Bangladesh at 50

Dr Shamsul Alam, Minister of State, Ministry of Planning, talks about the era of new national planning

Dr Shamsul Alam,Minister of State,Ministry of Planning
Dr Shamsul Alam,Minister of State,Ministry of Planning

Not long ago, the pessimists and the sceptic overlooked the development of Bangladesh merely as a fluke. Standing at the Golden Jubilee of the independence of the country, the policymakers of Bangladesh can now breathe a sigh of relief that it has put an end to the stigma of ‘international basket case’. Bangladesh is now following the path of the Asian miracle, proving the doubters wrong. Since the inception of the Human Development Report in 1990, the value of Human Development Index (HDI) of Bangladesh increased by 60.4 per cent, from 0.394 to 0.632 in 2019. Accordingly, the index now positions Bangladesh in the medium human development category.

Metro Rail
Metro Rail

Let us retrospect the tumultuous first few decades since the birth of the nation. After the destruction of infrastructure and loss of lives during the war, the Father of the Nation ventured courageously to rebuild the country. Immediately after returning to the country on January 10, 1972, Bangabandhu issued an order on January 31, 1972 to establish the Bangladesh Planning Commission. The first five-year plan was prepared within one and a half year of the liberation of Bangladesh. In the words of Professor Nurul Islam, then Deputy Chairman of the Planning Commission and Member of General Economics Division (GED) “Bangladesh inherited a poor, undiversified economy, characterised by an under-developed infrastructure, stagnant agriculture, and a rapidly growing population. She had suffered from colonial exploitation and missed opportunities with debilitating effect on initiative and enterprise.” To give it some perspective, Bangladesh where over 80 per cent population was living in poverty, was only ahead of one country,Burkina Faso — at that time in terms of quality of life.

In the first five-year plan, poverty reduction, although without a specific target being set, and reconstruction were the major objectives while GDP growth was targeted to be 5.5 per cent per annum. Bangabandhu always believed in the promotion of self-reliance and the reduction of dependence on foreign aid. From that perspective, he focused on prioritising agriculture and established Bangladesh Agricultural Research Council, Bangladesh Agricultural Research Institute, Bangladesh Rice Research Institute, Bangladesh Rural Development Board and Bangladesh Agricultural Research Council to coordinate and direct researches on agriculture. Within three years, Bangladesh was poised to expand her economy through the establishment of major institutions, accomplish reforms in agriculture, particularly on-setting green revolution, but the demise of the great leader left the country in peril. The momentum of socio-economic development slowed down and the period of economic stagnation with political upheavals started. So, the political stability — necessary for sustained growth, faded away, and a situation of uncertainty loomed large. Fourteen years from 1975 to 1990 happened to be a missed opportunity for Bangladesh to thrive.

LNG Terminal
LNG Terminal

The scenario began to gradually change in the early 1990s and since 2009, the transformation got full momentum. From 2002 to 2010, there were no five-year plans, rather the government adopted donor-driven poverty reduction strategy papers. The present government assumed the power with a landslide victory under the visionary and pragmatic leadership of Sheikh Hasina in 2009 for the second time. She envisaged Bangladesh to be a prosperous country that our Father of the Nation had dreamt of. She believes in the will-power of the people and is confident that with proper guidance and directions, they can be an immeasurable source of power. The PM initiated an era of new national planning, which started with Vision 2021 that articulates a transformed Bangladesh, moving it towards establishing a knowledge-based society, addressing climate change and promoting innovation under Digital Bangladesh. Bangladesh is now on the verge of achieving many of the targets set in the Vision 2021. For example, power generation capacity was targeted to reach 20,000 MW by 2021, which is now above 25,000 MW, with 99.5 per cent of the population having access to electricity with a per capita consumption of 560 KWH. The life expectancy has now reached 72.8 against the target of 70 years in 2021.

