Zahurul Alam :
Bangladesh continued to demonstrate success in socio-economic arena in 2015, as in the recent past. Developmental dynamism continued and the year comes to an end with remarkable milestones of success. Those pertain to economic indicators, political maturity, international relationship and social emancipation. The deficiencies are there, which should be overcome with continued efficient planning and implementation.
Despite political instability, terror, and destructions in the early months of this year, the country attained more than 6 per cent growth rate in 2015. Such growth rate the country sustained for more than six years consecutively. The most demonstrative achievement of Bangladesh in 2015 is perhaps its transition from LDC to Middle income Country by both World Bank and UN definitions. The per capita income recorded a 10 per cent growth rate in one year reaching USD 1,314 in 2015 against 1,190 in 2014.With this trend by 2021 the per capita GDP shall exceed the targeted level of USD 2,130 USD.
In 2015 Bangladesh’s GDP amounted to USD 205.3 billion compared to 153.5 in 2013, an increase of 33.7 per cent in two years. The figures were USD 173.8 billion in 2014, 114.6 billion in 2010 and 52.3, 32.3, 19.2 and 7.1 billion USD, respectively, in 2000, 1990, 1980 and 1970. Despite global economic depression in recent years, Bangladesh has sustained six plus growth rate and placed itself as 44th economy in the world in 2015 compared to 58th in 2013 and much lower in previous years.
A bottomless basket, that was how once Secretary of State of US Henry Kissinger termed Bangladesh in an attempt to hide the shame of his own and of the US diplomatic, political and military defeat in 1971 with the emergence of independent Bangladesh and destruction of its ally Pakistan. Now Bangladesh has overridden Pakistan in all indicators, while the latter is at the brink of a failed state. Bangladesh has established itself as an example in the world in economic growth and attaining the MDG targets. With current growth rate the economy of Bangladesh is expected to exceed many developed countries by 2050.
The volume of Bangladesh’s annual budget in 2015 amounted to 2,951,000 million Taka compared to 7,860 million in 1972-73, a 375 fold increase in 43 years! This could be much more in case of sustained political development, improved governance and uninterrupted democratization of the country – without unconstitutional power capture, corruption and resources leakages over long years of autocracy.
One of the excellent indicators that the country has achieved is its capacity to meet import expenditures from domestic sources. This reflects the strength of the economy in terms of its financial independence. The donor dictates are least effective now than ever. Even in late eighties, the country had to depend grossly on foreign aid.
In 2015, Bangladesh has attained remarkable progress in poverty alleviation. The share of the people in poverty has reduced from 31.5 per cent in 2010 to 24.7 per cent in 2015, a decrease of around 7 per cent in five years. These ratios were 48.9 and 40 per cent, respectively, in 2000 and 2005. The share of people living in extreme poverty has reduced from 13.1 per cent in 2010 to around 6 per cent in 2015. Unemployed youth aged 15-24 accounted for 9.3 per cent in Bangladesh in 2015, compared to 11.4 on an average in the world. The country now is in the process of creation of a skilled labour market based on intrusion of advanced technology in all sectors. Of special importance is its development in the IT sector. About 75 per cent of the population has mobile phones and a large part of both rural and urban population enjoy internet services. The IT centres in the rural areas are a great stimulus in the formation of a skilled IT based labour market, which is essential for the development of the country at an expected pace.
Another important aspect in attaining inclusive growth is more involvement of the women in the labour market. The women constitute more than 96 per cent of the workers in the garments sector. There are genuine questions regarding their remuneration packages. However, the fact that the women constitute overwhelming share of the workers in this prime export earning sector, is indicative of inclusiveness in the development process, recognition of women’s capacity to be integral part of developmental process, proceeding forward with gender equity agenda and building women’s capacity, providing them the opportunity whereby they can control their household fund and participate in decision making. All above are essential ingredients of social development. The women are now at the leading positions of many economic initiatives both in the urban and rural areas. In women empowerment Bangladesh ranks 64 among 145 countries. This indicator is better in Bangladesh than any other country of South Asia, including India. However, there are sustained discriminations against women in the families, at work, in politics and in social fora, based on religious and social superstitions and taboos. Greater inclusiveness in terms of greater involvement of the women in economic activities, education, social and political activities is the most essential remedial measure against inequality and gender discrimination.
