To safeguard the country and its economic progress, "the major political parties must work unitedly to rout" proliferation of extremism and the terrorists, Asian Development Bank (ADB) Country Director Hua Du told a press conference yesterday.

In the Quarterly Economic Update for July-September FY06 launched at the conference in ADB Bangladesh Resident Mission, the multilateral donor agency said the projected GDP growth rate hike from last year's 5.4 percent would be possible mainly thanks to a recovery in agriculture.

According to the update, besides the recent drastic downslide in law and order, the other risk factors affecting the country's medium-term economic prospects include the longer-term impacts of the quota abolition on the garment sector, the implications of high oil prices on macroeconomic management and weak governance.

"A stable domestic environment is essential for investment and private sector development," Hua told the press.

Terrorism now pervades the entire world, she observed and said global and South Asian leaders are committed and working hard to combat it, to see an end to it.

On terrorism in Bangladesh, she suggested for the political parties to deliberate on the issue and find way to address it domestically.

The ADB update identified the country's overall security situation as a major source of concern. In this connection it mentioned the frequent bombings and the Islamist militant groups in operation, adding, "In the run-up to the next elections, the political situation remains confrontational with the Awami League boycotting the Parliament sessions."

ADB Senior Economist Rezaul Karim Khan presented the details of the update.

Although the knitwear exports continued to register a strong growth after the MFA quota phase-out, the exports of woven garments have fallen, pointed out the report. The bank said, "There are several domestic policy measures including setting up central bonded warehouses and endorsing SAARC cumulation which are needed for boosting the external competitiveness of the garment industry."

Due to the global petroleum price hike, pressures on the country's balance of payments heightened in the first quarter of FY06, said the report. However, the balance of payments did not face any serious crisis mainly thanks to a robust growth in workers' remittances.

The ADB yesterday also unveiled its Country Strategy and Programme for Bangladesh for 2006-2010, pledging a total aid of $1.8 billion.