GDP growth in FY '08 to be projected at 7%

[GoldenAsif]

Finance adviser rules out controversy over budget presentation
GDP growth in FY '08 to be projected at 7.0pc
FE Report
4/30/2007

Finance Adviser AB Mirza Azizul Islam dismissed Sunday any constitutional controversy over the presentation of the national budget for the fiscal 2007-08.
"An ordinance promulgated by the President to this effect will do," the finance adviser told reporters at the end of a meeting of the Resource Committee at his secretariat chamber.
"This year's budget will be placed in a changed situation and will be approved by a presidential ordinance" he said.
The committee discussed the revenue collection trend of this fiscal and ways of increasing revenues in the next fiscal.
This is for the first time a caretaker government is going to present a full-fledged national budget in absence of the national parliament.
Prof. Wahiduddin Mahmud, who was adviser in-charge of the finance ministry under the 1996 caretaker government, placed a budget for three-months and late President Ziaur Rahman placed a full-fledged budget outside parliament in 1977.
The President under Article 93(3) of the constitution is empowered to promulgate an ordinance authorising expenditure from consolidated fund, "whether the expenditure is charged by the constitution upon that fund or not."
bdnews24.com adds: "This year's revenue growth will near 12 percent," Islam said. "The growth rate hovered around 9.0 percent in the last nine months."
The BNP-led alliance government projected revenue growth of about 21 percent for the current fiscal year, which the finance adviser dubbed as an ambitious target.
The adviser however hoped the revenue growth would increase significantly in the next fiscal year due to the caretaker government's anti-graft drive, a finance ministry official who was present at the meeting told the agency, asking not to be named.
In the nine months to March, revenues earned by the national exchequer recorded Tk 250.52 billion, an increase of only 8.5 percent from the last fiscal year, according to NBR statistics.
The target for the nine months was about Tk 308 billion.
Islam said the government would try to specify budgetary allocations on a regional basis to make public spending transparent.
The adviser indicated that subsidies for agriculture might be increased in the next budget.
UNB adds: The finance adviser said that for the next fiscal year the government would project GDP growth at 7.0 per cent and inflation at 6.5 per cent.
"Taking those into consideration, we will try to increase the revenue-GDP ratio and expand the revenue after counting foreign resources and deficit financing," he told reporters.
From the meeting the government has decided to expand the Implementation Monitoring and Evaluation Division (IMED) website to infuse transparency in public expenditure.
"There is an allegation that government did not maintain balance in public expenditure in different regions of the country. On the IMED website we will put all the information about the expenditure region-wise and people will monitor the expenditure," he said.
He also apprised that there would be a window in the website for the people concerned to put in their views-one of the measures being taken to bring pecuniary probity in spending people's money.

http://www.financialexpress-bd.com/i...=59793&spcl=no

[GoldenAsif]

For me the most significant part of the article is this:

"bdnews24.com adds: "This year's revenue growth will near 12 percent," Islam said. "The growth rate hovered around 9.0 percent in the last nine months." "

We achieved such an impressive rate of growth with a gang of crooks running the country and stealing huge sums, so imagine how well we will do with:

1. Them out of the way and a more honest government.

2. More investment from the diaspora.

3. More FDI.

4. More collection of taxes, whereas before lots of people didn't pay tax or lots of business profits.

BD is on its way to becoming a major Asian state, no wonder wikipedia has been making our country the subject of its frontpage a lot recently. For all the minnow mentality people here who like to think of BD as an unimportant country and unsuccessful, start changing your minnow mentality and just like our cricket team know we are winners, you too start to need to realize this.

[Rabz]

Originally Posted by GoldenAsif
BD is on its way to becoming a major Asian state, no wonder wikipedia has been making our country the subject of its frontpage a lot recently. For all the minnow mentality people here who like to think of BD as an unimportant country and unsuccessful, start changing your minnow mentality and just like our cricket team know we are winners, you too start to need to realize this.

GoldenAsif, i can understand your enthusiam and love for Bangladesh.
We all share more or less the same passion here.

