Factors responsible for poor economic development in urban areas
Saturday, 2 October 2010
To what extend are the economic factors responsible for the poor development in TNT Colony, Dhaka, Bangladesh? For better understanding of this particular area (TNT Colony), there is a brief description of Bangladesh's economic and social background.
Bangladesh is one of the countries that have reflected its poverty through decades. Due to its geographical location it has been prone to floods and other natural disasters. Having faced these problems there have been some significant changes in the country's economy. However three quarters of the population still live in the rural area. The poverty level still persists at an alarming level in Bangladesh. Its massive population of 160 million recorded in 2008. Some12 million of its population live in shanty towns and slum areas only in Dhaka city the capital of Bangladesh. TNT Colony is an example of shanty town and slum area. Bangladesh is one of the poorest in Asia and a GDP per capita of $1, 300.
Not only Bangladesh is affected by poverty it also faces high unemployment at an average of 20%. The literacy rate is only 49.7 percent. The government policies has helped slum areas to raise production however the development of living standards are very primitive.
TNT colony is situated in Dhaka city, near the posh Banani residential area. Nevertheless, its positive externalities being situated beside a well developed area its people live in huts and slums. Most of the population there are low paid day labourers, rickshaw pullers, domestic workers and garment workers. Most of the people living there are migrated individuals TNT colony is one of the areas which are prone to flooding. TNT is an area which is affected by poverty and poor level of development.
What is development?
Economic development aims to improve lives of all the people in a country. This involves not only raising living standards but also the production of goods and services. There, however, is a difference between economic development and economic growth (the increase in the national income). Development is a much broader concept and has many variables or indicators that can be used to measure. Growth can be measured in a very simple way as it is a macroeconomic variable. Development on the other hand involves both economic and non economic ideas and is quite related to the standard of living. This may deal with the health care, education, employment, literacy rate, living quality and freedom of speech.
In 1950's - 60's governments in Less developed countries' (LDC) main objective or aim was growth of a single sector such as an urban area or an industrial area. Then the increase of GNP would 'trickle down' on the poor individuals. The failure of 'trickle down' is very much evident while looking at the living standards or development in Banani, an area that has flourished urbanisation with investment of government and private companies. On the other hand the colony being a neighbour of a well developed area, still is a heaven for slum dwellers, who have no access to education and health care. Thus growth may occur in an area but it is only when increased output improved the provision of health care, housing, education, jobs and even more distribution of income.
The three objectives of development in a society are explained by a prominent academic, Professor Michael Todaro:
1. The increase in accessibility and widening of basic life sustaining goods and services such as food, health, protection, shelter of all members of a society.
2. To raise both income and levels of living to a higher level and the provision of both education and better jobs. These on a whole would promote national self esteem and also enhance material well being and also create greater individuals.
3. Expanding the area of economic and social choices to all individuals living in a society and nation by freeing them from servitude and dependence, not only in relation to other people and nation- states but also to the forces of ignorance and human misery.
Thus we see in TNT colony how the indicators of wealth which reflect the accessibility of resources to the society effects the poor levels of development such as health care and educational services, employment opportunities, availability of clean and safe drinking water.
Human Development Index
The Human Development Index has been published every year by the United Nations since1990. The index indicates the current state of the nation with respect to its population. The human development index measures three aspects of human development.
- Living a long healthy life (Measure of life expectancy)
- Being educated (Measured by adult education and enrolment at primary, secondary and tertiary level)
- Having a decent standard of living (measured by purchasing power)
The index is not a comprehensive method of measuring human development. It does not include gender and income inequality and it does not include political freedom and more aspects of human life. However, the index creates a broaden connection between income and well being. Bangladesh is rated 0.547 with a rank of 140 among 177 countries by the human development index.
Most of the regions in the world show a positive upward trend in HDI from 1990. An upward progress is seen in South East Asia and South Asia. However, Bangladesh has a slower increase than south Asia. The exception is seen in Sub Saharan countries due to low life expectancy from HIV/ AIDS.
