http://www.thedailystar.net/newDesign/news-details.php?nid=203383
Business interview
Focus on manufacturing to create jobs
Samiran Chakraborty
Suman Saha
Bangladesh should focus more on development of the manufacturing sector as it will ensure the highest number of employments, says a noted Indian economist.
“The country is facing a huge unemployment problem. Large scale industrialisation can solve the problem,” says Samiran Chakraborty, regional head of research for India at Standard Chartered Bank.
He says the manufacturing sector of the country contributes nearly 20 percent to the national economy. But it is not enough to accommodate a growing number of job-seekers.
Rapid growth of the manufacturing and service sector can be an optimal solution as these sectors generate huge employment opportunities, says Chakraborty at an interview with The Daily Star in Dhaka recently.
He says Bangladesh has the ability to achieve seven percent growth as the country has a couple of unique advantages, such as demography and niche businesses.
But it probably depends on how the government can handle the energy and power issue, says Chakraborty. “If the government is able to supply the promised power, the country can certainly attain the 7 percent growth trajectory,” he adds.
Chakraborty, who has in-depth knowledge on financial markets in India, says India achieved growth momentum in 2003-04 because the government had undertaken several reforms.
India plans to open up the financial markets and encourage more foreign direct investment and foreign portfolio investment, he says.
He says India spent huge sums of money for infrastructure development in 2008 that gave a big boost.
Bangladesh can apply this growth model. But the growth strategy should compliment the policy reforms, says Chakraborty.
He says seven percent growth means the economy will double in the next ten years and per capita income would reach nearly $1200. But the challenge mainly remains in reducing the poverty rate.
Chakraborty, who also worked as chief economist for ICICI Bank in India for 5 years, says Bangladesh can attract more foreign investment through information dissemination.
He says the country should host numerous roadshows and ask investment communities to invest by depicting the investment opportunities, incentives and regulations.
The government should also provide necessary information in attracting investment, says Chakraborty, who was a faculty of Delhi School of Economics for 5 years prior to moving to the corporate sector.
He says the policy makers must listen to the problems raised by the prospective investors, and promptly solve these problems.
Otherwise the flow of investment will be hampered because the ability to attract foreign investment largely depends on the ease of doing business as well as political stability, he adds.
He says the optimum strategy would be to make all information open to all. And for this, transparency is very important.
People’s mindset also needs to change, he says. It is a globalised world and Bangladesh needs to be a part of it, adds Chakraborty.
suman.saha@thedailystar.net
