Finance Minister AMA Muhith identified on Monday weak governance as one of the major hurdles to attaining the expected level of the country’s economic growth despite good progress in development activities.
“Governance is very weak here. The country could not achieve a 7.0 or 8.0 per cent economic growth because of it,” he said, adding that keeping this in view the government has paid serious attention to this effect.
He also identified inadequate infrastructure and creation of job opportunities as two other challenges for the country.
“We need to create more job opportunities locally and internationally for the country’s huge population to ensure socio-economic development,” he said.
The finance minister was speaking at a city hotel as the chief guest at the signing ceremony of an agreement with the Japan International Cooperation Agency (JICA) for US$ 1.18 billion loan package for five projects.
Economic Relations Division (ERD) Secretary Mohammad Mezbah Uddin and Chief Representative of JICA Mikio Hataeda signed the agreement on behalf of their respective organisations.
He said the public administration needs to be restructured and all the districts should have been empowered equally so that the 64 districts can function more efficiently.
He said the country should concentrate much on social sectors like education, health and social security, which will help it gain status of a middle-income nation by 2021.
He said after getting the status, Bangladesh will face new challenge as benefits like duty-free or quota-free market access and concessionary loan the country is now enjoying as a least developed country (LDC), will be lifted.
“Bangladesh is making itself prepared to take the challenge,” he said.
According to the signing, the loan package covers financing of five projects amounting to US$ 1.18 billion to promote socio-economic development in both urban and rural areas and to provide solid foundation for BIG-B (Bay of Bengal Industrial Growth Belt) initiative proposed in the summit talk between the Prime Ministers of Japan and Bangladesh last month.
As per the agreement, the projects will be implemented in power, energy, city governance, flood management and agriculture productivity sectors. The concessional loan carries only 0.01 per cent interest rate per annum, with a 40-year repayment period and a 10-year grace period.
The projects are: Matarbari Ultra Super Critical Coal-Fired Power Project (US$ 406 million), Natural Gas Efficiency Project (US$ 231 million), Inclusive City Governance Project (US$ 300 million), Haor Management and Livelihood Improvement Project (US$ 149 million) and Small and Marginal Sized Farmers Agricultural Productivity Improvement and Diversification Financing Project (US$ 97 million).
Speaking on the occasion, JICA’s President Dr Akihiko Tanaka said among the projects, the Matarbari Ultra Super Critical Coal-Fired Power Project is considered as one of the key projects to support materialising the initiative of BIG-B.
He said the BIG-B has three pillars – industry and trade, energy and transportation. “To enable greater industry, trade and energy production, Dhaka-Chittagong-Cox’s Bazar transport artery needs to be strengthened and even extended to neighbouring countries,” he said.
He said Bangladesh has a strategic location as it is a country between the Indian Ocean and the Asian continent and a country between Southeast and South Asia.
He said Bangladesh can provide a gateway to the ocean for Bengal regional economies and play between a nodal role between Southeast and South Asia.
“If Bangladesh is to make the most of these opportunities, it must overcome several important socio-economic challenges like heavy energy resource deficit, massive demand for employment and adaptation to upcoming changes related to international trade regime,” he said.
The JICA President said Bangladesh is expected to graduate from LDC (least developed country) status in the near future. “This means the termination of a variety of preferential trade treatments, which Bangladesh currently enjoys. Last but not least, fundamental infrastructure development and sound governance establishment are urgent needs,” he said.
He said the government of Bangladesh and the JICA have jointly identified the Matarbari area, located 60 kilometres south of Chittagong city as the tipping point of carrying out BIG-B.
“This island and surrounding area have all the potential to become completely transformed into an integrated industrial and trading hub as well as central energy base,” he said.
According to the agreements, the project on natural gas efficiency will enhance gas use efficiency from the exploration (six wellhead compressors to increase 30 per cent gas production), transmission to distribution of gas supply chain to ensure gas supply for vital economic growth.
Governance reform, city planning and infrastructure construction to promote local empowerment for better public service delivery will be ensured in five city corporations (Rangpur, Gazipur, Narayanganj, Comilla and Chittagong) under the Inclusive City Governance Project.
The project on Haor management and livelihood improvement will rehabilitate and construct flood management facilities and rural infrastructure with agriculture and fishery promotion for flash flood risk mitigation and livelihood improvement in Haor areas.
Agricultural loans and training services will be provided through microfinance institutions to increase agriculture productivity and diversity of small and marginal farmers under the final project.
Among others, State Minister for Power, Energy and Mineral Resources Nasrul Hamid and Chief Representative of JICA Mikio Hataeda also spoke on the occasion.
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