Thinking Aloud: Volume V, Issue 6

This November 2018 issue of Thinking Aloud focuses on “Investment challenges”. The first article on ‘Boosting private investment in Bangladesh’ highlights that, though there has been a gradual rise in the investment-GDP ratio in Bangladesh over the past three decades, in recent years, the share of private investment in GDP has remained static and the share of public investment in GDP has risen. Also, the share of private investment in total investment has fallen whereas the share of public investment in total investment has increased. The article emphasizes on the need for addressing policy-induced and supply-side problems and enhancing the quantity and quality of human capital for an accelerated private investment in Bangladesh. The second article titled ‘How does public investment affect private investment?’ highlights that one of the critical channels through which public investment may play a role in increasing the rate of return of private capital is infrastructure development. However, it is not only the quantity, but also the quality of the infrastructure is equally important. In many developing countries, due to institutional deficiencies, infrastructural projects suffer from huge cost and time over-run, which can discourage private investment. Also, interconnection and complementarities between general and sector-specific infrastructures are key elements for the promotion of private investment. The third article on ‘Political economy of special economic zones: China vs India’ argues that political stability and understanding between political parties to ensure economic success for a country is the primary incentive for an SEZ’s success. The article titled ‘Intraregional Investment in South Asia’ emphasizes that Intra-regional investment is lower than 1 percent of overall investment in South Asia. The fourth page covers the events that took place in the month of October.