What do you top policy-makers say?
Every dollar that non-residents send to Bangladesh has a multiplier
effect of 3.3 on overall economy in GNP terms.
In lay-man's term, if some worker sends 1 dollar to Bangladesh, it does
not increase the GNP by 1 dollar, rather it increases the national GNP
by 3.3 dollar. Its a very promising statistics, isn't it?
Don't be too ecstatic. Take a second look.
Where does that that 3.3 dollars of additional GNP comes from? 2.8
dollars from consumption and 0.5 dollars from investment.
Now if 2.8 dollars is spent on consumption - its a good sign too. The
market size growth rate is healthy.
However, if all of those consumption is fulfilled by imported goods, it
wouldn't be a good news. So, to be on the safe side, the ratio of
imports in local consumption has to go down that would help us to
prevent those 2.8 dollars to take an U-turn and go out of the country
again.
How do you do that? Not easy task, but to achieve that two pronged
strategy is needed.
Increase the overall investment multiplier of the economy.
Increase the share of the dollar amount that goes into investment when a
remitter send 1 dollar of their hard-earned money; i.e. push that 0.5
dollars to something higher.
How do you do that?
If we start talking about that in detail, it would need another
afternoon. So, we leave that to the experts. Or search the
scholar.google.com <http://scholar.google.com/>
But here is a clue - change the incentive structure to the businessman.
Do not give cash incentive directly on export dollars. Businessman will
export as long as they can sell it. What they do not find attractive is
- specifically the lazy ones who are after quick money - they do not
re-invest their export-earned dollars. Give incentive to investment -
through the use of tax filing system. In other words, do not give cash.
Give double tax breaks on investment dollars. Give tax break in R&D
dollars. Give tax break in donations to educational institutions.
Its very unfortunate that govt gives tax break if someone gives handout
to the poor (through donating to the central relief fund), but govt do
not give tax break if someone gives poor students money to study, or
make an investment in an educational institution.
Hopefully the Chief Adviser, Finance Adviser and NBR Chief will look
into these issues - for the next budget (short term). We also expect you
to start a national dialogue to devise a strategy about how to increase
the nations "investment multiplier" so that multinational companies do
not come here only to sell their products, but also choose Bangladesh as
their investment destination.
If you thought some of the ideas are worth of your reading time, please
forward it to others. If you have an ear to the columinsts in regular
traditional media, please forward it to them. If you have an ear to the
journalists and news editors of the electronic media, discuss it with
them. Hope they would look at the suggestions and give due diligence.
Thanks for your time,
Innovation Line
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Note: This is a freelance column, published mainly in different internet
based forums. This column is open for contribution by the members of new
generation, sometimes referred to as Gen 71. If you identify yourself as
someone from that age-group and want to contribute to this column,
please feel free to contact. Thanks to the group moderator for
publishing the article.
Dear readers, also, if you thought the article was important enough so
it should come under attention of the head of the government please
forward the message to them. Email address for the Chief Advisor:
feeedback@pmo.gov.bd or at http://www.cao.gov.bd/feedback/comments.php .
The more of you forward it to them, the less will be the need to go back
to street agitation. Use ICT to practice democracy. It is already proven
that this government responds to the feedback.
You can also send it to Bangladesh Bank at this email:
gm2combb@bangla.net
Don't forget to send it to the NBR man himself (most important):
bdnbr@mail.com
And to the Ministry of Finance info@mof.gov.bd
OR
http://www.mof.gov.bd/contact/email.html
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