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The book makes significant value addition to the growing body of literature on development economics. Its publication, as Dr. Salehuddin Ahmed himself, the author, himself says, has been motivated by two major considerations. First, there has been recent emphasis on making policy decisions based on critical analysis of economic issues. Second, there has been a renewed interest in dynamics of both rural and urban sectors of a developing country along with external factors of globalisation. The book provides some analytical frameworks which, to some extent, are time-neutral and as such has considerable relevance for the development efforts in Bangladesh.
The stance the author, a former governor of Bangladesh Bank (BB), has taken in various chapters of this book has been first to identify the critical factors contributing to development and then analyse the direction of influences on development indictors and their quantitative dimensions. The topics covered in the book represent an array of subjects: peasant households, small entrepreneurs, poverty and access to land, rural-urban migration, environment and poverty, international cooperation and a few others. The topics covered encompass micro, meso and macro levels of an economy. The analytical approach goes beyond the field of economics to incorporate other disciplines in order to make it multidisciplinary.
The book begins addressing comprehensively the theme of self-employed small entrepreneurs of the informal sector in Dhaka city. The potential of utilising manpower through self-managed small business is enormous. These small units of business and industrial activities use small amount of capital, absorb relatively high amount of labour and requires less expensive education and training. However, there has been little efforts in procuring information about the existing small entrepreneurs in various cities.
In order to fill the information gap in this field, the National Foundation for Research on Human Resources Development (NFRHRD), which was subsequently merged with Bangladesh Institute of Development Studies (BIDS), conducted a survey of some small entrepreneurs in Dhaka city. The major objectives of the survey were: (a) to assess the socio-economic background of the self-employed small entrepreneurs; (b) to identify the socio-economic-cultural forces which influence their occupation; (c) to assess the level of income and the factors influencing it; (d) to identify the problems of finance, marketing, training and expansion of their economic activities; (e) to assess the standard of living and aspirations in entrepreneurial pursuits; and (f) to establish a close linkage with rest of the economy and to utilise man and materials efficiently.
The author has devoted several chapters to analyse the role of small-scale industries and business in solving the poverty and unemployment in a country like Bangladesh. The vast reservoir of human resources can be utilised effectively through the small entrepreneurial activities both rural and urban sectors of the economy. In the process of economic development in general and in the development of large-scale industrial enterprises, a fruitful and supportive role can be played by the small entrepreneurial activities like those covered in the study.
Moreover, in a country like Bangladesh, the activities carried out in the informal sectors of the rural and urban areas are no less significant than the activities in the organised sectors. There are several other advantages to be derived, if self-employed small entrepreneurial activities are encouraged. These activities mainly use domestic technology and resources. Since these activities can be developed in different regions and localities of the country, this may help in evolving a smooth process of regional development. The author has also put forward some policy suggestions to overcome the problems faced by the self-employed small entrepreneurs.
The next broad theme the author addresses in his book relates to macro intervention for poverty alleviation, illustrating with experiences of some selected Asian countries including India, Nepal, Indonesia, Thailand, Bangladesh and the Philippines. Poverty alleviation, which forms the basis of the development programmes of the selected countries is observed to be inextricably intertwined with numerous other activities - economic, economic, social, and political - within the national boundaries and beyond. Lessons drawn from experiences, especially, from micro interventions will go a long way in forging new national and regional strategies of poverty alleviation.
The micro-level grassroots experiments demonstrate possibilities for a new sustainable accumulation process, both in the formal and informal sectors in the rural areas. Many of these experiments confirm how human development and equity go hand in hand with the accumulation process. Irrespective of whether poverty is alleviated as a result of spontaneous activities of the poor or supported by a government agency, a bank, or a non-governmental organisation (NGO), or whether they emerge with a particular "entry" point, the process as a whole must be rigorously and regularly monitored and evaluated for future guidance of the policy makers, development partners as well as implementation of programme and projects for poverty alleviation.
