BANGLADESH ECONOMY GROWING FAST
MASIHUL HUQ CHOWDHURY
Bangladesh is ranked among the top ten fastest growing economies in the World in 2016 as per the report published by International Monetary Fund (IMF). The GDP growth was recorded at 6.5 percent as published. However as per Goldman Sachs report, the GDP growth of our country in 2016 was 7.10 percent. The similar growth rate is expected to continue in 2017. The sectoral contribution in 2016 as per the elite Global Finance Report was, Agriculture 15.1 percent, Industry 28.6 percent and Services 56.3 percent respectively. As per the recent PWC report, Bangladesh has the potential to become the world’s 23rd largest economy by 2050, overtaking countries such as Netherlands, Australia, Spain, Thailand and Malaysia. The report also predicted that Bangladesh would be the 28th largest economy by 2030, up from 31st in 2016. On a PPP basis, Bangladesh’s GDP would stand at $3,064 billion in 2050, up from just $628 billion in 2016. The other economies like Philippine, Vietnam, Pakistan and Nigeria are expected to grow quite significantly and be among the top 20 economies by 2050 as per the same report.
Bangladesh is strategically important for the economies of North East India, Nepal and Bhutan, as Bangladeshi seaports provide maritime access for these land locked regions and countries. China also views Bangladesh as a potential gateway for its landlocked southwest, including Tibet, Sichuan and Yunnan. What we really need now are think tanks which are quite successful in providing policy level research and support to the administration for the overall growth in a sustainable manner. A think tank or policy institute is an organisation that performs research and advocacy concerning topics such as social polity, economics, technology, culture and other areas of utmost importance. Most policy institutes are non profit organisations, which some countries such as the United States and Canada provide with tax exempt status. Other think tanks are funded by governments, advocacy groups, or businesses, or derive revenue from consulting or research work related to their projects.
The effect of globalization on the proliferation of think tanks is most evident in regions such as Africa, Eastern Europe, Central Asia, and parts of Southeast Asia, where there was a concerted effort by the international community to assist in the creation of independent public policy research organizations. A recent survey performed by the Foreign Policy Research Institute’s Think Tanks and Civil Societies Program underscores the significance of this effort and documents the fact that most of the think tanks in these regions have been established during the last 10 years. Presently there are more than 4,500 of these institutions around the world. Many of the more established think tanks, having been created during the Cold War, are focused on international affairs, security studies, and foreign policy and foreign policy.
In a thought-provoking conversation at the United Nations University in Tokyo with the President of the Centre for International Governance Innovation (CIGI) eloquently explained about the role of think tanks as “influence peddling, in the best sense of the term.” He went on to stress that while one could question the tactics and motivations behind how and who Think Tanks influence, the bottom line was that they are in the business of pushing for change through ideas and networks.
The litmus test of a good Think Tank, according to Medhora, was not whether it was “right, left, liberal or not, but whether it was proposing evidence-based discussion.” Brookings Institution, Carnegie Endowment for International Peace, Center for Strategic and International Studies, Rand Corporation from USA; Chatham House, Amnesty International from U.K.; Transparency International, German Institute for International and Security Affairs from Germany; Chinese Academy of Social Science from China; African Economic Research Consortium from Kenya are examples of leading think tanks globally.
The S Rajaratnam School of International Studies of Singapore ranks among the top 50 think tanks globally. The role of the think tanks in providing research based policy papers on the areas of economic development, technology, culture, environment, social polity have significantly influenced the overall sustainable development in the western world. The building of overall national consensus on the major issues like social polity, education, economy is mandatory irrespective of party in power.
Agriculture is the largest employment sector in Bangladesh. As of 2016, it employs 47% of the total labor force (87 percent of rural employment) and comprises 16% of the country’s GDP. The primary challenge here is the proportionate contribution of this sector compared to the level of employment. The performance of this sector has an overwhelming impact on major macroeconomic objectives like employment generation, poverty alleviation, human resources development and food security.