But i also realise that you have been a member of this forum for a grand total of 23 days.

It might not be the best of ideas to call names to other members so soon, so early.
Just because some are not mentioning here does not mean they are far from realising a thing or two about the prospect of our country's future.

Moderate tone would be highly appreciated.

[GoldenAsif]

Sydney you do have a point.

However I am not trying to offend anyone by pointing out the "minnow mentality" (if that's the right word to describe it) present amongst some here. Habibul Bashar was ridiculed and attacked by many here and criticized for his "minnow mentality" and I felt sorry for him. I defended him, however I feel that it is ironic that some people get so worked up about cricket but care little or take little pride in their country's growth or success.

[BangladeshCricket]

Not sure where the country is heading too...so far this gov't doing 'right' things...or this is just a showoff...two parties need to go but is this another repeat of 80's.
We want our country to prosper with whatever GDP growth or other improvement happenning, enough of these dirty politics. But I don't trust the politicians don't matter which party they are from.

[Special 1]

something I always wondered was whether these GDP projections were inflation adjusted. Well i will be wating for CPD's report which should be out this week on the overall performance of the economy. Dr. Debopriyo does a good job of analysing the macroeconomy.

[ammark]

Originally Posted by Special 1
something I always wondered was whether these GDP projections were inflation adjusted. Well i will be wating for CPD's report which should be out this week on the overall performance of the economy. Dr. Debopriyo does a good job of analysing the macroeconomy.

Well here's CPD's take on inflation figures:

Originally Posted by The Daily Star
Inflation spiralling
Rice price hike contributes to inflation; BB banks on Boro harvest
Rejaul Karim Byron

Inflation rate is rising incessantly with a 0.15 percentage point increase in March compared to the rate in February while economists largely blame the hike in food prices, especially of rice, for the increase. Low production and short supply of rice in the market caused price hikes in the last few months and sources predict more hikes in rice prices in the current month.
"The inflation rate might come down after the May-June period if the target production of boro rice is met," an official of the Bangladesh Bank (BB) told The Daily Star.
According to the Bangladesh Bureau of Statistics (BBS), the inflation rate was 7.43 percent in March while in February it had been 7.28 percent.
The BBS data also show that inflation rate of food items increased by 0.17 percentage points in March in comparison to the figure of February. The inflation rate of food items in March was 8.53 percent.
Inflation rate of non-food items rose by 0.02 percentage point in March reaching 5.76 percent compared to the rate of 5.74 percent in February, according to available data.
After a steady decline till January the inflation rate was soaring in the last few months reaching 7.28 percent in February.
The data also show an opposite trend of inflation if the present scenario is compared to the same month of the last fiscal. The highest inflation rate in the last fiscal (2005-06) was in November, which was 7.95 percent. However, later the rate was declining and in February of the same fiscal, the rate declined to 5.72 percent.
Uttam Kumar Dev, senior research fellow of the Centre for Policy Dialogue (CPD), identified three main reasons for the recent hike in rice prices. "First of all, we have short production of aus and aman rice, and import was also low," he said adding, "The other reason is that the prices of rice in the international market are high."
He, however, said the recent trend of inflation rate might change within a couple of weeks when boro rice will be available in markets.
According to the Bangladesh Bank (BB) statistics aus and aman rice production in the current fiscal was 1.24 crore metric tons while in the last fiscal it had been 1.25 metric tons.
Import volume of rice in the last nine months of the current fiscal was 17.08 lakh metric tons, which had been 19.41 lakh metric tons in the same period of the last fiscal.
The trend of rice prices in the international market show that in Thailand a metric ton of rice had been $352 in the first quarter of the current fiscal which rose to $372 in the second quarter.
BBS sources said rice consumption largely controls the changes in the inflation rate. One official said 50 to 60 percent of the inflation rate depends on rice consumption.
Rice prices increased in recent days. According to yesterday's Trading Corporation of Bangladesh (TCB) report, rice prices increased by 14 to 26 percent in the last one year while the rate of increase was 8-14 percent in the last one month.
Economists predict more increase in the inflation rate in the current month as production cost of boro rice increased this year due to a fuel price hike.
Economic Research Group, an independent research organisation, in a recent study apprehended that inflation rate might reach double digits (10 percent) within a year.
Uttam Kumar Dev of CPD said the only possible way of lowering rice prices is to meet the target production of boro. He, however, is sceptic about meeting the target production saying that the government could not achieve the target production of aus and aman.

source: http://www.thedailystar.net/2007/05/07/d7050701022.htm

This doesnt sound all that good. Especially seeing the growth rate at 6-7%.... Wonder what sort of monetary management BB will delve in now.

