalisation of community health care initiatives in Bangladesh 2009-2014 267749 50000 0%First class materological observation centre at Panchagar, Bandarban, Khagrachori, C b 2009 2013 249696 0%Coxsbazar 2009-2013 249696 0%Development of physical infrastructure of selected non-government high schools 2011-2014 211480 0%Construction of Shiddhirganj 335MW peaking combined cycle power plant 2009-2015 207781 150213 0%

3G network technology establishment and extension of 2.5G network 2011-2012 190099 147700 0%

Construction of meter gauge line at Dohajari-Coxsbazar and Ramu-Gungdum 2010-2013 185235 118228 1%Feasibility study and railway construction from Khulna to Mongla port 2010-2013 172139 120231 0%

Bibiana-Kaliakoir 400KV and Fenchuganj-Bibiana 230KV transmission line 2010-2013 172085 70000 9%ekti bari, ekti khamar project (rev) 2009-2013 149292 15%South-West rural infrastructure development 2010-2013 148072 107113 4%Renovation of ailed roads under Roads and Highways (R&H) 2011-2012 141027 6%

Rural electrification upgradation project(Rajshahi, Rangpur, Khulna, Barisal division) 2010-2015 132218 99554 0%Dredger and related machinery procurement for Capital dredging of rivers of Bangladesh 2010-2012 130988 0%Construction of Shiddhirganj 2*120MW peaking power plant (2nd rev) 2009-2012 124363 7700 70%Asrayan-2 2010-2015 116918 0%


Important urban infrastructure development project 2011-2014 115099 1%Total for the 20 projects 6344108 2817799 10.3%


Largest 20 aided projects in the RADP of FY12: less than average performanceName of project

Implementation rate (% of RADP allocation)Total Taka Aid

Introduction of 3G network technology and expansion of 2.5G network 42.3 0.0 42.2Construction of Horipur 360 MW Combined Sycle Power Plant and

Largest 20 aided projects in the RADP of FY12: less than average performance

p yAssociated Sub-Station (ECGB Comonent) 38.6 22.7 43.3Conctruction of Padma Multipurpose Bridge 40.6 67.0 31.12nd Local Governance Support Project (LGSP-2) 0.0 0.0 0.0Shahjalal Fertilizer Project 0.0 0.0 0.0Construction of Sirajgonj 150 MW Gas Turbine Power Plant 68.0 41.0 96.4Maternal, Newnetal, Child and Adolescent Health Care 0.0 0.0 0.0Special Purpose Development Assistance 0.0 0.0 0.0Karnafuli Water Supply Project 41.1 118.8 22.9Second Rural Infrastructure Improvement Project (RIIP-2) 76.3 96.2 64.1Saidabad Water Treatment Plant Project 73.0 78.3 71.1Bangladesh Railway Sector Improvement Project (Construction of Double Line upto Tongi-Bhairab including Signalling Component) 46.2 22.1 59.4Secondary Education Quality Enhancement Project (SEAQP) 36.4 2.4 40.8Construction of Shiddergonj 2*120 MW Piking Power Plant 58.3 0.0 110.2Bangladesh Power Zone Distribution Project 42.4 26.7 44.1Procurement of Single Decker CNG Buses 0.0 0.0 0.0School Feeding Programme in Poverty Affected Area 52.5 22.3 75.7Project for Infrastructure Development and Secondary City Management 79.5 57.1 82.8Clinical Contraception Services Delivery 0.0 0.0 0.0Primary Education Development Project-3 0.0 0.0 0.0Average for 20 projects 34.0 29.3 35.7Overall RADP Jul-Mar 50.3 55.7 40.9Share of 20 in the total RADP of FY12 20.6%



B d t D fi it i d t d f f i fi iBudget Deficit: in desperate need of foreign financing

The low aid utilisation in the ADP had severe repercussions for the bank‐borrowing needs of the government to finance the deficit.

Latest available information shows that as of May 21, total borrowing by thegovernment from the banking system stood at Tk. 18,452 crore; hovering aroundthe original target for the entire year.

The government later revised the target to Tk. 27,900 crore for FY12.

Utilisation of the foreign resources accumulated in the pipeline (USD14 bln) hasbecome an urgent necessity; a reflection of Bangladesh’s lack of ability to use

k d d f i id d jresources earmarked under foreign aided projects.

The second area of intervention is the non‐bank sources of financing.

the government is planning to introduce five new savings schemes whichg p g gtargeted towards elderly people, farmers, students and persons with disabilities.

