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Remarkable Socio-Economic Gains and Future Outlook of Bangladesh at her 43

Dr. Mohammed Farashuddin
Bangladesh is amongst the few countries that defied the global meltdown 2006-09 to achieve heartwarming growth in Gross Domestic Products (GDP). Six percent plus annual GDP growth rate over the period 2009-14 is exemplary. The economic growth has also been significantly transformed into social progress. As the father of the nation and the head of the government, he articulated in 1972 the 7(h March vow towards a planned socio-economic development for a welfare state. The First Five Year Plan, 1972-75 adopted in unambiguous terms, the goals of infrastructure rehabilitation and expansion, poverty reduction, subsidy in inputs and price support for output in agriculture, planned growth in population, a scientific and technology oriented modern education system with unified primary stream in mother tongue, industrialization and use of the fiscal instruments for growth with equity.
The Status
The following two tables give a comparative picture of Socio-economic development of Bangladesh in recent years: In 2013, the per capita income in Bangladesh had been 2364 measured in purchasing power parity dollar. Thus the country is poised to reach the Middle Income status by 2019 at the latest. Noble Laureate Professor Amartya Sen and others characterize the economic growth and its social transformation in Bangladesh to be excellent, an undiscovered gem and amongst the top in South Asia. Compared to 1972 (a) life expectancy at birth has increased from 43 to 69 years in 2011 which is second highest to Sri Lanka (75), (b) annual population growth rate has declined from 3.3% to 1.3% in 2014, (c) infant mortality has dropped to 34 per thousand compared to 179, and (d) maternal mortality has declined to 194 per hundred thousand live births (BMMS 2010). Total Fertility Rate (TFR) in Bangladesh is 2.2, the lowest in Asia. The primary enrollment is 99% and the dropout rate has declined to 34 percent. The girl child enrollment in the primary and secondary is higher reflecting the demographic composition. 56% have access to improved sanitation and 64% have access to pure drinking water. The country is now almost self-sufficient in food production. There is no serious gap in clothing. In terms of housing (shelter), there are problems but no crisis. Primary healthcare service is on an improvement trajectory. Bangladesh has thus been paying successful attention to the five basic needs of its people. The social safety net has its own success and could be upgraded to a social protection programme.
The Evidence
Bangladesh has a formidable wave of positive vibration around its development journey. Goldman Suchs finds it to be amongst the topmost “next eleven”. To J P Morgan, Bangladesh is a Top Five Front Liners. Leading Pollstar PEW research institute of USA has found in a 2014 survey that 71% of the citizens of Bangladesh are satisfied with their economic status, and 81% think that the posterity will be even better off. A New York based research organization in an applied research survey in 27 Asia Pacific, Middle Eastern and African countries finds that consumer confidence index in Bangladesh has jumped to 66.4 percent, the highest in its sample. UNCTAD 2013 Report views Bangladesh to be the second best destination for FDI. In the years 2009,2010,2011,2012 and 2013, the country attracted an ever increasing FDI of 0.70,0.91,1.14, 1.21 and 1.60 billion US dollars respectively. Bangladesh has ample opportunity to improve its development programming to attract significantly higher levels of FDI. The top buyers of RMG and knitwear products are increasingly leaning towards the Bangladesh source. The sector is striving hard and the recovery of the export momentum is in sight since the tragic Rana Plaza accident. Physical and working conditions are on an improvement track in the factories.
The exports of Bangladesh reached a level of $3.03 billion in 2013-14; is expected to increase to $33 billion in 2014-15. It is still very modest at 20% of GDP. Despite the problems in the Middle Eastern countries, the remittances bounced back to reach $14 billion level in 2013-14, the 7th largest in the world. IMF lauds the macroeconomic stability of the country.
A determined and gutsy drive in the non-communal Bangladesh against fundamentalism, terrorism and crime against humanity has impressed the global community. In connection with a death penalty verdict against an accused proven guilty of specific charges of crimes against humanity during the war of liberation, the European Commission has clarified, it was not against such trials. Nor was the EU complaining about the procedures of the trials. The Commission was expressing reservation against death penalty each time such a verdict was pronounced anywhere in the world.
