Bangladesh: Road to DevelopmentAsghar Hussain Jaffery Mohammad Saud AhmedMuhammad Daniyal KananiMuhammad Kazim FidaniSalman ud Din Khan

ContentsIntroduction3Millennium Development Goals4Goal 1: Extreme Poverty and Hunger Eradication4Goal 2: Attainment of Universal Primary Education4Goal 3: Promotion of Gender Equality and Women Empowerment4Goal 4: Decline in Child Mortality Rate4Goal 5: Improvement in Maternal Health5Goal 6: Combat HIV/AIDS, Malaria and other diseases5Goal 7: Ensure Environmental Sustainability5Goal 8: Develop a global partnership for Development5Indonesia6Structural Change in Bangladesh6Big Push7The Linear Growth Model8Multiple Equilibria8Population8Age dependency ratio (% of working-age population) in Bangladesh9Bangladesh vs. Indonesia10Fertility per woman (number of child birth per woman)10Population Growth10Past Steps and Future Recommendations11Health12Recommendation13Education14Recommendation14Urbanization15Urbanization and Migration in Bangladesh and Indonesia17Recommendations17Trade18Exports18Imports18Balance of Trade19Trade Partners and Agreements19Government interventions and Policies20Comparison with Indonesia20Recommendation20Poverty and Inequality in Bangladesh21Poverty Reduction, Contributing Factors and Current Situation21Recommendations23Conclusion24Overall Policy Recommendations for Bangladesh24

IntroductionBangladesh came into being as a sovereign and independent nation after its separation from Pakistan on 16th December 1971 and according to recent statistics the population of Bangladesh in 2013 was 156 million. The country is geographically divided into 6 administrative divisions which include Chittagong, Khulna, Rajshahi, Barisal, Sylhet and Dhaka being the capital as well. Bangladesh is a multi-religious country with Muslims (approx 89 %) being the largest religious group.Bangladesh has had a troubled political history since its independence. It had seen numerous military regimes and coupes until 1991 when first free elections were held after 18years and lead to Khaleda Zia (widow of former president, Zia Ur Rehman) took office. She was replaced by Sheikh Haseena (daughter of ex-prime minister and president, Mujib Ur Rehman) in 1996. Since then the two have traded power in succeeding elections. In 2006, Khaleda Zias government resigned leading to another military takeover and massive crackdown on corruption in the country. Elections held in 2008 brought back Sheikh Haseena as Prime Minister. The country has developed economically since the end of political turmoil and start of democratic process in 1991. It is a rapidly growing LDC (Less Developed Country) with important trade relations with India and China. It is also one of the largest receivers of aid from United States. The country enjoys good relations with its neighbors and other countries around the world. It has also served two terms in the United Nations Security Council. It was also the pioneer of South Asian Association for Regional Cooperation (SAARC). Bangladesh has seen significant strides in various areas such as human and social development since independence but still it has failed to graduate from its LDC status. Previously Bangladesh was a primary exporter of Jute and other agricultural goods but during the passage of time there has been a shift to the manufacturing sector from agricultural sector however till 2005 the percentage employment in the agricultural sector as compared to the total employment was 48 %, showing a slow progress towards modernization. Another, obstacle to development that has held Bangladesh back from leaving its LDC status are the political challenges such as corruption, weak government institutions and unstable political scenario. Secondly, large proportion of the country being a low lying are, it is prone to natural disaster such as floods, which negatively effects the economy of the country. However, despite all the facts Bangladesh has shown some remarkable improvements in trying to overcome these obstacles and regardless of all the above impediments it is on its way to come out of this LDC status by 2021. Bangladesh has become one of the largest exporters of garments and is giving competition to Pakistan. (Graph 1)

