The announcement that country’s economy will grow by 4.63 percent this year--close to the targeted five percent--is an encouraging development for a staggering economy. The announcement has at last raised some hope of an economic revival. Yet, there are reasons to doubt the sustainability of such growth, for it was not the output of much-needed systemic reforms, but a consequence of sheer luck. The equation is quite simple: as a result of timely and adequate monsoon, agricultural production grew by 4.93 percent and thus buoyed overall growth. The second major factor was robust growth in remittances, which fuelled consumption. Given the heavy dependency of remittances on external factors, mainly the performance of Gulf economics, the national economy´s vulnerability can be guessed.
Contrary to the claims of concerned officials, the GDP data unveiled by the government indicates there are serious loopholes in the economy. For instance, growth of manufacturing sector, which has the capacity to create mass employment and absorb much of the unskilled and semi-skilled workforce coming into the labor market, continued to decelerate to 6.17 percent of GDP last year. Similar squeeze was seen in the construction sector. While the government has lagged in terms of capital spending, power crisis discouraged the private sector from investing open-heartedly. Together, these facts suggest that the country dismally failed to create off-farm jobs.
Hence, instead of beating the drums of achieving set growth target, we urge the government to do some serious soul searching and make efforts to remove existing shortcomings. How long can we afford to rely on unpredictable monsoon in the era of climate change in order for our farmers to eke out decent living and for economy to attain sound growth? Why doesn´t the government come out with an integrated agriculture development plan for the areas that have the round-the-year agriculture potential, which is also one of the few sectors that is least affected by the ongoing power shortage? The government must answer these questions earnestly.
We believe a coordinated approach to bring much-needed synergy in planning and implementation of agriculture related development is still missing. We have traditionally understood that distributing agriculture inputs and expansion of irrigation facilities are the major tools of agriculture development. But its development goes much beyond those two variables. Without linking inputs and irrigation with finances, technology and market access, attaining a sustainable agriculture growth remains a pipedream. Thus, we urge the government to consider a new approach for the development of agriculture sector. Development histories of many countries suggest that though agriculture alone can’t put a country among developed economics, it does provide a strong foundation for industrial growth