A plurality of Bangladeshis earn their living from agriculture. Although rice and jute are the primary crops, wheat is assuming greater importance. Tea is grown in the northeast. Because of Bangladesh’s fertile soil and normally ample water supply, rice can be grown and harvested three times a year in many areas. Due to a number of factors, Bangladesh’s labor-intensive agriculture has achieved steady increases in food grain production despite the often unfavourable weather conditions. These include better flood control and irrigation , a generally more efficient use of fertilisers, and the establishment of better distribution and rural credit networks. Extensive irrigation, high-yielding crop varieties, more efficient markets, and mechanisation, enabled by policy reforms and investments in agriculture research, human capital, and roads have driven agriculture sector’s growth.
Agriculture is a major source of rural jobs in Bangladesh. Over 87 percent rural people derive at least some income from agriculture. However, two thirds of rural households rely on both farm and non-farm incomes. Pro-poor agriculture growth has stimulated the non-farm economy in Bangladesh: a 10 percent rise in farm incomes generates a 6 percent rise in non-farm incomes. As non-farm incomes continue to grow, the government needs to focus on fostering a more robust rural non-farm economy.
Bringing in proper land reform in order to have economies of scale, digitisation in the field of irrigation and seed ploughing need attention. The digital revolution is changing the face of agriculture, with the zeros and ones that make up binary code set to become the most important tools for farmers worldwide. Highly automated tractors and combines equipped with a vast array of sensors are already traversing our fields of corn, oilseed rape, soybeans and wheat, collecting data about plant health, yields, soil composition and field topography. Drones and satellites are likewise helping farmers work more efficiently by generating millions of relevant data points. Nowadays satellite imaging allows us to analyze a single patch of land at a resolution of just 30 centimeters.
The ability to analyze highly accurate data from the current growing season and compare it with previous years brings a whole new dimension to modern agriculture. Digital farming is based on individual data elements. The quality of soil in a single field can be significantly different. The farmers can easily find out the quality of soil through the digital scanning and use the seeds and other inputs for optimum yields. Bangladesh now needs to shift toward high-value agriculture, including horticulture, livestock, poultry and fisheries to foster future growth and further reduce poverty.
Being the largest delta in the world, Bangladesh is enriched with water bodies. This unique advantage puts us among the largest producers of fresh water globally ranking 4th just below China, India and Myanmar. Fresh water fish is the largest supply source for animal based protein for us. But the industry has its own challenges. Fund scarcity, irregular funding, lack of uniform service rules, limited opportunities for permission, etc., are on the constraining factors for dissatisfaction of scientists in harmonising research.
Low production, knowledge gaps, lack of dependable marketing information, disease hazards, low price, required inputs supports and uneducable technologies are major factors responsible for optimising production. Therefore, the sector is to face serious challenges to keep pace with the production target with the demand in future.
Bangladesh in general is highly vulnerable to predicted climate changes that are already occurring and are expected to continue over the next century. Bangladesh is recognised worldwide as one of the most vulnerable to the impact of global warming and climate change. There is no study on the expected affect of climate change on fisheries in Bangladesh. However, it is apprehended that the vulnerability of fisheries dependent communities, particularly open and floodplain fishers will be high if the climate becomes more extreme. Climate change has both direct and indirect impacts in fish stock which are exploited commercially. It is evident that natural fish stock will be more resilient to climate impacts with significant food security consequences for certain populations.
The species composition in open-water has been out of balance because of disturbance to natural reproduction of the fish by overfishing and other natural and man made causes. During migratory journey to and from floodplains and return to the safe habitat fish face many obstacle and hazards, which seriously disturb reproduction and survival in the system. Physical loss, shrinkage and modification of habitats are major factors in depleting fish varieties.In addition to human-induced degradation of aquatic habitats, siltation is also a problem for open-water fisheries. Siltation is a natural feature along the length of rivers and normally results in a gradation of particle size from lower order streams with the coarsest material to higher order streams with the finest. This natural sedimentation contributes to the development of many of the morphological features of rivers and floodplains. Siltation generally reduces the area and decreases water volume of waterways.
Silt deposited in riverbeds results in loss of breeding grounds and disturbs migratory routes of valued carp and catfish. Further, siltation causes drainage problems and diminishes water refuge grounds for fish. Silting also results from low stream flow and erosion of floodplain sediments after rain and wind. Wind erosion occurs during the dry season.
