The moment one tries to envisage Bangladesh in another two decades, say 2025, several questions crowd into one's mind. What would be the population in 2025 in this already very densely populated country? What would be the level of degradation of our environment, bio-diversity, and coastal environment? What would be the state of our rivers -- our lifeline? What will be the dominant forces driving the global economy? What sources of energy will drive our machines? How will the industrialised world guide and interpret globalisation and free trade? One wonders what marvellous technological innovations will be unveiled? What new jobs and activities will emerge as a result of those innovations? What sort of economic transformation will take place in our own region?

Now these are far cry for most of our citizens who are struggling every day in abject poverty to eke out a living. Since we have to build on the present structure for 2025 a brief examination of the domestic and external economic scenario inherited by the present caretaker government would bring home the enormity and complexity of the task ahead. Despite robust growth in exports and surge in foreign exchange remittance from overseas wage earners and our peace keeping forces with the United Nations, high interest rats, creeping inflation, declining net FDI flows and foreign assistance are putting pressure on macro economic stability. The threat of a weakening financial and banking sector with large volume of non-performing loans particularly on account of SOEs and signs of boom in asset prices do not augur well for the future. Criminalisation of many important sectors of the economy and political patronage have created uneven competition and had been driving out many genuine entrepreneurs from such sectors which include real estate, transportation, public procurement and retailing. If the private sector is not rewarded through merit and competition then growth will not be sustainable. The RMG sector which accounts for 75 percent of our exports is faced with rising wages triggered by increased cost of essentials, housing and transport and dogged by frequent power failures on one hand and on the other worsening terms of trade and increased cost of compliances.

Externally with volatile oil prices Bangladesh faces a huge challenge in meeting higher cost and higher level of energy demands, and in devising a sustainable energy pricing policy. In international trade the developing countries are faced with moving goal posts. Increasingly a question is asked "Is free trade really fair trade?" Doha development round launched in 2001 with the avowed aim to lift millions out of poverty were suspended on July 24th 2006 after key players in WTO failed to reach consensus although frantic efforts are being made o revive the discussions. These decisions will have profound long term consequences for Bangladesh.

Now the critical question before us is that can we raise our GDP growth from the present level of 5 percent to 6 percent to 8 percent to 10 percent on a sustainable basis? For starters, rent seeking, smuggling, customs duty and tax evasion, system losses in electricity, gas and petroleum products, premeditated non-performing loans, corruption in public procurement are estimated to cost the economy about 3 percent of the GDP annually. The key to growth is investment -- both domestic and FDI. Therefore, we have to carry out reforms of institutions and policies in the areas of governance, trade, finance, economic infrastructure including electricity, port, telecom and transport and improve skill level of the workforces, establish a competitive business environment, free from political patronage, establish clear regulations for start up and exit of enterprises, develop an energy development and security strategy, ensure contract enforcement and protection of property rights, including intellectual property. Every year 2.4 million boys and girls enter the job market now. We can only generate about 800,000 jobs. Many of them have education which has little relevance to the job market. This on one hand deprives the nation from the productive capacity of our youth and on the other hand provides fertile ground for recruitment by terrorists, criminals and anti-social groups. Backwardness in education and health is the root cause of persistent poverty.

While the agricultural sector remains in important driver for change through its linkages non-farm activities now constitute the larger share of rural household income. Wage earners' remittance and increased mobility have brought about a profound change in the consumption and demand for the rural people. Women's role in economic activity has now gained wide acceptance. There is no alternative to an effective local government for the demand mediation and opportunity spotting. The non-farm rural economy that includes trading, transport, agro-processing, nursery, fish farming, poultry, retail sectors and services today hold tremendous potential for providing further depth and growth in our economy leading to accelerated poverty alleviation 90 percent of all our enterprises fall into the category of SMEs. They can create a job for as little investment as Tk 15,000 ($200). We cannot ensure sustained growth by not addressing the special needs of the SMEs. They now require new support and new institutions. For example the agro processor wants advice on packaging, longer shelf life, international product standards, access to foreign buyers, the people who want to work abroad require skill training for higher wages. We have to take technology to their doorstep for improved productivity.

These are areas where the government the NGOs and the private sector can forge an alliance and make poverty alleviation a very rewarding undertaking. But the biggest stumbling block for SME is access to finance. They are considered not small enough for micro finance and not big enough for access to formal banks. Also traditional collateral based lending is not suitable for most of the SMEs, particularly in creative sectors like ICT. On the other had the lack of market based regional growth centres in the country has actually resulted in net outflow of resources from the rural economy as confirmed by a recent study.

