BANGLADESH

CONUNDRUM

INTRODUCTIONBangladesh’s economy:-remarkable economic performance in the new millennium-but its per capita income has remained low.

Even more spectacular has been the steady improvement in its levels of many social development outcomes.

Popular commentaries have drawn comparisons with India and Pakistan in highlighting the significance of Bangladesh’s development achievements.

This phenomenon has been termed as the “BANGLADESH CONUNDRUM,” and has received extensive coverage in international media outlets, such as the -New York Times,-The Economist -Wall Street Journal.

HENRY KISSINGER, AMERICAN DIPLOMAT:

-Coined the demeaning term, ‘basket case’

-For countries that would always depend on foreign aid

-Applied to Bangladesh by many thinkers

Bangladesh“TEST CASE FOR DEVELOPMENT”

INDIA Vs. BANGLADESH: AT A GLANCE

1.) PER CAPITA INCOMEBangladesh’s per capita income is half of what India’s is at this point of time

GDP per capita(Constant 2005 International $) BANGLADESH INDIA

1990 741 1,1932011 1569 3,203

2.) Bangladesh has improved its performance in the social indicators, especially

-Child Survival-Reduced Fertility Rates-Life Expectancy-Enhanced immunization rates-Few of the Schooling Indicators

SOME FACTS-Between 1990 and 2010 life expectancy of Bangladeshis rose by 10 years, from 59 to 69.

-Bangladeshis now have a life expectancy FOUR YEARS longer than Indians, despite the Indians being, on average, twice as rich.

-Even more remarkably, the improvement in life expectancy has been. as great among the poor as the rich

-According to the latest United Nations (UN) Human Development Report, Bangladesh comfortably beats India on most such social indicators. It has lower infant and child mortality, higher life expectancy, and does better on gender equality

-One of the few countries on the path to achieving Millennium Development Goals

PUBLIC SPENDING: BANGLADESH Vs. INDIA

SPENDING INDIA BANGLADESH (% of GDP)

EDUCATION 3% 2%

HEALTH 1% 1%

Unlike India, welfare programmes haven’t derailed government finances:

Bangladesh’s fiscal deficit is much lower than India’s.

Broadly speaking, the stellar improvement made by Bangladesh has been in the following three aspects:

1. HEALTH (Meiji Restoration, 19th Century, child and maternal mortality)

2. EDUCATION

3. GENDER-PARITY

BANGLADESH VS INDIAN STATES

The infant mortality rate and the under-five mortality rate in Bangladesh is better than 13 large Indian States, including much

richer Indian States like GujaratHaryanaHimachal Pradesh.

ARGUMENTS OF THE NAYSAYERS

-Let us first examine the arguments of the naysayers. One set of sceptics would argue that Bangladesh simply “exports its poverty” to India, especially to our Northeast. But even if one believes the most exaggerated statistics of Bangladeshi migration to India, not more than five to six per cent of Bangladeshis seek their livelihoods in our country.

-The second argument of the naysayers is that Bangladesh’s data is fudged or exaggerated by the donor community to justify its larger than life presence in the country. However, doctoring national data at such scale is simply not possible in today’s day and age of scrutiny by academics, researchers and sceptics.

SO HOW BANGLADESH IMPROVED ON ITS SOCIAL INDICATORS?

1. INCREASING REAL WAGES

2. FAMILY PLANNING---DEMOGRAPHIC DIVIDEND

3. RESTRAIN THE FALL IN RURAL HOUSEHOLD INCOMES

4. REMITTANCES

5. INCREASED ROLE OF WOMEN

6. MORE INCLUSIVE GROWTH: Everyone reaped benefits

7. NGOs + MICROCREDIT

INCREASED REAL WAGES

-Increasing labour cost in China and India-Base for Garment Industry-High quality, lowest price in the world-Led to migration of workers from rural areas to urban areas due to opportunities -Largest beneficiaries have been women

-Significantly, the share of employment in the formal sector in Bangladesh is 27.9%, well above that in India, and the proportion of working women in formal employment is even higher.

-India’s draconian labour laws have ensured that we miss out on the relocation of low-cost manufacturing out of China.

FAMILY PLANNING--- DEMOGRAPHIC DIVIDEND

-Pakistan Vs. Bangladesh (1975 and NOW)

-Bangladesh: World’s most densely populated country- At independence, its leaders decided that they had to restrain further

population growth

- (China’s One Child Policy, India’s Forced Sterilization Programmes)

- Government lacked power to be coercive

- Instead: Birth Control Government Workers Distributed Pills and Advice

NOW, reaping benefits of ‘demographic dividend’:

number of people entering adulthood will handsomely exceed the number of children being born, increasing the share of the total population that works

AGRICULTURE, YIELD, etc

-managed to restrain the fall in rural household incomes that usually increases extreme poverty in developing countries.

-Yield and the Cropping Season

-Monsoon Crop: Aman-Winter Crop: Boro

Decline the uncertainty associated with Monsoon Crop due to erratic monsoons

Less shocks for households, pushing them into abject poverty

REMITTANCES:

-Middle East-Send back incomes-More well-off households benefit more (How?

INCREASED ROLE OF WOMEN:-SHGs-Increased payment in pocket-Better health care for women, implies better family planning-Helped with gender parity

MICROCREDIT +NGOs

Without the state’s schools, clinics and cash-transfer schemes, says Rehman Sobhan, the head of the Centre for Policy Dialogue, a think-tank, other interventions would not work. It is the things which NGOs do, though, that make Bangladesh’s way of fighting poverty unique.

The government of Bangladesh has been unusually friendly to NGOs, perhaps because, to begin with, it realised it needed all the help it could get.

Most important:1. BRAC2. Grameen Bank

BRAC (which originally stood for Bangladesh Rehabilitation Assistance Committee, but now is the only name the organisation needs) invented the idea of microcredit, that is, tiny loans to the destitute.

Grameen Bank, made them work by targeting them on women and holding weekly meetings of borrowers who would identify and support anyone who was falling behind on repayments.

The poor account for roughly a fifth of the total loan portfolio of the country, an unusually high proportion.

ISSUES STILL EXISTING IN BANGLADESH

Bangladesh is still poor and crowded

Poor nutrition

Quality of Education Still Poor

With the lowest labour costs in the world (textile workers make about $35 a month) it should be growing faster than China, not more slowly than India.

It is badly governed, stifled by red tape and faces severe environmental problems.

GRASSROOT INSTITUITIONSSocial mobilization at local levelSHGsBangladesh is perhaps the best case study of NGO success anywhere in the world. As scholars have argued, NGOs are involved at scale in virtually every development activity in the country, including education, health, poverty alleviation, etc.

INCLUSIVENESSCurrently, 80 per cent of all credit to SHGs goes to the four southern States of India — Andhra Pradesh, Tamil Nadu, Karnataka and Kerala — and this needs to be broad-based nationally.

SETTLEMENT OF POLITICAL SCORES

SANITATIONMake in India: Construction of toilets, not a solutionMaking the communities realize the importance