It is to be borne in mind that more than the lack of government savings schemes,it is the issue of competitiveness of these against commercial deposit ratesp g poffered by private banks that actually matters more. This is an issue that needscareful considerations.


2.3. MONETARY POLICY: HURTING ECONOMIC GROWTH

Inflationary Pressure Continues: Non‐Food Inflation in the Driverʹs SeatInflationary Pressure Continues: Non‐Food Inflation in the Driver s SeatAnnual average general inflation 10.9% in April FY12 (8.5% in April 2011)Food inflation 11.4% in April FY12 (11.0% in April 2011)Non food inflation 10 0% in April FY12 (4 2% in April 2011)Non‐food inflation 10.0% in April FY12 (4.2% in April 2011)A decomposition of inflation figures as on April 2011 and 2012 reveals –Of incremental inflation i.e. 2.4percentage points – 2 0

SOURCES OF ANNUAL AVERAGE INFLATION percentage points – 2.0percentage points (or 82.7%) wasoriginated from non‐foodclothing & footwear (0.6g (percentage points),gross rent, fuel & lighting (0.6percentage points),transport and communication(0.2 percentage points)

Indeed, adjustment of administered prices of petroleum products and


Indeed, adjustment of administered prices of petroleum products andelectricity, depreciation of Taka and increase in cost of production made amark on price level of non‐food items.


I fl ti E t ti t C tiInflationary Expectation to ContinueCost‐push and structural factor overwhelmingly underpin the incrementalinflation in recent timesAmong the cost push factors a number of issues were identified in theAmong the cost‐push factors, a number of issues were identified in thepresent context including upward adjustment of administered petroleum andelectricity prices, increase in cost of production including wage rates, anddepreciation of exchange rateIt is also expected that the administered prices of key intermediate products(electricity, petroleum products, natural gas, fertiliser etc.) may be adjustedfurtherS i i i i i l i di h h f d i illStagnation in investment situation also indicates that the cost of production willnot going to decline anytime soonInflationary expectation remains quite high

Contractionary Monetary Policy pursued with Limited Success

In the recent MPS, Bangladesh Bank has reduced growth of credit flow to privatesector and expanded government borrowing targets



GROWTH OF CREDIT AND MONEY SUPPLY Until December 2011, private sector credit, pgrowth was on a declining pathWhereas government credit wasdemonstrating incremental growthDuring the third quarter of FY12,government managed to check its borrowingfrom banking system ‐ resulted in reducinggrowth of government borrowing

Concurrently, growth rate of credit to other public sector fell drasticallyFalling growth of private sector credit somewhat stabilized at around 19.0‐19.5%Overall money supply growth came close to its target at the end of March FY12

growth of government borrowing.

Overall money supply growth came close to its target at the end of March FY12

Monetary contraction found to be notff ti i t lli ll i fl ti

PRIVATE SECTOR CREDIT GROWTH AND INFLATION

effective in controlling overall inflation aswell as its non‐food component.Non‐food inflation continued to soar at atime when credit growth to private sector


time when credit growth to private sectorwas on decline


M t P li St f FY13 B ld St W t dMonetary Policy Stance for FY13: Bold Steps WarrantedIt appears that throughout FY12 the central bank’s monetary policy prioritisedinflation control over growth acceleration and lost the battle in both fronts.In reality the framework of forthcoming monetary policy from the central willIn reality, the framework of forthcoming monetary policy from the central willlargely depend on fiscal policyNo doubt, without restraining government’s bank borrowing, discipline inthe monetary sector will be difficult to attaint e o eta y secto wi be di icu t to attaiAccording to IMF country report, the projections for private sector credit andmoney supply growths are 14.9% and 15.4% respectivelyThe question is how these ‘projections’ are going to guide the upcoming MPS.q p j g g g p gBangladesh Bank will need to consider the fact that GDP growth projectionof IMF for FY13 is also lower at 6.2%.This target is even lower compared to the provisional figure for FY12 and about1.0 percentage point lower than the target of the government for FY13Hence, Bangladesh Bank is posed with a difficult choice between following atighter monetary policy and ensuring credit to the private sector to achievethe targeted growth


the targeted growthAn independent central bank will not shy away from choosing the latter

2.4 BALANCE OF PAYMENT: NOT OUT OF DANGER

A th t d i t th l t t f FY2011 12 ll thAs the economy entered into the last quarter of FY2011‐12, all themacroeconomic correlates associated with BoP were moving downwards.

