2013年-世界发展银行全球_Bangladesh_Development_Update_April_2013_32页_1mb

Bangladesh Development Update Summary

Core Content

This report provides an analysis of Bangladesh's recent economic developments, development progress, opportunities for growth, and an agenda for action in the context of macroeconomic stability and poverty reduction. It also outlines the outlook and associated risks, as well as the role of the World Bank in supporting the country's development efforts.

Recent Economic Developments

• GDP Growth: Fiscal 2013 GDP growth is expected to be around 5.8%, slightly lower than the 6.3% in fiscal 2012. The slowdown is attributed to weak exports and investments due to the euro-area crisis, domestic supply constraints, and political unrest ahead of the 2014 parliamentary elections.
• Inflation Decline: A broad-based decline in inflation is observed, with the twelve-month-moving average falling from nearly 11% in February 2012 to 8% in March 2013. Year-on-year inflation dropped to 7.7% in March 2013 from 10.1% in March 2012, driven by favorable commodity prices, a stable exchange rate, and monetary tightening.
• External Balances: The external balance remains positive with reserves increasing to over US$14 billion by end-March 2013. This reflects the country's ability to attract remittances and external assistance, though domestic demand growth has been weak.
• Financial Sector Stability: Bangladesh's ranking in the Financial Development Index dropped to 57th out of 62 economies. The banking sector's stability has deteriorated due to corporate governance failures, non-performing loans (NPLs) rising to 8.8%, and a confidence deficit in the capital market.
• Monetary and Fiscal Management: Prudent monetary and fiscal policies have supported macroeconomic stability. The BB maintained its monetary program target for the first half of 2013, but shifted to a modestly expansionary stance in the second half, which may be premature. Fiscal policy aims to reduce the overall deficit and increase the share of concessional external finance.
• Structural Reforms: Progress on structural reforms has been slow. While the government has initiated reforms supported by the IMF's ECF, several benchmarks have not been met due to legislative delays and internal policy disagreements.

Development Progress

• Poverty Reduction: Bangladesh has made remarkable progress in reducing poverty, achieving 3 of the 28 MDG targets and on track for another 11. The number of poor decreased by 15 million in the 2000-2010 decade, far exceeding the 2.3 million decline in the previous decade.
• Inclusive Growth: Human development in Bangladesh has been more inclusive than in other South Asian countries. However, the country still has the highest poverty rate relative to its neighbors, measured by low real per-capita GDP.
• Challenges: Despite achievements, challenges remain, including pockets of poverty in urban slums, hill tracts, and coastal areas. Improving education access, quality, and gender equity in tertiary education is crucial. Climate change poses a threat to the sustainability of development gains.

Opportunities for Development

• Growth Potential: Bangladesh has a historical opportunity to achieve 8% growth, driven by its competitive labor costs and potential to exploit the "demographic dividend".
• Job Creation: The country has the potential to create at least 15 million jobs, especially in labor-intensive industries. The government is promoting foreign investment in energy and infrastructure through various incentives.
• Investment Constraints: The lack of industrial zones, expensive financing, inadequate infrastructure, and limited promotion of the country's advantages hinder investment and job creation. The government has outlined four initial actions to address these constraints.

An Agenda for Action

• Job Creation Strategy: The focus is on creating productive jobs outside of agriculture, particularly in organized manufacturing and services, while improving agricultural productivity.
• Investment Increase: To achieve this, Bangladesh needs to increase its investment rate by at least 5 percentage points of GDP, which is essential for accelerating growth by 1.5-2.0 percentage points.
• Government Actions: The Bangladesh Economic Zones Authority (BEZA) is to allocate 40,000 acres for economic zones. The PPP Office will manage infrastructure tenders, the Bangladesh Bank will reduce trade finance costs, and the Board of Investment (BoI) will actively promote the country to investors.

Outlook and Risks

• Economic Outlook: The outlook is contingent on Bangladesh's ability to seize opportunities and manage risks. Export diversification and reducing reliance on EU and US markets are critical for sustained growth.
• Near-Term Risks: The RMG industry faces an image crisis due to safety concerns. The US and EU are rethinking GSP facilities for Bangladesh. Political instability and the financial condition of state-owned commercial banks pose significant risks to growth and public finances.
• Policy Adjustments: If risks materialize, policy adjustments will need to be made through exchange rate and fiscal channels. The BB must maintain a stable exchange rate and manage market interventions effectively.

Conclusion

Bangladesh has made significant progress in poverty reduction and human development, but faces challenges in sustaining growth and attracting investment. The country has a unique opportunity to capitalize on its competitive labor costs and demographic dividend, provided it addresses structural and policy constraints. The government's proactive measures and international support are crucial for realizing these opportunities and ensuring long-term economic stability and growth.