Since 1990, Gross Domestic Product (GDP) of Bangladesh has been growing at a sustained 5.5-6.5 per cent per annum in real terms (or 3-4 per cent per annum in per capita terms). In 2009, our per-capita income was $559 and in 2016, it was $1466 supported by export revenues of $29 billion.
The growth was broad-based - it trickled down, benefiting everyone, including the poor. In fact, the fall in extreme poverty was even faster than overall poverty decline. The most important factor behind poverty reduction was agricultural performance. Against this backdrop, the following questions were raised at the 2016 'Critical Conversation' organised by the Bangladesh Institute of Development Studies (BIDS): Can agriculture continue to play this role? Should we focus more on the non-farm sector in the future? Why didn't manufacturing, particularly ready-made garment (RMG), play a bigger role in reducing poverty?
Moreover, inequality has been rising alarmingly if we compare the situation in 2016 with what was the case in the early 1990s. However, recent evidence seems to suggest that inequality tended to decline since 2005. Key question here is whether this trend has been sustained.
Over the past 20 years, Bangladesh has made some of the biggest gains in the basic condition of people's lives seen anywhere. The improvement in life expectancy has been as great among the poor as the rich. Major gains have been made in education, health and gender parity. This is reflected in school enrolment of girls, reduction in child, infant and maternal mortality.
These improvements cannot be a simple result of increases in income. So what are some of the key factors responsible? These factors include: (1) Fertility decline, (2) the Green Revolution and food security, (3) microcredit and the role of non-governmental organisations (NGOs), (4) remittance and labour exports, (5) the RMG Sector, (6) the health Infrastructure, (7) education and gender parity, (8) targeted interventions, (9) rural institutions and local governance (CBO, NGO, samiti, SHG - key vehicles for transmission of inputs and ideas).
But there are threats, both old and new. Corruption continues to remain a major threat as there is no clear strategy yet to deal with it. Terrorist threat and growing religious intolerance also pose a big threat: the threat level rose dramatically last year. Other threats are: climate change, rapid urbanisation and educated unemployment.
Nevertheless, the mindsets are changing.
The War of 1971 brought a revolutionary change in the mindset of the people. They were no longer satisfied with takdir or fatalistic view. They were prepared to take matters into their own hands to change their fate. The large number of rural people heading to the Middle East or other countries is a case in point. The common man are awakened and decided to 'succeed' at any cost. The main question here is: while the people are ready to take up any challenge, are the policymakers ready?
In 2009, we aspired to produce 4500 megawatt of electricity. We had nothing to start with. While Hannibal was planning to cross the Alps with his elephants, he was asked: "How will you cross it?" He replied, "I'll find a way or I'll make one".
We did the same. We mobilised $8-9 billion. We wanted to make a power plant at Payra on a deserted open space beside the sea where there was no habitation for miles. We dreamt of mobilising $2.5 billion and we achieved it.
This is the new "can do" mindset of the people and the government.
ACHIEVEMENTS AND CHALLENGES: A session on Eradicating Extreme Poverty during the 2016 'Critical Conversation' noted significant achievements. Poverty has gone down at the rate of 1.6 per cent per year, reaching 24.8 per cent in 2015 while extreme poverty declined to 12.9 per cent in 2015. Prevalence of underweight children under five years of age declined from 57 per cent in 2000 to 31.9 per cent in 2013. Under-five mortality declined from 84 (per thousand live births) in 2000 to 41 in 2013. Maternal mortality (per 100,000 live births) declined from 318 in 2000 to 197 in 2013.
But challenges remain as still over 20 million people live in extreme poverty. Moreover, about one-fifth of primary school aged (6-10 years) children are out of school; child malnutrition is still high; about two-thirds of women get married before the age of 18 years, leading to early and risky pregnancy. Although access to sanitation has improved, 55.9 per cent people still live in poor conditions with unsafe sanitation facility. Maternal mortality is still high and has fallen short of the MDG target - a large proportion of it is thought to be preventable.
To overcome the challenges and to move forward, some suggestions were made: further push needed through replication of micro successes in eradicating extreme poverty. In other words, we need "bigger, better targeted social protection schemes" for extreme poverty reduction. Suggestion was also there for more investment on human capital development, promoting market development and facilitating access of extreme poor to labour markets and income generation opportunities.
It is important to note some features of poor households. Sex ratio has changed among the poorer households over time - there are now more women in poorer households. These households have more day-labourers and have less remittance income. Poorest women have more freedom, have own earning, and more decision-making power in household matters -- but they are more hungry, less respected, less informed and less healthy.
So the puzzle is, when real wages in agriculture have risen since 2007-08 in the midst of modest agricultural growth, a sizable population (20 million ) are still living in extreme poverty. So why is it that the higher agricultural wage did not eradicate poverty through employment?
Two suggestions were made to deal with extreme poverty: one is the creation of a permanent secretariat for extreme poverty eradication; and the other is putting together an official list of poor and extreme poor for targeting needs.
Regarding education and human capital, one suggestion was for primary education to be extended to eight years. Government seems not to be interested. 'The nationalisation of the education sector' has turned the teachers into central government employees - they now don't have any connection with the community and have less accountability - resulting in "a political culture that relies on populist and short-term calculations that aids and abets incompetence and corruption".
The task of publishing new books every year and distributing them to students is shown as a success by the government. However, publishing new books and distributing them every year is inefficient and costly. Why can't the government publish quality books that will last for three years?
Again, Bangladesh is probably the only or one of the few countries in the world whose basic school system has two ministries: Primary Education Ministry and Secondary and Higher secondary Ministry - this makes the transition from five years to eight years difficult.
The third phase of Primary Education Development Pogramme initiative will be implemented only by the government. What then will be the role of BRAC and other NGOs, which have significantly contributed in the non-formal education sector? What will happen to the more than 5000 'Community Learning Centers' run by NGOs that need official support and recognition.
Stipend-based incentives to promote education was necessary in the past but we need to evaluate if it is an appropriate tool today. The supply side of education is neglected. These incentive programmes in primary and secondary level attract more students, thus the demand for education is induced, but many of them drop out from schools overtime, because on the supply side the quality of education is poor. Creation of a "national teaching corps" could be considered.
There has also been a decline in public spending in the education sector in recent times. Considering the dropout rate, about 40 per cent children are still not going to school.
There is a mismatch between investment and allocation in education sector. The ministry of finance doesn't approve the allocated money to the Ministry of Education because they lack utilisation capacity; while the Ministry of Education accuses the ministry of finance for delaying approval.
Dr KAS Murshid is the director general of Bangladesh Institute of Development Studies (BIDS). The write-up is adapted from his keynote address at the inaugural session of the BIDS Critical Convesation-2017 on Sunday.