Congenial and conducive political environment is a precondition for sustained economic growth. With the drastic change in the world economy as a result of intense activities of globalization, it is vital that the objectives of politics should take a forward looking approach for achieving macroeconomic stability, encouraging private sector development, promoting good governance, investing in social development, accelerating trade liberalization, and strengthening financial sectors to meet the 2015 MDGs. Experience has shown the importance of sustainable growth as a necessary condition for poverty reduction.

Political instability in the third world often creates violence, street demonstrations and blockades of ports and industrial establishments and as a result causes more bleeding to the economy.

The deteriorating political situation in the country of 150 million people could turn into a manmade tsunami and may derail the economy projected to grow over 7 percent in the current fiscal year. In fact, this years GDP growth is now feared to fall behind last years 6.7 percent and political unrest, if continues, will pose a potential risk to sound macroeconomic management and implementation of structural reforms.

In addition, the rising power shortage and the delayed decision on power sector reforms, if not addressed immediately, may also negate growth prospects. Increase of oil prices on international markets and intensified competition on the global textile markets represent further major risks. As a result, the cost of living and prices of essentials, which had gone up by 13.52 per cent and 15.22 per cent respectively in 2006, may soar further in 2007. The poor and the middle class had to bear the harsh brunt of price spiraling.

The year 2006 was unquestionably an uneasy time for Bangladesh economy. It had to face serious challenges including the manmade ones. Despite the negative factors, Bangladesh successfully recovered from the muchapprehended impact of MFA (MultiFibre Arrangement) phaseout. Export of knitwear and oven apparels grew by 35.38 per cent and 13.5 percent respectively while total export exceeded US$10 billion. Besides, foreign Exchange reserve reached an all time high level of US$ 3.97 billion, remittances by expatriate workers increased to the highest ever level of US$ 5.46 billion and taka appreciated against dollar by a small percentage during the year.

It is predicted that the industrial growth for fiscal 2007 would be in the range of between 9.5 and 10.5 percent. The service sector, based on the past years performance, may yield a growth of 6.6 to 6.8 percent. So it seems that despite various ordeals Bangladesh has the inherent potential to perform better. The GDP growth is increasing and the country could easily look forward to achieving a doubledigit growth if only the political leaders avoid confrontational politics, develop a culture of sorting out differences through dialogues with an open mind as well as nurturing democracy within and practice proactive politics. The nation at this critical juncture needs political sagacity and visionary leadership to overcome the adverse effect of negative and outdated politics.

Sustainable democracy and economic development needs credible institutions such as totally independent Election Commission, AntiCorruption Commission and a judiciary free from administrative control as well as transparent and nonpartisan bureaucracy, among other things. In addition appropriate social policies like education, health and skill development are also essential.

Therefore, it is high time that the leaders take a forward looking approach and create an enabling environment so that the common people can embrace the wave of economic development taking place all over the world, particularly in the region. The businesses have always remained vocal about the damaging effect of street agitation, hartal and blockade as they more often than not turn out to be counterproductive. They must devise such political programme that support rather than harm the economy; to avail maximum benefit of globalization as well as attaining sustained poverty reduction and economic development. Otherwise, the country may suffer the damaging affect of manmade Tsunami.

Editorial of October-December issue