GDP and GDP (per capita)
Gross Domestic product of a nation's income generated from resources within its own geographical boundaries: the value of its total output of goods and services before depreciation. Gross Domestic product is a measure to see the economic state and also a key indicator of development. Bangladesh has particularly high GDP for LEDC standards. The problem Bangladesh faces is high population which instantly reduces the GDP per capita. Bangladesh's economy has grown 5- 6% over the past few years. Taking in account of the previous year's economic performances Bangladesh's private sector has proven more efficient than the public sector. The state owned enterprises have shown poor management of output of natural resources such as gas. Bangladesh's GDP is generated from mainly the service sector, approximately two-third of the population in Bangladesh are employed in the agricultural sector. A poverty inflicted area such as TNT Colony has poor levels of development. This is due to the low GDP of the area itself.
Bangladesh's GDP per capita is lower than $1, 000. Whereas it is $1, 500 to 2, 000 in other countries of Asia and the rest of the world is $5, 000. The reason for such a low GDP per capita for Bangladesh may be due the high population. Gross Domestic Product per capita is when the gross national product is divided by the population. It indicates average economic activity and income taking no account of income distribution. Bangladesh's Gross domestic product per capita is only 1, 300 US $ per year. Even though Bangladesh has a moderate GDP due to its large population the GDP per capita reduces. The purchasing power parity or the PPP of Bangladesh is only $1, 400 as this helps understand the living standards of a nation or in this case a particular area.
The Human development Index gives a complete scenario of the human development than income. The following figure explains that where with lower income Congo and Bangladesh shares the same position.
Unemployment
The poor development in TNT Colony is mainly related to unemployment and underemployment. As rural migrants compete with the new entrants to the labour market increases which means natural growth in the urban population. The underemployment and unemployment rates are still high and the jobs in public sectors and in companies which provide higher pay and stable jobs are scarce. TNT Colony is populated with individuals who are self employed.
Having understood the economic problems faced by the people in this particular area they do not have financial support to send their children to schools. As a result children aged from 8-15 often support their family through begging and child labour. Large number of population living in TNT Colony is paid such low wages that they cannot afford pay for medical treatment, which in some case may cost over TK 15,000.
Women's empowerment
Woman's empowerment is one of the development policies; one of the current policies of empowering woman in Bangladesh is through microfinance. Microfinance also known as microcredit has shown rapid growth in Bangladesh from the beginning of 1990. This programme actually began after independence 1970's, when Nobel laureate economics professor Muhammad Yunus, began an experimental project providing credit to the rural poor and loans to poor families. After the establishment of Grameen Bank in 1983, and its success to alleviate poverty and empower woman had inspired many at home and abroad. Microfinance is now being taken initiative in poor slum area such as TNT Colony and other poverty inflicted areas in Dhaka city. Why is empowerment of woman in TNT Colony so important in development and also to exterminate poverty?
Woman traditionally in Bangladesh has very little or no contact with the labour market and have no income. Through my survey of 50 male and 50 female, 29 of the female were unemployed whereas male have a relatively lower unemployment rate. There are 37 females with no education and only 4 had completed primary level. The male have a higher education than female as 4 male had completed secondary. Literacy rate is still a problem as it is very low as we can see that there is no one who has completed tertiary level. It is now obvious that the empowerment of woman will not be attained through income but also the gender relationship with their husband. Woman empowerment will occur if the government gives the women access to education and jobs.
Hunger Rising
According to the 2008 report of the Food and Agricultural Organisation (FAO) and the World Food Programme (WFP), Bangladesh's insecurity of food for the population has been stated to be 65.3 million and has risen by 7.5 million people. This is mainly due to the rise in food prices. TNT Colony is a similar area where its majority of the population, due to financial difficulties finds it difficult to acquire proper nutritious food products. They struggle in earning money to pay for food, housing and transportation. The households tend to spend the least or very few on nutrition- rich food such as vegetables, fruits and pulses. The price levels of nutritious food increase to unbearable heights. Thus with government intervention in food prices or reducing the food prices can be helpful in reducing misery in TNT Colony.
The most vulnerable groups in TNT Colony are women and children. With very low income levels the children cannot have proper healthcare, education and may even live in poverty. With poor levels of development the families in TNT Colony faces social problems.
