Edimon Ginting, the Asian Development Bank (ADB) country director for Bangladesh, has suggested ensuring and improving good governance in the banking sector to return to higher economic growth.
Saying ADB is positive about financing some projects and other business opportunities with Bangladesh, he on Monday said that bolt action is needed in economic governance, banking sector, tax revenue, procurement, investment and restoring macro-economic policy in terms of maintaining market economic sustainability of the country.
He made the observations while addressing a luncheon meeting organised by the Metropolitan Chamber of Commerce and Industry (MCCI) at its Gulshan office on Monday.
MCCI Secretary General Farooq Ahmed moderated the session while MCCI President Kamran T Rahman made the welcome remarks.
Ginting said that in the last 20 years, the development of Asian countries has been enormous and Bangladesh is growing fast but there are still challenges.
“The banking sector in Bangladesh is small compared to the needs of the country. Why is it small? We know because it has a problem with that. Capital is low. Because the FPL is there, and you know even to support domestic investors, they need to be bigger,” he said.
“We need to improve economic governance. Governance in the banking sector should be improved because it is the heart of the economy. I think good governance on the revenue side is also necessary,” Ginting said.
“Developed capital markets also need to have a good mix in your banking sector to deepen it. Before fixing the banking sector, it won't be easy to return to higher growth,” he added.
Ginting also said that he believed there was potential for increased investment flows, skills development and overall capacity building in the country.
He said, “Economic diversification is now or never and we have to work together. It is time to give us the motivation to increase both domestic and foreign direct investment.”
The ADB country director also underscored the need for human resources development and economic governance and added that the global lender could work in those areas.
“Quality education is mandatory in terms of human resource development because if they are not educated and skilful, they could not be helpful for the private sector. There are examples out there like China, Vietnam, etc.,” he said.
“Competition policy is really important. I think it is one of the guardians of good investment practices in the country. Domestic-oriented industries actually are receiving a lot of protection, but they're not competitive,” Ginting said.
“In this context, I think we have to diversify the economy and Bangladesh needs to be a bigger part of the global value chains in that context,” he said, adding that it was needed to bring more stable export sources from more different products.
“Domestic and foreign investment is a must but it is also a challenge. Do you have enough domestic push to grow 7 per cent and if not then find it? A quick industry can be the early hanging fruit, like machinery, light engineering and electronics,” he said.
He added, “We can focus on economic governance, banking sector, tax revenue, procurement, and investment. ADB has to bring knowledge and solutions to the country and we will work together with you.”
Former MCCI president Nihad Kabir, MCCI Senior Vice-President Habibullah N Karim, and officials of ADB and MCCI were also present at the meeting.