Export Earnings: Short of Target

At the end of first ten months attaining export growth target appears to beimpossible

Of the exported products knit‐RMG has underperformed significantly

Export to the US market has been rather weak while since January 2012 exportearnings from the EU also had started to decline

Export earnings from non‐traditional markets were impressive but inadequate toExport earnings from non traditional markets were impressive but inadequate tosustain overall export growth

Moreover, slowdown in private investment may also adversely affect export‐oriented industries in the coming monthsg

The gloomy global outlook, along with the possibility of prolonged crisis inthe Eurozone and underperformance in the US market do not promise anyquick recovery from the depressed ongoing realityq y p g g y

Indeed, export growth has fallen into negative terrain in Mar‐Apr



It i diffi lt t l i h t l d t h f t ti f f tIt is difficult to explain what leads to such a frustrating performance of exportFirst, attaining a higher growth on a high benchmark (FY11) became difficultSecond, scope for using unused capacity (if any) may also have become limitedin FY12 due to insignificant improvement in investment situationin FY12 due to insignificant improvement in investment situationAs a result it has been difficult for the exporters in FY12 to expand their capacityto supply more

Third pre ious fiscal year’s export growth may ha e been largely alue dri enThird, previous fiscal year’s export growth may have been largely value‐drivenunderpinned by rising unit prices as a result of significant rise in prices of rawmaterialsThe average cotton price during Jul‐Apr FY12 declined by (‐) 29.8%The average cotton price during Jul Apr FY12 declined by ( ) 29.8%

This should also be reflected in international prices of RMG products

Thus, in value terms the export may have experienced a setback, but in volumeterms the decline in growth may not have been that significantterms the decline in growth may not have been that significant

Fourth, the performance of export sector is tied with the global developmentsand grim global outlook affected the export orders



I t P t D d f P t l H ld th KImport Payments: Demand for Petroleum Holds the Key

Imports did not see a significant reduction, leading to heightened pressure onthe BOP position

Growth of import payments originated mainly from the higher demand forimported petroleum as about one‐third of the incremental import paymentscame from import of these products

Import of petroleum products registered a whopping 39.2% growth in Jul‐Mar

In contrast, other commodities registered only 8.5% growth

Regrettably import payments for capital machinery declined by (‐) 20.0% –Regrettably import payments for capital machinery declined by ( ) 20.0%indicating stagnation in investment situation in FY12

Indeed, in the backdrop of import pressure (along with subsidy requirement),the government is not utilising fully the capacity of liquid fuel run quickg g y p y q qrental power plants

It may be anticipated that the high growth of petroleum import will bemaintained, as growth of L/Cs opening for import of the petroleum stood atg p g p p75.9% during the first three quarters of FY12.



Balance of Payments: Concerns RemainBalance of Payments: Concerns RemainIn the face of a widening trade balance, remittance inflow, inspite of thecommendable growth, could not keep pace with the widening trade deficitDespite some improvements, foreign aid inflow remained below parp p , g pNet foreign aid inflow during July‐April FY12 (USD 1.0 billion) was USD 194million higher than the disbursement of July‐April FY11 ‐ but USD 459 millionless than the corresponding period of FY10Both the BoP and the value of BDT against foreign currencies remain on shakygroundThe government took IMF‐ECF support which came against a long list ofstru tural ben hmarksstructural benchmarksIt is however unclear whether the government will be able to receive all theplanned disbursements from IMF by fulfilling all the conditionalitiesIn the present context one may reiterate that the government is far better off byIn the present context, one may reiterate that the government is far better off byutilising the existing foreign aid awaiting in the pipeline.Without support in the form of higher net inflow of foreign aid, BoP willcontinue to remain vulnerable in the near termWith looming uncertainties in the developed world, external sector balances willlikely be under some pressure over the next months


INVESTMENTINVESTMENT SITUATION

3. INVESTMENT SITUATION

Widening the gapWidening the gap

Acceleration of investment has been identified as one of the major strategies forattaining targeted economic growth during the SFYP period (FY11‐15).

So far the performance was unsatisfactory

● This section seeks to address the following issues:

● Is aggregate investment in Bangladesh stagnating?

● Is the current trend in public investment failing to ‘crowd in’ privateinvestment significantly?g y

● Is there any liquidity crisis in the commercial banks from the perspective ofinvestment financing? Is public investment in recent years ‘crowding out’private investment?private investment?

● Are there other factors that explain the slowing down of aggregateinvestment particularly private investment?

