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Development of Bangladesh is about defying various odds ranging from frequent devastating disasters to managing highly dense population, and emerging as a development puzzle.
Social achievement in Bangladesh has superseded the economic one. Recognition from the international community following achievement of the Millinnium Development Goals (MDGs), particularly in reducing under-5 mortality rate, women empowerment, and poverty reduction boosted the confidence of policymakers to effectively implement sustainable development agenda.
Bangladesh touched a milestone by attaining the status of a lower middle-income country in 2015. The economy achieved over 7.0 per cent growth rate in 2016 breaking the trap of 6.0 per cent growth stagnation for over one and a half decade. The per capita income in 2017 increased to US$ 1610 from US$ 1465 from the previous year.
Bangladesh has been able to reduce poverty rate by 1.8 per cent during the 2000-2005 period, by 1.7 per cent between 2005 and 2010, and by 1.2 per cent from 2010 to 2016 each year. In the last Household Income and Expenditure Survey (HIES) 2016 Report, the head count poverty rate under upper poverty line has been registered at 24.3 per cent and for lower poverty line the rate is 12.9 per cent although the income Gini coefficient slightly deteriorated from 0.45 to 0.48.
Significant progress on food security through efficient food delivery mechanism, improved rural infrastructure, liberalised agricultural input, output markets and integration of markets have not only contributed to revitalise the rural economy but also helped reduce inequality.
Progress has been made in improving Bangladesh's life expectancy at birth (71.6 years in 2016).
Expanded programme on immunisation (EPI) coverage evaluation survey 2015 reveals that 82.5 per cent children were fully vaccinated which was only 2.0 per cent in 1985. The under-five mortality rate in Bangladesh declined from 212 deaths per thousand live births in 1982 to 36 deaths/1000 live births in 2015. The total fertility rate (TFR) also went down from 6.3 in 1975 to 4.3 in 1991 and finally to 2.1 (2015) (NIPORT, 2016).
Since 1990, the primary school enrolment increased 1.6 times from 11.9 million in 1990 to 19.07 million in 2015, of which 51 per cent are girls. In the Global Gender Gap index 2017, Bangladesh ranked 47 out of 144 countries (WEF, 2017).
The Bangladesh economy is now poised to take-off. The main development strategy of the government is to accelerate Gross Domestic Product (GDP) growth underpinned by higher investment and manufacturing sector growth. The growth is targeted to be pro-poor and employment generation so that poverty rate can be sufficiently reduced. Amid this strategy, the country has been undergoing severe challenges.
CHALLENGES TO BE FACED: The first challenge will be to reap demographic dividend. As of Labour Force Survey (BBS, 2017) 2015-16 data, 2.6 million persons aged 15 or above are still unemployed. This means growth falling short of absorbing a large proportion of employment.
Another major challenge remains in the area of investment climate. The government has a plan to establish 100 economic zones that requires considerable investment in energy sector.
One of the grave concerns in term of our export is the concentration of export basket into few items which make exports vulnerable to change in global political and economic situation.
Given the fact that implementation of Sustanable Development Goals (SDGs) heavily relies on building strong institutions and ensuring governance, making this happen will be the ultimate challenge for Bangladesh.
BDF'S EIGHT THEMATIC AREAS: This year's Bangladesh Development Forum (BDF) will cover eight thematic areas considered in the backdrop of recent development and perceived challenges. The recent damage in food production due to severe mid-year flood triggered soaring of prices of staple food items. Further growth of agriculture is slowing down to below 3.0 per cent. The agriculture sector is becoming increasingly vulnerable to climate change, which has short, medium and long-term implications for livelihood and food security of millions of people in Bangladesh. This thematic area is totally aligned with the Vision of Bangladesh Delta Plan 2100, which was prepared to "ensure long-term water and food security, economic growth and environmental sustainability while effectively coping with natural disasters, climate change and other delta issues through robust, adaptive and integrated strategies, and equitable water governance."
Despite some improvement in competitiveness and business environment, Bangladesh has to do a lot more to achieve the targeted foreign direct investment (FDI) and investment by private sector.
Education system in Bangladesh underwent a number of experiments in the last couple of decades; yet it calls for further reform in the area of providing quality education.
Technology and innovation remain one of the major drivers for sustained growth. Hence, the urgency of creating an environment for leapfrogging in ICT and promote growing penetration of ICT.
Inequality in Bangladesh has been on the rise across and within regions, in particular since the 1990s. Spending in health sector in Bangladesh in global comparison is low. Both the rise of communicable and non-communicable diseases has put the policymakers in dire challenge of delivering basic health services for all at an affordable cost.
Bangladesh aspires to be graduated from Least Developed Country status by 2024. But there is a need for a clear roadmap, cost assessment and coping up with measures in terms of trade in large part. Finally, there is an issue of financing SDGs up to 2030.