Millennium Development GoalsGoal 1: Extreme Poverty and Hunger EradicationImprovement with respect to abolition of poverty and hunger has been made in Bangladesh. GDP has grown at a rate of 6% in recent years and it has helped in reducing poverty. There has been a fall in poverty from 56.7% in 1991-92 to 31.5% in 2010. The poverty gap ratio has been reduced by Bangladesh to 6.5 which is even better as compared to 2015 target of 8.0 and as per MDG statistics people living below the poverty line were halved in 2012 (from 56.7 % to 29%).Goal 2: Attainment of Universal Primary EducationMajor development to increase equal access to education to both the gender was made by Bangladesh and has attained gender parity in enrollment to primary and secondary education. Pre-school education for the preparing children for formal schooling has been implemented. Primary Education (Compulsory) Act 1990 made primary education free and necessary. Attainment of the goal of completion of primary education rate and the adult literacy rate are some of the challenges MDG 2 are facing. Goal 3: Promotion of Gender Equality and Women EmpowermentSignificant progress has been made by Education Bangladesh in promoting gender equality and empowerment of women. The number of girls going to primary school is almost equal to the number of boys attending it. Steady improvements are seen in the social and political empowerment situation of females in Bangladesh. Sharp increase is seen in the amount of women parliamentarians chosen (20% of total seats) in the last national election. However, employment situation Bangladeshi women is still not very good and is low (one woman out of every five is occupied in wage employment in the non-agricultural sector).Goal 4: Decline in Child Mortality RateBangladesh is on track in achieving its target of reducing child mortality. The country has successfully implemented programs to combat diarrhea, vitamin A deficiency and educate women on pregnancy related issues which has lead to successful births. The use of midwives and nurses has also increased leading to greater chances of survival of new born infants.Goal 5: Improvement in Maternal HealthMaternal mortality in Bangladesh has declined from 322 in the decade between 2001 &2010 to 194, which is about 40 % reduction over a 9 year period. From the year 2001 there was an average reduction of about 3.3 % per year, which is slightly more than the target of 3% set in the MDG. Goal 6: Combat HIV/AIDS, Malaria and other diseasesBangladesh has done well in combating HIV/AIDs and other epidemics. The country has less than 0.1% HIV prevalence. The country has fought well against the spread of malaria and TB. The improvement in sanitation and an increase in the supply of clean drinking water have helped enormously. The awareness in the general population has increased and people are more aware about symptoms and how to fight against these diseases themselves. There is increased usage of long lasting impregnated nets (LLIN) and insecticide treated nets (ITN) which has helped combat malaria and reduced the number of cases across the country. The number of malaria cases (as per 2012, WHO report) was a mere 395 cases per 100,000 people compared to a global average of 3752 cases per 100,000 people and a regional average of 1462 cases per 100,000 people. Goal 7: Ensure Environmental SustainabilityThe current tree coverage in Bangladesh is 19.4% of the total land area. This is extremely close to the target of 20% set by the government but is still far behind the 70% target of the tree density. The carbon dioxide emissions have increased to 0.3 tonne per capita in 2007. The main challenge for the government is to provide clean safe drinking water to its people. There has been an increased arsenic content in drinking water as the government looks to find solutions to salinity.

Goal 8: Develop a global partnership for Development:Bangladesh has done well in developing partnerships globally. In 2008, it came to an agreement with neighboring country, India, to increase trade and solve the energy crisis in the region. Being a member of OECD and SAARC, Bangladesh received US $363.99m from developed countries to help it achieve its MDGs. The country has been a recipient of aid from United States over the years but the aid has come down from US $15.75bn in 1990 to US $12.01bn in 2012. There has been an increase in the loans that the country received recently from OECD countries. Recently, Bangladesh signed a trade agreement with China as well to increase trade. China and USA are the two largest markets for Bangladeshi textile industry. IndonesiaTalking about Indonesia, it has been successful in lowering the rate of people living on less than $1 a day by 50 % (from 1996 to 2008). Also, it is on its way to reduce the number of underweight children till the age of 5. As long as primary students enrollment is concerned, almost 95% of the students are already enrolled in the school and efforts are being made to complete the school building projects. According to the reports, 94% of this project has been accomplished. Some notable progress has been made by Indonesia in achieving gender equality by giving positions to women in the national government and also by special focus on female education. Indonesia thinks it is equally important for good economy and hence this goal has been achieved a bit too quickly. For MDG 4, Indonesias child mortality rate (figure 1) has gone down from 97 deaths per thousand to 44 deaths per thousand as of 2008. And it is still going down. Not only this, but immunization and vaccination progress has also been made. But, the number of HIV infected ones have increased drastically. As for the maternal health, no such progress has been made, with numbers still above 200 per 100,000 births, though it aims at reducing this to 102 by 2015. Indonesia shows a mixed progress for MDGs 6 and 7. It has reduced the incidents of malaria but HIV has grown, as mentioned above also. As for environmental sustainability, it has not made progress on reducing deforestation, but an effort on protection of fisheries has been made. It emitted more CO2 in 2008 than in 2000. Structural Change in BangladeshBangladesh is said to be good in terms of growing their economy in very less time. Independence in 1971, it has grown by 6% to 7% yearly over the last few years. Poverty reduced by almost a third, attached with better literacy, life expectancy and food intake/ capita. More than 15 million Bangladeshis have moved out of poverty since 1992. The service sector contributes to around half of Bangladeshs GDP; and about half of Bangladeshis are working in the agriculture sectorInitially an agro-based country, Bangladesh is now moving more towards service sector accompanied with significant growth in Manufacturing. Exports of textiles and garments are the largest supply of foreign exchange earnings. Shipbuilding, pharmaceuticals and consumer goods manufacturing are important emerging industries. Despite being on a rapid pace of growth, Bangladesh has long way to go and pick up further in order to be a middle-income country by 2021. GDP growth to 7.5 to 8 percent per year based on accelerated export and remittance growth increase in public and private investments are very important. Growth will also need to be more comprehensive through productive employment opportunities in the domestic economy. To continue accelerated and all-encompassing growth, Bangladesh will need to deal with the urbanization process more efficiently, as well as plan for adaptation to climate change impacts.Bangladesh can become an export hub with its labor-intensive manufactured and service exports rising twofold on a constant basis, if government makes decisions at a faster rate.Big Push

Big Push theory explains how the injection of capital/investments and Government Spending lead to economic growth. This can be proven by looking at the textile sector of Bangladesh. It is one the biggest industry and contributes a lot to the countrys foreign exchange.Government has created great investment opportunities in this sector. Backward linkage is an important trading prospect and is supported by a government backed incentive of 15% cash subsidy of the fabric cost to exporters sourcing fabrics locally.The Bangladeshi Government has designed much supported investment policies in these sectors offering investors the succeeding picks: Formation of textile mills in the private sector Revitalization of public sector textile mills Providing partnership opportunities with the existing textile mills Indirect investment by providing financial services and leasingAmong all, most advantageous public policy of introducing back to back Letter of Credit (LC) and bonded warehouse facilities provide an incredible stimulus to the export scenario in Bangladesh.The table below illustrates how these steps helped Bangladesh to earn a great amount of foreign exchange and textile sector to grow

