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No smooth road ahead for Bangladesh government

Jan 08, 2009

Newly elected Bangladeshi prime minister has a daunting task ahead of her, having come back to power on the promise of ending poverty. But the climate challenge of rising sea levels and the global economic crisis will only add to her problems.

Dhaka: Bangladesh's Prime Minister Sheikh Hasina Wajed faces a daunting array of problems ranging from spiralling food prices to the effects of global warming.

Her landslide election victory secured the Awami League party 230 of a possible 300 seats on promises that included bringing down inflation, which has hovered at around 10% for much of the past year.

"We have to end poverty," she said after her victory. "We have been charged with a huge responsibility to do this and our first task will be to cut prices of essential food items so everyone can afford to buy them."

Bangladesh is one of the poorest nations on the planet with 40% of its 144 million people living on less than a dollar a day.

Already four million people have been pushed back below the poverty line due to food price hikes since the middle of last year, according to the World Bank.

As well as lowering prices, analysts say Sheikh Hasina must immediately address the global economic crisis and tackle enormous power supply shortfalls to prevent the country becoming even poorer.

Electricity output is 40% less than needed, while a severe gas crisis has halted production in at least 300 factories.

"The world is heading towards a deep and prolonged economic recession. And already it has slowly started to affect our exports and remittances – our main levers of growth," said Mustafizur Rahman, head of Dhaka-based think tank the Centre for Policy Dialogue.

Bangladesh is the world's second largest clothing exporter after China, according to the International Monetary Fund (IMF).

Exports have nosedived after growing 42% in the July-September quarter as orders from Europe and the US – the two markets accounting for 90% of the country's overseas sales – have fallen.

The nine million Bangladeshis believed to be working abroad sent back last year a record 8 billion dollars or 12% of the economy. But remittances have slowed sharply due to job cuts in the Gulf countries as well as in Malaysia and Singapore.

The World Bank said growth in Bangladesh in the 2008-2009 fiscal year could dip below five percent because of the global economic turmoil if the government does not act fast.

Sheikh Hasina also faces the challenge of how to combat the effects of rising sea levels due to climate change which some scientists say could submerge the entire low-lying delta nation within 50 years.

Another issue high on the agenda is her vow to hold war crimes trials against those accused of siding with the Pakistani army during Bangladesh's 1971 independence struggle.

Analysts say this was one of the key reasons behind her massive election win, and she has already informally asked the UN for guidance on how to begin proceedings.

There have been few indications how such a variety of needs could be financed in a country where – according to the IMF – the tax-gross domestic product ratio is the lowest in Asia.

But Sheikh Hasina, who also ruled Bangladesh between 1996 and 2001, seems undaunted.

"We want to ensure people have better lives," she said. "We feel this is our duty to solve the nation's problems, to solve the people's problems."

The new government will end two years of rule by an army-backed regime which took power after months of deadly election violence brought the country to a standstill.

Source : AFP
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