The numbers of evolved packaged technologies are large and proved effective and potentials. Most of them are related to inland culture and capture fisheries. Technology necessary for marine fish breeding, culture, management and conservation are limited. Many of the evolved technologies are required modification and standardisation suited to more challenging agro ecological zones for balancing the ecological niches. Research focusing fish-culture and management in closed floodplains under unfavourable environments, development of stress and extreme heat and cold tolerant varieties is essential. Scientists must determine variables responsible for yield gap at fish cultures’ level.
The reforms including policies, training the human resource, deployment of modern process and technology, proper pricing mechanism will enable the agricultural sector to increase the output. As such the contribution from agriculture to GDP will increase and enable to match the efforts of being the employer of the largest sector. This will not only ensure food security but also be able to contribute in achieving the sustainable economic growth utilising the available potential. The resilience of the nation against the adversities from natural disasters, dislocations created by environmental changes over the years have created the foundation of successes in the field of agriculture.
The story of exports of ready made garments is a lead indicator for the growth of manufacturing sector in Bangladesh. Bangladesh garment industry has generated $28.09bn exports in the fiscal year 2015-16 with a 10.21% growth from the previous year, according to Export Promotion Bureau data.The growth has been attributed by exporters and analysts to political calmness during the year, increased productivity, entrepreneurs’ resilience and improvement of workers’ safety standards in factories.The data officially released yesterday showed that the earnings also exceeded the target of $27.37bn set for the year.Of the total figure, the knitwear constituted $13.35bn and woven products $14.74bn.
One of the major ingredients for the rise of garments industry in Bangladesh can be attributable to the women empowerment and gender equality. The entrepreneurship zeal and tenacity of the businessmen in this sector is another major ingredient. Despite the dent created in the reputation through Rana Plaza debacles, the industry responded positively with implementation of safety, security and other compliance regulations have rather bolstered the growth. The success story in garments sector can be replicated in developing other manufacturing sectors. Light engineering, pharmaceuticals, food and Afro processing sectors can use the full potential to increase the contribution to our GDP in manifold.
The service sector, also called tertiary sector, is the third of the three traditional economic sectors. The service sector provides a service, not an actual product that could be held in your hand.
Activities in the service sector include retail, banks, real estate, hotels, tourism, education, health, social work, recreation, media, communications, electricity, gas and water supply. Increasingly service sector businesses focus on what is now being called the “knowledge economy”. They need to keep ahead of other businesses by understanding what it is their customers want and be in a position to give it to them quickly and at low cost. The service sector needs strategic plan, proper policy reforms and effective action plan along with periodic evaluation. Banking sector is one of the largest contributor in the service sector. Since the liberalisation, the contribution of private sector in banking industry has significantly increased. The level of service in the banking sector has significantly improved due to competition.
The standardisation of banking industry in the global parameters has taken place with implementation of BASEL rules. What we need now is a way forward to arrest the up trend in the non performing loan of the banks. A policy like China may be adopted in order to deal with the bank defaulters which include not issuing plane tickets, special arrangements and queue system in the public places for loan defaulters etc. These special arrangements may bring in the required traction to manage the loan defaulters by sheer peer pressure may bring in the discipline. The education sector needs a massive refurbishment. The applied side of education needs to be harnessed and curricula need to be designed in a manner that the students can decide on the subject to chose through proper evaluation of strength areas. Moreover, the education system need to be so that the students can get involve directly in the economic activities rather than remain unemployed. Entrepreneurship and vocational skills can become a Center point of the education system. This will also help export of skilled Human Resources overseas and increase income of foreign exchange manifold.
The knowledge based economy will influence the positive impact on other prominent sectors including health, tourism, information technology which will be driving future growth aspirations of the nation to be among the top rated economies in the globe.
On the eve of 46th Independence Day, we solemnly remember the martyrs and others who sacrificed to establish our own identity. Once written off as a basket case, the country has shown what we are capable of. The improvement in various social indicators have not only help the economic growth but also the overall indices. The positive outlook on the country from the international community indeed bears the endorsement.
The writer, a banker by profession, has worked both in local and overseas market with various foreign and local banks in different positions
MARCH 26, 2017