The Linear Growth ModelRostows linear growth model suggests that an underdeveloped country must either be a traditional society or must be in the stage of meeting the pre-conditions. Since having other social institutes, an educated labor class, a stable political condition combined with some technological advancement is a must for the take off stage, Bangladesh could simply not meet those requirements at the time of independence amidst a situation where political vulnerability was high and outcomes were uncertain. Also, literacy rate was pretty low. Still a heavy capital aid by India to establish some of its sectors could be linked with HarrodDomar growth model. Also because labor was abundant and technological progress was being made, this model serves a basic justification for the initial progress.Multiple EquilibriaThe multiple equilibria model does not really fit into the initial stage of Bangladeshs growth as the political situation was worse and bureaucrats were posing negligible stance on expected growth or investment. Until 1990s when government policies invited private sectors to participate and developed 3 year plans with huge loans (some of them being interest free) from the IMF, there were some signs of future predictions with complimentary in action. Population

Bangladesh has a population of about 158 million people with a parallel population density of more than 1100 persons per square kilometer. When Bangladesh got independent in 1971, the government of understood the need to address the issue of population growth. In 1970, East Pakistan (Bangladesh) had a population of approximately 69 million, and West Pakistan (Pakistan) of approximately 62 million. Both parts of the country shared mutual family planning scheme and had identical fertility rates (around 6children per woman)Today, the situation is very much dierent. Bangladesh has a population of approximately 158 million; while Pakistans population is now over 184 million. The total fertility rate in 2007 was approx. 2.7 in Bangladesh and 4.0 in Pakistan. If present trends continue, Bangladesh will have more than 200m people in 2050. As shown in the diagram above, the fertility per woman has declined significantly and during the last decade, almost it declined by 1 child per woman. We can analyze two reasons for this fertility decline which were described in two different publications1) The first one explains it is due to National Family Planning Programme2) The other one emphasis on socio-economic changes equally significant with the Family planning schemes. *(Cleland et al.s 1994)** (Caldwell et al.s 1999)

Considering this fact, we still see the population increases by more than 1% per year. This is because the hidden momentum of population. This explains that however the growth rate and fertility rate is stabilizing, the population size will still increase considerably. This evidence of more people at reproductive age will cause a further increase in total population. This can be further understood by Table 2 (appendix). Age dependency ratio (% of working-age population) in Bangladesh

Age dependency ratio: Ratio of dependents (people younger than 15 or older than 64) to the working-age population (People between 15 and 64)

Bangladesh vs. IndonesiaAlthough Indonesias population is around 100 million more than of Bangladesh, the dynamics and challenges are the same. Family planning schemes by Indonesian government have brought the growth rate and fertility rate to decline over years but still around 3 million people are adding into population due to population momentum. The graph below shows that both growth and fertility rates of Indonesia are similar to Bangladesh.

Fertility per woman (number of child birth per woman)

Population Growth

As it could be seen that the fertility per women in both the countries is showing a similar decreasing trend over time and same is the case with the population growth rate as the growth rate is converging to the same point in 2013.

Past Steps and Future RecommendationsSince mid-1970s, major efforts were made by the Bangladeshi government to expand access to family planning services and widen choice of methods. These measures greatly contributed to rise in contraceptive prevalence. All subsequent governments maintained a strong emphasis on population programs though commitment to implementation began slackening since mid-1980s. The current population policy, formulated in October 2004, laid down a target of reaching replacement-level fertility by 2010 and to stabilize the population at 210 million around the year 2060 (MOHFW 2004). In terms of expressed intent and broad objectives, the stated policies, as well as program approaches seems suitable but apart from it, several sideline policies can also be implemented in order to have more stability,

Bangladesh government can design policies such that it persuades people to have smaller families. This can be done through many ways such as through designing awareness programs channeled by media, campaigns, education etc.

The government cans enhance family planning programs to provide health and contraceptive services to encourage the desired behavior. Such publicly sponsored programs are practiced in several developing countries including Bangladesh itself as mentioned above. Further emphasis and improvement in this program can bring more desirable results.

Another way of Bangladeshi government to attain population targets is by taking a rather strict and coerce stance. This can be done in several ways as to manipulating economic incentives and disincentives. Following are the major steps that the government can take in this regard

1. Imposing financing penalties after certain number of children2. Subsidizing smaller families monetary3. Reduce maternity benefits after certain number of children4. Force people to have fewer children through the power of state legislation.

The last policy and the one I recommend the most is empowerment of women. Any developing country including Bangladeshi just cant stabilize the population until and unless they raise the social and economic status of women. This basic reason why developed nations have more stabilized population is that, their women are more educated and hold a respectable status in society. They are more empowered and can make their own decisions. They marry on proper age and realize the social and economic cost of bearing each child.

