Shift in thinking of progress essential for Bangladesh's next transition

Dr Hossain Zillur Rahman has shared some of his thoughts of Bangladesh and Bangladeshis' development attainments.Based on his narrattives, The Financial Express journalist Khawaza Main Uddin and outreach team member Tanjim-Ul-Islam compiled the piece

The first major achievement is Bangladesh's transformation from disaster victim to disaster manager. In the past, Bangladesh was defined by its disasters. It was a disaster victim.In only one incident of the Bhola cyclone of 1970, three 300,000 deaths were recorded. The disasters had three-stage impacts.First, once a cyclone would happen, there wasno shelter. The second one was the post-disaster epidemics such as: diarrhea and cholera. The third was post-disaster starvation. So, there were three dimensions to being disaster vulnerable: meeting the disaster itself, post-disaster epidemic deaths, and post-disaster starvation deaths. The 1974 famine was also a very important experiential moment for Bangladesh's self-understanding. There were big prolonged floods in '74 as well. Fast forward to 1998, it was being dubbed the flood of the century. It was a very prolonged country-wide flood. International commentators were referring to that earlier imagery. They thought of Bangladesh from its '71 image. But Bangladesh actually proved to the world that by then a major transformation had taken plac. Bangladesh has graduated from being a disaster victim to being a disaster manager.

How did this happen? There were three drivers of deaths. One was vulnerability during the disaster. Cyclone shelters were instrumental in curbing those deaths. In addition, awareness campaigns to provide prior warning and information regarding the disaster to the people were effective. The second was the epidemic deaths. The improvement in primary healthcare facilities basically dramatically cut down the post-disaster epidemic death syndrome. The third one was the post-disaster starvation deaths. This phenomenon was tackled through implementation of social safety net programmes such as: VGF cards. During the 1990s, we created a road communication infrastructure reaching remote villages. That was another very important dimension. For instance, if food assistance came to Dhaka but we did not have the communication infrastructure, it could not be transported to the villages. Tellingly, in 2001, International Food Policy Research Institute (IFPRI) published a book titled "Out of the Shadow of Famine". The title itself was a signal of this change of Bangladesh. Bangladesh's vulnerability remains in multiple other dimensions. But Bangladesh has definitely come out of the phenomenon of deaths due to famine and epidemics. This is a massive change.

TRANSFORMATION FROM RURAL-URBAN DIVIDE TO RURAL-URBAN CONTINUUM: Bangladesh has a small landmass. But earlier, the cities and the villages were two different worlds. We used to call it the rural-urban divide. This has also changed. We have now what I call a "rural-urban continuum".  Instead of a divide, the urban lifestyle has also entered rural markets. This is also a significant transformation. It has two dimensions. The first one is that this was possible because of the connecting road infrastructure which we call the feeder roads. QuamrulIslamSiddique, LGED's chief engineer, was instrumental in this programme of feeder roads. What the feeder roads did was to banish the curse of remoteness of Bangladesh's villages. So, the villages became connected to the national economy. Hence, a peasant from Kushtia could easily think of selling their product in the Dhaka market by putting it on a Dhaka-bound bus and getting the appropriate return.

Another part of the rural-urban continuum was the rural non-farm sector. That was a big boost. Previously, villages only had the agriculture sector. But now the rural non-farm sector also became a very important part of this transition.We were able to increase productivity in the farm sector. Farmers were very smart in adopting technology even though the illiteracy rate is still very high in the rural sector. This is one of the few examples where homegrown experts played an enormous role in the transformation of agriculture.

ECONOMIC AND SOCIAL TRANSFORMATION THROUGH WOMEN EMPOWERMENT: The women became an important actor in the economic and social transformation of Bangladesh. The emergence of women was facilitated by a couple of things. Firstly, the reproductive burden on them decreased significantly. At birth, a woman used to give birth to 6.3 children in her reproductive age. She didn't have much time to do anything else after raising 6-7 children. Now, it is down to 2.3. So, they can give time to the children and do something else themselves. Microcredit played a very important role by becoming a vehicle for them to become economic actors sitting in their own homes. They used microcredit for the rural non-farm service sector initiatives. In the early 1990s, girl education got a boost via the stipend programmes. It was aided initially through the food for education programme and then later through the stipend programme for primary and secondary students. We reached the school enrolment rates early. This empowered women to become more active. Hence, they worked by availing microcredit in their own villages. Furthermore, they went to the garments factories and powered the labour part of it. They also went abroad. All of our remittance is not sent by male migrants, there is also a significant female part of it. This was also a big transformation.

