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Containing intra-regional imbalance in coastal districts

Muhammad Abdul Mazid | Published: January 03, 2020 20:22:20 | Updated: January 12, 2020 20:28:20


Disparity with respect to district GDP or the share of the individual district in the country's GDP (gross domestic product) may largely be attributed to the size of the district. But empirical studies strongly contradict this general hypothesis, particularly in coastal districts of Bangladesh.  Greater Khulna (Khulna, Satkhira and Bagerhat), being the largest coastal district, contributes only 5.5 per cent to the country GDP, the largest share (about 10 per cent) among the coastal districts comes from greater Chattogram (Chattogram, Cox's Bazar, and Bandarbans) which ranks third with respect to physical size.

The asymmetry in the contribution to GDP has remained more or less in a stagnant state for the last few years.

Among the coastal districts, greater Chattogram registered maximum growth rate (8.8 per cent), higher than the national figure of 8.1 per cent. For the largest coastal district -- greater Khulna, the estimated growth rate (5.92) is only marginally less than the national average, but in all other coastal districts, DGDP growth rate has been substantially lower than the national average.

Chattogram and Khulna, among the coastal districts, are the two relatively advanced districts of Bangladesh. Performance of Barishal, once the granary of Bangladesh, is alarmingly poor - the estimated growth rate (0.12) is not even statistically different from zero. This observation has an added significance since in all other coastal districts, growth rate estimates are both numerically and statistically different from zero. In consequence, per capita district gross domestic product of Barishal lost its earlier position. Despite slow growth, all the coastal districts, excepting the smallest Noakhali and Barishal, have recorded per capita district GDP above the national average. It requires mentioning that per capita income growth of Noakhali also recorded upward trend but the district could not cross the national average of per capita income.

Over the years, regional disparity in per capita income (PCDGDP) has worsened. Variation in performance as reflected by the DGDP growth rate is the explanation for the deteriorating situation. However, relative ranking of the districts with respect to PCDGDP underwent only marginal changes.

Intra-regional inequality -- measured as a ratio of the highest to the lowest per capita income -- thus changed adversely. If the present trend continues, value added might decline in near future; adequate administrative remedy measures are essential to reverse the trend. Warning should be read for Patuakhali district, as well, where crop growth is also negative. In Noakhali, although crop growth estimate is encouraging compared to the above two districts, it is substantially low compared to Chattogram and Khulna. Thus, it seems logical to state that some kind of polarisation tendency has started in the coastal belt.

Dominance of agriculture in coastal economy is well known. Some amount of variation across the coast may not be given any serious weightage. But one should not ignore the fact that inter-regional discrepancy between coastal region and national economy in agricultural performance contributed in accentuating the differences. Chattogram is the only exceptional district with CGR (Compound Growth Rates) of agriculture sector above national average. But for all other coastal districts, the scenario is dismal. In Barishal, agriculture sector is experiencing near stagnancy.

No less significant is to point out that crop growth in greater part of the coastal region (Barishal, Noakhali and Patuakhali) is negative. However, it would not be wise to hold only the performance of coastal belt responsible for adverse MGR at national level. That crop growth for Chattogram district is substantially low compared to Khulna raises some doubts about the role of agriculture sector in growth and development. Speedy expansion of non-agriculture activities might play greater role in these two districts.

It would not be grossly unjustified to state that due to existence of the sea port, which has induced urbanisation and industrial activities, Chattogram district, in the coastal region, is favourably positioned in per capita income scale compared to other districts of the country. The port has, perhaps, induced agriculture sector to play the second fiddle of growth and development. However, one should not ignore the better performance of agriculture sector. In other words, although high level of per capita income has been favourably contributed by non-agricultural activities, it is difficult to contradict the hypothesis that industrial activity has favourably influenced agriculture sector of the region. In support of the above contention, we might point out the fact that the share of agriculture sector in the country of all other coastal districts, except Chattogram, has experienced a decline. Speedy urbanisation, on the other hand, failed to influence growth in Khulna. Mongla seaport is situated in this district but the port activities have failed to make any mentionable impact on the growth process of the district. However, growth trend of the district is favourable compared to other coastal districts.

In absolute terms, agricultural output across the region has recorded upward movement. However, contribution of agriculture sector in GDP across the coastal districts has declined. Thus, the role of non-agricultural activities should not be overlookded. In what follows, structural composition of DGDP has undergone changes favourable to non-agricultural activities across the coastal region. Favourable spread of non-agricultural activities across the region is further strengthened by the observation that despite climatic disturbances, GDP level improved across the region with contribution from agricultural sector drastically reduced. However, it would be grossly unwise to ignore the role of agricultural sector in removing intra and inter-regional imbalance and causing development of the coastal areas.

 

Dr Muhammad Abdul Mazid is former Secretary to the government and Chairman NBR. mazid.muhammad@gmail.com

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