The development priorities of the government are in the right direction but all will depend on how much resources are available and what percentage of the annual development programme (ADP) is implemented, a leading chamber said yesterday.

According to an editorial of a news bulletin by International Chamber of Commerce-Bangladesh (ICCB) released yesterday, the ADP for fiscal 2011 includes 21.2 percent for over all agriculture, 15.78 percent for power and energy, 15 percent for communications and 24.2 percent for human resources.

The ADP for fiscal 2010 was revised to Tk 285,000 million from Tk 305,000 million. Only 68 percent of the total sum was disbursed in the first 11 months, ICCB said.

The implementation of ADP was only 61 percent in the last three fiscal years. The finance minister, in his post-budget press conference, said the government would ensure full implementation of this years ADP. This is very unlikely, the chamber said, quoting experts.
The energy sector roadmap aims at importing liquefied natural gas (LNG) within the next two years by building two LNG terminals to handle the import of 500 million cubic feet (MMCFD) a day. Investment worth at least $1 billion with a time frame of 4-5 years would be required for this, according to experts.

Will the import of 500 MMCFD of gas justify such a costly investment, when Chevron alone just now is ready to increase gas supply by 300 MMCFD if transmission facilities are available? Besides, the country,s existing gas fields Titas, Habiganj and Bakhrabad can also add 500 MMCFD, if developed to full potential, the ICCB editorial said.

The plan also includes setting up two 1,300MW capacity power plants with imported coal at Khulna and Chittagong. Experts feel these will also be difficult and time consuming as Bangladesh does not have the port facilities to receive ocean going coal carriers and store huge coal, the ICCB statement added.
To diversify energy sources, Vietnam is going to set up a 600 MW coal fired power plant at a cost of $1.2 billion with Japanese aid, which will be completed in 2014. So why does Bangladesh not do the same by immediate exploration of coal through open pit system for power plants, as suggested by experts during the ICC Conference on Energy for Growth held in Dhaka on April 13, according to the statement.
Development of infrastructure like highways, Padma bridge, elevated expressway for Dhaka, railway reforms and expansion, enhancing waterways navigability and capacity enhancement of Chittagong and Mongla Port are crucial for sustained growth. According to analysts, GDP growth will depend largely on how soon communication projects, for which 15 percent is earmarked in the ADP, are implemented, according to the editorial.

Bangladesh being a riverine country has the unique opportunity to develop better and efficient water transport systems, to ease traffic congestion not only in Dhaka, but also reduce the pressure on the highways. Unfortunately, successive governments have failed to develop an appropriate waterway system, the statement said.

The budget deficit for fiscal 2011 is around 5 percent of GDP — 2 percent will be met from external sources and three percent from domestic sources. The government plans to borrow two percent of GDP from banking sources, indicating a possible liquidity shortage of the commercial banks for the private sector, the statement added.

Market capitalisation, when the present daily trading is more than Tk 2 billion, rose to 34.2 percent of GDP in April and the number of beneficiary accounts increased to more than 2.5 million.

According to experts, the capital market could be an alternate source for the government to reduce the deficit and raise the funds required for infrastructure projects. Immediate divesting of shares of major state owned enterprises, including banks, Biman, Jamuna Bridge, Railway, and Padma Bridge must be done. The proposed Bangladesh Infrastructure Finance Fund could also raise necessary capital to finance all infrastructure projects, the editorial said.

According to a recent study by Buet Professor Ijaz Hossain, the energy crunch causes loss of around $16.6 billion a year, which is about 16.6 percent of the $100 billion GDP and higher than total yearly exports. The figure would probably double, if the loss due to existing traffic jams were added, the editorial added.
Businesses, therefore, strongly suggest immediate open pit coal mining with setting up power plants and modernisation of the existing power plants. With timely implementation of major infrastructure projects, Bangladesh could easily achieve eight percent plus GDP in 2012, as mentioned by the finance minister, the ICCB said.

As time is running out fast, there is need for more action and less talks and thinking to capitalise on the bright prospect of attracting both local and FDIs, the statement said.