Branding Bangladesh as land of the poor or hopeless is not fair
Saturday, 25 July 2009
Enayet Rasul Bhuiyan
They never fail to emphasise that Bangladesh is one of the, 'the poorest countries in the world.' But on the list of the countries of the world sorted by their Gross Domestic Product (GDP), which has been prepared by the IMF, Bangladesh stands 58th with GDP to the tune of USD 64,854 million among 180 countries. On the same sort of list prepared by the World Bank, Bangladesh stands at 56th among 183 countries. Again, on the three lists of the countries sorted by their GDP on the basis of Purchasing Power Parity (PPP), which have been prepared by IMF, World Bank and CIA, Bangladesh ranks at 33, 49, and 31 respectively among 179, 145 and 227 countries So, how far it is justified to pin the label on Bangladesh as an extremely bad case of poverty and deprivation ? Bangladesh is not in the top league of the world's richest. But it is not doing too bad in terms of wealth and economic opportunities on the whole when compared to the rest of the world.
Due to the bad image of the country, we receive minimal foreign direct and indirect investments. For the same cause we receive virtually no tourist, though these days tourism is the number one global export item, and our country can be the haven of ecotourism. (Tourism earns foreign exchange for a country, so it is considered as an export.)
At this moment our serious problem is not the rising of the sea level. It is still not possible to prophecy with absolute surety that a big part of Bangladesh would be submerged by the sea from global warming. As it is, Bangladesh is actually growing bigger in size from accretion of new lands from the deposit of sediments brought down by rivers and flowing through Bangladesh before emptying their silt in the coastal waters helping, thus, new lands to rise from the sea. We, Bangladeshis, can hasten this process of accretion by our own endeavours and prove the world wrong about our imminent drowning. But that is another matter.
The immediate threat that looms in the face is not sinking into the sea but the prospects of some 280 million Bangladeshis from the present over 150 million by 2050 if the current unbridled growth of the population continues unchecked. Due to population explosion people of our country are compelled to live near the coast, on the newly formed shoals, and lose their lives helplessly when a cyclone or a tidal surge hits the coast.
Two centuries back European countries were suffering from population boom. Fortunately for them the excess people of those countries had the opportunity to migrate, in big number, to the 'new lands' like America, Australia, and Latin America. Nowadays the scope of migration in big number has ceased. So we have no other way, but to control the population explosion.
Some people term our annual flood as dreadful, but it is not indeed. The flood makes our soil fertile for better harvest, raises the land up gradually by millimeters each year. Otherwise a boon the flood becomes dreadful because the total population of the country is disproportionate to the total area of the land. By population we are the 8th largest nation in the world, by land area, 93rd.
If we can stop the population explosion, we will be able to live keeping safe distance from the coast. When a cyclone hits our costal districts the poor die in hundreds, their houses get destroyed, because these are made of bamboo and reed. Economic progress will make them able to build houses high and with brick. Then the storms won't be able to blow them away like grass and twigs.
There is the shining example of the Netherlands in front of us. About half of the land area in the Netherlands lies at or below sea level. The Dutch built dikes around swampy or flooded land and then pumped the water out. Several major rivers of Europe flow through the Netherlands into the sea. The country has few natural resources, and its lands are poor for agriculture. But the Dutch have struggled to make their country one of the wealthiest in the world.
Sometime ago, the world famous Goldman Sachs Group who do future prospects analysis on countries and institutions included Bangladesh in a list of 11 developing countries that, according to its analysts, have the greatest potential to emulate the long-term economic success expected from China, India, Brazil and Russia. That vote of confidence came as a surprise. What payoffs can investors anticipate from a country where the average daily income of citizens was just $1.20 last year?
Bangladesh is considered as wretchedly overpopulated. About 150 million people, equivalent to about half of the U.S. population, live in an area the size of New York state, situated on the Bay of Bengal and bordering India and Myanmar.
With so much going wrong, why should investors care about Bangladesh?
There are several good reasons :
First, no matter how bad things get, Bangladesh almost always manages to produce a decent economic growth rate of about 5 percent. In a sample of 151 countries studied by the World Bank, Bangladesh's gross domestic product expanded with the least volatility.
Second, almost 35 per cent of Bangladeshis are now aged 15 years or younger. They will soon enter the work force. Compared with three decades ago, when women, on average, produced six children, the fertility rate has dropped to below three children. That means the new workers will not have too many young dependents to care for. Household incomes and savings will rise, provided there is enough capital to employ the labor productively.
Third, for all the beating the legal system has taken from rampant corruption and entrenched special interest groups, it still has a healthy core in the form of a British common law tradition dating back to 1862, when it was part of British-ruled India. With some cleaning up, the Bangladeshi judiciary can be made to support a modern economy if only politicians would agree to create one. Enforcing a contract is 4 percentage points cheaper in Bangladesh than in China, where a creditor ends up losing 25 percent of the value of the debt in the process of trying to collect it legally, according to a World Bank assessment of economies and the ease of doing business in them.
Not only are Bangladesh's investor protection standards far superior to China's, they are also better than what is available, on average, in rich countries, according to a World Bank web site. Bangladesh is also competitive on labor costs. Garment workers in Dhaka earn 39 U.S. cents an hour, while the hourly wage for sewing and stitching in coastal China is 88 cents. Bangladesh with its abundance of workers who would be willing to work for wages considered as the lowest in the world --long into the future-- will draw investors to it wanting to exploit this lowest cost destination in terms of labour. As any good investor knows it, wages are usually the biggest costs in the production processes.
With sensible policies, the gap between Bangladesh's promise and performance can narrow, if not disappear. If Bangladesh receives its demographic dividend in full, Goldman Sachs may be proved right in its prediction.