Among other major developmental indicators are reduced rate of population growth, which accounted for 1.6 per cent in 2015. The child mortality rate has decreased substantially in 2015 coupled with increased average life expectancy (more than 71 years) and increased girl child enrollment in education. The enrollment rate in primary education in Bangladesh was 97 per cent in 2015. The latter is a result of greater incentives for primary education and incorporation of the concept of universal education in the education policies and strategies. In the rural areas, the girl children have become more inclined to education and the women have become more inclined to entrepreneurship than ever before due to the incentives and other conducive to employment and entrepreneurship environment created through policy changes and amendments. This, however, does not mean that the discriminatory and exploitative approach towards the women has diminished to satisfactory level. The implication is that the women need to be empowered to the extent that they have appropriate leverages to protect themselves from all kinds of discrimination and exploitation.
In a nutshell, most Asian and African countries lagged behind Bangladesh in most social indicators in 2015, including India and Pakistan in the Sub-Continent. Continued and sustained dynamism in Bangladesh’s equity market are results of macro-economic stability, increased export earnings, increased purchasing capacity of the people, remittance flow, capacity building, and human resources development. With current trend of development, Bangladesh is expected to emerge as 23rd economy in the world by 2050.
In terms of foreign currency reserve, Bangladesh is placed only after India among the South Asian countries, with more than USD 27 billion. The reserve is more than double that in Pakistan and much more than those in other countries of South Asia. High foreign currency reserve, in general, is demonstrative of the existence of a strong economy with large export earnings, high remittance inflow and inflow of corporate loan from foreign countries. While the first two are unquestionable positive trends, the third one may not always demonstrate healthy economic environment. The usability or the capacity of the economy to absorb corporate loan in an efficient manner is an important pre-condition for making an economy stronger with foreign corporate loan. Decreased import expenditure is another factor of increased reserve. Such decrease in import may occur due to decreased investment, which in turn may be a result of lack of favourable investment climate. Given above dilemma, it is essential that appropriate measures are taken to ensure increased usability of the ‘idle money’. Such measures are inevitably related to good governance that would ensure transparency, accountability and responsiveness, reduce corruption and increase participation. Notably, all above ingredients in the corporate world and in developmental process, such as participation of the people in local planning, are important for attaining accelerated development and investment. Participation also is an important component of inclusive development, which ultimately leads to increased investment.
One of the most important developmental milestones of 2015 is the initiation of the construction of Padma Multipurpose Bridge. This 6.19 km bridge will establish direct road and rail communication between Dhaka and 19 southern and south-western districts. The 28,000 crore Taka mega project is the largest self-financed project of the country. The bridge will ultimately become part of the Asian Highway passing through Bangladesh. Conservative estimates suggest that this mega infrastructure will increase the country’s GDP at least by 1.23 per cent after being fully operational. Drastic improvements in Mongla port operation are expected following construction of the bridge. Padma Bridge will earn extra revenue from neighbouring countries as a result of their intention to intensify use of Mongla port.
Construction of self-financed Padma Bridge is demonstrative of the capacity of the government to mobilise and use domestic resources for developmental purposes. The country’s revenue earning through NBR during 2014-2015 amounted to Taka 1,36,723 crores against targeted Taka 1,35,028 crores. The amount is 13.16 per cent more than that earned during previous fiscal year. Despite huge revenue earnings Bangladesh is one of the countries with less than 1 per cent of the population paying tax appropriately. The ratio is 3 per cent in India and much more in the developed countries. Despite drastic improvements in the tax collection system in recent past, the system has ambiguities that prevent involvement of more tax payers in the system. The deficiencies remain in the structure of tax net, as well as in motivational aspects. According to ESCAP the governments of the developing countries like Bangladesh have excluded low-income people from the tax net. Also, the people working in the informal sector, especially in the agriculture sector overwhelmingly remain outside the tax net, irrespective of their income level, due to the lack of appropriate system for measuring their income level. Most importantly, a large number of eligible tax payers with reasonable income remain outside the tax net. In 2014-15, only 1.1 million people submitted their tax returns, which is 0.73 per cent of the total population of the country. In Bangladesh of the 35 million businessmen, only 1.34 million have electronic TINs. As percentage of GDP, 2014-2015 FY revenue collection accounted for 10.5 per cent, which according to ESCAP should be around 18 per cent. For domestic financing of more mega projects, which now emerges as the demand of the time, tax net needs to be expanded and at the same time the tax collection procedure needs to be simplified and be made more client-friendly. The automation efforts of the government in almost all government agencies do not produce expected results due to intentional attachment of complicated paper works in the process at the interest of the rent seekers. As mentioned by UN ESCAP, Bangladeshis have to visit tax officials six times more than in Indonesia. Prevailing high tax rate is another reason for low tax collection. The tax-GDP ratio in Bangladesh is 11 per cent, which should be raised to around 15 per cent.
