In a recent report the globally acclaimed newsmagazine the Economist talked about a 'remarkable turnaround' of Bangladesh economy. The report, firstly, made a comparative analysis of Bangladesh's per capita GDP with that of Pakistan from which it gained independence through a bloody war of liberation. The former was quoted as $ 1,538 which is $ 58 higher than that of the latter.
The latest Bangladesh's Per capita GDP has been stated by Bangladesh Bureau of Statics to be $ 1610. The report also talks about how 'Bangladesh was left in dire consequences' immediately after its independence in 1971. The war of liberation, according to the Economist, 'led to the displacement of million lives and damaged infrastructure'.
Mind it, nearly 32 per cent of our exports and 35 per cent of the import were linked with the then West Pakistan. Suddenly the raw materials like raw cotton, yarn, clothes, oil seeds, and manufacturing products stopped coming from Pakistan. There were not many entrepreneurs in Bangladesh either. Most of the educated Bengalees used to opt for government employment or small businesses. The raw jute was the major export item of the then East Pakistan. Most of the foreign exchange earned from this export used to be spent for building the new capital of Pakistan. Since most of the armed forces and civilian government employees were recruited from West Pakistan the share of the revenue budget was also meagre for the eastern province of Pakistan.
So the economists of the then East Pakistan coined the phrase 'two economy' as early as in 1956. Professor Nurul Islam, the doyen of economists originating from the then East Pakistan claimed in one of his researches (1972) the per capita GDP of the inhabitants of eastern province of Pakistan increased by only 17 per cent during 1959-60 to 1969-70. Back in 1959-60 the per capita GDP of 'East Pakistan' was one third less than that of West Pakistan. Within a span of decade the Eastern Province of Pakistan was impoverished to an extent that its per capita GDP was two-third less than that of West Pakistan.
Given this initial unequal economic bases, the performance of Bangladesh economy has indeed been spectacular compared to Pakistan. The Economist rightly assessed that '' Bangladesh rose from the ashes of the past and transformed itself into a state of flourishing economic growth.'' The Economist further adds," Bangladesh's economic progress must be celebrated, since its annual growth has averaged more than 6% over the past ten years and has run above 7% over the past two." Pakistan could manage only 3-4 per cent of GDP growth rate during this period.
While industry accounted for only 6-7% of GDP of Bangladesh in 1971 (Pakistan's was 20%), the figure has gone up to 29 per cent now. The contribution of manufacturing sector, particularly the RMG sector has been expanding consistently. In fact, according to the Economist, "Bangladesh, one of the primary exporters of ready-made clothes across the world, now exports more ready-made garments than India and Pakistan combined." The pro-active move by the government to establish hundreds of special economic zones including some with foreign participation may also strengthen the export-earning capacity of Bangladesh.
Bangladesh's per capita GDP also received boost from another source which is its stunning performance in fertility reduction. Back in 1972, the total population of Bangladesh was about 80 million compared to the truncated Pakistan, still five times larger than Bangladesh physically, with a population size of 70 million. Today, the population of Bangladesh is 160 million compared to Pakistan's 210 million. The current population growth rate in Bangladesh is 1.2 per cent compared to 2.1 per cent in Pakistan.
In addition, all other social development indicators improved in Bangladesh much faster than in Pakistan. The end result has been higher average life expectancy in Bangladesh. On an average a Bangladeshi lives more than 72 years compared to 66 years in Pakistan. The infant mortality rate in Bangladesh is 31 per thousand births compared to 66 in Pakistan. The average schooling period for a Bangladeshi is 10.2 years compared to 8.1 years in Pakistan. Forty two per cent of our children have secondary education compared to 20 in Pakistan. Almost cent percentage of our children go to primary schools. The latest Human Development Index for Bangladesh is 0.58. The same index for Pakistan is 0.55. We have been doing far better in women empowerment as well. The gender development index of Bangladesh is 0.93 as against Pakistan's 0.74. Thanks to rising industrialization 59.4 per cent of our labor force (aged 15 years +) are now gainfully employed including a substantial proportion of them being women. The comparative rate for Pakistan is 51%. The export and import figures of Bangladesh account for 42.1 per cent of the country's total GDP while this is 28.1%. If we take 2000 as the base year our export index increased to 506.79 in 2014. The comparative figure for Pakistan was 245.77. The performance of agricultural sector in Bangladesh, essentially with majority of small-holding farms, has been stunning in terms of adoption of farm mechanization leading to near food self-sufficiency. This year the food supply has been less than normal due to repeated flood and sudden pest attack. The Pakistan agriculture remained feudalistic and hence less favorable to the small holders. The socio-economic condition of an average Bangladeshi farmer is far better than his/her counterpart in Pakistan. The financial sector led by a pro-active developmental central bank has improved the money transmission channels through mobile financial services and agent banking in addition to directed credit to farmers and small rural entrepreneurs. As a result the effective demand has improved in rural Bangladesh leading to a vibrant rural economic rejuvenation.
