In­fras­truc­tural De­vel­op­ment

Southasia - - Briefing -

The Asian De­vel­op­ment Bank (ADB), in its re­cent re­port, has termed Bangladesh as hav­ing the worst in­fra­struc­ture fa­cil­i­ties, third only to Nepal and Man­go­lia.

The re­port states that Bangladesh’s phys­i­cal in­fra­struc­ture such as trans­port, com­mu­ni­ca­tion, sewage, wa­ter, and en­ergy are in dire state. More­over, the coun­try’s grow­ing ur­ban­iza­tion in re­cent years has gen­er­ated de­mands for phys­i­cal in­fra­struc­ture but ow­ing to fi­nan­cial con­straints, Bangladesh could not achieve much progress in in­fras­truc­tural de­vel­op­ment.

Econ­o­mists be­lieve that Bangladesh can meet its in­fras­truc­tural fi­nanc­ing through a num­ber of ways such as uti­liz­ing ex­ter­nal and in­ter­nal re­sources, do­mes­tic sav­ings, and for­eign ex­change re­serves. Econ­o­mists are of the view that Bangladesh should use its for­eign ex­change re­serves to meet its in­fra­struc­ture costs. How­ever, ac­cord­ing to some es­ti­mates, the coun­try needs nearly $35 bil­lion of in­fra­struc­ture in­vest­ment in the next five years.

An­a­lysts be­lieve that since Bangladesh has scarce do­mes­tic sav­ings and a shal­low do­mes­tic fi­nan­cial mar­ket, it ought to ex­plore ex­ter­nal re­sources to fi­nance in­fra­struc­ture. This is be­cause the coun­try’s growth of sav­ing rates and de­vel­op­ment of fi­nan­cial mar­kets cor­re­late with its in­come level. The ADB re­port ob­serves that for­eign in­vest­ments bring spe­cial types of risk to the coun­try be­cause of their long de­vel­op­ment time, cur­rency ex­po­sure, po­lit­i­cal risks, like­li­hood of can­cel­la­tion, and pos­si­ble un­der­uti­liza­tion.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.