31Analytical Review of Bangladesh’s Macroeconomic Performance in FY2011-12: Third Reading


Growth‐investment linkage‐debates over public and private investmentg p pPublic investment (ADP/RADP) does not show any significant rise in real term

Yearly growth of 6.3% between FY09 and FY12 (inflation adjusted)It shrunk during FY06 to FY09

Size of ADP in terms of actual expenditure did not increase notwithstanding theclaims by the policymakersLocal sources are increasingly used for financing ADP particularly through bankbborrowing

93% of total local finance in Jul‐Mar FY12 by bank borrowing (74% in FY09)

6774 70

93

79708090

100 Net borrowing of the Govt. from the banking system 1/ Net non-bank borrowing of the Govt. from the public 2/

Share of banking and non-banking sectors in government borrowing

35

21

52

67

53

7065

48

33

47

26 30 32

203040506070

32

137

010

2001

-02

2003

-04

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2010

-11

R

Jul.-

Mar

., 2

010-

11R

Jul.-

Mar

., 2

011-

12P

Analytical Review of Bangladesh’s Macroeconomic Performance in FY2011-12: Third Reading


Fluctuation of the excess liquidity in banks cannot always be explained byadditional public borrowing.

A number of other issues related to the financial market may be partlyibl f h t f dit fl t th i t tresponsible for shortages of credit flow to the private sector.

Analysis of VECM by CPD shows that public borrowing may not havesignificant ‘crowd‐out’ effect on private investment in Bangladesh.

d f d d f l hMajumder (2007) found a negative and significant relationship

CPD’s analysis found positive but insignificant relationship

EXCESS LIQUIDITY

100001200014000160001800020000 State Owned Bank Private Bank

Private Bank(Islamic) Foreign BankSpecialized Bank

EXCESS LIQUIDITY

02000400060008000

10000



Examining the ‘complementary’ role of public investmentExamining the complementary role of public investment

Present government has put special focus on a few selected sectors

Power, transport and rural development (45% of the RADP in FY2012).S f h li i h l d i h f ‘ diSome of the qualitative aspects have led to question on the extent of ‘crowdingin’ effect of public investment

Effective electricity generation was only about 50% of the installed capacityFiscal burden and pressure on BoPLow level of project implementation (55% during July‐April, 2012)

An exercise of VAR model by CPD found insignificant crowd‐in effect of publici t t i t i t tinvestment on private investment

Slowing down of private investment

Private investment has been slowing down in FY12 (4.3% against 6.9% in FY11)g g

Disbursement of agricultural credit decelerated in July‐March, FY12 (6.2%vis‐à‐vis 16.6%)Industrial term loan disbursement was mere 2.3% higher during the sameg gperiodFDI flow declined by 3.5% during July‐March, FY12



Slowing down of private investmentSlowing down of private investment

Outward transfer of foreign‐owned companies in recent years was high

Net inward FDI flow will be negative (‐ US$51 million) in July‐March, 2012Lack of reinvestment interest of the existing foreign‐owned companies

The capital market is in a volatile state since its collapse in December, 2010

Numerous initiatives undertaken were by and large unable to restorey gdiscipline and stability

593700

FDI inflow and Outward Transfer: Net Result

288

571 551565 553593

300

400

500

600

18 -42

200

-100

0

100

200

Jul-Mar., 2010* Jul-Mar., 2011* Jul.-Mar., 2012*

35

-277-400

-300

-200 Foreign direct investment Outward transfers FDI inflow after deducting outward transfers



Less improvement in business enabling Top Problematic FactorsLess improvement in business enablingenvironment

Adversities in business enablingenvironment

Problematic factors2012

WeightRank

Top Problematic Factors

Inadequate supply of electricity andgas and poor physical infrastructureHigh inflation and high lending rates

Inadequate supply of infrastructure 20.6 1

Corruption 17.6 2

Access to finance 10.0 3

Inefficient government bureaucracy 9 4 4ig i a io a ig e i g a eof commercial banksDevaluation of local currency againstUS$

Inefficient government bureaucracy 9.4 4

Policy instability 8.5 5

Inflation 8.4 6

Government instability/coups 5.7 7National, regional and district levelhighways/roads were not in goodcondition

Gove e t i stabi ity/coups 5.

Foreign currency regulations 4.2 8

Tax rates 4.0 9

Inadequately educated workforce 3.9 10Average roughness index increasedin FY10 compared to the previousyears

‘Access to finance’ is one of the most

Complexity of tax regulations 2.3 11Poor work ethic in national labour force 1.7 12

Crime and theft 1.7 13Access to finance is one of the mostimportant problematic factors that inhibitbusiness ‐emerged from the EOS 2012

36

Restrictive labour regulations 1.1 14

Poor public health 0.8 15



SummarySummaryInvestment targets set forth in the Sixth Five Year Plan faced a major hurdleOver the years, financing of the ADP through bank borrowing has been on therise.

