Bangladesh at 40: Changes and Challenges

Atiur Rahman Labeled immediately after her birth in 1971 as a hopeless 'basket case' by many like Mr. Henry Kissinger, Bangladesh has come a long way today earning recognition as a steadily growing economy on a firm footing on the path of inclusive social and economic progress, with global recognition as an upcoming emerging economy. From the initial position as a primary goods producing small agrarian economy, Bangladesh has by now transformed into a globally integrated manufacturing economy, a leading apparels and textiles exporter gradually breaking grounds into newer areas like shipbuilding, light engineering, IT enabled services, and so forth. Bangladesh is also an acknowledged global pioneer in microfinance for self-employment based poverty reduction; spawning microfinance based large globally active socially responsible businesses like ones (e.g. Aarong handicrafts, dairy, poultry etc.) run by the BRAC. The social and economic progress attained since the birth of Bangladesh as a new nation will not be immediately obvious from reports and reviews in the country's print and electronic media freely voicing the views of our predominantly young, aspiring population mainly reflecting the gaps between the prevailing social and economic realities and their expectations; only rarely looking back on the path trodden behind. I therefore heartily congratulate the Business Studies Faculty (BSF) of Jahangirnagar University (JU) for organizing a three day Seminar for stock-taking of achievements thus far and for brainstorming on the challenges on the way forward towards socially just and environmentally sustainable prosperity with advancement opportunities open to all in our population. The coverage of topics in the seminar agenda is comprehensive, and I am confident that the discussions in the seminar will provide ideas and thoughts valuable to our development planners and practitioners, policy makers, civil society development activists, academic and applied researchers. Let me recall here a few macro data, sketching the outlines of the picture of progress we attained in forty years. Our nominal gross domestic product (GDP) in US dollar terms has increased more than eighteen fold against population growth of about two fold. GDP growth trend in real terms has steadily gained pace, from 1.1 per cent and 3.2 per cent average annually in the 1970s and 1980s, rising to 5.8 per cent in the first decade of this century. In FY 11 Bangladesh economy grew 6.7 per cent in real terms, and the target for FY12 is 7.0 per cent. Trade openness has integrated Bangladesh with the global economy; with trade GDP ratio rising from around 20 per cent of the 1970s and 1980s to 40.7 per cent in FY11. Poverty has come down to about 30 per cent of the population now, from around 57 per cent in the 1990s. Bangladesh is ahead of most of the South Asian nations in progress in human development indicators. Rising emigration from our youthful population to labor markets abroad have been fetching steadily growing wage remittance inflows; bolstering our external sector viability and per capita gross national income (GNI), helping progress towards crossing the middle income country group income threshold by 2020. Despite some weaknesses, democratic governance and rule of law safeguarded by independent judiciary is a major achievement in the governance area, attained through decades of struggle and efforts of our broad masses. With sustained development dynamism powering our growth pace, we can reasonably aspire for joining the group of upper middle income countries by 2030 and mature developed economy-status by 2050. There are, of course, formidable challenges to overcome on the path forward, both in the near and longer terms. One looming near term challenge is the apprehended impact of the ongoing debt crisis in the EURO Zone, hurting prospects of our export, wage earners' remittance and investment inflows from the Euro Zone; weakened growth prospects of other countries outside the EURO Zone due to the crisis will also hurt prospects of commodity and manpower exports to those countries. Appropriate coping responses will need to include seeking strengthened trade and investment ties with near neighbours and other fast growing emerging economies, a course already adopted by us. The longer term challenges include the still prevalent extreme poverty of nearly twenty five million of our population, climate change threats, inadequacies in physical infrastructure, widespread use of corrupt practices in public life criminally enriching the powerful at the expense of the weak and the vulnerable. Bangladesh's perspective, five year and annual development plans outline comprehensive, well rounded approaches in addressing these challenges, pursuing inclusive socio economic growth and well-being for all. Bangladesh Bank's (BB's) financial inclusion drive is proactively supporting the government's growth pursuits while maintaining monetary and financial stability; interalia ensuring adequate credit flows to productive pursuits including agriculture, small and million (SMEs), and environment friendly projects like renewable energy generation. I look forward to these and the other challenges being deliberated at depth in the JU's BSF-sponsored seminar sessions. This is an edited version of the presentation made by the Governor of Bangladesh Bank, Dr Atiur Rahman, at the inaugural session on Friday of the three-day seminar, 'Bangladesh at 40: changes and challenges', organised by faculty of Business Administration, Jahangirnagor University The Financial Express is the media partner of this event.