International Financial Management
Topic: Public private partnership.
Md. Shoaib Ahmed
Senior Lecturer, DBA
ASA UNIVERSITY BANGLADESH
Md. Fazlul Mobin
Md. Rakib Siddique
Shahanur Alam Bhuyan
Syed Abdus Salam
Md. Ariful Islam
Date: 12th August, 2010
ASA UNIVERSITY BANGLADESH
“Public Private Partnership and Explore the Related Issue of It”
This is an empirical study to investigate the feasibility of public private partnership idea that introduced by the government of Bangladesh to increase the GDP growth rate. For the purpose of the analysis, different types of data and information were used as measured to identify the feasibility of public private partnership in our country. In this paper we examine the different information of PPP activities in different countries like India, Malaysia, South Korea and Philippine. From that information we found that there is a close relationship between PPP and the growth rate. If we deeply concentrate on PPP activities in our country then we can easily achieve high GDP growth. So the development of our country mostly depend on how we efficiently done the PPP activities. Most of the People believe that PPP is a idea to develop a country.
Key words: Public Private Partnership (PPP), Gross Domestic Product (GDP), development.
A public private partnership is a legally-binding contract between government and business for the provision of assets and the delivery of services that allocates responsibilities and business risks among the various partners. In a P3 arrangement, government remains actively involved throughout the project’s life cycle. The private sector is responsible for the more commercial functions such as project design, construction, finance and operations. At present per capita income in Bangladesh is only USD 695 (BDT 47,955) and almost 40percent (58 million) of population live below the poverty line. Income from industry is 29.7 percent of total national income, and external trade is 40 percent of total national income. However, we are still considered as one of the least developed countries. Present government has vowed to eradicate poverty, attain highest possible growth by 2021, and build the country such that a thriving economy will fulfill basic human needs. Increased investment is a must for attaining higher growth. Bangladesh economy failed to gather momentum until 1990. Average growth rate during this time was stagnant at less than 4 percent per year. The growth rate is also on the decline due to impact of the global economic downturn. Lack of investment in infrastructure, especially energy and power, port and communication has been identified as root cause behind sluggish growth. In order to achieve 8-10 percent growth, rate of investment needs to increase from 24-25 percent of GDP to 35-40 percent of GDP. A lot of resources are required to raise rate of investment to 35-40 percent of GDP. It is challenging for the government to arrange such huge resources. Moreover, due to current global economic downturn, the prospect of receiving foreign assistance has diminished. Resource mobilization is not the only challenge for the government. It is also imperative to ascertain whether the government has skilled manpower and required institutional framework to implement mega infrastructure projects. So, the government of Bangladesh has taken the initiative of public private partnership to increase the GDP growth.
Objective of the Study
The objective of the paper is to investigate the impact of PPP on GDP growth of Bangladesh. The concept of the study is taken from one of the working paper of Finance Division “Invigorating Investment Initiative through Public Private Partnership A Position Paper”. Moreover after completion of this paper we...
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