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“Good planning means making the vision a reality”

Interview - May 12, 2015

Bangladesh’s Honorable Minister of Planning, AHM Mustafa Kamal spoke with United World about the new Five Year Plan and how that is fitting into the wider Vision 2021.


The Vision 2021, and the new Five Year Plan is an opportunity to fulfill the development goals of the government. How do you perceive the progress towards the 2021 Vision?

2021 is our mission. By 2021 this country will be a middle class income country. That’s our main objective. Mostly three parameters are considered: the first parameter is income, which should be about 992 USD per year, for an average of three years. Now, our poverty income is 1290 USD. So we have already met that parameter. The second parameter that they also considered is that it has to be inflation adjusted. We have never had any fears that our economy would be going backwards. We are all of us thinking our economy will be going forward. Another parameter is the resilience of the economy, and our economy has the resilience to absorb external shocks. Suppose in America, on the 14th of September 2008, you have lost Leman Brothers. In Bangladesh our economy has the resilience to absorb those shocks. It has been certified by three international agencies for the last five years. Consistently, they are rating the same grading. We are maintaining the same standard, by Pitch, by Standard and Poor, by Moodys. So they're saying: "This economy is resilient. They can absorb external shocks; and we have no external shocks, because foreign investment is not that big yet. Our debt-to-GDP is the lowest in the whole world. Our total debt, public and private, both are 41% of the GDP. External debt is only 22 billion. And in our whole life we have never even delayed, even one day, in servicing our debt.

Taking into consideration the fact that as a creditor, Bangladesh is very good: with low debt, would it be a smart decision to go to the international markets for financing the government’s objectives?

We are financing ourselves. As I've said, total debt is very low, so we have a big cushion. Suppose that we cannot finance a project, in that case we would go to the overseas market, we'll issue bonds, and we'll borrow money from there. But that time has not come. Whatever projects we have in our hands, we are capable of financing those projects. Now we're in for mega projects and mostly funding is coming from our side. So for one project we are giving almost 4.8 billion dollars. It is coming from Dhaka. Mostly coming from Dhaka; and interest is nothing. 0,01% that is the interest rate and the agreement time is thirty years with ten years grace. The World Bank is also supporting us, the ID is supporting us, China is supporting us. India is supporting us. So now, that is why we're actually not going overseas in a big way. Growth trade in the GDP is on a consistent basis, 6% for six years is a huge achievement. Only six years back our poverty aid was 41% percent and now, in six years time, it has come down to 24% percent. By year 2021 everybody will be having primary education. So this the second part of what I was saying. Now the top parameter is the human index, how you invest money for education. So, we are investing for the future. Our social safety net is so strong, no one can compete with us. We have developed not only in the cities. We are also developing in the villages. It’s an inclusive growth, for the business community and for the poorest. The wages increased for the factory workers was over 70%. Now, almost 67% are increasing their wages and salaries for all the government officials. So who can afford to do that? We can afford to. Our growth in the revenue generation area is over 20% percent.

Imagine, exports were 14 billion dollars five years back, our export earnings last year we made it 212 billion dollars. So, don't you think our economy has been strong enough to meet all of these things? Our economy itself has a good potential.  You might say that there are problems, economic problems, and it’s very correct. But I’m telling you, had there been no problem like that our growth would have been 8% plus, not 6%.  

You come from the private sector so you understand the needs and the agenda of the private sector. What are those needs? What role is the private sector of Bangladesh playing in this new path that the country is going for?

First of all, for a businessman there's only one religion: to make the maximum profit. And money has a simple policy: it will go to those places where it is being regarded as a priceless commodity. They'll be investing in those places where they think their investments will be tangible, and where they will be in a position to earn the money that they are looking for. Bangladesh - it's the best place. Why is it the best place? Here you export, you don't pay the taxes, here you set up any factory, you get tax incentives and you become the owner of the land where the factory is set up. Our past governments were not forward looking, they could not recognize the potential of this country. Otherwise, they could have attracted more investments. Now, a businessman, in order to invest the money, he will be looking, first of all, at the infrastructure. But infrastructure is both physical and non-physical. Physical infrastructure is roads, airways power, and electricity. Non-physical infrastructure is the government’s support through policy, which is currently very good.

It does seem that there are many reasons to invest in Bangladesh and the only real thing that maybe is holding the country back is infrastructure and investment. So, in your role as Minister of Planning maybe you could tell us about a few key projects in conjunction with international organizations.

World Bank is supporting us. World Bank is investing nearly 3 billion dollars a year, they are financing us. But, if we take too much you cannot invest it properly, so I'm looking for an optimum size. I'm trying to make equilibrium in such a way that nothing is missed: demand and supply. An inclusive growth, a balanced growth, covering cities and urban regions as well as the villages. Now, as I have said we have power shortages. So in the last one year, three projects, all energy projects, have been started. One to China, one to India and one to Japan.  Each one is 1.320 megawatts. So almost 5.000 megawatts should be coming online. Now, yes we are still facing a gas shortage. We need almost 3.400 million cubic feet.  So, that's why we came out with the project for 500 million cubic feet funding Energy Terminal.

So, we need another 500 million cubic feet of energy terminal to meet the future demand. If that 500 cubic feet comes out, it will meet the current demand. But for the future, we’ll need another one. Bangladesh is it a takeoff state now.  It has its own part to move forward, and is in the right course. We have the right leadership, under the dynamic leadership of our Prime Minister Sheikh Hasina. 

We know the potential and where Bangladesh is standing in this very complex global environment. I would like to ask you about the perception about Bangladesh in the international community, which is in some cases maybe different from the information we are trying to gather here…

In terms of the media coverage internationally, NY Times and others are highly appreciative of Bangladesh’s efforts. The United Nations Secretary-General says that every developing economy should follow Bangladesh… Coopers says world will be moving at 3%, Bangladesh will be moving at 7%. And also, Goldman Sachs: they said in the next 15 years, Bangladesh is one of the Next 11 countries in the world. The negative sort of things is okay, but that’s more a political agenda. You have to see, you have to know, you have to trust the numbers. Numbers are positive, and give us all this good signals that we've been promoting all these years.  If you are a poor country, a developing country, all countries will face this sort of thing. It's impossible, because demand is very big and the population is very big.

And Minister, my last question will be, what would you tell me are the three things that best describe your country?

In my country, I have a good person, I have the better person, and I have the best person. And by "me" do not understand I'm saying about myself. I'm talking about the entire country and people!