The Financial Express

Matching economic success with flourishing of democracy

| Updated: April 18, 2019 21:19:35

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Matching economic success with flourishing of democracy

By all accounts Bangladesh has done exceptionally well over the past two decades. This is true for both economic and social progress, where the internationally accepted indicators have placed Bangladesh in the forefront of nations in the developing world in terms of reducing deep poverty and improving the lives of tens of millions of its citizens.  This is also true for its positive impact on women, particularly in terms of education for girls, women's employment, and improving the quality of their lives.

Bangladesh is a relatively young nation - not quite 50 years old.  The country has emerged from the shadows of abject poverty and famines to a nation where rapid and sustained economic growth has benefitted a broad swath of the society, moving tens of millions out of extreme poverty to the lower middle class over the past 20 years. No, the economy of Bangladesh has not yet replicated the double-digit growth attained by China in its early years of growth spurt. But it has done sufficiently well so that the economic and social development in Bangladesh can be described as somewhat of a "miracle."  This sterling performance has definitely proved Mr. Henry Kissinger and other pessimists wrong, and has brought a smile to those who had believed in the potential and promise of this young nation.

The case for the future development of Bangladesh is strong.  Bangladesh still faces challenges and threats both internally and externally, but overall the outlook remains very optimistic. The people of Bangladesh have demonstrated many times their ability to work hard, and be resilient in the face of numerous threats and challenges, including severe natural disasters.

The secret behind the success of Bangladesh is its people. This includes the entrepreneurs and the millions of women who left their village homes to work in the ready-made garments (RMG) factories and the non-governmental organisation (NGO) leaders such as BRAC and Grameen Bank, and millions of citizens they serve each day. There are the farmers and the millions of hardworking Bangladeshis overseas who send their incomes each month to their families, and of course those in public sector, the government (and in the opposition) who love their country.

Over the past 48 years, Bangladeshis, across the income and wealth spectrum, have demonstrated incredible resilience, grit, courage, ambition, and love for their country.  They have overcome a brutal war of independence and mass exodus, as well as natural disasters, and a great many challenges. Yet they remain a hopeful and optimistic people. There is much to celebrate about this nation of 165 million people, where nearly 50 per cent of the population is under the age of 24 years. In recent years, gross domestic product (GDP) growth was as high as 7.9 per cent, powered by RMG exports (which have reached nearly $35 billion annually) has pushed the economy upwards from the least developed country (LDC) status to the lower middle-income status (2015)…Extreme poverty (below $1.90 a day) has been reduced from 44 per cent in 1991 to under 10 per cent in 2018.

 As this success is celebrated, scholars and citizens should be obligated to ask the policymakers and politicians in the government the toughest questions. The top five questions may include the following:

  • WHY ARE FOREIGN BUSINESSES STAYING AWAY FROM INVESTING IN BANGLADESH? The foreign direct investment (FDI) has increased in recent years, but pales in comparison to what Vietnam and other nations are receiving. Fortunately, the nation maintains a healthy reserve of the foreign exchange because of two sectors - the dynamic RMG export sector now approaching $35 billion, and remittance from the hard-working expatriate workers who are sending their incomes back to their families.
  • WHAT CAN BE DONE TO REDUCE CORRUPTION? On the widely recognised Corruption Perceptions Index by Transparency International, Bangladesh fared poorly in 2018.  Its ranking as one of world's most corrupt nations went up from 143/180 to 149/180, an increase of six points. This is embarrassing to say the least and is also detrimental for social and economic development. Who knows what the GDP growth would be without this endemic corruption? Perhaps Bangladesh is losing 2-3 percentage points annually in GDP growth due to its inability to reduce corruption. Every economist and political scientist who has studied the subject will agree that corruption is largely corrosive to development. It undermines the rule of law and makes the playing field uneven. It destroys morale and perpetuates the inequities in wealth and income distribution.
  • WHAT POLICIES CAN BE PURSUED TO ACHIEVE A "ZERO POVERTY SOCIETY?" Despite lifting tens of millions of people from extreme poverty, nearly 12 million are extremely deprived. This is likely to be the most difficult group for policymakers to address in order to lift them out of deprivation.  As a nation nobody should be left behind as it marches out of the LDC (least developed country) camp to the MIC (middle-income country) camp of nations. A strong "safety net" should be built so that all citizens can share the nation's prosperity. 
  • WHY IS IT THAT THE COUNTRY HAS NOT BEEN ABLE TO BUILD A DEMOCRACY THAT COMPARES FAVORABLY WITH ITS OUTSTANDING SUCCESS IN THE ECONOMIC ARENA? Bangladesh's economic success is a significant feat. An exemplary democracy should also be in the country. These two goals should not be mutually exclusive. A democracy that works for all means that as a nation, all citizens are working together and thus are drawing from a bigger pool of ideas and talent in leadership, governance and administration. The future challenges that Bangladesh would face are steep.  The chances of success are much greater if different quarters work together as a nation. Perhaps this is a dream, but it is worth pursuing.
  • n  WHY IS IT THAT A NATION OF 165 MILLION PEOPLE CANNOT WIN A MEDAL IN THE OLYMPICS? The success of Bangladesh's cricket team shows that the significance of success in sports at the national and international level on the nation's psyche and self-esteem should not be underestimated.  Developing self-confidence as a nation is an essential ingredient for development. Surely, with adequate training and financial support, talented athletes from the country will be perfectly capable of winning medals at the next Olympics.

Of course, this is not a comprehensive list of challenges.  Extremely high and ever increasing inequalities in income and wealth distribution, and the negative impact of catastrophic climate change remain major concerns. These issues need to be addressed before it is too late.

But these questions can provide some food for thought as future decisions are taken to strengthen social and economic progress on the path to becoming a more prosperous and democratic nation. The people of Bangladesh along with those in leadership in the government, the opposition, the private sector, and the dynamic expatriate community, should work together to build a Bangladesh that the founding father and the freedom fighters had fought for.

This article draws from the author's welcome remarks at the recently concluded International Conference on Bangladesh organised by Bangladesh Development Initiative (BDI) at the Yale campus, in association with the Yale MacMillan Centre.

Dr. Munir Quddus is a Professor of Economics and Dean of the College of Business at Prairie View A&M University near Houston, Texas.

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