Employment Promoting Growth in Bangladesh: Monetary and Financial Sector Issues

Although economic growth has improved in recent years in Bangladesh, the better economic performance has not translated into satisfactory poverty reduction. The type of growth that matters Bangladesh is the one that creates employment opportunities especially for the poor. In Bangladesh, monetary policy can create better employment opportunities with a well functioning financial sector having capability to ensure adequate resource flows to socially productive uses. On the contrary, such a monetary regime may contribute to high real interest rates impeding the realization of stipulated growth and poverty reduction. For success in reducing poverty, complementary policies to increase the economic mobility of the poor and raise their average returns to labor are also crucial.[PAU 0904]