ICC Chairman says recovery is fragile and requires vigilance
Although the world’s economy averted the worst, the current recovery is fragile and it will take some time for the global economy to return to robust growth, ICC Chairman Victor K. Fung told an energy conference today.
“We did not fall over the precipice,” Mr Fung said at the inaugural ceremony of the ICC Bangladesh Conference on Energy for Growth to mark ICC Bangladesh’s 15th anniversary. “But the precipice is still there.”
He added that despite efforts by ICC and others it appeared highly unlikely that the Doha Round of trade negotiations would be concluded this year. “A successful conclusion of the Doha Round would have boosted confidence and shown the world that countries are able to work together for the common good.”
Instead, he added, the global market is becoming at once more regional and bilateral, a situation that will not help countries such as Bangladesh, as South Asia lags badly behind other regions in intra-regional trade and investment flows.
The ICC-sponsored conference examined possible solutions to Bangladesh’s chronic energy shortages, which are hampering growth even though the country continued to manage the 5-6% annual growth rate of recent years even during the recession. The production of electricity, however, falls far short of demand, a situation that has led the government to add additional generation capacity.
Bangladesh is believed to have huge gas and coal reserves that have not been exploited. “For the foreseeable medium-term projection, these will form the bases of power generation for the manufacturing sector,” ICC Bangladesh said in a statement ahead of the conference.
The statement added that this situation poses a challenge for the private sector in that the establishment of new industries will have to consider the reality of the energy deficit. But it added that the private sector could also seize the opportunity to promote an economic environment that will allow immediate investment in power generation projects.
Referring to this situation, Mr Fung said in his speech that the power deficit presents a major impediment to growth, competitiveness and social development. He said the negative consequences of the energy production crisis and the constraints in the transmission of the gas system have affected fertilizer production and the functioning of the country’s textile, leather and ceramics industries among others. About 65% of Bangladesh’s 160 million people have no power supply whatsoever, severely hampering human development.
“The point therefore is that even in a benign global environment, Bangladesh would be hampered due to its persistent energy crisis,” he said.
The one-day conference discussed issues that included the available options to power project developers given Bangladesh’s coal, oil and gas reserves; the legal and regulatory structures required to implement power projects successfully; and the possible sources of local and foreign funding to carry out planned energy projects.