Bangladeshi government like any other LDC can take following steps to raise women status and their empowerment:

create favorable condition for late marriages implementing laws related to minimum marriage laws comprehensive education program for women Creating job opportunities for women once they are over with education. Subsidizing those cottage industries which are women centered as to create income opportunities for them.HealthBangladesh, being the eighth most populated country in the world, has an insufficient health services for its populace. The country faces severe shortage of professional medical staff and medical facilities. In 2010, it was estimated that there were only 4 beds (in hospitals) per 10000 patients. The number of professionally trained doctors constitutes only 5% of the medical sector with the 62% of the medical sector comprising of informal medical agents. These medical agents are people with nominal medical expertise and are mostly found in villages and rural areas. They provide drugs and medical advice to people who come to them. Medical facilities are not subsidized and most of the brunt of the medical expenditure is borne by the private individuals. The country faces a malnutrition crisis. Up to 46% children under the age of five are considered to be suffering from it. The country has a wide spread Vitamin A deficiency and more than 50% of the adults (15-64 years of age) are considered to be under-weight. According to the World Health Organization report, more than 80% people in Bangladesh today (2014) have access to clean drinking water compared to 67% in 1990. The sanitation facilities are now available to just below 60% of the population, an increase from 35% in 1990. This has lead to a decrease in water related illnesses such as diarrhea and malaria. The life expectancy in Bangladesh is 69 years for males while for females it is 71 years. This is higher than the regional average in the South East Asia region which is 66 years for males and 68 for females. The mortality rate per 1000 births is 41 deaths, better than the regional average of 50 and global mortality rate of 48 deaths per 1000 births. The mortality rate has seen a huge improvement from previous years and has seen a steady decline since the turn of the century (Figure 5). This has been due to an increase in the number of pregnant women using professional or semi professional medical help during their pregnancy and childbirth times. The number of midwives and nurses used by people in rural areas has steadily increased, resulting in successful births and healthy delivery of infants. The government spending on health was 3.6% of the GDP in 2012. The total per capita expenditure on health has nearly doubled from 10% in 1995 to 19% in 2014. This is still considerably lower than the regional average of 70%. The government has realized that there is a dire need for trained professionals in the rural areas to help with health care. The government has increased its expenditure in training of medical staff and now holds training programs for people who serve as informal medical agents in the villages and remote areas. They have also divided the health care system into three categories:1. Primary level: this is the most basic level where treatment is offered by informal medical agents and the diseases in question are relatively less dangerous than others. For example, fever, common cold and some injuries. 2. Secondary level: at this level, the diseases and injuries are a little more dangerous and require the help of professional doctors and specified medicine. These are the people who have diseases like malaria and diarrhea. The patients are referred to district hospitals or specialist doctors. 3. Tertiary level: this is for the most dangerous level of diseases such as AIDS, TT and TB or major accidents or injuries. Usually the patients are referred to large hospitals in urban sectors where high tech medical facilities are available. This program is being used to ease the burden on the health care system. The patients are classified on the basis of how serious their condition and need for medical assistance is and then they are treated at that level. RecommendationThe country has a shortage of hospitals and professionally trained medical staff in the rural sector. The government needs to invest more in building hospitals in rural areas and small towns and divisions. They also need to encourage young people to pursue careers in medicine so as to increase the pool of professionals in the future. The government can encourage students to become doctors by offering scholarships and training programs to youth who would want to pursue their careers in medicine. Another thing that the government should do is subsidize some medicines and medical procedures. This would allow the poor to access medical facilities and not be hindered by the lack of funds. The government also needs to monitor the informal sector. These informal agents can help become better at medical jobs by getting some training. They already act at the most basic level and more knowledge about medicine can help make them more reliable and provide service to areas that are remote. EducationBangladesh has a relatively low literacy rate. It was estimated that in 2012, 61.3% males were in literate compared to only 52.2% females. Of the young adults, between the ages of 15 and 24, the literacy rate in adults was at 77.1% while for females, it was 80.4% (UNICEF report). According to the Bangladesh Educational Database (BANBEIS), 47.5% of the people who pursue education were in the primary level (up to class 8), 20.5% were pursuing secondary education (grades 9-10), 14.7% were pursuing higher secondary (11-12), 13.96% were pursuing undergraduate education and only 2% pursuing masters or post graduate education. The others were following other non tertiary education systems like certification and diplomas. The overall enrollment in the primary level has seen a steady increase in the recent past. The enrollment rate, according UNICEF has been greater than 100%, which shows that people who dont even fall into the age group of primary education are still enrolling themselves to get primary education. These might be people from rural areas who have no education and now realize the importance of it and are starting to pursue it. This shows a positive trend and a general desire for education in the people. The enrollment rate in the country has been higher than that of the region, according to a report by UNICEF (Figure 6). Coupled with an 80.1% net attendance ratio, shows that population is genuinely interested in pursuing education. The spending on education is 2.06% of the GDP while the government spending is at 11.28% of its total expenditure. Most of this money is used to provide with free primary education in government schools while most of the private schools providing primary education are subsidized. This encourages the people to pursue education at least at the primary level even if they cant afford the secondary or the higher secondary level. RecommendationThe government needs to fund more in the secondary levels to encourage people to further their education. Very few people pursue professional education beyond the higher secondary and undergraduate levels. There are very few universities that offer post graduate education. There is a vacuum in this regard. The government needs to encourage people to follow higher education. As the education level gets higher, an individual can be of greater help to the economic development of the country. To encourage people to follow higher education, the government should offer grants and subsidies to existing universities to encourage enrollment. They should also offer scholarship programs for those who want to pursue post graduate education.UrbanizationBangladesh is one of the most densely populated countries in the world (1203 people per square Km) and has faced a rapid growth in its population in the recent past. It has been stated that Bangladeshs urban population is growing at an average rate of 6% per year since its independence and according to the latest statistics by the World Bank urban population constitutes approximately 30% (47.3 million) of the total population. The four major cities contain more than half of the urban population of Bangladesh.There are number of reasons that have contributed to the increase in the urban population of Bangladesh including natural increase in native urban population, territorial extension of existing urban areas and reclassification as a result of development of rural areas but rural urban migration remains the primary reason for the explosion of population in the urban areas of Bangladesh.As mentioned earlier that about 30% of the total population lives in urban areas, this is indicative