The Unnayan Onneshan (UO), an independent multidisciplinary think tank, in its year-end assessment of the economy has urged the government to adopt a medium-term strategy and encompass employment enhancement actions for fostering equality of opportunity in the society. It also put emphasis on higher revenue collection through expanding the tax base, institutional reform in financial sector, increasing private investment through improved business climate and effective harmonisation of macroeconomic policies.The issue identifies the medium-term macroeconomic challenges in the forms of inequality of opportunities, arrested productive capacity, ineffectual macroeconomic policy framework and resultant growth hiding in shadows looming large.“The causes of elapsing prospects are more institutional. The gradual corrosion of institutions has constrained allocation of resources to channel efficiently into the productive sectors in order for the economy to get higher returns in terms of reduced welfare gap and expanded productive capacity,” the UO said.The UO in its monthly Bangladesh Economic Update mentioned that farsighted choice of macroeconomic policy regimes is critical to transporting the benefits of accelerated growth to the masses.It cautioned that decline in the inflow of remittance coupled with recent inflationary pressure is likely to upset the rural economy since the remittance-recipient households in rural areas expend a significant portion of their income on consumption, health and education.Referring to the unequal distribution of national income, the UO uncovers the of reported growth in gross domestic product (GDP).The average rate of more than six per cent growth in GDP in the last five years has not succeeded to bring benefits for the low-income people, as demonstrated by reduced rate of poverty alleviation and increased Gini coefficient.The annual average reduction in incidence of poverty has declined of late according to the preliminary report on the Household Income and Expenditure Survey (HIES) 2016.Annual average reduction in overall poverty as measured by upper poverty line fell to 1.2 percentage points in 2010-2016 from 1.7 percentage points in 2005-10 while the rate of reduction in extreme poverty as measured by lower poverty line declined to 0.8 from 1.5 percentage points.The UO, referring to the World Bank, evinces that annual rate of growth in employment was 3.1 per cent during the period between 2003 and 2010, whereas employment growth declined to 1.8 per cent per annum during the period between 2011 and 2016, questioning the effectiveness of accelerated economic growth.The twelve month average general inflation has been on the rise since May 2017. Average general inflation edged up to 5.59 per cent in October 2017 while the average food inflation also increased to 6.89 per cent.The think tank shows that private investment as percentage of GDP has increased by less than one per cent on average during the period between FY 2010-11 and FY 2016-17.The research organisation warns that national savings, which have remained stagnant at 29-30 per cent of GDP during the last decade, may further stagnate in the coming fiscal year. Consequentially, the target of increasing private investment is unlikely to be achieved.The macroeconomic policy framework has not succeeded to boost the agriculture, industry and service sectors to their potential. Growth in agriculture has been on the decline, while growth in industry and service sectors stagnates.Agriculture sector grew by 5.50 per cent in FY 2005-06, and subsequently declined to 4.46 per cent in FY 2010-11 and 3.40 per cent in FY 2016-17.
