Bangladesh's financial sector reform initiatives have been progressing in the right direction, according to Martin Holtmann, the country manager for International Finance Corporation (IFC) in Bangladesh, Nepal, and Bhutan.
Speaking at the event titled "Role of IFC as a development partner in Bangladesh," organised by the American Chamber of Commerce (AmCham) in Bangladesh at Sheraton Hotel in Dhaka, he emphasised the urgency of these reforms.
Holtmann pointed out that the inefficiency of banks leads to higher interest rates for customers, underscoring the importance of addressing these issues.
One area of concern he highlighted was Bangladesh's low tax collection ratio, standing at only 7.0 per cent of the GDP, which is one of the lowest in the world.
Despite this, he praised the active participation of the private sector in infrastructure development and commended private sector entrepreneurs for investing in the power generation sector.
Holtmann also noted positive developments in the foreign exchange rate, with recent government initiatives aimed at bringing normalcy to the volatile forex market during the Russia-Ukraine war.
He lauded the diligent work ethic of Bangladeshi workers, which he sees as a significant advantage for the country.
Even though some countries may lack abundant national resources, they can still perform well, and Bangladesh is a prime example of such a nation.
Highlighting the country's entrepreneurial spirit, Holtmann pointed out that the private sector has substantial opportunities for investment in the healthcare and medical services sectors.
He also encouraged Bangladesh to explore the global food processing value chain as part of its export diversification efforts.
Syed Ershad Ahmed, the president of AmCham, acknowledged the challenges faced by the Bangladeshi economy, including the impact of Covid-19, economic sanctions, and disruptions in supply chains due to war.
Despite these hurdles, he emphasised the importance of the Bangladeshi private sector in driving economic growth, creating employment opportunities, attracting investment, and fostering innovation.
According to the World Bank and BCG Analysis, Bangladesh's competitive advantage has led to increased foreign direct investment (FDI), paving the way for the country to cross the $1 trillion mark by 2040.
As a member of the World Bank Group, the IFC focuses on promoting sustainable economic growth and poverty reduction through investments in the private sector, which plays a crucial role in supporting the development of countries on the path to progress.
Bangladesh's impressive annual GDP growth rate, strategic geopolitical location, and skilled workforce have garnered global attention, making it an attractive destination for foreign direct investment. Despite unforeseen challenges, the Ready Made Garments (RMG) sector and foreign remittance earnings have contributed significantly to the country's resilience in the pre-Covid era, making it a "poster boy" for the economy.