Public borrowing may not have significant `crowd‐outʹ effect on privateinvestment in Bangladesh. But there are indications for crowd‐out effectSimilarly, public investment have insignificant crowd‐in effect on publicinvestmentinvestment.

Adversities in business enabling environment are found to be responsible forslowing down of private investment.The Central Bank should revisit its monetary policy

To ensure that the interest of the private sector with respect to access to creditis not undermined

A strong coordination is requiredBetween fiscal measures, budgetary targets with that of benchmarks set in theBetween fiscal measures, budgetary targets with that of benchmarks set in thefinancial sector

Government should strongly assess the quality of public sector projectsAppropriate and timely measures on the part of the regulatory authorities(B l d h B k SEC d Mi i t f Fi ) d d

37

(Bangladesh Bank, SEC and Ministry of Finance) are neededTo restore discipline in the financial sector


ON CROP PRODUCTIONON CROP PRODUCTIONAND FOOD SECURITY

4. ON CROP PRODUCTION AND FOOD SECURITY

The issue of long term food security has emerged as a concern for thepolicymakers as to whether the growth record could be sustained in future andwhether Bangladesh has reached a technological frontiers.

A d ti i d b l 0 05% l ith 1 1% d li i t fAman production increased by only 0.05% along with 1.1% declining rate ofcultivable land in FY2012. Thanks to the productivity growth of about 1.22 percent.

The early production estimates of Boro shows a growth of about 0 3%The early production estimates of Boro shows a growth of about 0.3%.

8

9

35000

40000

Boro Aman aus growth rateDuring July‐March FY2012, totalimport of foodgrains was 44 per cent

4

5

6

7

20000

25000

30000

Growth (%

)

od

uct

ion

(TM

T)

import of foodgrains was 44 per centlower than the compared months ofFY2011.

According to a CPD

0

1

2

3

0

5000

10000

15000Proestimation, in FY 2012 a total

amount of 5.0 MMT rice wasavailable as production surpluswhich was 5 7 MMT in FY 2011


002008/09 2009/10 2010/11 2011/12

which was 5.7 MMT in FY 2011.Source: FPMU

F f di i i i hi b f


Farmers may face disincentives in this year because of‐Low coverage and delayed start of government procurementRelatively low market price in the post harvest season in FY2012No additional storage capacity over the last three yearsNo a i io a o age apa i y o e e a ee yea

Boro production cost was 18% higher this seasoncompared to the last year due to upward revision of prices for fertilizer, diesel andelectricity and increasing labour costy g

The procurement prices of rice (Tk. 28/kg) and paddy (Tk. 8/kg) are justenough to meet the cost of production.

At t th f h t i l f Tk d 150At present on an average the farmers have to incur a loss of Tk. around 150per maund of paddy

Rice price in the international market is showing a declining trend

Due to good harvest and large carry‐over stocks in major importing countries,world rice price is expected to decline further in the coming days.

In Bangladesh, dependence on import from the international market is likelyIn Bangladesh, dependence on import from the international market is likelyto be lower this year for owing to a good Boro harvest and a comfortable level ofstock.



In the budget for FY12 about Tk. 4,500 crore was allocated on account ofagriculture sector’s subsidy.

However, the requirement increased to about Tk. 10,000 crore of which Tk.6,500 crore will be accommodated in the revised budget for FY12 and the rest(Tk. 3,500 crore) will be deferred to the next year’s budget.

If as reported Tk. 6,000 crore (plus Tk. 3,500 crore) will be allocated asagriculture subsidy for FY13.

This would imply that the government in due course has to either enhance theallocation or undertake radical price adjustments of inputs, in case it does not

t t b l th FY12 b h kwant to go below the FY12 benchmark.

To ensure proper distributional justice and allocative efficiency, it is importantto revise the beneficiary list of the farmers on a regular basis.

Initiatives with regard to rice procurement, including fixation of price, willneed to be taken in a timely manner.


