Speeches and Remarks

Remarks by Ambassador James F. Moriarty for Resource Mobilization and Investment Panel

October 10, 2009

Theme:  Ideas and Strategies for Rapid GDP Growth and Development of the Bangladesh Economy, or What can Bangladesh do to achieve middle income status in the next decade?

Dr. Samad of the Board of Investment, Dr. Mujeri of the Bangladesh Institute of Development Studies, Dr. Rahman of the Center for Policy Dialogue, Professor Khan of the University of Denver, Professor Quddus, our panel chair, Ladies and Gentlemen.

Thank you for inviting me to join you today.  I think that mobilizing resources and investment is the most urgent challenge facing Bangladesh.  Success in this area will lead to economic growth, greater prosperity, and ultimately, middle income status for Bangladesh.

To mobilize resources and spur investment, Bangladesh must address problems like food security, economic diversification, weak infrastructure, and good governance.

President Obama and Secretary Clinton have voiced a renewed U.S. commitment to global food security.   In recent remarks at the UN, Secretary Clinton stated that food security “is a key foreign policy objective of President Obama and our administration.  This is an issue that affects all of us, because food security is about economic, environmental, and national security for our individual homelands and the world.”

The U.S. Government stands behind the five principles embraced at the G8 summit in L’Aquila, Italy to fight hunger and alleviate poverty through sustainable agricultural development. 

Under the first principle, the United States will invest in country-led plans developed by the people who live and work in affected countries. 

Second, the United States will address the underlying causes of hunger.  We will make investments ranging from greater research to better seeds and insurance for small farmers to large-scale infrastructure projects. 

Third, the United States supports improved coordination and will form partnerships across nations, international organizations and NGOs. 

Fourth, the United States will leverage the benefits of multilateral institutions to support country-led plans.  Institutions like the United Nations can provide valuable assistance to a nation’s food security plan.

Finally, the United States pledges its long-term commitment to ensuring people have the means to feed themselves.

Bangladesh has already proven it can produce enough rice to feed itself.  Additional measures to improve agricultural productivity and increase crop yields are within the country’s grasp.  I am confident that Bangladesh can guarantee food security for future generations.

But increasing crop yields alone is not enough to achieve food security or middle income status.  If you double the income of the average farm laborer in Bangladesh, that worker is still only earning $2 a day. 

Bangladesh can be proud of its strong economic progress over the past couple decades.  The economy is expected to grow between 5 and 6 percent this year, at a time when many countries are struggling to show any economic growth.  But those of us who believe in Bangladesh’s potential—and I am one of those believers—think that Bangladesh can, and should, perform even better.

Bangladesh needs to diversify its economy.  There has to be economic growth.  There has to be a bigger pie to satisfy the legitimate demands of all 155 million Bangladeshis.
Bangladesh has already proven it can perform.  All you have to do is look at the spectacular success of the garment industry.  There are other sectors in which Bangladesh can replicate this success.  The U.S. Government is helping Bangladesh develop some of these sectors through our competitiveness program, called PRICE.   PRICE is working with entrepreneurs to build the shrimp, leather and horticulture sectors.  In addition, there are many dynamic entrepreneurs seeking new niches for Bangladesh in the global economy.

Ingenuity and hard work only get you so far, however.  Bangladesh needs to create the environment in which enterprise can flourish.  Bangladesh needs an infrastructure framework to support drive and creativity.

I would like to underscore the especially pressing need for improvements in infrastructure, particularly energy and communications.  Without the necessary infrastructure, even the hardest-working farmers, the smartest entrepreneurs, and the best factories will not be able to produce or sell their products.

The government’s investment in infrastructure has simply not kept up with the pace of growth in the private sector.  As a result, infrastructure is one of the leading constraints on Bangladesh’s growth today.

The government must move swiftly to reverse this trend, to ensure that infrastructure becomes a facilitator for economic growth rather than a constraint.  Improvements in the energy sector, for example, would have powerful multiplier effects for industry, for households and for generating new and higher-skilled employment.

Improving infrastructure by itself will mobilize resources, spur investment and create jobs, in addition to the benefits that will flow once the infrastructure is complete.  Bangladesh can also tap into private funds and international expertise to reach its infrastructure goals.  I commend the government for placing a priority on public-private partnerships to build these important networks.

Infrastructure alone cannot ensure that enterprise will flourish, however.  The government must also create a healthy regulatory framework.  I emphasize the word framework.  A framework is a skeleton.  It is up to the private sector to put meat on the bones.

The government’s framework should be clear, consistent and corruption-free.  Such a framework will give confidence to domestic and foreign investors.  More and better business will grow.  And when people see how well business can work in Bangladesh, more businesses will follow.

I cannot over-emphasize the point that government should provide a framework, or skeleton, only.  Experience has shown that an economy directed by government does not ultimately promote growth; rather, it stunts growth.  Even more importantly, rent-seeking is a cancer that eats away at the skeleton.  It can weaken an economy, and if not removed, kill it.

Happily, Bangladesh has an excellent prognosis.  It has demonstrated that it can grow its economy at a healthy rate despite flood, famine and turmoil.  As Bangladesh embarks on its next phase of growth, the country faces a fundamental decision:  Will Bangladesh settle for a growth rate of 5 to 6 percent, which will be enough to show progress?  Bangladesh has made great progress on this track in the past two decades.

Or, should Bangladesh aspire to that 7 to 10 percent growth rate, the growth rate and trajectory that will begin bringing people out of poverty, raising literacy and standards of living throughout the country, begin giving people better and more productive lives?

I think we all know how that question should be answered.

Thank you.