PSYCHOLOGICAL TRANSFORMATION OF THE ASPIRATIONAL BANGLADESHIS: Garments industry and remittance, the two growth drivers, played a major role in the external economy. In the internal economy, we had a low productivity service sector playing an important role. It did not earn remittance but it gave local people some income and employment. When we think about growth, usually we only talk of garments and remittance. But I made a study on incremental growth where findings showed that rural non-farm and service sector contributed to the growth itself.This portrays the resilience of the economy. The resilience part of Bangladesh's transformation is a solid achievement. Throughout its entire 50-year history, except for '72 which was right after the devastation of the '71 war of independence, Bangladesh has not had a single year of negative growth amidst different political, natural, economic disasters. The discussion of the economic resilience of Bangladesh hinges on two crucial non-economic explanations.If you look at the literature of the 1960s and 1970s,  fatalistic phrases were abundantly found.

However, Bangladesh's population had a psychological transformation because of the war of independence. From being a fatalistic population, Bangladesh's population as a whole became aspirational. They were willing to dream differently for themselves. This was not restricted to the political leadership or upper elite groups, it was across society. For this reason, if you go to a slum, you will see that they prioritise their education and they are also willing to pay for that. The aspirational transformation of personality is a very important non-economic factor for Bangladesh. The other one is that to a large extent, from a political economy perspective, Bangladesh's story is more of an initiative-driven story. Policy definitely played an important role in many places, but the initiatives were more important and the policies actually followed. So, the initiative-driven transformation distinguishes us from the East Asian countries.

RESOLUTION OF BANGLADESHIS ON THE 50TH ANNIVERSARY OF INDEPENDENCE: The first resolution of the Bangladeshis should be to do a sort of a mindset shift. We measure progress based on the yardstick of how far we have progressed since '71. But when we celebrate the 50th anniversary, we now have to do a different way of understanding progress. How far are we progressing vis-à-vis our dream? How are we doing compared to comparable middle-income countries? We need to do a sort of shift in our thinking about progress. Compared to our origin, we have come a long way. But where we have to go now, that discussion cannot be based on the previous benchmark.

Going forward, three facts need to be looked at. The initial part of our development, up to the first four decades or so, was broad-based growth. But since the last decade, inequality has now become much more serious in multiple dimensions. So, this is an important issue. The type of growth strategy we now seem to have chosen has been exacerbating inequality. Furthermore, the growth elasticity of poverty reduction, which measures the percentage of poverty reduction for a 1.0 percent increase in growth, has decreased. Part of the reason behind this is the type of growth we are prioritising. The rise of inequality is posing a new level of concern. Going ahead, we have to really look at this issue in a very strong manner. Secondly, a key challenge for us is that we are still walking on the back of these two growth drivers, garments and remittance. As per the trend of the global economy, we cannot continue the next part of our journey depending on these two growth drivers moving forward. For the first 50 years, one of the underlying basis of our economic success was that it was a low-cost and low-skilled labour economy. This remains our selling point in both the garments and remittance sector. The transition that is required now is the transition from a low-cost, low-skilled economy to a more skilled and productive labour economy. There are many small start-ups but our population size is 180 million. Things have to be considered on scale. If we measure the one or two examples by scale, it is apparent that it is not enough. Microcredit, the rural non-farm sector, garments, remittance, all the growth drivers are serving millions of people. Hence, whatever we do in Bangladesh, we have to touch millions. So, we need to resolve for the transition to a more skilled economy. In that regard, we are in a very critical situation.

