The growing disparity in economic development
Wednesday, 3 June 2009
Ferdous Alam
ECONOMIC disparity prompts people to move to urban centres in search of work. But, some 90 per cent of the population in Bangladesh still live in the rural areas, with uneven economic and developmental opportunities.
Some of the regions are relatively advanced while the others are very backward. Employment opportunities are reasonable in some of the regions but the others have none. In sum, the national picture presents a lack of uniformity in economic growth and development. The urban population monopolise the benefits of jobs and higher income to the exclusion of the rural people. There are also regional disparities in industrialisation.
For example, the areas in and around the three major cities of Dhaka, Chitttagong and Khulna have major industrial concentration whereas the other areas lack it. Thus, the other areas with surplus agricultural labour force do not offer industrial employment.
The new government and its policy makers need to address the issues of growing imbalance in economic growth and development. A region-based policy and its phasewise implementation, after setting the priorities, can achieve the objective.
The plan should first identify the areas where no economic opportunities are available. Then the plan should concentrate on how to develop economic activities or set up enterprises in the backward areas.
Agriculture-based value addition, new crops for export as well as light and all sorts of new industries can be encouraged in these areas. The government will have to build the basic infrastructure in the backward areas to facilitate private investment. Besides, the government can also help set up various enterprises in the areas to be run by private firms on rental or sell them on favourable terms.
The government can also promote development in backward regions by creating special zones. It can extend assistance to the entrepreneurs in these areas for buying land and machinery and the construction of buildings. Fiscal incentives can be given to the enterprises in such areas by way of reducing the value added tax (VAT), import duties for raw materials, tariff for power and gas and corporate tax. The industries, to be set up in the areas, should enjoy preferential treatment with the government buying their products when official contracts are awarded.
All these and more could encourage investors to set up their enterprises in the special zones. It would remove the regional imbalance by creating economic opportunities in the backward areas.
The new government, at the same time, should put the maximum emphasis on decentralisation of administration. With stronger and effective local government, endowed with the needed resource, the task of development of local growth centres becomes easier.
ECONOMIC disparity prompts people to move to urban centres in search of work. But, some 90 per cent of the population in Bangladesh still live in the rural areas, with uneven economic and developmental opportunities.
Some of the regions are relatively advanced while the others are very backward. Employment opportunities are reasonable in some of the regions but the others have none. In sum, the national picture presents a lack of uniformity in economic growth and development. The urban population monopolise the benefits of jobs and higher income to the exclusion of the rural people. There are also regional disparities in industrialisation.
For example, the areas in and around the three major cities of Dhaka, Chitttagong and Khulna have major industrial concentration whereas the other areas lack it. Thus, the other areas with surplus agricultural labour force do not offer industrial employment.
The new government and its policy makers need to address the issues of growing imbalance in economic growth and development. A region-based policy and its phasewise implementation, after setting the priorities, can achieve the objective.
The plan should first identify the areas where no economic opportunities are available. Then the plan should concentrate on how to develop economic activities or set up enterprises in the backward areas.
Agriculture-based value addition, new crops for export as well as light and all sorts of new industries can be encouraged in these areas. The government will have to build the basic infrastructure in the backward areas to facilitate private investment. Besides, the government can also help set up various enterprises in the areas to be run by private firms on rental or sell them on favourable terms.
The government can also promote development in backward regions by creating special zones. It can extend assistance to the entrepreneurs in these areas for buying land and machinery and the construction of buildings. Fiscal incentives can be given to the enterprises in such areas by way of reducing the value added tax (VAT), import duties for raw materials, tariff for power and gas and corporate tax. The industries, to be set up in the areas, should enjoy preferential treatment with the government buying their products when official contracts are awarded.
All these and more could encourage investors to set up their enterprises in the special zones. It would remove the regional imbalance by creating economic opportunities in the backward areas.
The new government, at the same time, should put the maximum emphasis on decentralisation of administration. With stronger and effective local government, endowed with the needed resource, the task of development of local growth centres becomes easier.