"There might be some isolated incidents of businessmen being harassed but we see an improvement in overall law and order situation," she said adding, "We are no more frightened of walking on the streets now."

The caretaker government seems to have every intention of taking care of the people, she said speaking at the launch of Asian Development Outlook 2007 at its Dhaka mission.

Du suggested that the government take timely decisions on issues regarding foreign direct investment (FDI).

Citing the example of Indian conglomerate Tata's investment proposal that has been hanging on for over two years now due to the government's indecision, she said,"Business is business. You would have to decide whether to grab it or not."

She, however, believes that FDI will definitely pick up as the conditions for business and investment are improving.

Chief Economic Analyst of Dhaka Mission Rezaul Karim Khan presented the highlights of the ADB's flagship annual economic publication launched simultaneously in all 53 member states.

According to the outlook, the country will post a 6.5 percent GDP growth in the year 2007 while 7 percent in 2008. Trends in the first half of fiscal 2006-07 point to a turnaround in economic activities.

Analysing the recent developments, Karim said the growth prospect for Bangladesh economy is bright.

He said the current economic progress is the result of growing remittance and 28 percent growth in readymade garment export. He, however, said the recent bird flu outbreak might constitute a major risk.

Macroeconomic stability must be maintained and tax-GDP ratio increased for maintaining the growth rate, he observed.

The ADB outlook reads,"Despite internal and external shocks, steady growth record of Bangladesh economy provides a sound basis for its medium-term prospects."

"Driven by the robust performance in industry and services and a further increase in workers remittances the gross domestic product (GDP) is forecast to grow steadily," it adds.

According to it, the current account balance in 2007 is expected to record a surplus of 1 percent of the GDP.

In the report, inflation is projected to decline to 7 percent in 2007 from 7.2 percent in the previous year. It is likely to dip further to 6 percent in 2008.

The ADB pointed out that corruption holds back the country from tapping its potential for higher economic growth and faster poverty reduction.

The caretaker government has taken some extensive anti-graft measures and accordingly, shortcomings of the Anti-Corruption Commission (ACC) too will have to be addressed through giving it greater independence, scope and resources, it added.

Upgrading physical infrastructure, augmenting efficiency in the financial sector, stimulating FDI inflows and strengthening governance are the key development challenges confronting the country.

The multilateral development institution suggested that the Chittagong port should be privatised. It proposes the country increase its power generation capacity to meet the burgeoning energy demand and establish a healthy and efficient financial system.

Power remains the biggest logjam in physical infrastructure. Only one-third of the population has access to electricity, notes the ADB report.

It forecasts a moderate growth of 7.7 percent in 2007 and 8 percent in 2008 for the South Asian economies.

Tight monetary policy in several countries in the region in 2006 is expected to dampen consumption with investment and growth in developed countries easing, the report continues.

The service sector might drive the economic growth in South Asia supported by accelerated growth in manufacturing sector, it says.