Transitioning to a more skilled economy requires getting our education and human capital agenda right. The worrying part is that on this issue of human capital and education, the indicators are not very helpful.Enrollment has increased but the dropout rate has not decreased dramatically or the completion cycle of the secondary school education. Students have gone to school but there is a learning gap. Schooling is not equivalent to learning. If a student goes to school but there is no teacher in the class, the learning gap will persist. Hence, a student of gradeVIII does not even have the equivalent learning of a student of grade VI.A dramatic example of the consequences of the poor quality of the education system can be seen in our most dynamic growth sector, the garments industry. According to BGMEA, the employment structure of the garments sector shows that 16 per cent of the jobs are being occupied by non-Bangladeshi skilled workers from abroad. If we look at the managerial jobs, the majority are from outside. The labour market statistics show an immediate reflection of thecrisis of quality of our workforce. We are facing a big challenge here. The low quality of education is not only a function of lack of investment. The type of investment is also vital. There are many universities that are getting thousands of crores of investment. This investment is mainly allotted for building infrastructures. The quality of education is not necessarily translating into that. Being able to overcome this crisis of human capital and quality education is not just a matter of policy or more investment. It is also crucially an issue of governance. What type of accountability is there in terms of performance, competency, and merit? UGC (Univesity Grants Commission) is reporting against 11 Vice-Chancellors. If the appointments of the VCs are not merit-based, then the whole system becomes corrupted. So, the solution to education and human capital agenda of our journey is not just in investment or some other policy. It is crucially an issue of governance of this sector. If the teachers are not appropriately recruited and rewarded based on merit, then you will not attract the meritorious ones.

ENSURING ECONOMIC TRANSFORMATION THROUGH ECONOMIC GOVERNANCE: Even though Bangladesh is graduating from the least developed to developing country status, we are still a relatively poor country based on our overall resource base.For example, the country is plagued by a poor taxation regime which is very much a governance issue. Bangladesh has established the first part of its journey by establishing resilience and creating important broad-based growth but there are now new problems. In that regard, the efficient use of resources is one of the most important issues. Efficiency is a very important word when you are looking to go ahead. Previously, we have not separately focused on efficiency because we needed to get the job done. Now, we have multiple alternatives regarding where to use the resources. If we can use the resources efficiently in one sector, that frees it up for other types of use. This again becomes a governance issue that is related to economic governance. When we talk about governance, we only think of political governance and electoral governance. But governance is also very critical for economic transformation which is the type of transformation we want. Economic transformation has to be from a social welfare point of view. If we want that transformation, the inefficient use of resources needs to be mitigated. Currently, the expenditure per kilometre road construction, building construction is exorbitantly high. Most worryingly, there is not a focus on building state capacity. Particularly, existing capacities are allowed to fall into decay, BAPEX being a prime example. If we look at the comparator countries, strengthening their state capacity was also a part of their way to become important to address the next part of their journey. But we didn't work toward strengthening critical state institutions. The private sector now needs to be thought of in two parts. Firstly, there is the private sector that values rules of competition, who value transparency in rules, and who are willing to play by the competitive rules, who do not want just support per se. The other one consists of those who by their proximity to power centres take unfair advantage of getting access to the most lucrative sectors, shutting down their competitors and so on. In order to make the private sector a very important part of our transformation in the next stage, strengthening the capacity of the state and giving policy attention to the private sector who abides by the competitive rules of the game will be essential.

GLOBAL BRANDING BASED ON REALITIES: Global branding will have to be based on realities. Global branding for a country like Bangladesh cannot be a PR (public relations) exercise. Bangladesh's transformation from disaster victim to disaster manager did not happen because of a PR company. None of the brandings based on PR exercises have succeeded. Branding can certainly have many advantages. Bangladesh can project itself through its achievements. For example, how to deal more effectively with climate change can be a centerpiece of our branding efforts. How we have prioritised women's empowerment could also be another aspect of the global branding. However, the rapid rise of gender-based violence is putting to shadow earlier achievements of women's empowerment. If we want to do branding, first of all, we need to assess where our strengths are. Branding will ultimately have to reflect realities. There is a misconception in certain circles in Bangladesh that branding is mainly a PR exercise. In recent times, a dramatic challenge of branding can be understood by looking at the flow of FDI. It is crucial to understand which countries are the prime destinations of FDI and how much of it has come to Bangladesh. Mainly, the flow of FDI to Bangladesh has been so small and comparatively very poor not because of branding but rather due to institutional governance. When the foreigners arrive, will they actually get a one-stop service? Will s/he have to give a bribe? Will s/he be able to do land registration quickly? Will s/he find skilled-labour easily? One of the main causes behind the relatively lower flow of FDI compared to our competitors such as Vietnam is thepoor institutional governance, i.e. red-tapism, inconsistent policy shifts, land registration difficulties and so on. Furthermore, livability is also an issue. If someone invests, s/he will have to live here. However, our cities are not livable. This should also be one of our final dreams when we talk about our next journey, we have to make our villages and particularly our cities more livable.

Dr. HossainZillurRahman is the Executive Chairman of Power and Participation Research Centre (PPRC) and current Chairperson of BRAC.

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