The garments sector remained in extreme uncertainty and experienced unprecedented difficulties in production, supply and export due to political instability at the beginning of the year. However, from mid-2015, this sector overcame all challenges and attained production and export targets. At the end of FY 2014-2015 the woven garments export increased by 5 per cent compared to the same period of the previous year. The EPB estimates suggest that growth in the knit sector at the end of last FY was more than 3 per cent. The knit sector earned USD 12,426 million from export in 2014-2015. The home textile recorded extremely moderate export growth, 1.5 per cent. During FY 2014-2015, woven garments and home textile export earnings amounted to USD 13,064 and 804 million, respectively. Owing to the above, the garments sector share in the country’s total export accounted for more than 37 per cent. Export earning as a whole recorded almost 14 per cent increase in November 2015, compared to the same period of the previous year. Bangladesh’s export earnings amounted to USD 128.8 billion in first five months of the current FY, which is around 7 per cent more than that during the same period of last FY. In 2015 Bangladesh became second largest garments exporting country. The country aims at attaining USD 50 billion export earnings from the garments sector by 2021, against 25 billion now. The pharmaceutical industry meets 97 per cent of the country’s requirements. Bangladesh’s pharmaceutical products and medicines are exported to 80 countries all over the world. Bangladesh has emerged as one of the leading manpower exporting countries in recent years. Currently, more than 9 million people are working in 157 countries. However, the country lags behind some of the South Asian countries, including India, Srilanka and Pakistan in export of skilled workers.
Another dimension of success for Bangladesh in 2015 is its sustained food security. In this regard, the country has recorded greater success than all other countries of South Asia. Bangladesh is about to fulfill the target of reducing the share of hungry people to less than 5 per cent by 2015. Currently, Bangladesh ranks fourth in rice production in the world and had exceeded world average in yield of rice, wheat and maize. The country has recorded unprecedented growth rates in vegetable and fruit production. Bangladesh ranks first in growth rate of fruit production. As regards fish production, Bangladesh remains in the group of first five countries in the world for last ten years. Bangladesh ranks fifth in production of sweet water fish. Despite natural disasters, climate change effects and socio-political adversities, Bangladesh is proceeding steadily towards sustainable food security and complete freedom from hunger and poverty.
Bangladesh has successfully attained seven of the eight MDG targets and has expressed its firm determination to address the SDGs. Both ‘Vision 2021’ and ‘Vision 2041’ encompass the global agendas. The country has proved to be one of the 11 emerging economies of this century. However, Bangladesh needs to overcome enormous political and social challenges to materialize the overall goal of socio-economic emancipation. Strengthened democracy, good governance and participatory local governance are crucial for sustaining the achievements. The country needs to create an efficient and pro-people bureaucracy, bring inflation rate down to 4 per cent and sustain that level, establish and continue with rule of law and come out of the culture of impunity. Among most important challenges that the country may face in its development endeavour would supposedly be political confrontation and hostilities that degrade human rights and provides space for anti-democratic forces to take over. The nation needs to believe and firmly establish that democracy and good governance cannot go hand in hand with anti-democratic forces. A nation that won a war and liberated itself with clear vision and principles would not suffer from identity crisis. While the people know who they are and what they need to do for themselves and for the future generations, development remains within their purview.
