Skip to main content

Can Bangladesh become developing country from ‘least developed’ by 2024?


By Dr Utpal K De, Dr Simi Mehta*
The COVID-19 pandemic has added fuel to the fire in an era of global economic downturn and political unrest. Incontestably, the less developed nations are hit harder than their counterparts. Pandemic had led to global economic contraction (barring China) with national shutdowns and employment losses. In a webinar organized by South Asian Studies Center (SASC), IMPRI, Counterview and Centre for Development Communication & Studies (CDECS), Jaipur on “State of Bangladesh Economy in the Time of COVID-19”, by Dr Fahmida Khatun, the Executive Director at the Centre for Policy Dialogue (CPD), Bangladesh says that before pandemic there was a significant upsurge in the Bangladeshi economy, with a promising projection of 8.2% for financial year 2019-20. However, the pandemic came as a wrecking ball on the economy with growth estimates plunging to as low as 1% (according to World Bank). As unemployment surged, an additional estimated 1.75 crore people fell into poverty raising the poverty rate to 35%.
The Bangladeshi economy has been well-integrated in the international networks as evident with 40% of the economy accounting for international trade, foreign investments and remittances. The pandemic-induced disruption of the existing supply chains, combined with a drop in investment, impacted the country’s economy. As global uncertainties continue with the manufacture and dispense of COVID-19 vaccines, the projection stays grim.
The domestic economy is also saddled with uncertainties in an already-disappointing private investment. National lockdowns disturbed supply chains in essentials, manufacturing and consumer items. This has added to the pressure on public expenditure. The government introduced stimuli for the various sectors in the economy. The Centre for Policy Dialogue report indicates that, as of November 2020, the total public pandemic-related funding comprises an appreciable 3.7% of the GDP. It focused mainly on liquidity support in social safety measures for interest-waivers, employment loans and pro-poor economic measures. To create an additional fiscal space for the same, the banks were mandated to maintain a higher CRR.
Some indicators have shown positive signs recently. The agricultural sector has done spectacularly with bumper harvests in both the seasons. In the latter part of 2020, the exports of readymade garments spiked as global demand gained traction. Remittances also grew, informally via Bangladeshi nationals sending money back or themselves, returning and formally via government incentives and foreign aid.
Yet, the road ahead is uncertain. Adding to the pre-existing worries of the extent of the pandemic and vaccination plans, Bangladesh is hit by the second wave. The order of public vaccination and the measures to deal with its possible side-effects, are in the works. Moreover, Bangladesh is highly dependent on the external market for vaccine technology as well as global trade. In the short run, the public demands a second stimulus package like their foreign counterparts.
However, the capability of producing one and its efficacy are contestable. Despite earnest banking reforms, the nature of disbursement renders it inaccessible to MSMEs. As, the population is majorly dependent on smaller enterprises in the informal sector, the employment rates are in jeopardy.
Dr Khatun concluded that Bangladesh needs improvement on three fronts: health, economic and social. The infrastructure to enable MSMEs and microfinance institutions to avail of stimulus disbursement packages. The reform is critical owing to an estimated 70% of MSME workers are considered to be in a vulnerable position – employed in businesses that are temporarily closed or partially open. As gender-related issues still plague the social ecosystem, labour laws to bridge the gender gap achieve a dual target. Education and skill development programmes for the poor and women, is one way to go about it.
There is an abject need for better financial allocation in these sectors. It is possible through making a better fiscal space in public expenditure, private and foreign investments. A higher tax-GDP ratio is essential for the former. However, to resist a private investment crowding out, these funds need to be better allocated, which is necessary for employment (re)generation.
As of December 13, 2020, the Bangladesh Planning Commission is still preparing for the eighth five-year plan spanning the period from 2021 to 2025. The main goal is to raise the status of Bangladesh from the “Least Developed Countries” category to the “Developing Countries” one by 2024. This leaves the country five more years to accomplish the 17 UN-stipulated Sustainable Development Goals to 2030. The climb ahead is steep and daunting. An inclusive, equitable and “green” growth is crucial for the revival of the economy.