Our success stories abound not only in the arena of socio-economic development but as well in many other fields. Our contribution towards peace- building through UN Peace Mission is globally well appreciated. The recent brave initiative taken by Bangladesh in managing the unprecedented influx of Rohingya refugees despite our limited resources including space is yet another example of our humane foreign policy. Many developed countries hesitated to address the Syrian refugee problem head on, except of course Germany, despite their abundant resources. Bangladesh has, therefore, been appreciated by the UN and many others for its humanitarian gesture to the refugees. Millions of nonresident Bangladeshis are working day and night in the Middle Eastern and South East Asian countries in developing their infrastructures and running their economies. Simultaneously, the domestic economy of Bangladesh benefited significantly from this regular inflow of remittances.
This success story of Bangladesh economy did not happen in a day or two. We had to go through all kinds of struggle to reach hear. Back in 1946, the people of East Bengal voted for Pakistan in the referendum basically for economic emancipation. But the independent Pakistan effectively led by civil-military bureaucrats dashed all their hopes and turned East Bengal into an internal colony. Even the cultural freedom of this part of Pakistan was denied when the Pakistani rulers refused to recognize mother tongue Bangla as one of the state languages. There was a strong language movement in East Bengal and a number of young men, mostly students embraced martyrdom on 21st February 1952. In the process Sheikh Mujibur Rahman emerged as their leader. He along with other co-leaders organized students, youths and workers for autonomy of East Bengal (though named as East Pakistan) under the banner of Six Point programme of Awami League. The autocratic government of Pakistan put him in jail off and on. At a point in time he was made the number one accused of a sedation case called 'Agartala Conspiracy case'. This conspiratorial move by the Pakistani autocratic rulers created in-depth agitation in the minds of Bengalees, particularly the students and youths. They challenged this move and initiated an all-out protest movement which led to people's upsurge in 1969. Sheikh Mujib was released from the jail and given the title Bangabandhu, the Friend of Bengal. Subsequently the Ayub regime was replaced by another military government led by General Yahiya Khan. Yahiya Khan promised national election with some conditions. Bangabandhu took the challenge and fought the election promising to realize the 'Six-Point Programme' which was, in effect, a reassurance of autonomy for Bangladesh. People voted overwhelmingly for Awami League in the Eastern Province of Pakistan and Bangabandhu emerged as the elected majority leader of the Parliament. President Yahiya Khan broke his promise to honour the election results. He suddenly postponed the promised session of the National Assembly and an all-embracing non-cooperation movement was initiated by Bangabandhu. The political stalemate continued until the military started a genocide on the evening of 25th March, 1971. In this backdrop, Bangabandhu declared independence of Bangladesh in the early hours of 26th March 1971. And thus started a bloody war of liberation of Bangladesh from the Pakistani occupying forces which continued for nine months.