Bangladesh continued to demonstrate success in socio-economic arena in 2015, as in the recent past. Developmental dynamism continued and the year comes to an end with remarkable milestones of success. Those pertain to economic indicators, political maturity, international relationship and social emancipation. The deficiencies are there, which should be overcome with continued efficient planning and implementation.
Despite political instability, terror, and destructions in the early months of this year, the country attained more than 6 per cent growth rate in 2015. Such growth rate the country sustained for more than six years consecutively. The most demonstrative achievement of Bangladesh in 2015 is perhaps its transition from LDC to Middle income Country by both World Bank and UN definitions. The per capita income recorded a 10 per cent growth rate in one year reaching USD 1,314 in 2015 against 1,190 in 2014.With this trend by 2021 the per capita GDP shall exceed the targeted level of USD 2,130 USD.
In 2015 Bangladesh’s GDP amounted to USD 205.3 billion compared to 153.5 in 2013, an increase of 33.7 per cent in two years. The figures were USD 173.8 billion in 2014, 114.6 billion in 2010 and 52.3, 32.3, 19.2 and 7.1 billion USD, respectively, in 2000, 1990, 1980 and 1970. Despite global economic depression in recent years, Bangladesh has sustained six plus growth rate and placed itself as 44th economy in the world in 2015 compared to 58th in 2013 and much lower in previous years.
A bottomless basket, that was how once Secretary of State of US Henry Kissinger termed Bangladesh in an attempt to hide the shame of his own and of the US diplomatic, political and military defeat in 1971 with the emergence of independent Bangladesh and destruction of its ally Pakistan. Now Bangladesh has overridden Pakistan in all indicators, while the latter is at the brink of a failed state. Bangladesh has established itself as an example in the world in economic growth and attaining the MDG targets. With current growth rate the economy of Bangladesh is expected to exceed many developed countries by 2050.
The volume of Bangladesh’s annual budget in 2015 amounted to 2,951,000 million Taka compared to 7,860 million in 1972-73, a 375 fold increase in 43 years! This could be much more in case of sustained political development, improved governance and uninterrupted democratization of the country – without unconstitutional power capture, corruption and resources leakages over long years of autocracy.
One of the excellent indicators that the country has achieved is its capacity to meet import expenditures from domestic sources. This reflects the strength of the economy in terms of its financial independence. The donor dictates are least effective now than ever. Even in late eighties, the country had to depend grossly on foreign aid.
In 2015, Bangladesh has attained remarkable progress in poverty alleviation. The share of the people in poverty has reduced from 31.5 per cent in 2010 to 24.7 per cent in 2015, a decrease of around 7 per cent in five years. These ratios were 48.9 and 40 per cent, respectively, in 2000 and 2005. The share of people living in extreme poverty has reduced from 13.1 per cent in 2010 to around 6 per cent in 2015. Unemployed youth aged 15-24 accounted for 9.3 per cent in Bangladesh in 2015, compared to 11.4 on an average in the world. The country now is in the process of creation of a skilled labour market based on intrusion of advanced technology in all sectors. Of special importance is its development in the IT sector. About 75 per cent of the population has mobile phones and a large part of both rural and urban population enjoy internet services. The IT centres in the rural areas are a great stimulus in the formation of a skilled IT based labour market, which is essential for the development of the country at an expected pace.
Another important aspect in attaining inclusive growth is more involvement of the women in the labour market. The women constitute more than 96 per cent of the workers in the garments sector. There are genuine questions regarding their remuneration packages. However, the fact that the women constitute overwhelming share of the workers in this prime export earning sector, is indicative of inclusiveness in the development process, recognition of women’s capacity to be integral part of developmental process, proceeding forward with gender equity agenda and building women’s capacity, providing them the opportunity whereby they can control their household fund and participate in decision making. All above are essential ingredients of social development. The women are now at the leading positions of many economic initiatives both in the urban and rural areas. In women empowerment Bangladesh ranks 64 among 145 countries. This indicator is better in Bangladesh than any other country of South Asia, including India. However, there are sustained discriminations against women in the families, at work, in politics and in social fora, based on religious and social superstitions and taboos. Greater inclusiveness in terms of greater involvement of the women in economic activities, education, social and political activities is the most essential remedial measure against inequality and gender discrimination.