The writer is an undergraduate student of Singapore-based German European School
Bangladesh is one of the countries that have reflected its poverty through decades. Due to its geographical location it has been prone to floods and other natural disasters. Having faced these problems there have been some significant changes in the country's economy. However three quarters of the population still live in the rural area. The poverty level still persists at an alarming level in Bangladesh. Its massive population of 160 million recorded in 2008. Some12 million of its population live in shanty towns and slum areas only in Dhaka city the capital of Bangladesh. TNT Colony is an example of shanty town and slum area. Bangladesh is one of the poorest in Asia and a GDP per capita of $1, 300.
Not only Bangladesh is affected by poverty it also faces high unemployment at an average of 20%. The literacy rate is only 49.7 percent. The government policies has helped slum areas to raise production however the development of living standards are very primitive.
TNT colony is situated in Dhaka city, near the posh Banani residential area. Nevertheless, its positive externalities being situated beside a well developed area its people live in huts and slums. Most of the population there are low paid day labourers, rickshaw pullers, domestic workers and garment workers. Most of the people living there are migrated individuals TNT colony is one of the areas which are prone to flooding. TNT is an area which is affected by poverty and poor level of development.
What is development?
Economic development aims to improve lives of all the people in a country. This involves not only raising living standards but also the production of goods and services. There, however, is a difference between economic development and economic growth (the increase in the national income). Development is a much broader concept and has many variables or indicators that can be used to measure. Growth can be measured in a very simple way as it is a macroeconomic variable. Development on the other hand involves both economic and non economic ideas and is quite related to the standard of living. This may deal with the health care, education, employment, literacy rate, living quality and freedom of speech.
In 1950's - 60's governments in Less developed countries' (LDC) main objective or aim was growth of a single sector such as an urban area or an industrial area. Then the increase of GNP would 'trickle down' on the poor individuals. The failure of 'trickle down' is very much evident while looking at the living standards or development in Banani, an area that has flourished urbanisation with investment of government and private companies. On the other hand the colony being a neighbour of a well developed area, still is a heaven for slum dwellers, who have no access to education and health care. Thus growth may occur in an area but it is only when increased output improved the provision of health care, housing, education, jobs and even more distribution of income.
The three objectives of development in a society are explained by a prominent academic, Professor Michael Todaro:
1. The increase in accessibility and widening of basic life sustaining goods and services such as food, health, protection, shelter of all members of a society.
2. To raise both income and levels of living to a higher level and the provision of both education and better jobs. These on a whole would promote national self esteem and also enhance material well being and also create greater individuals.
3. Expanding the area of economic and social choices to all individuals living in a society and nation by freeing them from servitude and dependence, not only in relation to other people and nation- states but also to the forces of ignorance and human misery.
Thus we see in TNT colony how the indicators of wealth which reflect the accessibility of resources to the society effects the poor levels of development such as health care and educational services, employment opportunities, availability of clean and safe drinking water.
Human Development Index
The Human Development Index has been published every year by the United Nations since1990. The index indicates the current state of the nation with respect to its population. The human development index measures three aspects of human development.
- Living a long healthy life (Measure of life expectancy)
- Being educated (Measured by adult education and enrolment at primary, secondary and tertiary level)
- Having a decent standard of living (measured by purchasing power)
The index is not a comprehensive method of measuring human development. It does not include gender and income inequality and it does not include political freedom and more aspects of human life. However, the index creates a broaden connection between income and well being. Bangladesh is rated 0.547 with a rank of 140 among 177 countries by the human development index.
Most of the regions in the world show a positive upward trend in HDI from 1990. An upward progress is seen in South East Asia and South Asia. However, Bangladesh has a slower increase than south Asia. The exception is seen in Sub Saharan countries due to low life expectancy from HIV/ AIDS.
