BD needs strong private sector for diversified export growth: IFC
The IFC, the private sector window of the World Bank (WB) has said Bangladesh needs to embark on a new round of reforms to strengthen and modernize the private sector in a bid to unleash the country's potential to achieve export diversified led growth and job creation.
The IFC's report published on Wednesday on 'Bangladesh Country Private Sector Diagnostic (CPSD) study says this country has one of the biggest development success stories in recent decades and it's now time to switch gears to achieve transform into an upper middle-income country soon.
"Bangladesh had a positive GDP growth despite adverse impact of the COVID-19 pandemic and the only country in South Asia which did not experience a recession and now working on Eighth Five Year Plan.
Hit hard by the pandemic and now recovering it need reforms to become even more compelling. IFC Vice President for Asia and Pacific Alfonso Garcia Mora said the private sector, which accounts for more than 70 percent of all investment in Bangladesh need to play an important role in spurring the recovery. It is essential so that the country can grow, increase export and create quality jobs.
The report praised Bangladesh garment sector success which alone created more than 4 million jobs, along with the strong inflow of remittances is the country's key growth engines with strong growth even during the pandemic outbreak.
For a more resilient, inclusive and sustainable growth, Bangladesh now needs to diversify its export basket and develop a robust and sophisticated private sector, relevant in the post-COVID-19 recovery phase when public resources will be needed most in the social sectors," said Mercy Tembon, World Bank's Country Director for Bangladesh and Bhutan.
The report pointed out key priority areas for reform which include creating a favorable trade and investment environment for domestic and foreign investors, modernizing and expanding the financial sector and removing impediments for developing infrastructure.
Transport and logistics, energy, financial services, light manufacturing, agribusiness, healthcare and pharmaceuticals sectors are among those with the strongest potential for private investment that could play a significant role in boosting the country's economic growth.
The report said Bangladesh government Perspective Plan 2021-41 aims at achieving upper-middle-income country status by 2031, along with full employment and elimination of extreme poverty. The report said challenges still persist with more than 40 million people still below poverty. Nearly half the population is still vulnerable to falling back into poverty.