Among other major developmental indicators are reduced rate of population growth, which accounted for 1.6 per cent in 2015. The child mortality rate has decreased substantially in 2015 coupled with increased average life expectancy (more than 71 years) and increased girl child enrollment in education. The enrollment rate in primary education in Bangladesh was 97 per cent in 2015. The latter is a result of greater incentives for primary education and incorporation of the concept of universal education in the education policies and strategies. In the rural areas, the girl children have become more inclined to education and the women have become more inclined to entrepreneurship than ever before due to the incentives and other conducive to employment and entrepreneurship environment created through policy changes and amendments. This, however, does not mean that the discriminatory and exploitative approach towards the women has diminished to satisfactory level. The implication is that the women need to be empowered to the extent that they have appropriate leverages to protect themselves from all kinds of discrimination and exploitation.
In a nutshell, most Asian and African countries lagged behind Bangladesh in most social indicators in 2015, including India and Pakistan in the Sub-Continent. Continued and sustained dynamism in Bangladesh’s equity market are results of macro-economic stability, increased export earnings, increased purchasing capacity of the people, remittance flow, capacity building, and human resources development. With current trend of development, Bangladesh is expected to emerge as 23rd economy in the world by 2050.
In terms of foreign currency reserve, Bangladesh is placed only after India among the South Asian countries, with more than USD 27 billion. The reserve is more than double that in Pakistan and much more than those in other countries of South Asia. High foreign currency reserve, in general, is demonstrative of the existence of a strong economy with large export earnings, high remittance inflow and inflow of corporate loan from foreign countries. While the first two are unquestionable positive trends, the third one may not always demonstrate healthy economic environment. The usability or the capacity of the economy to absorb corporate loan in an efficient manner is an important pre-condition for making an economy stronger with foreign corporate loan. Decreased import expenditure is another factor of increased reserve. Such decrease in import may occur due to decreased investment, which in turn may be a result of lack of favourable investment climate. Given above dilemma, it is essential that appropriate measures are taken to ensure increased usability of the ‘idle money’. Such measures are inevitably related to good governance that would ensure transparency, accountability and responsiveness, reduce corruption and increase participation. Notably, all above ingredients in the corporate world and in developmental process, such as participation of the people in local planning, are important for attaining accelerated development and investment. Participation also is an important component of inclusive development, which ultimately leads to increased investment.
One of the most important developmental milestones of 2015 is the initiation of the construction of Padma Multipurpose Bridge. This 6.19 km bridge will establish direct road and rail communication between Dhaka and 19 southern and south-western districts. The 28,000 crore Taka mega project is the largest self-financed project of the country. The bridge will ultimately become part of the Asian Highway passing through Bangladesh. Conservative estimates suggest that this mega infrastructure will increase the country’s GDP at least by 1.23 per cent after being fully operational. Drastic improvements in Mongla port operation are expected following construction of the bridge. Padma Bridge will earn extra revenue from neighbouring countries as a result of their intention to intensify use of Mongla port.
Construction of self-financed Padma Bridge is demonstrative of the capacity of the government to mobilise and use domestic resources for developmental purposes. The country’s revenue earning through NBR during 2014-2015 amounted to Taka 1,36,723 crores against targeted Taka 1,35,028 crores. The amount is 13.16 per cent more than that earned during previous fiscal year. Despite huge revenue earnings Bangladesh is one of the countries with less than 1 per cent of the population paying tax appropriately. The ratio is 3 per cent in India and much more in the developed countries. Despite drastic improvements in the tax collection system in recent past, the system has ambiguities that prevent involvement of more tax payers in the system. The deficiencies remain in the structure of tax net, as well as in motivational aspects. According to ESCAP the governments of the developing countries like Bangladesh have excluded low-income people from the tax net. Also, the people working in the informal sector, especially in the agriculture sector overwhelmingly remain outside the tax net, irrespective of their income level, due to the lack of appropriate system for measuring their income level. Most importantly, a large number of eligible tax payers with reasonable income remain outside the tax net. In 2014-15, only 1.1 million people submitted their tax returns, which is 0.73 per cent of the total population of the country. In Bangladesh of the 35 million businessmen, only 1.34 million have electronic TINs. As percentage of GDP, 2014-2015 FY revenue collection accounted for 10.5 per cent, which according to ESCAP should be around 18 per cent. For domestic financing of more mega projects, which now emerges as the demand of the time, tax net needs to be expanded and at the same time the tax collection procedure needs to be simplified and be made more client-friendly. The automation efforts of the government in almost all government agencies do not produce expected results due to intentional attachment of complicated paper works in the process at the interest of the rent seekers. As mentioned by UN ESCAP, Bangladeshis have to visit tax officials six times more than in Indonesia. Prevailing high tax rate is another reason for low tax collection. The tax-GDP ratio in Bangladesh is 11 per cent, which should be raised to around 15 per cent.