of the fact that there has been a greater growth of urban population and labor force as compared to that in the rural areas. People in the rural areas of Bangladesh are moving to the urban areas in search of better wages so as to provide for the household and the growing dependents in their family due to the increase in population and this rural urban migration in case of Bangladesh has accounted for about 40% of the change in the urban population of the country (Khan, 2008). There has been an increase in the industrialization process in major cities of Bangladesh recently, and establishment of industries namely textiles and the service sector have opened job opportunities for the people that have migrated from the rural parts of Bangladesh. However, the influx was more than that could be absorbed in the formal sector alone. This resulted in the explosion of the informal sector of the urban areas such as Dhaka and other metropolitans such as Chittagong, Rajshahi etc. It has been estimated that Bangladeshs informal sector creates 88.5% of the total number of jobs for the labor force and the job creation by the informal sector has been increasing over the years. The informal sector has seen a steady growth even after the exclusion of the home based workers from the society. Despite the exclusion of home-based workers from the working society, the informal sector has been on a constant rise. There are sweatshops related to automobile workshops, garment factories and food industry present which has further given a boost to the informal sector. The development of the textile sector in Bangladesh and increase in the exports of Value added garments to different parts of the world has resulted in small related industries to support the exports which have cultivated the informal sector in return.The presence of informal sector can be attributed to the privatization and deregulation of State owned enterprises as the private companies are driven mainly by profits and so they try to hire high skilled labor with higher productivity and as a result the people with low skill sets are forced to work in the informal sector. The public sector provides the highest number of formal employment for the people which include public administration and defense (81 %) followed by financial institution and education sector. Large informal labor raises many issues related to accommodation and management of the people including problems of providing them with economic subsistence. Workers operating in the informal sector such as operating from home or working for other are responsible for a number of cottage industries that has sprung up in the recent past, supporting the complimentary industries. However, these cottage industries are not registered formally and so are excluded from the work force which restricts them from receiving state benefits as well as benefits from their employers. As a result the employees are not given the due benefits equal to their economic contribution by the employers.A large number of informal labors entail problems and issues associated with managing, accommodating and providing economic subsistence for them. Workers operating from home are responsible for a number of cottage industries which support the complimentary industries yet they are not registered workers as per law and hence excluded from the work-force. This restricts them from receiving employment benefits provided by the state and their employer. The harassment faced by home-workers at the hands of officials does not allow them to receive the benefits equal to their economic contribution. This attitude further discourages individuals especially women to join the work-force, whether formal or informal. It should be noted that in Bangladesh like other countries, first city bias exists and due to this factor major cities are much more developed in comparison to others in the country. Dhaka city, capital of Bangladesh, has much better infrastructure and quality of life when compared to other cities. About 80% of the garment industry of Bangladesh is located in Dhaka; this contributes 13% to the total GDP of the country. The urban poverty incidence of Dhaka (28.2%) is lower than the urban poverty incidence of the country which is 36.6% (Bangladesh bureau of Statistics, 2003). Urbanization and Migration in Bangladesh and IndonesiaThere has been a major surge in the number of urban dwellers and urbanization caused by rapid migration has lead to a rise in the urban population as a percentage of the total population from a humble 5 % in 1955 to 30 % in 2014. This rapid increase in the urban population signifies the Urbanization and migration dilemma for the policy makers. There are number of factors that have lead to rapid urbanization apart from rural to urban migration such as reclassification as a result of rural areas and natural increase in the urban population. However, migration from rural to urban areas remains the foremost cause of the increase in the urban population. The real or perceived job opportunities coupled with better lifestyle and enhanced living standards lead to people being attracted towards the urban centers. Some of these migrants have been absorbed in the formal sector such as cleaning staff in the offices but this number was small so most of the migrants couldnt be absorbed in the formal sector and were forced to join the informal sector.Indonesia has also experienced a significant increase in its share of urban population. There has been an increase in urbanization from 41.9% to 49.7% over the last decade (Indonesian census 2010). This has resulted in the number of urban dwellers crossing the million-plus population mark and reaching the huge number of 1118.3 million from 85.2 million, ten years ago from the census. RecommendationsThere are number of challenges that are posed due to large urbanization including the burden on the urban resources such as water, sanitation along with increase in the urban unemployment rate and other related social problems. There are number of ways that the government could deter this high influx of migrants into the urban areas. Foremost, there is the need to create an economic balance between rural and urban areas as the government is focusing on the large urban cities and are inclined towards their development only. Bangladeshs government should create labor intensive industries in rural as well as urban areas which could provide job opportunities for the people and for this government should provide easy access to finances as only 10% of the people opt for bank loans and financing and about 70% use their own savings or take loans from relatives (ISS, 2010). Along with this government should direct its resources towards developing the rural infrastructure too thereby increasing the cost of migrating to urban areas. Secondly, in order to improve the urban policies and the quality of public services decentralization of functions and responsibilities would be necessary as it would give full autonomy to the local government and this way the local government would be held accountable for its performance to its local people as well as the central government and would not be able to blame its poor performance on other bodies.TradeBangladesh is relatively a recent entrant in the international market. It started its journey in the 1970s when the general trend was towards Import Substitution. It followed the general trend and started to be self-sufficient in the primary goods by imposing trade restrictions such as taxes on imports. This led to the development and a step towards self-sufficiency in food, which has remained its main import. Moving ahead from the 70s, Bangladesh made use of its excessive labor and specialization techniques to produce hand-made goods such as garments. It gradually gained a heavy status in the US and other EU markets as the major trade partner. But still, it has to heavily rely on the imports of basic raw materials which are quite vulnerable being primary goods. It still has to go a long way into manufactured items.ExportsJute and its products were Bangladeshs major exports in 80s. Soon after that, manufacturing became its main merchandise export accounting for 92% in the 1990. A substantial portion of which was textile, and handmade garments. The signing of MFA helped Bangladesh make a permanent place in the international market. ImportsBeing protectionist in the beginning, trade restrictions were imposed soon after its independence and in 2002, almost 40% of the revenues were collected in the form of import duties. Its main imports are still the food product, having a production and demand gap of 15%. Importers have to pay a variety of taxes including VAT and AIT. Recently, capital goods are given exemptions on taxation if they are used by 100% export oriented firms.