The review of experiences of micro-interventions shows the lack of a monitoring, information and feedback system to assess the impact of such intervention of poverty alleviation on the micro or household level. The first step in the formulation of a regular micro-level appraisal system would be to find out the relevant quantitative and qualitative indicators. A carefully chosen set of indicators has the potential for monitoring the impact of various interventions if the changes in the indicators over time are observed across a carefully designed typology of villages, rural communities, and rural households. The experiences suggest that the growing mass of programme-wise statistics is quite inadequate for undertaking an in-depth impact analysis. The second step in this direction would be to set up institutional mechanism linking macro-micro movement/flow of decision, resources, inputs and personnel.
The author concludes, and rightly so, that it is not enough to focus the interventions on the symptoms of poverty alone, like low income and calories intake of the poor, which represents the "state" dimension of poverty. The objective of interventions should also be to counter the marginalisation processes ("process" dimension of poverty) pushing larger number of rural people to the brink of mere subsistence.
Landlessness is often both the cause and manifestation of poverty, indebtedness and powerlessness of the majority of the rural households. In fact, the pattern of land holding is a major determinant of the economic condition of the rural people in most of the countries of South East Asia. The author, therefore, critically analysed the imperatives of agrarian reform in the context of rural poverty alleviation, with facts and figures. There may be several ways of reducing the incidence of landlessness. For some groups of people in the rural areas, ownership or access to land may neither be a necessary nor a sufficient condition for reducing or eliminating their poverty. Earning from non-land based activities may be higher than land-based activities for these groups. But in many countries of the Asia-Pacific region, majority of the poor group are dependent on land; therefore, access to land becomes a crucial factor.
While admitting the fact that most of the government of the developing countries is not oblivious to the seriousness of the problem of landlessness, the author mentioned that pragmatism and commitment are often lacking in implementing measures to improve access to land. The experience seems to suggest that only technocratic solution will not be sufficient to tackle such a complex problem like landlessness. In view of the complex relationships existing in the rural society itself and among the rural and urban areas, policy makers, planners, NGOs as well as donors, it should be kept in mind that there is no simple and uniform solution. The solution has to be based depending on specific cases taking into account differences in resource endowment, ecology, location and a host of other factors.
The crucial factor for poverty alleviation, the author emphasises, is the "human factor", the missing link in development. The recent emphasis on human development should not obscure the economic aspect of development. In some developing countries, where development in education and some other social services is claimed to be higher, significant economic inequality is prevalent in these countries. Unless people participate actively in all stages of development programmes/projects, it will be difficult even to maintain the present status quo, not to speak of improving upon.
The small farmers constitute the most important segment of the farming community of Asian countries. The benefits of various rural development programmes/projects derived by small farmers are not significant. The concept of small farmers and the efforts to develop their condition vary from country to country in the Asian Pacific region. The author outlined the experience of the development programs/projects intended for small farmers in Bangladesh, Indonesia, Nepal, the Philippines and Thailand. He recommended that the government agencies and the NGOs should further increase the efficacy and coverage of their efforts for improving the conditions of small farmers in these countries or for that matter, in all countries in South Asia.
In many developing countries including Bangladesh, environmental degradation such as deforestation, soil erosion and pollution are most visible around the poor settlements, both in the rural and urban areas. This has motivated some policy makers, planners and social scientists to investigate direct casual linkages between poverty and the environment. On the other hand, others have emphasised the role of public policies in altering incentive structure and redirecting resources between sectors and regions as the dominating underlying causes of the observed poverty environment linkages. The second line of thought emphasised on the implications of structural adjustment and promoting market mechanism and its impact on sustainable development.
The author has discussed both the direct and indirect linkages between poverty and environmental degradation. The direct poverty and environmental linkages often lead people to blame the "poor" for environmental degradation. It is in fact not the "poor" as individual, but the "poverty" both as "state" and "process" which should be blamed for environmental degradation. Therefore, the author emphasised on a comprehensive set of public policies to integrate environmental concerns into development perspectives both at micro and macro levels. It must be pointed out here that although the prime responsibility to integrate environmental conservation into poverty alleviation lies with the national governments, there are international implications and responsibilities which the rich developed countries should take into cognizance as well.