They never fail to emphasise that Bangladesh is one of the, 'the poorest countries in the world.' But on the list of the countries of the world sorted by their Gross Domestic Product (GDP), which has been prepared by the IMF, Bangladesh stands 58th with GDP to the tune of USD 64,854 million among 180 countries. On the same sort of list prepared by the World Bank, Bangladesh stands at 56th among 183 countries. Again, on the three lists of the countries sorted by their GDP on the basis of Purchasing Power Parity (PPP), which have been prepared by IMF, World Bank and CIA, Bangladesh ranks at 33, 49, and 31 respectively among 179, 145 and 227 countries So, how far it is justified to pin the label on Bangladesh as an extremely bad case of poverty and deprivation ? Bangladesh is not in the top league of the world's richest. But it is not doing too bad in terms of wealth and economic opportunities on the whole when compared to the rest of the world.
Due to the bad image of the country, we receive minimal foreign direct and indirect investments. For the same cause we receive virtually no tourist, though these days tourism is the number one global export item, and our country can be the haven of ecotourism. (Tourism earns foreign exchange for a country, so it is considered as an export.)
At this moment our serious problem is not the rising of the sea level. It is still not possible to prophecy with absolute surety that a big part of Bangladesh would be submerged by the sea from global warming. As it is, Bangladesh is actually growing bigger in size from accretion of new lands from the deposit of sediments brought down by rivers and flowing through Bangladesh before emptying their silt in the coastal waters helping, thus, new lands to rise from the sea. We, Bangladeshis, can hasten this process of accretion by our own endeavours and prove the world wrong about our imminent drowning. But that is another matter.
The immediate threat that looms in the face is not sinking into the sea but the prospects of some 280 million Bangladeshis from the present over 150 million by 2050 if the current unbridled growth of the population continues unchecked. Due to population explosion people of our country are compelled to live near the coast, on the newly formed shoals, and lose their lives helplessly when a cyclone or a tidal surge hits the coast.
Two centuries back European countries were suffering from population boom. Fortunately for them the excess people of those countries had the opportunity to migrate, in big number, to the 'new lands' like America, Australia, and Latin America. Nowadays the scope of migration in big number has ceased. So we have no other way, but to control the population explosion.
Some people term our annual flood as dreadful, but it is not indeed. The flood makes our soil fertile for better harvest, raises the land up gradually by millimeters each year. Otherwise a boon the flood becomes dreadful because the total population of the country is disproportionate to the total area of the land. By population we are the 8th largest nation in the world, by land area, 93rd.
If we can stop the population explosion, we will be able to live keeping safe distance from the coast. When a cyclone hits our costal districts the poor die in hundreds, their houses get destroyed, because these are made of bamboo and reed. Economic progress will make them able to build houses high and with brick. Then the storms won't be able to blow them away like grass and twigs.
There is the shining example of the Netherlands in front of us. About half of the land area in the Netherlands lies at or below sea level. The Dutch built dikes around swampy or flooded land and then pumped the water out. Several major rivers of Europe flow through the Netherlands into the sea. The country has few natural resources, and its lands are poor for agriculture. But the Dutch have struggled to make their country one of the wealthiest in the world.
Sometime ago, the world famous Goldman Sachs Group who do future prospects analysis on countries and institutions included Bangladesh in a list of 11 developing countries that, according to its analysts, have the greatest potential to emulate the long-term economic success expected from China, India, Brazil and Russia. That vote of confidence came as a surprise. What payoffs can investors anticipate from a country where the average daily income of citizens was just $1.20 last year?
Bangladesh is considered as wretchedly overpopulated. About 150 million people, equivalent to about half of the U.S. population, live in an area the size of New York state, situated on the Bay of Bengal and bordering India and Myanmar.
With so much going wrong, why should investors care about Bangladesh?
There are several good reasons :
First, no matter how bad things get, Bangladesh almost always manages to produce a decent economic growth rate of about 5 percent. In a sample of 151 countries studied by the World Bank, Bangladesh's gross domestic product expanded with the least volatility.
Second, almost 35 per cent of Bangladeshis are now aged 15 years or younger. They will soon enter the work force. Compared with three decades ago, when women, on average, produced six children, the fertility rate has dropped to below three children. That means the new workers will not have too many young dependents to care for. Household incomes and savings will rise, provided there is enough capital to employ the labor productively.
Third, for all the beating the legal system has taken from rampant corruption and entrenched special interest groups, it still has a healthy core in the form of a British common law tradition dating back to 1862, when it was part of British-ruled India. With some cleaning up, the Bangladeshi judiciary can be made to support a modern economy if only politicians would agree to create one. Enforcing a contract is 4 percentage points cheaper in Bangladesh than in China, where a creditor ends up losing 25 percent of the value of the debt in the process of trying to collect it legally, according to a World Bank assessment of economies and the ease of doing business in them.
Not only are Bangladesh's investor protection standards far superior to China's, they are also better than what is available, on average, in rich countries, according to a World Bank web site. Bangladesh is also competitive on labor costs. Garment workers in Dhaka earn 39 U.S. cents an hour, while the hourly wage for sewing and stitching in coastal China is 88 cents. Bangladesh with its abundance of workers who would be willing to work for wages considered as the lowest in the world --long into the future-- will draw investors to it wanting to exploit this lowest cost destination in terms of labour. As any good investor knows it, wages are usually the biggest costs in the production processes.
With sensible policies, the gap between Bangladesh's promise and performance can narrow, if not disappear. If Bangladesh receives its demographic dividend in full, Goldman Sachs may be proved right in its prediction.