The Executive Times (ET): There were many hurdles for Bangladesh economy in 2007. What is the outlook for 2008?
Akbar Ali Khan (AAK): There are both strengths and weaknesses of the economy. Some of the developments are coming from the international market. Prices of edible oil and food grains are high in the international market, so the costs of import are becoming higher in our economy. Last year, we had natural calamities. Obviously there will be pressure on the economy of Bangladesh.
Good things are that we have stable macro economy, the exchange rate is also stable and we have a comfortable reserve situation. Remittance flows are still strong. Overall, the economy will depend on the business climate-that is how business people will react-and also on the crop production. If next Boro crop production is satisfactory then there is a great probability of decline in the price of essential commodities, which will reduce many of the problems. GDP will be in the range of 5-6%.
ET: What about the export sector?
AAK: The performance of the export sector is below the target right now. I don't think it will rise significantly. But we have potentialities in the areas of food and fish production and a tremendous potentiality in the area of software.
Dr. Akbar Ali Khan was Advisor in charge of the Ministries of Finance, Planning, Commerce, Post, Telegraph and Telephones in the Caretaker Government in 2006. He studied History at Dhaka University and secured first place in first class in both B.A. (Hons.) and M.A. examinations. He studied Economics in Queen's University Canada and obtained M.A. and PhD. in Economics. He joined the Civil Service of Pakistan (CSP) in 1967.
He served in various Ministries; he was Chairman, NBR, and Secretary, Internal Resource Division. He served as Finance Secretary for more than five and a half years. He was appointed Cabinet Secretary (the head of Civil Service) in 2001 and retired from that position in 2002.
Dr. Khan was the Alternative Executive Director of World Bank and he was elected chairman of the 42-nation FAO sub committee on Surplus Disposal (Food Aid) for the year 1987. On lien from the Government service, he served as assistant and associate professor of Jahangirnagar University. He taught Development Economics and Development Administration at Bangladesh Public Administration Training Center and he also taught Governance at BRAC University after his retirement.
He has published seven books and a. number of articles in various national and international journals.
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ET: Investment is not very encouraging.
AAK: It will take time. This is because there is still unease among businesspeople, and unless we have a significant increase in domestic investment it is unlikely that foreign investment will come. I hope Bangladesh Better Business forum (BBBF) will play a great role in increasing investment because it is headed by the chief advisor himself, and if he can reduce the problems of the business community then obviously business confidence will rise and as a result there will be more investment.
ET: How concerned are you about the impact of inflation?
AAK: I am very concerned about the inflation because it hurts the common people and it creates uncertainty. Increase in inflation is dependent on our agricultural production, because so far it is due to food inflation that the general inflation has increased. I don't think that monetary policy can work quickly for the inflation. It may work in the long run but in the short run it will not be very useful.
ET: Why are we seeing low utilization of the ADP (Annual Development Programme)?
AAK: I think the ministries are not taking enough care. There was also low utilization of the ADP in the previous fiscal year. But this time we have had natural calamities and there is a lack of confidence among the bureaucrats who are not working to the extent they
should. For high utilization of ADP government should monitor the bureaucrats more closely.
ET: In the last six months, what do you think have been the biggest achievement and failure of the government?
AAK: Every government has some major successes and failures. The major achievement I would say of the current government is the anticorruption campaign, where a lot of measures have been taken and this may contribute to transparency in the government. And the major failure of the government has been the inability to check inflation-the government policy did not work for the action against inflation.
ET: Finally, what should the government do to ensure better performance of the economy?
AAK: It is the implementation of the government policy that is necessary. Non-implementation of policies is the major problem. So, the government must monitor the implementation of the actions taken by them.
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