After independence, Bangladesh was viewed as a dismal 'basket case' by the US State Department. A CIA Report predicted immediate famine and deteriorating poverty in such a small land area facing hostile environment. To them the Malthusian prediction was in full play and Bangladesh could be the biggest headache for its neighbours. The World Bank in a Report (1972) said Bangladesh inherited a near stagnant economy with per capita income of only 50-60 US dollars during the previous two decades and a life expectancy of less than 50 years. The unemployment rate was about 20-30 per cent and literacy rate around 20 per cent. No doubt two senior economists, Faaland and Parkinson, wrote (1976) that 'nature and not man' was in charge in Bangladesh. They thought this was a "Test Case of Development", as if any country could develop if Bangladesh developed. But the situation has changed dramatically over the years. The national liberation of Bangladesh was indeed a social revolution providing an explosion of aspirations and as well as a fighting spirit to the entrepreneurial people of Bangladesh which made this possible. They left no stone unturned while rebuilding a war-torn Bangladesh. In the process, a stream of young entrepreneurs started emerging, many of whom are by now successful industrialists of global repute. The Father of the Nation Bangabandhu Sheikh Mujibar Rahman worked hard to lay the foundation of this inclusive growth process by not only rebuilding the war ravaged infrastructures but also provided a new constitution with clear declaration "to emancipate the toiling masses" (Article 14) and creating necessary institutions to take the country forward. Though his nation-building journey was tragically cut short by the conspirators in August 1975, Bangladesh weathered all the odds and moved on. Bangabandhu's daughter Sheikh Hasina's government's increased investment on health and education, food security, fertility control, disaster management along with providing greater space for government's partnership with NGOs and private sector on public delivery services helped achieve a national consensus for early realization of MDGs. This pro-poor thrust of inclusive development has been further consolidated during latest rounds of government by Sheikh Hasina with the launching of SDGs programs. The social contract between the government and the poor is now real in Bangladesh.
However, the infrastructural deficits and less than satisfactory level of governance in some areas can hardly be denied. We need to remain focused on these deficits and continue to move forward with implementation of appropriate policies so that Bangladesh can reach the status upper- middle income country by 2030 and developed country by 2041. To give the desired policy directions let me mention a few:
1. Maintaining sound macro-economic policy framework to create further space for private sector investment.
2. Public sector lead in mega infrastructural projects should continue with a scope for public-private partnership. The emphasis on speedy generation of energy including solar and other forms of renewable energy should be fast tracked to attract more private investment.
3. Continuation of policy leadership by the government to develop planned special economic zones where both foreign and domestic private investors will invest. The SEZs around the ports should be prioritized.
4. The emphasis on rail, water and air transports should continue to get policy priority. In fact, Bangladesh should be the hub of air cargo transportation with open-door investment policy.
5. The state and the community capacities developed for disaster management should get further boost. How quickly we can translate this capacity development knowledge of ours for desired level of addressing the climate challenges remains to be seen.
6. The early take on sensible public expenditures for rural infrastructures, education and health should continue to get the needed policy support. The policy thrust on appropriate skill development should continue to get support from the top policy makers.
7. The drive for enhancing digital technologies and providing access to start-ups and young entrepreneurs should continue unabated.
8. Partnership with the private sector and NGOs for fast delivery of public services including primary health, education and nutrition, women empowerment should remain on track.
9. The labor-intensive export-led manufacturing should continue to get policy support along with appropriate labor and environmental safety clauses fulfilled.
10. The rights of our migrant workers who are sending regularly remittances should be ensured.
11. The emphasis on developmental central banking with desired regulatory and low-cost credit support for farmers, small and medium entrepreneurs and green entrepreneurs must continue for quite some time to come.
12. The bureaucracy should be remolded to transform it into a facilitator rather than a 'ruler'.
13. The public and private commitment for realizing SDGs should be as good as it used to be in case of realizing MDGs.
14. The degree of political stability witnessed in recent years must continue to give space for the economic actors to flourish.
The policy directions hinted above should not treated as given. These will continue to change. So these policies will have to be monitored continuously and researched for necessary adjustments. The state has to take the lead in many areas but enough space has to be created for the seamless participation of the private and NGO sectors. Most importantly, we must embed our educational system with ethics and technologies so that we can produce enough right kind of human skills for the sustainable development. Certainly, Bangladesh has all the potential of becoming one of the fastest growing inclusive economy in the coming years. Let's all remain optimistic and united on this dream.
Professor Dr. Atiur Rahman is a noted economist and a former governor of Bangladesh Bank. [email protected]
© 2024 - All Rights with The Financial Express
