IMF lends support to Bangladesh's reforms aimed at boosting growth, improving investment climate
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Page 321
On October 14, IMF Deputy Managing Director Shigemitsu Sugisaki addressed a dinner gathering of senior policymakers and opinion leaders hosted by Bangladesh's Finance and Planning Minister Saifur Rahman. This followed a day of meetings with Prime Minister Khaleda Zia, opposition leader Shaikh Hasina, and senior government officials. In his remarks, Sugisaki focused on the outlook for Bangladesh, which recently entered into a Poverty Reduction and Growth Facility (PRGF) Arrangement with the IMF. Following are edited excerpts from his remarks. The full text is available on the IMF's website (www.imf.org).
In my capacity as Deputy Managing Director, I have been seeking since 1997 to establish a closer working relationship between the IMF and Bangladesh.
It is only now, under the current government, that we have been able to successfully conclude a PRGF Arrangement. This reflects our support for the direction of economic reforms that the Bangladeshi government is pursuing. Credit for this effort must go to the current economic team, which has worked so hard to make this possible.
The benefits of these policies are already becoming apparent. The economy is showing renewed vigor. Industrial activity and exports are rebounding. Inflation is being held in check, even after needed adjustments in key prices.A smooth transition to a floating exchange rate has been achieved, and international reserves today are two and one-half times the level when the government took office. For this fiscal year, a projected real GDP growth of 5.5 percent is well within reach, given continued supportive fiscal and monetary policies and further progress with structural reforms.
The key challenge now for Bangladesh is to move to a higher growth path to help create jobs and, over time, lift the country out of poverty. The government is moving forward with a homegrown strategy to raise growth to 7 percent and to halve poverty by 2015.
The IMF shares this vision and is supporting it with funding and technical support. At the center of this strategy are reforms to boost private sector growth, improve the investment climate, and diversify exports.
This is a pro-growth and pro-poor strategy that grapples squarely with the structural flaws of the economy.
And this is a strategy that, we understand from our discussions, enjoys broad support across society.
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