EMPLOYMENTEMPLOYMENT GENERATION

5. EMPLOYMENT GENERATION

E l t i i B l d hEmployment scenario in BangladeshWith a reasonably high GDP growth Bangladesh economy has gradually movedfrom an agrarian to a more industry and services sector based economy.

h h h b d b d lHowever, the growth has not been accompanied by adequate employmentcreation and the number of unemployed people has increased over the years.One of the encouraging developments in the employment scenario of theeconomy has been the increase of female participation in the labour forceeconomy has been the increase of female participation in the labour force.

Between 2000 and 2010, female labour force doubled, against a 39.3% growthin the overall labour force.

Employment targets in the strategic planning documentsEmployment targets in the strategic planning documentsThe government in its manifesto targeted to reduce unemployment by more than50 per cent by 2021, with accelerated structural shift in the economy.The SFYP however remains less optimistic pessimistic in its targets:The SFYP, however, remains less optimistic pessimistic in its targets:

unemployment rate is not going to decline compared to FY10 until the verylast year of the plan period (only marginally by 0.3 per cent).total number of unemployed people is projected to increase in the next fewtotal number of unemployed people is projected to increase in the next fewyears (till FY14) and is expected to return to the FY10 level in FY15.



E l t ti d i th l t th d P t f SFYP t tEmployment creation during the last three years and Prospects for SFYP targetsRecently it has been claimed by the government that about 6.8 million jobs havebeen created during the last three years.In the absence of annual labour force (employment) survey, it is difficult to discussIn the absence of annual labour force (employment) survey, it is difficult to discussthe incremental changes that have been in the employment situation over the lastthree years.Based on the sectoral elasticity approach CPD has estimated that during the lastthree years (end of FY09 to FY12) about 5.8 million employments have beencreated i.e. an annual average of 1.9 million.one million less than that of the official claim

Based on CPD estimates if the economic growth projections of the SFYPBased on CPD estimates, if the economic growth projections of the SFYPmaterialise, by FY15 the traditional employment concerns will be eliminated, butunderemployment will continue to prevail as a major concern.

ESTIMATED EMPLOYMENT DURING THE LAST THREE YEARSFY10 FY11 FY12

Labour force 56.7 58.5 60.3New employment 1.9 2.1 1.8Total employment 54.1 56.2 58.0


Unemployment 2.6 2.3 2.3Unemployment rate 4.6 3.9 3.8CPD estimate based on Labor Force Surveys (various years).


W f dWay forwardWith three years left for the implementation of the SFYP, any significant change inthe composition of the GDP may not be realistic.However, the government may try to achieve the aggregate growth projectionHowever, the government may try to achieve the aggregate growth projectionwhich is a difficult, but not impossible task, given the performance thatBangladesh economy was able to demonstrate over the recent past.Two other important areas of interventions:Employment generating safety net programmes (SNPs)

For example, in FY12 about 8.6 million person‐months of employmentgenerated through the Employment Generation Program for the Poorest(EGPP) the Food for Work programme and the National Service programme(EGPP), the Food for Work programme and the National Service programme.Challenge is to generate additional employment opportunities through SNPs

Overseas employmentDuring FY06 to FY10 (between the last two LFSs), 2.9 million people wentg ( ), p pabroad from Bangladesh for jobs; equivalent to about 40 per cent of the newentrants to the labour market during this period.Apart from strengthening diplomatic relations, challenge lies in reducing costf i ti d h i kill th h t i i t t fof migration and enhancing skills through training programmes to cater for

the particular needs of the overseas markets.


REVIEW OF POLICY ANDREVIEW OF POLICY AND REFORM INITIATIVES

6. REVIEW OF POLICY AND REFORM INITIATIVES

IntroductionIntroduction

Need for undertaking reforms and policy initiatives: a generally accepted wisdom

for developing countriesp g

The Caretaker Government (2007‐2008), as part of the broader development

strategy, introduced a series of reform programmes in some key areas of

governance and development (ease of doing business; land administration)

Regulatory Reforms Commission, Bangladesh Better Business Forum, etc

The present government expressed its keen interest to pursue policy initiativesThe present government expressed its keen interest to pursue policy initiatives

and reforms with a view to addressing bottlenecks and improving the quality of

management of the economy. This got reflected in various documents: the Awami

League Election Manifesto and the Rupokolpo 2021; three budget speeches;

Perspective Plan; Sixth Five Year Plan (SFYP)


I t d ti


Introduction

Government’s reforms and policy initiatives have been grouped under threecategories

• economy‐wide policies,

• economic governance, and,

d l d i i i• development administration;

A tracer study was undertaken with regard to the aforementioned initiatives witha view to:

• To make an assessment of the progress made so far with regard to therelevant policies and laws/acts/regulations/ordinance etc (preparation ofdrafts, enactment of laws by the parliament)

• To comment on the state of follow‐up actions to pursue and implement thepolicy initiatives in the aforesaid areas.



