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Friday, November 9, 2012
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Five-year plan misses key targets in two years

The country has failed to achieve its private investment, agricultural growth and inflation targets for the first two years of its sixth five-year plan, according to a report by Planning Commission's General Economic Division (GED).

The disclosure came at the first review meeting of the five-year plan for fiscal 2011-15, held at the National Economic Council auditorium yesterday.

Emerging from the meeting, Finance Minister AMA Muhith told reporters: “Our weaknesses were amply pointed out in the meeting, which are less growth in agriculture and investment.”

“We are dying for a lack of investment,” Muhith said.

The target for private investment against GDP for fiscal 2012 was 22.20 percent but only 19.14 percent was achieved.

When reporters asked the reason for falling short on the investment target, the minister said the country has limited resources -- so more foreign direct investment (FDI) is required.

He, however, added that much progress was made in a number of fields that include information and communication technology and sanitation.

The inflation target, too, was not met for the year: the target was 7 percent but it stood at 10.6 percent.

The GED report, which assessed the progress made in the last two years, said the monetary and fiscal policies need to be coordinated for the monetary growth rate to be consistent with the sixth plan's inflation target.

It also said proper implementation of Bangladesh Bank's monetary policy statement is imperative for achieving the lower inflation rate.

GDP growth target, which was 7 percent, was not achieved, along with the sectoral GDP growth for agriculture and service.

The GED review report, however, said 95 percent of the targets were met in the two years of the current five-year plan, when the attainment rate of the past five-year plans since independence was between 63 to 84 percent.

To achieve the GDP growth target of the sixth plan, Bangladesh needs to mobilise substantial higher inflows of official aid and FDI, according to the report.

The report, however, has drawbacks as it could not employ accurate sectoral data, which comes on a 3-5 year cycle, and measurements of the performance of public institutions and governance, which does not exist. The report added there are serious limitations to the conduct of proper monitoring and evaluation of sectoral and national programmes -- and will need to be addressed on an urgent basis.

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