Sheikh Hasina has emphasised on building up the economy, following a planned path of growth with development of human capital and facilitating export-led growth, which gave a new perspective for national planning. The long-term vision is followed by medium-term interval plan (five-year plan). Furthermore, the philosophical foundation of the plans had been derived from the five basic human needs, as enunciated in the constitution. Poverty reduction, employment generation at home and abroad, human resource development and inclusive growth remain at the centre of discussion. Additionally, to address the adverse impact of climate change, formulation of a long-term plan was felt necessary. This whole perspective has been termed as the new national planning era.

The first five five-year plans were basically investment plans void of specific time-bound targets of any vision. However, there has been a paradigm shift since 2009, which helped accelerate the implementation process as ministries are now more aware of their responsibilities and targets set along with budget linkage to the plan. Projects have to be prepared based on the targets outlined in the plan. Millennium Development Goals (MDGs) and Sustainable Development Goals (SDGs) were integrated into the national plans. The result is evident. Bangladesh entered into an era of new economic development. Many accolades have been received by the honourable Prime Minister since then. Awards include the UN MDG Award 2010, South-South Global Health Award 2011, South-South Award for Poverty Reduction 2013, FAO Diploma Award 2013, ICT Sustainable Development 2015, UN Environmental Prize 2015, Planet 50-50 Champion 2016, Global Women Leadership Award 2018, International Achievement Award and Special Distinction Award for Leadership 2018, Vaccine Hero 2019 (GAVI), Champion for Skill Development 2019, UN Public Service Award 2020, SDGs Performance Success Award in 2021.

Bangladesh is now one of the fastest growing economies in the world. The per capita income now stands at $2,554, which was only $93 in the early years of independence. The size of the economy (GDP) is now $411 billion, which was only $6.5 billion during the early years of independence. During Covid-19, very few countries have been able to register positive growth. Bangladesh not only achieved positive growth, it also recorded top performance in Asia. German international broadcaster Deutsche Welle has hailed Bangladesh as the rising economic star. Chinese President Xi Jinping delivered a message on the Golden Jubilee of independence by saying: “Under Prime Minister Sheikh Hasina’s leadership, Bangladesh has focused on reform and development and entered a fast lane of growth.” The Diplomat magazine lauded Bangladesh for beating the odds, while Wall Street Journal called Bangladesh as South Asia’s economic bull case, spotlighting export boom over the last decade. One of the biggest successes of Bangladesh in MDG era was reduction of poverty, the achievement underpinned by the investment on the marginalised and the poor. According to the World Bank, 25 million people were lifted out of poverty in the last decade and half — an inspiring story of poverty reduction. Among the factors that contributed to this reduction was the development policy adopted by the government in macroeconomic management, investment in human capital resulting in higher life expectancy, lower fertility rates, reduced infant and maternal mortality and improved living standards.

One of the significant roles by the government was heavy investment in girl’s education. Now, net enrolment rate of girls in primary education has reached 98 per cent, which is well above boys. An article in The New York Times suggested the Biden administration to look to Bangladesh for lessons in reducing child mortality. Bloomberg termed the Bangladesh phenomenon as a stand-out success in South Asia, underscoring that the country can offer lessons to others. Indian leading newspapers also seem to be complementary of Bangladesh’s advancement, particularly of robust economic performance in the last decade. Times of India wrote that Bangladesh has left India far behind in social and economic front in just ten years. Arvind Subramanian, the former Chief Economic advisor of India, hailed Bangladesh as the global paragon of economic development. Bangladesh’s journey of development has been solidified by a multitude of factors — stable macro and fiscal policy, remittances, women economic empowerment, supportive regulatory policy, ready-made garments taking advantage of surplus labour, investment in social and physical infrastructure, particularly maternal and child health, birth control, and connectivity in rural areas, to name a few. Majority of the narrative focuses on the social dimensions and economic growth, but few credited the rural connectivity that had happened over the last few decades. For example, during the period 2009-2018, over 55,000 km of roads were constructed under the local government division and massive drives in establishing drinking water facilities and sanitation helped improve coverage to 99 per cent.