*With Impact Policy and Research Institute (IMPRI), New Delhi

Comments

TRENDING

Abrogation of Art 370: Increasing alienation, relentless repression, simmering conflict

One year after the abrogation by the Central Government of Art. 370 in Kashmir, what is the situation in the Valley. Have the promises of peace, normalcy and development been realised? What is the current status in the Valley? Here is a detailed note by the People’s Union for Civil Liberties , “Jammu & Kashmir: One Year after Abrogation of Art. 370: Increasing Alienation, Relentless Repression, Simmering Conflict”:

Repeated failure to appoint Chief, other commissioners undermining RTI Act

By Anjali Bhardwaj, Amrita Johri* The post of the Chief Information Commissioner of the Central Information Commission (CIC) has fallen vacant with the retirement of Bimal Julka with effect from August 27, 2020. This is the fifth time in the last six years that the Commission has been rendered headless. Four posts of information commissioners are also vacant in the CIC. Currently more than 35,000 appeals and complaints are pending in the commission resulting in citizens having to wait for months, even years for their cases to be disposed, thereby frustrating peoples’ right to know. Since May 2014, not a single commissioner of the CIC has been appointed without citizens having to approach courts. The failure of the government to make timely appointments of commissioners is a flagrant violation of the directions of the Supreme Court. In its February 2019 judgment, the apex court had categorically stated that if the CIC does not have a Chief Information Commissioner or required strength

Sunil Gavaskar, G Viswanath rated Andy Roberts best fast bowler they ever faced

By Harsh Thakor  The West Indies pace quartet or battery of the 1970’s and 1980’s truck terror to deliver a knockout punch, like never in cricket history. One was reminded of bomber raiding an airbase or a combing operation. Andy Roberts was the pioneer in orchestrating or propelling the most fiery and lethal pace bowling attack ever in the history of the game. Simply the godfather of Modern West Indies fast bowlers. He spearheaded the pack from the mid 1970’s .Without Andy the talent of Michael Holding, Joel Garner and Colin Croft would never have blossomed.Michael Holding credits Andy for shaping his great bowling career, by infusing vital elements.

Adivasi land rights question in Telugu states: Digitization process without transparency?

By Dr Palla Trinadha Rao  This paper examines whether the Land Records Modernization Program initiated by the successive governments in Telugu States is beneficial to tribals in the Scheduled Areas in the light of special protective Land laws that are in force there. Digitization process or regularization of land records or land surveys without transparency will result in disempowerment of Adivasis. This can be tested in the case of Adivasis in the Scheduled Areas of Telugu States. British colonialism, through its land revenue policy and elaborate exploitative bureaucratic structure, made land alienable on a large scale especially in tribal areas. 1 Land and the forest produce remain the main source of tribals’ livelihood; but availability of land is restricted by forest reservation on the one hand, and non-tribal encroachment on the other. 2 In the Andhra Area, there were certain laws including the Agency Tracts Interest and Land Transfer Act, 1917 that existed before the inaugurati

Ultimate champion in crisis, arguably best ever skipper: Created history in Aussie cricket

By Harsh Thakor  In the history of cricket few cricketers knit and propelled a cricket team or had such profound influence on the game as Ian Chappell. Ian Chappell was responsible for converting a bunch of talented individuals into a world beating side, giving a dramatic turn to Australian cricket. Few cricketers ever led such a renaissance.

