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Bangladesh is a development case for globe; to sustain the economic upturn attained in 50 years, thereby becoming a developed country, it is instrumental in identifying economic potentials ahead to compete in global arena, Zahid Hussain, former lead economist of the World Bank, Dhaka, told The Business Post’s Ibrahim Hossain Ovi in an exclusive interview
The seasoned economist was sharing his views in an exclusive interview with The Business Post.
As a new state, what were the challenges for economy in 1971?
Following its independence in 1971, Bangladesh had to face challenges in phases to reach the current state of development.
It inherited an economy with fragile infrastructure, food shortage and growing population.The challenge for the country was to reconstruct the war-ravaged economy.
The great challenge was to ensure food for 7-crore peoplethrough the traditional method of agriculture while the second challenge was to rein in the high birth rate.
The rate of around 3 per cent birth was a major threat to food security.Another key issue was preparedness against the natural disaster to reduce casualty and crop losses.
How does Bangladesh become a self-sufficient country in food?
Modernisation in agriculture started from the beginning of 1980s to boost production. As a part of this, the government put emphasis on research, uses of high-yield seeds and fertilizers massively among the farmers.
After the success in rice production, farmers moved towards non-rice agriculture, fruits and vegetables, which reduced import dependency. With mechanisationin agriculture and uses of high-yield varieties of seeds, now Bangladeshis almost self-reliant in meeting domestic demand.
On top of that, Bangladesh developed resilience in tackling disaster with the help of global development partners. This helped a lot to reduce risk and calamity of natural disaster.
What led Bangladesh to become an industrial country from agriculture?
After 1990s especially in between 1986 and 1994, there was a massive policy reforms to promote private sector. The reforms focused on exchange rate, trade facilitation, deregulation of colonial rules, liberalization of investment and opening window for private sector in different areas such as banks.
As a result, there was a new entrepreneurial class, who moved the economy towards an exporting country mostly driven by the apparel industry. On the other hand, the quota preferences in RMG export created a new opportunity for Bangladesh to emerge an export lead economy.
Later, with the growth of RMG sector and its backward linkage, other sectors turned Bangladesh into a manufacturing country.
Besides, the development in transportation and communication gave pace to industrialisation.
How do you evaluate RMG’s contribution to economic growth and poverty alleviation?
The contribution of RMG sector is not just limited to just exports, employment or to manufacturing it has a great social aspect and over the years played a multi-pronged role.
With the progress in RMG sector, Bangladeshhas transformed itself into a country committed to development rather than hopelessness.
By creating employment mostly for rural women RMG sector empowered women, which decreased child marriage and helped population control.
On the other hand, it also increased female participation in workforce. The gender disparity came down as the female workforcecould raise voice being empowered economically. The sector cemented a path for Bangladesh journey to a developing nation with a multimodal role.
What about the institutional strength?
In course of time, a strong institutionalisation has taken place in the country’s private sector that has formed several associations to protect their interest through bargain with the government,and thus realisedtheir demand for the development of industries.
In agriculture sector, there is also institutionalised development as the sector recorded the involvement of corporate bodies while colonial and old systems are gone.
However, there is the presence of complex bureaucracy in the policy relating to the development of private sector and providing services to people. This is inherited from the British rule. There are rules and regulations, which paved ways towards transparency but lack of implementation is a challenge. However, regulatory reforms and deregulation helped a lot to reach today’s level.
What was the great achievement in 50 years?
For me, Bangladesh’s greatest achievement was in social indicators such as women empowerment, life expectancy, reducing infant maternal mortality rate and literacy.
In case of economic success, the country has achieved structural transformation, converting it into an export-manufacturing country from primary commodity.
How to sustain the 50-year achievement and where to concentrate for further growth?
Bangladesh is a development case for globe. To grow further and sustain the growth attained in 50 years, we have to identify potentials ahead.
The country has two big advantages -- one is its strategic geographical location with two big emerging economies such as China and India, and is demography with huge workforce aging between 15 and 60 years.
But we are yet toutilise the opportunity properly in attaining economic prosperity. This opportunity of demographic dividend will remain for at least next 10-15 years. From the young group, we can get skilled workforce and entrepreneurs, which are crucial to economic development.
Our labour are young but unskilled. If Bangladesh wants to harvest it, it has to focus on devising ways to utilise and reap the benefits. Education is a role to play in creating entrepreneurs as well as skilled workforce. Currently, there is deficit in education system to cash the demographic dividend.
On the other hand, for capitalisingon the geographic location, Bangladesh needs to develop a functionalsea and land ports to connect with regional potential partners.
The country also needs to remove infrastructural deficit while regulatory environment should be in favour investment.