To achieve higher growth we must unleash the creative initiative and productive capacity of our 150 million people, 40 percent of whom are below the poverty line. Stimulating economic growth does not necessarily help reduce poverty. In fact we have been witnessing an increasing income inequality. Without addressing this issue of economic inequality the goal of faster poverty alleviation cannot be achieved.

Therefore, the basic challenge before Bangladesh is how to raise and sustain efficiency and competitiveness and create an attractive investment climate and implement an inclusive growth strategy to tackle pervasive poverty.

Now what are the areas that hold for us the greatest potential for growth over the next few decades? I passionately believe two of the critical areas are human resources development and regional market integration.

The latest phase of world economy is truly knowledge based, where ideas are more important than physical assets. Knowledge has evolved as a basic form of capital and is now the key driver of economic growth. It is undeniable that the more innovative and knowledge abundant a business location is the higher is its position in the ladder of global trade, finance and investment. Bangladesh needs to undertake significant reforms and investment in building education and skills and strengthening its innovation system. This will enable us to harness the vast reservoir of our talented youth to leverage the global ICT and outsourcing business which is estimated to be worth $141 billion by 2008.

The process of globalisation is being driven by the economic forces of greater global interdependence on one hand and the integration of regional market on the other. Bangladesh is today sitting at the epicentre of growth in the new millennium. China is expected to capture 10 percent of global trade by 2020 second only to USA with 12 percent while India is expected to follow closely on her heels. Therefore, Bangladesh must devise a strategy to weave into these two fastest growing economies of the world.

This may be done by binding the region through multimodal connectivity which will establish Chittagong port as a nodal point for handling trade of the region that would include North-East India, South-West China and South Asia and beyond. Integration with regional markets will create exciting opportunities for exploiting synergies based on comparative advantages and investment in cross border infrastructure projects. Thus we shall have the potential to tap into a market of over 2 billion people, one-third of humanity with fast rising purchasing power. This calls for sensitive, innovative, visionary and bold leadership in our country.

In the recent past the government was keyed to crisis management while long term policy planning was largely neglected. As far as plotting any road map for the future is concerned there will be a gap in our vision if we do not take on views of the younger generation who will provide the leadership in different fields in 20 years time. Indeed after consultations with the citizens and stake holders we should interact with the political leadership of our country because it is their role to guide and materialise the vision. We must bear in mind that people's awareness and aspiration today is different from those of 20 years ago. Education, globalisation, internet electronic media, high mobility have given them global exposures that are constantly influencing their thoughts, values, priorities and aspirations enormously. Are our politicians aware of these changes? Even if they are aware do they care about people's expectations? Can our politicians raise themselves above narrow party interest and pursuit of power at any cost to provide the kind of bold and enlightened leadership the country needs to take us to 2025?

But alas! the people were utterly disappointed with the shenanigans and unethical behaviour of the political leadership in preparation for the scheduled election of 22nd January 2007. We had witnessed how they obstructed reforms for ensuring a proper voters' list and a free and fair election. We had witnessed how they disrupted people's lives and economic activities pushing the country to the brink of a civil war to protect their "election engineering" rather than place their faith on the voters. We had witnessed how people's aspiration to see able and decent candidates in the election was shattered by the brazen trading of election nominations with many godfathers and black money holders.

The question that naturally comes to one's mind is why do the parties nominate godfathers/black money holders as candidates to the parliament? Is it because they can win election by vote rigging and violence and bring the party sure seats? Is it because they can help the parties rule the streets when parliament is made dysfunctional and politics is diverted from the parliament to the streets? The fact is when these people are elected or form government the first thing they do is seek return on their "nomination investment" plunging the government into corruption and bad governance.

We have now reached such a juncture in our national development, regional economic transformation and globalisation that we must create an enabling environment to encourage more and more dedicated and able people to enter politics and provide imaginative, constructive and accountable leadership. Along side the national politics we also need to look into the issue of local government very urgently. It is universally accepted that an effective a local government is a precondition for accelerated economic development and poverty alleviation through better service delivery, empowerment of the people and accountability. But so far we have witnessed a curious unanimity among the leading political parties in resisting the local government system as this would result in devolution of power from the centre and erosion of influence of the members of parliament.

The present government has a unique opportunity now to cleanse our politics through appropriate and far reaching reforms, strengthening of the institutions, ensure accountability of the political parties and set the stage for free and fair elections. This is not only the cry of the hapless citizens but also many decent politicians in different political parties who had been marginalised in their respective parties by a few godfathers, black money holders and self-seeking politicians. Any half-baked or botched reform effort this time would lead to more bleeding of the economy and more misery to the people in the future.

The government must pursue this goal above everything else and all the major political parties, civil societies, the business community and social groups must support the government in this endeavour. We owe this to our freedom fighters, our citizens and our future generations.

Yussuf Abdullah Harun, FCA is former president of FBCCI.