[layperson]

Originally Posted by Special 1
I am waiting for the IRBD report. Its more elaborate

Originally Posted by Special 1
Well i will be wating for CPD's report which should be out this week on the overall performance of the economy. Dr. Debopriyo does a good job of analysing the macroeconomy.

Whats next in line ? :p
The GDP figure can be measured a couple of ways and maybe different organisations measure them using different ways which is why you dont see the same numbers refelcting on eqch report. HOwever the main fact is the economy is growing at a very desirable rate and provided we can keep up the momentum and take proper policy decisions along with cleaning up the political and beaurucratic tangles, Bangladesh is well on its way to be a major economic force. However the two biggest obstacle is the political and beaurucratic mess in Bangladesh which retards our growth rate and makes it unsustainable. Personally I think the single biggest obstacle to any developing country is the level of corruption in it and for a country like Bangladesh this fits to the T. If we can reduce corruption political and beaurucratic problems would be solved as they are all related implicitly.

[Special 1]

Originally Posted by layperson
Whats next in line ? :p
The GDP figure can be measured a couple of ways and maybe different organisations measure them using different ways which is why you dont see the same numbers refelcting on eqch report. HOwever the main fact is the economy is growing at a very desirable rate and provided we can keep up the momentum and take proper policy decisions along with cleaning up the political and beaurucratic tangles, Bangladesh is well on its way to be a major economic force. However the two biggest obstacle is the political and beaurucratic mess in Bangladesh which retards our growth rate and makes it unsustainable. Personally I think the single biggest obstacle to any developing country is the level of corruption in it and for a country like Bangladesh this fits to the T. If we can reduce corruption political and beaurucratic problems would be solved as they are all related implicitly.

You just love to quote me don't you.
By CPD's report, i meant the IRBD report that CPD prepares before budgets every year.
Well I would love to hear why you think we are growing at a desirable rate and why it is well on its way to be a major economic force.

[layperson]

Originally Posted by ammark
Growing at a desirable rate, yes... but there are political ramifications for this. Most importantly: How is this growth redressing income disparity... and is the massive population of 140million plus truly experiencing a growth in their purchasing power and propensity to consume? I mean Bashundhara City is great for status symbol... but is it really expanding employment or giving existing workers an increased income to combat the increased inflation around? Is whatever wealth generated concentrated in too few hands or is there genuinely better distribution of this wealth? This is ultimately a socio-political issue.

Originally Posted by Special 1
You just love to quote me don't you.
By CPD's report, i meant the IRBD report that CPD prepares before budgets every year.
Well I would love to hear why you think we are growing at a desirable rate and why it is well on its way to be a major economic force.

Special 1, I did not say that Bangladesh is well on its way to be a major economic force. I said it would go on to become one if proper policy decisions and appropriate political and beauracratic reforms take place along with this very desirable growth rate.
Ammark, income distribution is a result of proper policy making. Growth is very desirable and growth leads to increase in income. However income distribution depends largely on policies of the central bank and the government. Living in Canada you can very well understand the concept of a welfare government. I think more welfare programs and a stricter progressive income tax collection plan can go a long way to providing much needed income distribution. However , there will always be a lower class, middle class and upper class in the society. Income distribution would try and ensure that the lower class is not dying of hunger or in other words income distribution should target to have as less people as possible below the pverty line. Whenever there is growth there is bound to be a section of people who are more able than others to take advantage of the boom and make a lot mooney. Hence you see the uneven distrubution of wealth. This is where policy making and enforcing them is required to distribute it more evenly.

