Government eyes Tk77 trillion investment to take GDP growth to 8.51%

The government intends to attract over Tk77 trillion in investments to implement the eighth five-year plan, aimed at increasing the gross domestic product (GDP) growth to 8.51 percent.

The General Economic Division under the Planning Commission is going to set a target to draw Tk19 trillion of the amount from the public sector and over Tk58 trillion from the private sector.

If successfully implemented, the plan would guarantee 10.5 million employment opportunities – 7.5 million in Bangladesh and the remaining 3 million abroad.

The plan would also bring down moderate poverty rate to 12.17 percent by the 2024-25 fiscal year, from the existing 20.5 percent. Extreme poverty is expected to drop to 5.28 percent by FY25 from 10.5 percent recorded in the previous fiscal year.

Dr Shamsul Alam, member of the General Economic Division, on Wednesday presented a paper titled "Effective Partnership for Implementation of 8th Five Year Plan towards Achieving SDGs" at a session of the two-day Bangladesh Development Forum held at the Bangabandhu International Conference Centre, Dhaka. Representatives of several development partners attended the session.

Dr Shamsul sought cooperation from development partners in achieving Sustainable Development Goals (SDGs) by providing foreign aid and investment, especially in the health and education sectors, to build a strong human capital.

"Although the role of development partners has been shrinking over time, they are still considered major players as far as socioeconomic development is concerned."

He asked the partners to continue and enhance support to policy reforms and their implementation.

Shamsul also urged them to strengthen their roles in localising SDGs and realigning their national strategies with enhanced fund provisions.

Dr Shamsul Alam called upon the partners to reinforce their action for building resilience against climate change and disaster and for helping implement the Bangladesh Delta Plan 2100.

He also asked the partners to continue their support towards ensuring duty and quota-free market access to both developed and developing countries.

Achieving SDGs requires an effective partnership between the governments, private sectors, development partners, NGOs, academicians and professional bodies. SDG17 articulates the need for multi-stakeholder partnership for mobilising resources, transferring technology, sharing knowledge to fully materialise the agenda 2030.

Bangladesh integrated well the Agenda 2030 into the national development plan at the early stage because the period for achieving SDGs coincided with the starting period of the 7th five year plan, Shamsul informed.

He said the government is now set to drive the economy to a new level by investing heavily on mega infrastructure and establishing economic zones for foreign investors. 

Megaprojects, including the construction of the Padma Bridge, Dhaka Mass Transit, Payra Deep Sea Port, Rooppur Nuclear Power Plant, Matarbari power plant and the Chattogram-Cox's Bazar Rail Link are expected to boost the economy by at least 2 percent.

"Bangladesh now looks into moving forward beyond the SDGs, which is 2041, marked as the platinum jubilee of her independence," he said.

The first phase of implementation of Vision 2041 will be made through the 8th five year plan.

The plan will broadly take into account two things – firstly, graduation from the Least Developed Country status by 2024 and secondly, achieving Agenda 2030.

The major vision and objectives of the eighth five-year plan include building infrastructure similar to that of an upper-middle-income economy, reducing moderate poverty to 12.17 percent and extreme poverty to 5.28 percent, graduating from LDC to a developing country status by 2024 and achieving major SDG targets.

Dr Shamsul said the Gross National Savings would increase to 36.2 percent of the GDP by fiscal year 2024-25, which was 29.5 percent in the last fiscal year. Investment would reach to 37.2 percent of the GDP – 28.2 percent from the private sector and 9 percent from the public sector.

According to the Bangladesh Bureau of Statistics (BBS), investment reached 31.57 percent of the GDP in the last fiscal year, of which 8.03 percent came from public investment and 23.54 percent from private sector investment.

He also declared a target to achieve the foreign direct investment (FDI) equivalent to 2 percent of the GDP by fiscal year FY25, which is now close to 1 percent of the GDP.

Identifying lower revenue generation as an obstacle to the projected higher growth target, Dr Shamsul Alam said, "A 40 percent investment to GDP ratio will require massive drives to enhance the revenue base. During the seventh five-year plan, the progress has been below satisfactory."

More generally, the investment in health, education and social protection largely rely upon the size of the government revenue.

He set a target to enhance revenue generation to 16.31 percent of the GDP by fiscal year 2024-25, which is only 10.60 percent of the GDP in the current fiscal year.

"Bangladesh has had tremendous success in reducing poverty. Now it is time to look more at the micro-level."

The government intends to focus on a multidimensional poverty reduction measure which has become a trend across developing countries.

The eighth plan will continue the renewed emphasis on minimising regional disparity through not just social safety net but scaling up investment in health, education, physical infrastructure, and establishing economic zones in backward regions.

Tajul Islam, minister for Local Government and Rural Development and Cooperative, said Bangladesh was struggling against poverty and hunger after independence.

"But the country has achieved a tremendous development over the last decade and now wants to achieve the status of a developed country," he added.

Mentioning that the process will not be very easy, he asked loan and investment support for the country's development.

While addressing the session, Judith Herberston, head of the Department for International Development (DFID) Bangladesh, said the country has a good track record on poverty alleviation.

The government should emphasise on transparent policies, climate change, enhancing opportunity of private investment, innovation and entrepreneurship.

"It should also focus on eradicating poverty, reducing inequality, providing health services and education for all," she added.

She urged for a good political will to boost the tax-GDP ratio and ensure proper measures to prevent corruption in implementing megaprojects.

Rensje Teerink, the European Union ambassador to Bangladesh, said climate change is one of the most important challenges for Bangladesh.

She asked the government to prioritise education, health and nutrition.

She also said the EU will continue its support to solve the Rohingya crisis and the organisation is formulating the next plan to tackle it.

Foreign Secretary Masud Bin Momen said, "Our aids will reduce once we graduate from the LDC status. We should develop bilateral relations to boost foreign aid."

He identified the Rohingya issue as an additional pressure for the country and asked the development partners to help repatriate the refugees.

Finance Secretary Abdour Rouf Talukdar said Bangladesh requires an additional $66.32 billion every year to meet the SDGs.

"The development partners should widen their hands with official development assistance, considering the resource gap of Bangladesh," he added.