The Bangladeshi economy underwent a gradual structural transformation from the dominance of agriculture to orientation of manufacturing-based industries. Over the last 25 years, the service sector contribution to GDP had been more or less stable, while the share of agriculture declined from 60 per cent in the early years of independence to 12 per cent in recent years. Industry sector now constitutes 31 per cent, which is expected to reach 40 per cent by the end of 2030. In the last decade, drastic changes in Bangladesh development has been possible due to political stability and the government’s plan-based development programmes/projects. There were critical economic turning points throughout the 50 years journey. The first critical turning point was the setting up of Desh Company and Daewoo — a Korean company—pioneering ready-made garment industry in late 1970s. The subsequent policy on the back-to-back Letter of Credit and Duty Drawback Facilities in the mid-1980s solidified the rise of garments industry. With support of export earnings by RMGs, remittances began to gradually increase since early 2000s. In 1999-2000, Bangladesh achieved self-sufficiency in food grains— that became an important turning point. Since 1990, it took two decades to triple the size of GDP to 2009, whereas, it took only one decade to do that in the ten years. Reforms in power sector after 2010 helped trigger the economy to grow at a rapid rate. Subsequent achievement in MDGs in 2015, lower middle-income status by World Bank in 2015 and meeting all criteria to graduate from LDC status has had profound implications for adopting new national planning for a prosperous Bangladesh. These are important milestones that have earned praise from global academicians and thinkers. Kaushik Basu, the former Chief Economist of the World Bank and former adviser to the government of India, credited the political factor for success in economic growth, particularly the leadership of Prime Minister Sheikh Hasina. He also called the growth model of Bangladesh as being inclusive, and driven by grassroots-level human development. The third turning point was the early second decade of the 21st century with the formulation of the new National Planning System in Bangladesh.

Gregory Chen wrote an article in Devex— an independent news organisation for global development, which articulates three lessons from Bangladesh for the developing world. The first one is economic transformation does not happen overnight. It takes a decade to make visible changes. The second lesson is interconnectedness between economic and human development. The last lesson involves human investment, especially women. Bangladesh’s attainment in women empowerment has been spectacular in the last decade. According to the Global Gender Gap Report 2020, Bangladesh ranked 50 globally, making it a unique case for lower-middle-income countries. Bangladesh has made remarkable progress in reducing the percentage of stunted children under 5 years by almost half from 60 per cent in 1996-97 to 28 per cent in 2019. The proportion of wasted children has gone down to 9.8 per cent in 2019 from 14 per cent in 2014. The proportion of underweight children under five years has also reduced by half between 2007, when it was 41 per cent, and 2019, when it came down to 22.6 per cent. Globally, Bangladesh is the 7th ranked country in terms of women’s political empowerment, indicating significantly better performance in promoting women empowerment. For attaining SDG 5— gender equality, the government has adopted several legal and policy actions to advocate the rights of women. The Global Gender Gap report puts Bangladesh as the only country in the world where the number of years with a female head of state exceeds that with a male head of state — 25.6 years compared with 24.4 years.

The leader of Bangladesh does not seem to be complacent of what has been achieved in the last decade. It is just the beginning of Bangladesh’s path to prosperity. The country now wants to become an upper-middle country by 2031 and high-income country by 2041, underlined in the second Perspective Plan of Bangladesh (2021-2041). The country will be guided by this 20-year-long plan with strategic goals on industrialisation with export-oriented manufacturing, paradigm shifts in agriculture, a service sector of the future—providing the bridge for the transformation of the rural agrarian economy to a primarily industrial and digital economy, urban transition, efficient energy and infrastructure. This will help in building a Bangladesh resilient to climate change, establishing the country as a knowledge hub destination. A paradigm shift in the planning process has showed Bangladesh a new era of development. Building on the success in the last decade, Bangladesh will be moving on the path that had been dreamt by the Father of the Nation.

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