Balance of TradeBangladeshs trade balance has been negative since the beginning only. It could never exceed its exports due to the fact that some socialist policies were adopted by the early economists to nationalize the industries which in turn overburdened already destabilized economy. A positive balance in its current account was shown around 2003 because of the remittances inwards. (Figure 7)Trade Partners and AgreementsBangladesh has had a good trade history with the EU. It first received aid from the EU in 1973 as it has always remained short of food supplies. Later on, Bangladeshs most exports were to EU including textile, garments on the top of the list. It also succeeded in capturing a large market of the USA even after the MFA ended. But it faces competition from other exporters of China and India as it is still not granted FTA. Although it currently has 30% of the USAs market. It has entered into trade agreement with EU also and no tax except arms and ammunitions agreement also. Other markets include India, France, Germany and Japan.Being a member if WTO since 1995, it is a beneficiary under the GSP schemes and has found ways to improve trade with more Asian countries. Also, it is trying to obtain duty free access to US markets. (Table 3) Government interventions and PoliciesHaving a protectionist and socialist movement in the beginning, the Government reduced restrictions on investments, started denationalization and reduced part of the tariffs to promote external setup. Soon after that, all political parties gathered to agree on a single point which was more liberalized economy. It resulted in further reduction of tariffs and import duties. Also, Quantitative restrictions were also lifted and economy was more open. Exchange rates were more flexible to adjust for overvaluation which helped import of heavy machinery in fewer amounts. It also paved way for more factor advantages and wage increments as unskilled people also got jobs because of new setups.Comparison with IndonesiaIndonesias trade policies in 1970s suggest that the Government at that time was too corrupt to formulate proper policies. Inefficient firms were granted licenses while imports and tariffs were too high. Despite that, large conglomerates had established their hold in Indonesia and a little effort in curbing the corruption led to a huge cost reduction. But this came up with wide disparity in the income distribution as Profits were sent outside. Manufactured exports were still not at par with Bangladesh during the 1980s. In 1986, new policies came into action and import taxes were reduced, exporters were allowed to import their own raw material mainly to facilitate trade exports. As the time passed, more and more tariffs were reduced and in 2008, Indonesia had one of the lowest taxes in the region. But the recent policies suggest an inward looking protectionist outlook. As policy makers suggest, Indonesia should focus more on the infrastructure and cost before it opens its trade for international market or it might lose its market and end up with heavy trade deficit. This is because Indonesia doesnt have much trade agreements as of now. RecommendationOne of the things Bangladesh must work as its priority is that it should focus on the export of diversified goods. Since it has a very limited base as of now, having garments as 75% contributor towards merchandise exports, the possibility is that it might be hit hard if there are crisis as its main market is the US and the EU. Although immobility of capital would be a hindrance but trade agreements and Foreign Investments would help production of other goods as well.Poverty and Inequality in BangladeshBangladesh is considered to be a relative success story among the developing nations when it comes to combating the issue of poverty. Poverty incidence reduced from 57 percent in 1991 to 49 percent in 2000 (worldbank.org). This trend has continued to accelerate, reducing the poverty headcount rate to 40 percent in 2005. The major contributing factor was understood to be stable economic growth along with no further widening of inequality gap. The World Bank has defined absolute poverty in two categories of moderate poverty, considered to be living on less than US$2.00 per day, and extreme poverty, people living on less than US$1.25 per day. According to a recent report fromWorld Bank in June 2013, in the decade since the turn of the century, poverty in Bangladesh has decreased from 63m to 47m people. This shows that the country has met its goal of reducing poverty ahead of the deadline of 2015. It is also on path to reduce the proportion of the people living below the poverty threshold to about 26%, whereas the original target was of 29.5%. GINI index, which measures inequality, in Bangladesh, was measured at 32.12 by the World Bank in 2010.