SEVENTH FYP BROAD DEVELOPMENT PRIORITIES: The 7th Plan centres on following three themes:
- GDP growth acceleration, employment generation and rapid poverty reduction;
- A broad-based strategy of inclusiveness with a view to empowering every citizen to participate full and benefit from development process.
- A sustainable development pathway that is resilient to disaster and climate change entails sustainable use of natural resources and successfully manages the inevitable urbanisation transition.
National priorities, according to the 7th Plan and SDGs intertwined, are as follows:
- Conducive macroeconomic environment to promote growth, supported by trade and private sector development
- Reduction in poverty and inequality across all groups and regions
- Increase in productive and decent employment opportunities for sustainable and inclusive growth
- Ensuring quality education for all to reduce poverty and increase economic growth
- Sustainable improvements in health including reproductive health, family planning, particularly of vulnerable group
- Ensuring availability of safe drinking water and sanitation for all
- Improving infrastructure for higher economic growth
- Ensuring sustainability in production, consumption and use of energy and mineral resources
- Achieving gender equality and empowering all women and girls
- Preserving and preventing environment from degradation, ensuring climate change adaptation and mitigation and disaster management
- Increasing access to digital communication through telephone and broadband services
- Reducing urban poverty and improved living conditions through better city governance and service improvements
- Promoting inclusive, transparent, accountable and effective democratic governance system and ensuring justice for all
- Strengthening international cooperation and partnership for sustainable development
IMPLEMENTATION PROGRESS OF 7TH FYP: One of the major targets of the 7th Plan is to break out of the sphere of 6.0 per cent growth rate and raise the annual average growth rate to 7.4 per cent. The target has been achieved in the last two subsequent fiscal years.
Following are the areas where progress is above the target:
- GDP growth surpassed the target in the last two years reaching 7.28 per cent in FY2017.
- Service sector registered a steady growth
- Public investment is filling the gap of private investment and well ahead of what is targeted.
- One of the major successes of this period is restricting inflation within 6.0 per cent.
- Number of students in TVET (Technical and Vocational Education and Training) system increased significantly (14 per cent) however; there is still a strong need for increased participation from girls.
- Adult literacy rate (per cent) of 15+yrs old population reached 72.3 against the target 66.9.
- The improvement in Under-five Mortality Rate (per 1,000 live births) and Infant Mortality Rate (per 1,000 live births) is evident as they went down to 35 and 28 in 2016 against targets of 43 and 32 respectively.
- Total Fertility Rate (children per woman) has been reduced to 2.10 from the baseline 2.3 in 2014.
- Life expectancy at birth, total (years) is on the rise, reaching 71.6 in 2016.
- A large number of population have access to sanitary latrines, which is 75 in 2016 compared to 64.2 in 2015.
In following areas the country is on track:
- Having a close look at sectoral performance, industry is experiencing double-digit growth as was targeted.
- Budget deficit maintained below 5.0 per cent of GDP as targeted.
- Export and import performances are on track.
- Government spending on social protection has been increasing in line with the target.
- Net enrolment rate particularly for girls in primary education and lower secondary level is fully consistent with the target.
- Although net completion rate of primary education has increased from base year, it is marginally below the targeted rate.
- Percentage of urban and rural populations with access to safe drinking water is increasing but falls behind target.
- Eighty-seven per cent of households now have access to electricity
Following areas need serious attention:
- Private investment has become a matter of concern. It was 22.99 per cent in 2016 (77.54 per cent of total investment) of GDP against the target 23.7 per cent. In a similar trend, the fiscal year 2017 records private investment 23.10 per cent (75.71 per cent of total investment) of GDP against the target 23.9 per cent of GDP. The share of private investment in 7th FYP is projected to be 77.27 per cent of total investment.
- Major issue of sustaining the growth is having little buoyancy in private sector investment, falling behind the target.
- Agriculture growth slowed down as expected but is slower than that is needed to buttress total growth rate.
- Remittance shows downward trend as it is recorded at 6.7 per cent of GDP and 5.1 per cent of GDP in 2016 and 2017 respectively against the target 8 per cent of GDP in both the years.
- Bangladesh has one of the low tax-GDP ratios in the world. The last two years' revenue performance is far below than expected. Nevertheless, the tax revenue in the last two years registered 17.9 per cent and 26.6 per cent increase respectively.
- Although, public investment has performed relatively well, the government spending has to be increased further.
- Percentage of schools that meet the Student Teacher Ratio (STR) standard of 46:1 (per cent) is just 61.8 against the benchmark 70.
- As alarming as it is, maternal Mortality Ratio (per 100,000 live births) instead increased to 178 in 2016 from baseline 170 in 2013.
- Serious attention is required for sluggish Contraceptive Prevalence Rate (per cent) and birth delivery management.
Prof. Shamsul Alam is Senior Secretary, General Economics Division, Planning Commission. The article is adapted from a paper he presented on Wednesday at the Keynote Session of the January 17-18 Bangladesh Development Forum.
The second part of the article will be published on Saturday.