Policy and Reform Initiatives

Economy‐Wide PoliciesConsolidation of Fiscal Management (e.g. VAT Act)Introducing E‐Governance (e.g. National Information and CommunicationTechnology Policy 2009)L d Ad i i i d F d S i ( N i l A i l P li )Land Administration and Food Security (e.g. National Agriculture Policy)Resource Mobilisation through PPP (e.g. PPP Policy and Guidelines)Managing the Industrialisation Process (e.g. Industrial Policy 2010‐2014)

l k E fCapital Market Management (e.g. SEC reforms)Developing the Energy Sector (e.g. Power and Energy Fast Supply (SpecialProvision) Law, 2010)Fi i l S t M t ( A ti M L d i L 2012)Financial Sector Management (e.g. Anti‐Money Laundering Law 2012)


P li d R f I iti ti


Policy and Reform Initiatives

Economic governance

Strengthening the Anti‐Corruption Commission (e.g. Proposal to put in place ACC Act)Institutions to Promote Reforms (e.g. Independent Vision 2021 Council was proposed to be set up)proposed to be set up)

Development administration

Raising Efficacy of Public Administration (e.g. Proposed Civil Service Act)Decentralisation of Public Administration (e.g. Administrative devolution to local government bodies

Although some progress have been made in following up with the proposed initiatives the list of unfinished agendas remains long


initiatives, the list of unfinished agendas remains long.


Review of the Policy and Reform Initiatives

Failure to address some key areas including reforms and policy changes in

public expenditure, the state‐owned enterprises, civil service and

administration, land administration, subsidy management

Delay in finalising the coal policy

Slow progress in the areas of PPP and MTBF

Real decentralisation and devolution of power have not taken place

Police Reform Act is yet to be finalised

Lack of preparatory framework for the effectiveness of the VAT Law

Financial Reporting Act (FRA) is yet to be draftedp g ( ) y





Enactment of appropriate reforms in civil service and other areas have faced

resistance from vested groups bent on upholding narrow coterie interestsg p p g

Absence of wide‐ranging stakeholders’ consultation and, in some instances, a

lack of the needed drafting capacities in place, has led to a need for repeatedg p p p

amendments of the law

Performance Based Evaluation System (PBES) for various Ministries is yet to be

introduced in a comprehensive manner

Institutions to promote economic reforms and maintain its momentum are

missing (Ombudsman; Pay, Services and Regulatory Reforms Commission

(PSRRC); Perspective Plan Management Office (PPMO); an Independent Vision

2021 C il)2021 Council)



Conclusion

Inability to undertake the needed reforms in some of the key areas

Slow progress in cases where reforms were initiated

Weakness in undertaking associated measures to make the reforms more

effective

Weak preparatory work in view of proposed reforms

Lack of oversight for ensuring effective follow‐up efforts

Heightened need for Bangladesh’s policymakers to take a serious review of the

reform measures and policy initiatives and energetically act on the unfinished

agendas


OUTLOOK FOR FY2013

OUTLOOK FOR FY2013

Alth h th h l k d 6 3 t GDP th ( i i lAlthough the economy has clocked a 6.3 per cent GDP growth (provisionalestimate) in FY12, the foregoing analysis indicates that, from economicperspective, FY12 had been the weakest of the three years of the presentgovernment.g

This weakness manifested itself in a major way in continued stagnation, if notfall in the aggregate investment rate including both its components, viz. publicand private.p

Record low level of implementation of ADP as well as utilisation of foreign aidhas aggravated the situation further.

Indeed the investment targets of the SFYP are increasingly moving out of reachIndeed, the investment targets of the SFYP are increasingly moving out of reach.

Thus, the single most important objective for the next fiscal year should berevamping the investment situation with a view to attain the targeted GDPgrowth rate.growth rate.


OUTLOOK FOR FY2013

L i t h b tl ibl f f thLax macroeconomic management has been greatly responsible for many of therecent economic woes.

This relates particularly to the shabby public resource management.Notwithstanding the steady above the trend performance of the NBR theNotwithstanding the steady above the trend performance of the NBR, thegovernment could not tap adequately the non‐NBR tax and non‐tax sources foradditional revenue.

More importantly increasing inability to effectively access the committedMore importantly, increasing inability to effectively access the committedforeign aid has given rise to a number of serious tensions in financingdevelopment expenditures.