The garments sector remained in extreme uncertainty and experienced unprecedented difficulties in production, supply and export due to political instability at the beginning of the year. However, from mid-2015, this sector overcame all challenges and attained production and export targets. At the end of FY 2014-2015 the woven garments export increased by 5 per cent compared to the same period of the previous year. The EPB estimates suggest that growth in the knit sector at the end of last FY was more than 3 per cent. The knit sector earned USD 12,426 million from export in 2014-2015. The home textile recorded extremely moderate export growth, 1.5 per cent. During FY 2014-2015, woven garments and home textile export earnings amounted to USD 13,064 and 804 million, respectively. Owing to the above, the garments sector share in the country’s total export accounted for more than 37 per cent. Export earning as a whole recorded almost 14 per cent increase in November 2015, compared to the same period of the previous year. Bangladesh’s export earnings amounted to USD 128.8 billion in first five months of the current FY, which is around 7 per cent more than that during the same period of last FY. In 2015 Bangladesh became second largest garments exporting country. The country aims at attaining USD 50 billion export earnings from the garments sector by 2021, against 25 billion now. The pharmaceutical industry meets 97 per cent of the country’s requirements. Bangladesh’s pharmaceutical products and medicines are exported to 80 countries all over the world. Bangladesh has emerged as one of the leading manpower exporting countries in recent years. Currently, more than 9 million people are working in 157 countries. However, the country lags behind some of the South Asian countries, including India, Srilanka and Pakistan in export of skilled workers.
Another dimension of success for Bangladesh in 2015 is its sustained food security. In this regard, the country has recorded greater success than all other countries of South Asia. Bangladesh is about to fulfill the target of reducing the share of hungry people to less than 5 per cent by 2015. Currently, Bangladesh ranks fourth in rice production in the world and had exceeded world average in yield of rice, wheat and maize. The country has recorded unprecedented growth rates in vegetable and fruit production. Bangladesh ranks first in growth rate of fruit production. As regards fish production, Bangladesh remains in the group of first five countries in the world for last ten years. Bangladesh ranks fifth in production of sweet water fish. Despite natural disasters, climate change effects and socio-political adversities, Bangladesh is proceeding steadily towards sustainable food security and complete freedom from hunger and poverty.
Bangladesh has successfully attained seven of the eight MDG targets and has expressed its firm determination to address the SDGs. Both ‘Vision 2021’ and ‘Vision 2041’ encompass the global agendas. The country has proved to be one of the 11 emerging economies of this century. However, Bangladesh needs to overcome enormous political and social challenges to materialize the overall goal of socio-economic emancipation. Strengthened democracy, good governance and participatory local governance are crucial for sustaining the achievements. The country needs to create an efficient and pro-people bureaucracy, bring inflation rate down to 4 per cent and sustain that level, establish and continue with rule of law and come out of the culture of impunity. Among most important challenges that the country may face in its development endeavour would supposedly be political confrontation and hostilities that degrade human rights and provides space for anti-democratic forces to take over. The nation needs to believe and firmly establish that democracy and good governance cannot go hand in hand with anti-democratic forces. A nation that won a war and liberated itself with clear vision and principles would not suffer from identity crisis. While the people know who they are and what they need to do for themselves and for the future generations, development remains within their purview.
(ZahurulAlam, Ph.D, President, Governance and Rights Centre (GRC).
