Hossain Zillur Rahman
A nation born in blood and tears, written off at birth by a section of the international community yet rising like a phoenix from every calamity inflicted by nature and man, united in the upward aspirations of its people but cruelly riven by the pettiness and greed of its leaders! Bangladesh at forty-one offers a fascinating tale of developmental transformation rarely found in the text-books.
The first challenge for the nation was to demonstrate staying power. And how spectacular has been this success! In 1974, people died of hunger on the streets of Dhaka. In 1998 when a larger flood engulfed the country in August-September, doomsayers at home and abroad were proven comprehensively wrong before the year was out. In 1974, there were no VGF cards, no orsaline. Three odd decades later, Bangladesh is being held up as a disaster-management role model on the global stage. International perceptions of Bangladesh too have undergone a remarkable change. Increasingly, Bangladesh is cited as an example on several key social achievements such as girl education, reduction in child mortality, effective disaster management, and, increased economic participation by women. The facts speak for themselves. Gender parity has already been achieved in primary and secondary school enrollment. Child mortality has been brought down from 146 in 1990 to 65 in 2008. An extensive system of safety net programs has virtually eliminated post-disaster secondary cycles of death and hunger. Access to micro-credit has seen a quantum jump in women's gainful self-employment. Work force in the readymade garment sector, the country's biggest export earner, is overwhelmingly female.
Parallel to changing international imageries, the transition in the national psyche has been even more remarkable. Over the course of the four odd decades since independence, a personality revolution has touched critical segments of society - business community, farmers, youth, women, and the broad ranks of the poor themselves. A forward-looking entrepreneurial culture has taken root amidst enormous odds. Continuing problems of governance, political culture and elite failures have failed to dampen the unceasing quest of ordinary citizens for building qualitatively more prosperous lives.
The known growth drivers
Some parts of the growth story are well-known. Three drivers are usually singled out and rightly so - RMG, remittance and growth-enhancing policy reforms. From its chance beginning in 1979-81, export of ready-made garments (RMG) has been an unquestioned growth driver both in exports and formal sector employment. Remittances by overseas migrant workers have also been a recognized growth driver. From a small annual inflow of 115 million USD in the mid 1970s, remittances have surged past the 11 billion USD mark in recent years. The third of the recognized growth drivers has been the policy reforms from late 1980s focused on trade liberalization, banking and telecommunications reforms and fiscal responsibility. These served to unleash a multitude of private sector initiatives which sharply accelerated the growth process.
Growth: The lesser-told story
Some parts of the growth story are less well-known. Alongside industry, the other key growth driver has been services/trade. Public sector services account for only 14% of this growth while private services account for 55% and trade 31%. Private services encompass a wide range of activities including transport, telecommunications, professional services, real estate, education, health and finance.
Contrary to popular perceptions, domestic economy has been as important a growth driver as exports. Small-scale manufacturing, construction, services and trade all relate to the domestic economy and these together accounted for nearly two-third of the incremental growth in the 1990s and even a larger proportion in the 2000s. Policy pre-occupations, however, have tended to neglect this significance of the domestic economy as a growth driver. External and domestic economies, of course, have not been isolated realities. Tomorrow's exporters are being born within today's domestic production activities and likewise export and remittance incomes have been a key source of the demand boost which has driven many of the service, construction, trade and small manufacturing activities of the domestic economy.
A unifying factor in driving growth in the domestic economy has been urban consumption. The link between urban consumption and growth of rural non-farm employment is little analysed by economists but some studies in the region are pointing to its critical role in the employment goal of the growth strategy. An important catalyst here has been the system of feeder roads that have helped to transform the rural-urban divide into a rural-urban continuum stretching from metropolitan Dhaka and Chittagong to larger secondary towns to rural towns to market centres to villages espousing urban consumption aspirations.
Where has agriculture stood in the growth story? Two facts are clear: as a share of GDP, agriculture has been secularly declining and currently is below 20%. Even within the structure of rural household income, the share of agriculture has declined to about 40%. However, agriculture has been critical not to growth per se but in providing a crucial cushion in terms of food security.
A second crucial cushion has been the development of an extensive system of safety net programs which have ensured that the larger growth process has not been derailed by post-disaster cycles of death and hunger.
The next forty years
It is indeed a great irony that at its birth, the real concern for Bangladesh was its economic fututure while its politics was seen as its strength as exemplified by the galvanizing force of 1971. As the country looks forward to its next forty years, the prognosis is now wholly upside down - economic prospects appear bright while politics keeps on adding new layers of despair. Will Bangladesh's remarkable journey of transformation continue? Easy answers are best avoided because success in Round One is no guarantee of success in Round Two. As we contemplate the next forty years, new realizations are afoot. Growth acceleration is needed. So is politics that nurtures dignity. So is power tempered with humility. So is celebration of merit and competence. Perhaps the biggest realization is that the first i.e. growth acceleration, may not be wholly possible without the others. The future is thus not a given. We have to earn it. Not just us the ordinary citizens but also those who claim to lead us.
The writer is chairman, Power and Participation Research Centre.