GDP and GDP (per capita)
Gross Domestic product of a nation's income generated from resources within its own geographical boundaries: the value of its total output of goods and services before depreciation. Gross Domestic product is a measure to see the economic state and also a key indicator of development. Bangladesh has particularly high GDP for LEDC standards. The problem Bangladesh faces is high population which instantly reduces the GDP per capita. Bangladesh's economy has grown 5- 6% over the past few years. Taking in account of the previous year's economic performances Bangladesh's private sector has proven more efficient than the public sector. The state owned enterprises have shown poor management of output of natural resources such as gas. Bangladesh's GDP is generated from mainly the service sector, approximately two-third of the population in Bangladesh are employed in the agricultural sector. A poverty inflicted area such as TNT Colony has poor levels of development. This is due to the low GDP of the area itself.
Bangladesh's GDP per capita is lower than $1, 000. Whereas it is $1, 500 to 2, 000 in other countries of Asia and the rest of the world is $5, 000. The reason for such a low GDP per capita for Bangladesh may be due the high population. Gross Domestic Product per capita is when the gross national product is divided by the population. It indicates average economic activity and income taking no account of income distribution. Bangladesh's Gross domestic product per capita is only 1, 300 US $ per year. Even though Bangladesh has a moderate GDP due to its large population the GDP per capita reduces. The purchasing power parity or the PPP of Bangladesh is only $1, 400 as this helps understand the living standards of a nation or in this case a particular area.
The Human development Index gives a complete scenario of the human development than income. The following figure explains that where with lower income Congo and Bangladesh shares the same position.
Unemployment
The poor development in TNT Colony is mainly related to unemployment and underemployment. As rural migrants compete with the new entrants to the labour market increases which means natural growth in the urban population. The underemployment and unemployment rates are still high and the jobs in public sectors and in companies which provide higher pay and stable jobs are scarce. TNT Colony is populated with individuals who are self employed.
Having understood the economic problems faced by the people in this particular area they do not have financial support to send their children to schools. As a result children aged from 8-15 often support their family through begging and child labour. Large number of population living in TNT Colony is paid such low wages that they cannot afford pay for medical treatment, which in some case may cost over TK 15,000.
Women's empowerment
Woman's empowerment is one of the development policies; one of the current policies of empowering woman in Bangladesh is through microfinance. Microfinance also known as microcredit has shown rapid growth in Bangladesh from the beginning of 1990. This programme actually began after independence 1970's, when Nobel laureate economics professor Muhammad Yunus, began an experimental project providing credit to the rural poor and loans to poor families. After the establishment of Grameen Bank in 1983, and its success to alleviate poverty and empower woman had inspired many at home and abroad. Microfinance is now being taken initiative in poor slum area such as TNT Colony and other poverty inflicted areas in Dhaka city. Why is empowerment of woman in TNT Colony so important in development and also to exterminate poverty?
Woman traditionally in Bangladesh has very little or no contact with the labour market and have no income. Through my survey of 50 male and 50 female, 29 of the female were unemployed whereas male have a relatively lower unemployment rate. There are 37 females with no education and only 4 had completed primary level. The male have a higher education than female as 4 male had completed secondary. Literacy rate is still a problem as it is very low as we can see that there is no one who has completed tertiary level. It is now obvious that the empowerment of woman will not be attained through income but also the gender relationship with their husband. Woman empowerment will occur if the government gives the women access to education and jobs.
Hunger Rising
According to the 2008 report of the Food and Agricultural Organisation (FAO) and the World Food Programme (WFP), Bangladesh's insecurity of food for the population has been stated to be 65.3 million and has risen by 7.5 million people. This is mainly due to the rise in food prices. TNT Colony is a similar area where its majority of the population, due to financial difficulties finds it difficult to acquire proper nutritious food products. They struggle in earning money to pay for food, housing and transportation. The households tend to spend the least or very few on nutrition- rich food such as vegetables, fruits and pulses. The price levels of nutritious food increase to unbearable heights. Thus with government intervention in food prices or reducing the food prices can be helpful in reducing misery in TNT Colony.
The most vulnerable groups in TNT Colony are women and children. With very low income levels the children cannot have proper healthcare, education and may even live in poverty. With poor levels of development the families in TNT Colony faces social problems.
The writer is an undergraduate student of Singapore-based German European School