In Bangladesh, given a large number of environmental problems across various agro-ecological zones, target groups of people at high risk exposed to poverty and environmental degradation should be clearly identified. The macro policy should not rely heavily on regulation and poverty issues should not be solely tackled from poverty perspectives. The nexus among development, population, environment and poverty alleviation should be fully understood and a holistic approach should be taken. The structural adjustment policies in Bangladesh should, the author recommends, have more than economic perspective and should consider a long-term horizon.
Also, it is necessary to establish linkages among economic growth, poverty alleviation and improvement of environmental conditions in order to achieve sustainable development and equity. The government of Bangladesh has recently taken steps to involve the grassroots people in the environmental preservation through the formulation of National Environmental Management Policy (NEMAP). Several interactions among the poor, development workers, environmentalists, planners and policy makers have taken place in formulating NEMAP. If the poor people and villagers are given chances to manage natural resources, then it will become easier to levy "user charges" or "service charges" on the collective body of the users or some sort of people's organisations. These will also be consistent, as the author remarks, with the participatory approach to development.
The next two chapters of the book are devoted to economic modelling exercise - the first one dealt with a Model of Peasant Household in Bangladesh while the second one carried out policy simulations in a Dual Economy Model of Bangladesh. A few words on each of these may not be out of place. The first modelling exercise attempted to give a theoretically consistent approach which is quite helpful in building up empirically an aggregate model for the developing economies including Bangladesh. The assumption of rational optimising behaviour of the rural people both as producers and consumers has enabled to specify the aggregate relationship with better theoretical insights. The empirical results suggest that the analytical framework of the study can be applied to analyse development prospects of the developing economies, especially those with a large agrarian sector. The second modelling exercise focuses on the process of rural-urban migration of the population within a dual economy model and analyses some policy implications which may be adopted to reduce migration rate consistent with overall development of the Bangladesh economy.
The last chapter of the book has been devoted to explore the prospects of South-South and Triangular Development Cooperation in Asia. There is an increasing awareness to enhance South-South and Triangular cooperation to transform the conditions of least developed countries (LDCs), land-locked developing countries (LLDCs) and the small island developing states (SIDS). The post-2015 development agenda incorporated in the UN Sustainable Development Goals (SDGs) have to be achieved by the year 2030 in the context of the cooperation among the countries located in the North and South of the globe. To graduate from LDC, LLDC and SIDS, a country has to address issues related to reduction of poverty and hunger; ability to take advantage of its openness and globalisation; acceleration of growth with equity; social security of the poor; energy need for a growing economy; climate change; financial architecture to cater to the need of a developing economy and financial inclusion. The chapter addressed these issues pertaining to LDCs, LLDC, and SIDS in the Asia Pacific region. It provides some recommendations for future actions to be taken by the countries of both North and South to enhance South-South and Triangular cooperation. Special emphasis is given on financing for development.
The author also emphasises-and rightly so-that the post-2015 development agenda for the less developed countries needs to recognize the complex relationship between the state and the market, the nature of which is mostly complimentary. Moreover, it is important to recognise the changing role of both state and market with time and country-specific situation and the need to adapt to each other. The success in the past has come in countries which succeeded in bringing the right blend of the roles of the state and the market especially in ensuring investments in infrastructure and social sectors and promoting employment creating and inclusive growth and development. There should be a clear message that achieving the MDGs and delivering on the post-MDG agenda is not optional, since the agenda involves an essential investment for a safer, more human and prosperous world. The goals are not just an "aid obligation" but the basis for political and economic strategies that will benefit all the world's citizens, and not just the least fortunate. Moreover, the post-2015 agenda should include some explicit accountability mechanisms for relevant stakeholders.
I hope a wide audience including academicians and policy makers concerned eager to see faster growth and accelerated poverty reduction in Bangladesh will find the book informative and useful.
Some of the tables in the book needs updating. Also, there are a number of typos which needs to be corrected, if and when the author brings out the next edition of the book.
Dr. Quazi Shahabuddin is former Director General, Bangladesh Institute of Development Studies.