GINI INDEX GRAPHPoverty Reduction, Contributing Factors and Current SituationPoverty in Bangladesh has declined by 1.6 percent each year since the 1990s. According to the Household Income and Expenditure Surveys (HIES) conducted by the Bangladesh Bureau of Statistics, the proportion of population below the upper poverty line (US$2.00 per day) declined by 19 percent between 2000 and 2005.The percentage of population under the lower poverty line (US$1.25 per day) declined by 26 percent. 25 percent of the population in Bangladesh was extremely poor (per capita consumption less than US$1.25 a day) in 2005 as compared to 34percent in 2000. Extreme poverty declined by 27 percent in urban areas and 25 percent in rural areas in 2005. (Table 4).Depth of poverty (measured by poverty gap) reduced by 28 and 29 percent and the severity of poverty (measured by squared poverty gap) declined by 36 and 37 percent for urban and rural areas respectively in 2005.

The significant social and economic transformation was a key factor that contributed to poverty reduction in Bangladesh from 2000 to 2010. Rapid GDP growth and the urbanization process in recent times have catalyzed the economic transformation. This has manifested in increase in human and physical assets returns, increasing labor productivity and, the shift from low return agricultural labor to nonfarm employment and development in export industries. A high volume of remittances has been another key factor contributing to poverty reduction. There have been several positive implications of poverty reduction in Bangladesh. There has been a decline in the amount of dependents in a family, due to significant reductions in fertility, which has been an important contributor in raising per capita income. Increases in labor force contribution and the overall educational levels, especially amongst women, have contributed as well.Despite its progress, however, Bangladesh still remains a poor country with an estimated 56million people in poverty in 2005 and disparities in incomes and human capabilities across income and occupational groups, gender, and regions. According to the World Bank, the Gross Domestic Product per capita of Bangladesh was last measured at 625.34 US dollars in 2013, which is equivalent to only 5 percent of the world's average. There are vast differences prevalent between regions. While Dhaka, Chittagong, and Sylhet divisions in the eastern part of the country experienced rapid poverty reduction, gains were much smaller for Rajshahi and nonexistent for Barisal and Khulna regions. Poverty as a result of structural causes, habitual economic shocks have had significant impact. A few of these shocks are seasonal in nature, while others tend to be more unpredictable, like tropical cyclone that was accompanied major floods in 2007. The recent sharp rise in rice prices has had a severe impact on the poor households. The frequency and severity of such large shocks call for safety nets programs to play a critical role. By extenuating the impact of these shocks, a well-functioning security net system would ensure that the significant gains Bangladesh has achieved through fast economic and social alteration are not eroded.RecommendationsThere has been focus on policy making in Bangladesh to combat poverty. Some specific areas include policies to encourage growth by sustaining the high levels of labor productivity and job creation in the manufacturing and services industry facilitate migration from poor rural areas given the impact of remittances that reduces poverty increase the level of women participating in the labor force and sustain Bangladesh's past successes in reducing fertility improve poor households access to better quality of education and health services Improve the coordination, targeting and coverage of safety net programsLike in most other developing countries, women are playing an increasingly vital role in the Bangladeshi labor market as well. The level of participation, total employment, number of working hours, degree of education, and income has all increased by a much bigger margin for Bangladeshi women than men between 2000 and 2005. The total earnings from salaried employment for women increased by about 62percent in 5 years, with increases in education level accounting for a major part of the change. The overall labor market, however, continues to be highly segmented on the basis of gender.To ease the pressures caused by the demographic transition in the labor market, Bangladesh needs to direct attention to the skills development of an ever expanding labor force. These should also include policies to enhance opportunities for overseas migration. Given the trend in female education level and low levels of female labor market participation, shaping policies to create female-friendly jobs and work environment will go a long way to improve the female participation level in the labor force. This in turn would help to reduce poverty.It is also very important to make safety net programs more affective. In order to achieve this, the safety net programs have to be better timed to more appropriate address the immediate needs, better targeted to ensure that maximum benefits are received by the poor, and better tailored to suit the particular needs of the poor. Strengthening safety net programs in Bangladesh along these principles would not only prove to be efficient but would also establish a firm foundation for increasing investments in to safety net programs.ConclusionBangladesh is the eighth most populous country in the world, located in the South East Asia. It is a relatively new country having got independence in 1971. In its initial stages, it went through political turmoil before coming out of it in the last decade of the twentieth century. Since then the country has not looked back and has worked very hard to move forward. It is one of the fastest growing economies in the region and has made giant strides in achieving its millennium development goals. Bangladesh has been a success story when it comes to combating poverty. It has achieved its target of reducing the number of people living below the poverty line to less than 50%. The inequality gap has somewhat reduced as the economy moves forward. The poverty gap ration has reduced. The Household Income and Expenditure Survey of 2010 data show that the incidence of poverty is decreasing at a rate of 2.47 percent per year since 1991-92 in Bangladesh. It can be said that the target of reducing the population living below the poverty line by 50%, was already achieved by 2012.There has been an increase in the number of children attending primary schools. The country has one of the highest enrollment rates in the region and coupled with a high attendance ratio, it shows the willingness of the people to follow education with honesty. There have been an equal percentage of males and females pursuing education. More importantly, Bangladesh has improved a lot in terms of health facilities. The mortality rate for children under five has seen a reduction, children under five sleeping under insecticide treated bed nets to combat malaria, reducing the prevalence of underweight children, minimizing the infant mortality rate and maternal mortality ratio, minimizing detection and cure rate oftuberculosis, reducing the incidence of communicable diseases and improving immunization coverage.Overall Policy Recommendations for BangladeshBesides improving overall, Bangladesh still needs to work on some key areas actively in order to gain true development. These areas include hunger-poverty reduction, employment generation, undergraduate and post graduate enrollment, adult literacy rates, providing opportunities for women with handsome wages and coverage of information and communication technology.Becoming a middle-income country will necessitate extensive efforts on many fronts by the government. These comprise of maintaining macroeconomic stability, improving revenue mobilization, tackling energy crisis and lack of infrastructure, deepening financial-sector and reforms in the external trade policies, improving labor skills and urban management and adapting to climate change. Bangladesh can become an export giant, with its labor-intensive manufactured and service exports industries growing at double digits on a continued basis, if it speeds up government decision-making process. Without timely action, other countries will take the markets being vacated by China. Bangladesh also needs to come up with an active effective plan to tackle the threat of natural disasters like floods and cyclones. Natural events such as these cannot be avoided but proper preparations to deal with them can immensely reduce the damage and destruction caused when they do occur. APPENDIXTrend of urbanization in Bangladesh from 2002-2014 (Graph 1)