Consequently the government has to greatly lean on the banking sector forConsequently, the government has to greatly lean on the banking sector foradditional resources, particularly to meet the unplanned subsidy demand.

Accordingly, restoring fiscal discipline would be another major challenge inFY13.FY13.


OUTLOOK FOR FY2013

O f th j f k f i t i FY12One of the major sources of weaknesses of macroeconomic management in FY12related to the energy sector.

Inadequate understanding about the implications of massive use of rental powerplants not only created serious destabilisation in fiscal as well as balance ofplants not only created serious destabilisation in fiscal as well as balance ofpayment management, it also defeated the very purpose of the initiative, i.e.quick and steady supply of electricity.

One definitely needs to revisit this initiative in FY13 so as to limit its negativeOne definitely needs to revisit this initiative in FY13 so as to limit its negativespillovers on government exchequer, and at the same time, rigorously pursueimplementation of the big power generation projects along with attempts tobring more gas supply on stream.

However, it seems the government has lost the opportunity to finalise the CoalPolicy in its present tenure.


OUTLOOK FOR FY2013

B d f i Tk 10 000 f b id t t th i b d t dBy deferring Tk. 10,000 crores of subsidy payment to the upcoming budget andallocating unsustainably low amount for subsidy and transfer, the governmenthas created a built‐in destabiliser in the budgetary management. Prudentmanagement of subsidy will continue to be a vexing issue in the upcoming fiscalg y g p gyear.

Controlling the government’s borrowing demand will be the central bank’s oneof the important preoccupations.p p p

What would be also important for the Bangladesh Bank to create adequate spacefor the private sector’s access to credit so as to meet the revealed investmentdemand.

One will have to wait for the announcement of the next MPS to understandwhether the central bank will seek to undermine economic growth prospect inits bid to control inflation through monetary contraction.


OUTLOOK FOR FY2013

F ll i di ti it th t i fl ti ill t i i thFrom all indications, it seems that inflationary pressure will sustain in theupcoming fiscal year.

It is to be seen whether the successive bumper productions of foodgrains alongwith high level of stock holding is going to bring down the level of foodwith high level of stock holding is going to bring down the level of foodinflation.

The fall in global foodgrain price is supposed to facilitate this process.

One the other hand, “cost push” brought about by the expected upwardrevisions of energy products will possibly enhance the non‐food inflation.

The government will need to energise its supply‐side interventions (beyondf d k l f f d i ) bl isafety net programme and open market sales of foodgrains) to enable investment

and create more jobs to augment purchasing power of the consumers.

One of major tasks for FY13 will strengthening the BoP situation. Along witht li i th i t d d th t ill h t h itstreamlining the import demand, the government will have to enhance itsforeign exchange receipts by getting more export receipts, remittance flow, FDIand most importantly, disbursement of foreign aid.

Maintaining a stable exchange rate will be a corollary of this exerciseMaintaining a stable exchange rate will be a corollary of this exercise.


OUTLOOK FOR FY2013

O i i t i d th t th t l t it ti t th tOur review maintained that the current employment situation at the aggregatelevel is not so disconcerting as the investment scenario.

However, the need to generate decent jobs with reasonable wages, particularlyfor the youth remains another yet to fulfil promise of the present governmentfor the youth, remains another yet‐to‐fulfil promise of the present government.

Arguably, this has to do more than sending people abroad and providingtemporary employment through safety net programmes. Indeed, this has to domore with the rejuvenation of the investment flow as mentioned earliermore with the rejuvenation of the investment flow, as mentioned earlier.

The wide ranging reform initiatives espoused by the ruling party and thegovernment are yet to provide necessary support towards accelerating theinclusive growth in the economyinclusive growth in the economy.

As the government approaches its finishing line, it has to concentrate on anumber of some quick‐yielding and/or demonstratively visible reforminitiatives.initiatives.


OUTLOOK FOR FY2013

I fi th t i it f th f t h t th h dIn fine, the government in its fourth year of tenure has to, on the one hand,consolidate its achievement and, on the other, aspire for attaining new heightsduring its last full fiscal year of the tenure.

To that end it will have to target to keep the economy stable as it strives forTo that end, it will have to target to keep the economy stable as it strives forhigher level of growth.

Admittedly, peaceful and predictable socio‐political environment can provideone of the most critical prerequisites for performing such featone of the most critical prerequisites for performing such feat.


The full report is available here:The full report is available here:

http://www.cpd.org.bd/html/IRBD_3_FY12.asp


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