Three recent positive events would most likely add to the significant vibe of the Bangladesh progress. The Speaker of Bangladesh Parliament, Dr. Shirin Sharmin Choudhury contested and won on October 09, 2014 the Chairmanship of the Commonwealth Parliamentary Association (CPA). Saber Hossain Chowdhury MP was elected on 16 October 2014 as the Chairman of the Inter Parliamentary Union (IPU). Bangladesh was also elected to a seat in the UN Human Rights Commission in New York in October 2014. These events do reflect the global confidence in the people, democracy and the government of Bangladesh.
Resource Mapping
Bangladesh is a country of high potential. Its human resources, fertile soil and the riverine topography are its best assets. With 50 million of its 160 million people in the productive working age group of 15-35 years, Bangladesh is well positioned to harvest the fruits of the Demographic Dividend. Hundreds of PPP projects for converting the youth force into human resources through skill education and training are long overdue. Thanks to the toils of the farmers, the country is now almost self-sufficient in annual food production of 34 million tons compared to 10 million tons in 1972. The potato output has increased more than 11 times to 8 million tons compared to 0.7 million tons in 1972. India and Russia are stated to be interested in importing Bangladesh potato. Bangladesh has been competing successfully with mega sized China, India and Mynmar in sweet water fish production and is ranked 4th in the UN. A micro, small and medium enterprise (MSME) strategy in agro based, fish processing, livestock, poultry, off-farm, light engineering, furniture making, horticulture and handicrafts can generate big outputs of high value addition with big employment intensity. Renewable energy such as solar, biogas, waste and even wind energy suitable for clusters of houses as in rural Bangladesh, highly concessional credit and MSME incubators for creating MSME entrepreneurs are highly recommended.
Minerals
The country has some mineral resources including a high quality bituminous coal deposits in about a hundred square kilometers of Rangpur-Dinajpur. If mined open pit, this coal can yield 20,000 MW of electricity for 50 years (or 30 years). Faridpur, Bogra and Sylhet have pit coal deposits. Lack of accurate and reliable data on the firm and probable deposit of gas is a problem. BAPEX should undertake expert and objective survey to determine the quantity of gas deposits. Bulk of the gas should be used for industrialization rather than its sub optional deployment in electricity generation with only 37% efficiency.
A switch to cylinder based gas supply for domestic use (8%) is long overdue. Limited deposit of oil and perhaps gold is possible. The longest and cleanest beach of the world and other tourist attractions like the shrines, temples, biodiversity, the flora and the fauna, haors-baors (Tanguar haor) and the enchanting natural beauties offer potential for tourism to become a leading sector in the country. And then there is the Sundarbans.
A Coordinated Apparatus for Planning and Development
A meaningful, coordinated and implementable organic plan advocated by Jan Tinbergen with perspective, medium and short term plans could be formulated. The resource
endowments, the goal to convert the comparative advantage into competitive production structure, poverty reduction towards a high Human Development Index (HDI), redoubling efforts to build an adequate infrastructure and an export focused diversification growth strategy could be the priorities. The Planning Commission could be upgraded into a substance oriented institution to ensure an infrastructure (physical and social) building in the public sector so that the private sector could be encouraged to invest for the propersity and wealth creation of the country to its maximum potential.
The infrastructure projects may be:
a) Expansion and modernization of the ports;
b) Construction of the deep sea port;
c) Four (even six) Lane Road connectivity and Broad Gauge Rail connectivity with all major towns;
d) Expansion, dredging and modernization of the waterways;
e) Capacity enhancement of BAPEX for assessment of reserves, exploration, exfraction and distribution of natural gas primarily as raw materials to industry;
f) Overhaul of the education system towards creating innovative, scientific, modern and technology oriented human resources;
g) Meaningfill implementation of the ‘Health For All”;
h) Promotion of the Blue Economy in energy, fishing, shipping, service, tourism in the context of the enormous victory at the ITLOS: sea area expansion and securing of the continental shelf;
i) Diversification of production and exports in keeping with the comparative advantage (Exports to GDP ratio could be improved to 0.40 in ten years);
j) Recovery of the salinity inflicted crop lands of the south;
k) Exploration of the integration of the land accretion from sea with the mainland.