Largest democracy in world has become weakest at hands of fascist Hindutva forces

Note on “The Nazification of India”, a report released By Justice For All: *** This report, the Nazification of India, compares how Hindutva ideology not only is inspired by Nazis and Fascists of Europe, but their treatment of the Muslim minority closely follows developments that resulted in pushing Jews to the gas chambers. Situation is indeed quite alarming. The report says that the largest democracy in the world has become the weakest at the hands of the fascist Hindutva ideology. India today is ruled not just by a political party the Bharatiya Janata Party (BJP), but its mother organization the Rashtriya Swayamsevak Sangh (RSS). Because the BJP’s government policies are linked to extra-legal enforcement by RSS paramilitary street power, this report has coined the term “The BJP-RSS regime” to reflect their intrinsic links and collaborative relationship. The Nazification of India report marks the anniversary of the Gujarat pogroms of 2002 against Muslims which propelled the BJP-RSS

BSF's unconstitutional, whimsical order violates life, livelihood of Dalits, minorities

Kirity Roy, Secretary, Banglar Manabadhikar Suraksha Mancha (MASUM), writes to the Chairman, National Human Rights Commission: *** I want to attract your attention towards the illegitimate restrictions on the life and livelihood of the villagers of Paschim Sahebganj village under Dinhata - II Block and Sahebganj police station in Cooch Behar district of West Bengal by the Border Security Force personnel attached with Dharala Border Out Post under 138 Battalion BSF. The population of Paschim Sahebganj village is around 1480, where almost 75 percent of the villagers belong from Hindu Scheduled Caste (Dalit) and 25 percent from minority Muslim backgrounds.The main occupation of the villagers is agriculture. About 260 acres of cultivable land in the village that belongs to the villagers is located outside the border fencing, which is heavily guarded by the Border Security Force (BSF). The BSF regulates the ingress and egress of the villagers to their fields through the fencing gates that a

Varanasi social worker who has devoted her life for the ultra-poor and the marginalized

Passion Vista and its partners profile Founder and Managing Trustee Shruti Nagvanshi as  someone whom women leaders look up to: *** Shruti Nagvanshi, a social worker and human rights activist based in Varanasi, Uttar Pradesh, has devoted her life to reaching out to the ultra-poor and marginalized communities in India. Born in Dashashwmedh, Varanasi on 2 January 1974, she married Dr Lenin Raghuvanshi on 22 February 1992 and has a son, Kabeer Karunik, a Business management Graduate who is also a national level snooker player.

An approach to lake/pond restoration by Ramveer Tanvar, Pond Man of India

By Monami Bhattacharya*, Mansee Bal Bhargava**  Lakes/ ponds are often referred to as an elixir of life, a living ecosystem that adds incremental value to the larger biota. Across the tropical landscape of the country lakes/ ponds are a common sight. Lakes/ponds have always shaped the life and livelihood of those dwelling in and around it. The dependence of the local population on these natural resources of water is noticeable since time immemorial. However, they are fading fast in both rural and urbanscapes from the popular parlance with the advance of humanity. It has been a popular notion to value land more than the waterscape and hence these nurturers of life are under stress in several areas. In many instances, these once beautiful waterscapes referred as the ‘Eye of the Earth’ are mostly now only dilapidated garbage dump yards emitting foul smell with no sign of a healthy ecosystem.

Urban crisis: Impact of erosion of democratic framework on Indian cities

By IMPRI Team  On 13th February, 2023, IMPRI Impact and Policy Research Institute, New Delhi in collaboration with ActionAid Association India arranged a book launch followed by lecture series under the title “India’s G20 Presidency & the Urban Agenda for the Developing Countries”. The event was held in Indian International Centre (IIC) Annex, New Delhi. The event began with the book inauguration session, under the honorary presence of Mr Sitaram Yechury, former Rajya Sabha member and General Secretary, CPI (M), accompanied by Mr Sandeep Chachra, executive director, ActionAid Association India. Session 1 | Book Launch: ‘Cities in Transition’ by Mr Tikender Singh Panwar The book launched was “Cities in Transition”, written by Mr Tikender Singh Panwar, former Deputy Mayor, Shimla and a Senior Fellow at IMPRI. Beginning with brief remarks on his book, Mr Panwar outlined the basic subject matter and the purpose behind writing the book, which he considers as a by-product of his experien