The rural population as % of the total population

Figure 1

Figure 1Employment in agriculture (as % of total employment)

Year

Figure 2 Figure 3

Table 1

Table 2

The figure shows the current age and sex structure of Bangladesh population and it is clear from the figure. That like any other developing countries in the world a large number of people of Bangladesh constitute inThe young age group which will be responsible for continuing high rate of population growth in future.However, age composition of population does not show any significant variations according to sex.

Figure 4

Figure 5

Figure 6

Figure 7

Table 3

Developing Indicators of Bangladesh

Table 4

Table 5RMG EXPORTS AND IT'S SHARE IN TOTAL EXPORT OF BANGLADESH

YEAREXPORT OF RMG(IN MILLION US$)TOTAL EXPORT OF BANGLADESH (IN MILLION US$)% OF RMG'S TO TOTAL EXPORT

1983-8431.57811.003.89

1984-85116.2934.4312.44

1985-86131.48819.2116.05

1986-87298.671076.6127.74

1987-88433.921231.235.24

1988-89471.091291.5636.47

1989-90624.161923.7032.45

1990-91866.821717.5550.47

1991-921182.571993.9059.31

1992-931445.022382.8960.64

1993-941555.792533.9061.40

1994-952228.353472.5664.17

1995-962547.133882.4265.61

1996-973001.254418.2867.93

1997-983781.945161.2073.28

1998-99 4019.985312.8675.67

1999-004349.415752.2075.61

2000-014859.836467.3075.14

2001-024583.755986.0976.57

2002-03 4912.096548.4475.01

2003-045686.097602.9974.79

2004-05 6417.678654.5274.15

2005-067900.8010526.1675.06

2006-079211.2312177.8675.64

2007-0810699.8014110.8075.83

2008-0912347.7715565.1979.33

2009-1012496.7216204.6577.12

2010-11 (July-Sep)3971.525029.0578.97

Data Source Export Promotion Bureau Compiled by BGMEA

Statement of Contribution

*Signed version of this statement will be submitted with the hard copy.

1. Asghar Hussain Jaffery: i. All the delegations, compilation and editing of reports.ii. Overview of Bangladeshiii. Urbanization and migration in Bangladesh iv. Recommendations

2. Mohammad Saud Ahmedi. Health and Education ii. Health and Education Recommendations iii. Summary and Conclusioniv. Introductionv. MDGs Bangladesh

3. Salman Khani. Povertyii. Recommendations

4. Daniyal Kananii. MDGs Indonesiaii. Growth Modelsiii. Trade

5. Muhammad Kazimi. Population ii. Structural theories

ReferencesTrade policy in swing: Indonesias attitude to liberalisation and the TPP | East Asia Forum. 2014.Trade policy in swing: Indonesias attitude to liberalisation and the TPP | East Asia Forum.WHO | Bangladesh. 2014.WHO | Bangladesh.Table 5.3: Public Expenditure on Education by Nature of Spending, 2012-13. 2014.Table 5.3: Public Expenditure on Education by Nature of Spending, 2012-13.

http://banbeis.gov.bd/data/index.php?option=com_content&view=article&id=692:table-02-number-of-student-by-level-management-and-gender-2011&catid=109:part-1-summaries-2013&Itemid=225http://www.unicef.org/infobycountry/bangladesh_bangladesh_statistics.htmlhttp://data.worldbank.org/indicator/SE.PRM.ENRR/countries/BD-8S?display=graph