1) Major overhaul of BSTI into an institution of global standards; and m) Strengthening the administration, management and governance.
In addition, the newly proposed Planning Commission with enhanced authority will ensure availability of accurate database. It will pay attention to monitoring and evaluation of programmes and projects relating physical progress to the financial outlay.
Implementation of Mega Projects
In Bangladesh, development projects do not seem to move without the intervention of the Head of the Government. She/he may be facilitated to oversee the largest projects as is done in Malaysia, South Korea and Indonesia. Projects such as (a) Padma Bridge, (b) Rail, Road and Waterways projects, (c) Electricity generation projects including the Coal Bangla Projects for generating 1O0O0MW energy to start with, (d) the gas exploration projects, (e) the Blue Economy, (f) Solution of the KEPZ dilemma through mutual consultation, (g) Shifting of the CETP equipped leather industry to the Savar Industrial Estate, (h) Quadrupling the capacity of Eastern Refinery and such other projects as singled out apex monitoring.
Notwithstanding political and ideological differences, major political parties would do well to reach national consensus on broad macroeconomic issues for effective implementation through a continuation of the policy framework. With the steady trend in poverty reduction, it may be wiser to concentrate on a strategy of climbing the ladder of the Human Development Index (HDI) which has improved to 0.525 in 2012 to the level of Medium HDI by 2021 and to High HDI by 2030. In addition to the priority attention to the transformation of the human persons into human resources, initiatives are needed for mainstreaming the persons with disability and autism, unofficially estimated to be close to 10 million. Attention to the ever increasing number of senior citizens is also in order. The economic participation rate of women reached 40% in 2014 compared to 03% in 1972; more progress is necessary; 50 (fifty) percent nomination by 2030 to women in the parliamentary election is recommended as well.
Effective governance is stated to be the mother infrastructure for socio-economic development. It is essential to put in place an honest and efficient, a transparent and confidence generating administration. Law has to apply to all without fear or favour. The drive against the law breakers may start against the land and the waterbody grabbers. Of the 08 (eight) lakh automobiles without fitness certificates, half a million are stated to be beyond repair. Half the motor vehicle drivers do not have valid licenses. For road safety and to minimize senseless killings by reckless driving, the High Court has recently revived the 7 year prison term; the offence could be made a non-bailable offence as before. Rigorous training and passing the test must be insisted upon before a driving license is issued. All commercial vehicles aged 10 years or more may be subjected to increasingly higher road taxes. Sustained drives to punish the offence on vehicles without fitness certificates, drivers found guilty of reckless driving and driving without license. Accidents and traffic congestion may reduce thereby. Government revenue will rise too. Old vehicles will be replaced by new high quality new buses. Innovative land management policy, if crafted carefully and implemented meticulously would generate substantive revenue particularly from the urban properties.
The introduction of the value added Tax (VAT) in 1991-92 worked wonders and the self-financing of the annual development programme, ADP rose from 0 (zero) percent to 50 (fifty) percent. A reformed and expanded VAT, if formulated with careful analysis and implemented with vigour may cause another major kick-up in Tax/GDP ratio.
Bangladesh is blessed with wonderful people, reasonable physical and mineral resources, very fertile land, a strategically important geo-political location, 118000 square kilometers of sea and a 200 mile long continental shelf, very hardworking farmers and industrial workers as well as entrepreneurs of proven quality. The economy is fortunate to be in the good book of the largest (China), third largest (Japan) and the fifth largest (India) economies of the world. The hitherto missing link is national consensus to work unitedly to further ignite the concerted efforts to build the cherished goal of Sonar Bangladesh.
The author is former governor of Bangladesh Bank.