I have been following with great interest our evolving economic scenario over the past few weeks. Contrary to dire forecasts about economic development in Bangladesh during fiscal 2009 and FY 2010. Cassandras have been proven wrong in most areas.

There has been some bad news but there have also been many encouraging reports. It has been a roller-coaster ride. Yes, export earnings might have grown by only 4.18 percent in May this year. However, in the broader perspective, we also posted an 11.87 percent export growth in the first 11 months of the immediate past fiscal year; earning USD 14.14 billion, up from USD 12.64 billion in the same period a year earlier. This was despite negative growth in the following sectors -- frozen food, raw jute, pharmaceuticals, jute goods, vegetables, leather and ceramic products.

Comparably, the country's import payment stood at USD 20.95 billion in the first 11 months of 2008-09 fiscal year. This meant that the trade deficit has narrowed. This was of course mostly due to decline not only in the prices of commodities in the international market but also because of a drop in the import of capital machinery compared to the corresponding period of the previous year. This last factor also indicated that there has been less investment in the manufacturing sector.

There was also the other important news -- the National Board of Revenue had achieved 99.01 percent of its revised revenue earning target fixed for the last fiscal year -- although the growth was a slim 10.63 percent year-on-year due to poor import duty collection (due to falling imports). The overall revenue collection was Taka 52,476 crore. That was commendable. 1 am confident that this figure will increase during the course of this current financial year, with the expansion of the income tax base as well as greater efficiency and better rnanagement in the collection ofValue Added Tax.

There were, as expected, disquieting statistics about the numbers getting employment abroad. Global recession has seen a gradual decline in the number of Bangladeshis obtaining such employment. This has been particularly evident since January this year. In fact, the first six months of January-June 2008 saw 475,896 Bangladeshis proceeding abroad. Comparably, during January-June 2009, only 250,900 left our shores. However, despite this, and the prediction of doornsayers, we have watched the amazing and steady rise by 22.32 percent in the remittance received from abroad during FY 2008-2009. It reached a record USD 9.68 billion.

This, juxtaposed with an improvement in the balance of trade scenario has helped the country's foreign exchange reserve to rise to an all time high of USD 7.42 billion -- sufficient to meet four months of our import requirement.

There has also been welcome news with regard to recovering money from large scale loan defaulters. An updated list is now being prepared of those who have defaulted on loans of Taka 10 million and above. This will include a wide selection --apparel units, government organizations including ministries, media houses, private aviation companies, leather and tannery units and even educational institutions. This is a good measure. One hopes that the relevant agencies of the government will pursue this matter with seriousness and quickly dispose of the cases on defaulting loans held up in courts, particularly in the Artha Rin Adalat. The process of recovery needs to be facilitated on an emergency basis.

Such a process will be important for success within this current financial year. Statistics released by the Bangladesh Bank has indicated that the economy grew 5.9 percent in the previous fiscal year, the slowest rate since 2002-03. It has mostly been due to the global slowdown. It could have been worse. As in the case of so many other countries it might have been in the negative territory. We have instead seen a case of the glass being more than half-full. This leads me to believe in the Bangladesh Bank forecast of the country achieving a growth of gross domestic product in the range of 5.5 percent to 6 percent during the current year. I also think that this figure will be exceeded in FY 2010-11 if we can successfully undertake infrastructure development -- especially through pub-lic-priva(e partnership. However, while undertaking such an exercise, we have to be careful that we do not trigger off an escalation of inflation.

We are today at a critical threshold in our economic journey. Policy plannes, quite often reiterate that we are striving to become a middle income country and exit from the LDC Group. This is of course the preferred option. Some of our economists believe that this will be possible by 2015. The UNCTAD considers 2024 to be the more likely scenario.

Nevertheless, one element is beyond

doubt. Rapid economic growth and achieving middle income status will require foreign direct investment. A recent report has revealed that FDI increased by 67.4 percent in the first nine months of the past financial year. It reached the figure of USD 882 million, partially because of the investment of nearly USD 300 million by a Japanese company in the local mobile phone industry. Our Board of Investment has revealed that they have registered USD 4.1 billion worth of investment proposals during the last fiscal year. This however does not mean that all these proposals will eventually materialise.

My reason for caution originates from a recent report published on Bangladesh by the Japanese trade and investment promotion agency -- Japan External Trade Organization (JETRO). In an indictment, this agency has pointed out that Bangladesh is losing its competitive edge in attracting investments compared to 30 other cities in 15 different countries. They have made their evaluation on the basis of 34 cost components which include, among others, factors like telecommunications, utilities, industrial estate prices, broadband internet connection charges, corporate income tax rates, mobile phone charges and transportation cost (the cost for carrying containers).

They have also hinted at other hidden costs like non-existence of comprehensive one-stop service, lack of clear regulatory regimes and corruption arising out of

abuse of governance and misuse of the due process of law. There is also the important factor related to absence of sufficient energy and gas supply within the power sector. We have already read recently about the problems being faced with regard to this last element by the important Korean Export Processing Zone near Chittagong. Apparently, total foreign investment from different companies totaling nearly USD one billion is held up. Some of those willing to invest in this zone earlier have since moved to Vietnam.

We have to move forward. We have to get our act together.

We have a new monetary policy for the next six months. The recent budget statement of the finance minister as well as statements by the Governor of the Bangladesh Bank have outlined ambitious steps. The possibility of success in the^A backdrop of continued global economic recession will lie in promoting inclusive economic growth. We will also have to expedite the pace of growth of our productive sectors. In addition, there has to be greater effort in ensuring that there is no unrest or violence in the industrial belts.

We have several tough tasks ahead of us during the current financial year and the next It will not be easy. However, achieving our economic objectives should be possible given dedication, seriousness and coordination.

Muhammad Zamir is a former Secretary and Ambassador and can be reached at rruanwgdhaka net