[ammark]

No doubt. Canada also had good reasons for the welfare state system. Without welfare, the first thing the people would fall victim to is the cold. Living in Toronto, I often remind myself that this is NOT Canada... Canada is out there in remote places north of Southern Ontario. Its a heck of an easier job for the Canadian govt to deal with 30 million than 140 million, wouldnt you agree? The distances are a b*tch, but Canada is resource rich and has relatively efficiently utilised those resources, and has not been a colonially exploited country.

In Bangladesh's Case we have a small geography, but our first casualties come from the climate, (Cyclones, Droughts and Floods to which some of the immense population is inevitably a victim. To follow Malthus, ideally they should die off rather than be saved... but then the sustenance of human life is our ultimate goal, setting Malthus' talk all topsy turvy with our human intervention to save lives) and then terrain. To address welfare there you MUST have a VERY transparent and highly efficient bureaucracy and welfare providing system. That inevitably we have lacked (and be fully assured that in history, every government has tried), and yes I agree with you that BD must clear up this governance and corruption issue. But whatabout resources? We have terrible internal revenue collection so far, and depend greatly on bank borrowing for state expenditures (which has its high interest rates and costs), next to foreign aid.

I would suggest, however that What bangladesh lacks in a very inefficient welfare 'state' system, - this void is filled entirely by NGOs and other aid programs, both foreign and local. Bangladesh in being an LDC has numerous perks from the WB and and the Developed countries (or used to). You cant deny the work the hundreds of thousands of NGO staff do to genuinely provide 'development' and poverty alleviation, family planning, education, social support services, etc in Bangladesh. Ideally given their success... and just out gut feeling and exasperation with our bureaucracy, inefficient junior officers and 'high powered committees'... ideally I'd want a more laissez-faire approach to macro and microeconomic policy implementation. What NGOs disperse in social welfare, and Businesses disperse in Investment, Income and Productivity.... I'd like to see entirely autonomous, independent bodies of Private citizens running the BTRC and VOIP policy boards and all that.

p.s: Just to set myself clear- not disagreeing with anyone here, and I am genuinely optimistic about BD, but just voicing my concern on whether our growth is positively contributing to the people.

[ammark]

Originally Posted by layperson
Whats next in line ? :p
The GDP figure can be measured a couple of ways and maybe different organisations measure them using different ways which is why you dont see the same numbers refelcting on eqch report. HOwever the main fact is the economy is growing at a very desirable rate and provided we can keep up the momentum and take proper policy decisions along with cleaning up the political and beaurucratic tangles, Bangladesh is well on its way to be a major economic force. However the two biggest obstacle is the political and beaurucratic mess in Bangladesh which retards our growth rate and makes it unsustainable. Personally I think the single biggest obstacle to any developing country is the level of corruption in it and for a country like Bangladesh this fits to the T. If we can reduce corruption political and beaurucratic problems would be solved as they are all related implicitly.

Growing at a desirable rate, yes... but there are political ramifications for this. Most importantly: How is this growth redressing income disparity... and is the massive population of 140million plus truly experiencing a growth in their purchasing power and propensity to consume? I mean Bashundhara City is great for status symbol... but is it really expanding employment or giving existing workers an increased income to combat the increased inflation around? Is whatever wealth generated concentrated in too few hands or is there genuinely better distribution of this wealth? This is ultimately a socio-political issue.

[Special 1]

I am waiting for the IRBD report. Its more elaborate

[Special 1]

if only it were that simple

[Special 1]

The problem of inequality is indeed the root of a lot of problems that the world faces today.
I belive social scientists of this era, atleast the main stream, fail to create effective tools which will address the issue of inequality.
For examply, taxing wages and capital at a progressive way. It is a good idea in philosophy, but its stupid practically. I would have such high incentives to hide my income and evade taxes.
We need to come up with better tools. Maybe a change of philosophies is required, maybe the answer lies in past policies. But whatever it is, it is not working. The richest countries are seeing an increase in inequality and developing countries having problems collecting revenue.