Eminent economist and former Governor of Bangladesh Bank (BB) Prof Dr Atiur Rahman believes that developmental role of the central bank has boosted inclusive growth process benefiting the micro, small and medium enterprises through strategic financing to them.
'Major drivers of the inspirational growth trajectory of Bangladesh have been RMG-led export growth, steadily increasing flow of remittance, and growth of agricultural production. All these have been supported by financial inclusion drive spearheaded by the country's central Bank during the last decade or so in particular. And, this developmental role of the central must be sustained if the country is to attain national macro-economic objectives,' he said.
He came up with these remarks on Monday while presenting a keynote paper at a day-long symposium on 'Economic Growth, Development and Economic Sustainability' at Swansea University, UK. The symposium has been organized by the School of Management, Swansea University.
The participants included among others Prof David Blackaby of Swansea University, Prof Shibli Rubayetul Islam, Selim Raihan and other scholars from Dhaka University.
Prof Backaby emphasized on the positive role of Universities in providing policy support to the government for institutional development which was also echoed by Dr Rahman.
Dr Atiur further elaborated on the recent endeavors of Bangladesh Bank to ensure financial inclusion of the people belonging to the bottom of the social pyramid. He pointed out that because of Bangladesh Bank's emphasize on ensuring flow of finance for agriculture sector, promotion of SMEs, facilitating women entrepreneurship, enhancing green finance etc, domestic demand has been bolstered which in turn have ensured economic stability as a whole.
Dr Atiur also pointed out that despite these gains a number specific emerging challenges for the financial sector such as- rising NPL, liquidity crunch, lack of good governance, underdeveloped capital and insurance market, and above all, lack of enhanced independent supervision by Central Bank can be pains in the country's neck while pursuing achieving SDGs.
He, however, also aired an aura of optimism in terms of Bangladesh making some progress in quality of institutions related to ease of doing business. For examples, the country is using digital technology in improving delivery of power and investment registrations. As a result FDI increased to 3.6 billion US dollars in 2018 compared to only about a billion USD annually in earlier years.
He concluded that all these gains in digital transformation of Bangladesh economy could be made sustainable only if government was prepared to face prudently the challenges of governance. Bangladesh has demonstrated that political elites can make a deal with non-elites in pushing strategically significant sectors like RMGs and food security.
This flexibility in governance approach to allow all kinds of institutions, both public and private, must continue to sustain our amazing growth progress made so far.
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