Bangladesh's Economic and Social Progress

From a Basket Case to a Development Model

Munim Kumar Barai

• Publisher: Palgrave Macmillan
• Year: 2020
• Print ISBN:
  9789811516825
• eBook ISBN:
  9789811516832
• Topic: Economics
• Subtopic: International Business
• Index: Economics

This book evaluates Bangladesh's impressive economic and social progress, more often referred to as a 'development surprise'. In doing so, the book examines the gap in existing explanations of Bangladesh's development and then offers an empirically informed analysis of a range of distinctive factors, policies, and actions that have individually and collectively contributed to the progress of Bangladesh. In an inclusive way, the book covers the developmental role, relation, and impact of poverty reduction, access to finance, progress in education and social empowerment, reduction in the climatic vulnerability, and evolving sectoral growth activities in the agriculture, garments, and light industries. It also takes into account the important role of the government and NGOs in the development process, identifies bottlenecks and challenges to Bangladesh's future development path and suggests measures to overcome them.

By providing an inclusive narrative to theorize Bangladesh's development, which is still missing in the public discourse, this book posits that Bangladesh per se can offer a development model to other developing countries.

Part IIntroduction

© The Author(s) 2020

M. K. Barai (ed.)Bangladesh's Economic and Social Progresshttps://doi.org/10.1007/978-981-15-1683-2_1

Begin Abstract

1. Introduction: Construction of a Development Model for Bangladesh

Munim Kumar Barai¹

(1)

Graduate School of Management, Ritsumeikan Asia Pacific University, Beppu, Japan

Munim Kumar Barai

Email: [email protected]

Keywords

BangladeshSocioeconomic developmentDevelopment theoriesCostFlow of information

End Abstract

Introduction

Let us begin with some recent socioeconomic statistics. In 2017, the life expectancy of the Bangladeshi population stood at 72.8 years, its population growth rate was 1.37 percent, literacy rate 72.3 percent, and infant mortality rate 24.0 per thousand live births. In 2018, the national poverty rate decreased further to 21.8 percent, while the extreme poverty rate also dropped to 11.3 percent (Table 1.2). On the economic front, Bangladesh achieved a 6 percent-plus growth for the first time in 2003–04 (6.27%). Then it broke the 6 percent growth trap in 2015. The pace of growth since then has been continuing to surpass each preceding year (7.28% in 2017 and 7.86% in 2018) (Table 1.1). According to the HSBC, Bangladesh is a US$300 billion economy now¹ and has been projected to reach US$700 billion in 2030. This will make Bangladesh the 26th largest economy in the world (from 42nd now): a 16 notch jump (Henry and Pomeroy 2018). The UN Department of Economic and Social Affairs (UN-DESA 2018) reports: “Propelled by better health and education, lower vulnerability and an economic boom, Bangladesh looks likely to leave the LDC category by 2024.”² The same UN body found Bangladesh exceeded the threshold level on the human assets index in 2016 (UN-DESA 2018).³ So much so, that the World Economic Forum has recently assumed Bangladesh to be the next emerging tiger in Asia (WEF 2017). This economic and social progress picture of Bangladesh, to say the least, is impressive.

Table 1.1

Bangladesh—Some basic socioeconomic indicators, 1970–2018

Land Area: 130170 (sq. km), Population (2018)—161.4 million
Indicators/Factors	1970	1971	1972	1980	1990	2000	2010	2016	2017	2018
Birth rate, crude (per 1000 people)	47.8	47.5	47.1	43.6	35.4	27.6	21.2	19.0	18.6
Death rate, crude (per 1000 people)	18.9	19.1	19.2	14.2	10.3	6.9	5.6	5.3	5.3
Exports of goods and services (current US$ billion)	0.8	0.6	0.4	1.0	1.9	6.6	18.5	36.9	37.5	40.6
Imports of goods and services (current US$ billion)	1.12	0.94	0.86	3.24	4.13	9.06	25.11	47.17	50.61	64.24
External debt stocks (% of GNI)				20.9	38.1	28.3	21.6	16.6	18.1
Foreign direct investment, net inflows (BoP, current US$ million)			0.09	8.51	3.24	280.4	1232.3	2332.7	2151.4
GDP (current US$ billion)	9.0	8.8	6.3	18.1	31.6	53.4	115.3	221.4	249.7	274.0
GDP (constant 2010—US$ billion)	26.4	25.0	21.5	28.6	42.4	67.0	115.3	167.8	180.0	194.1
GDP growth (annual %)	5.62	−5.48	−13.97	0.82	5.62	5.29	5.57	7.11	7.28	7.86
GDP per capita (current US$)	140.0	133.6	94.4	227.8	306.3	418.1	781.2	1401.6	1564.0	1698.3
GDP per capita, PPP (current international $)					860.2	1346.7	2466.9	3696.8	3998.4	4364.0
Gross capital formation (% of GDP)	11.3	8.2	4.7	14.4	16.5	23.8	26.2	29.7	30.5	31.2
Government expenditure on education, total (% of GDP)				0.9	1.5	2.1		1.5
Government expenditure on education, total (% of government expenditure)				5.3	11.2	20.5		11.4
Grants, excluding technical cooperation (BoP, current US$ million)		0.02	199.7	1000.9	771.7	594.9	1095.4	944.9	45.7
Labor force, total, million					34	46	57	63	67	68
Market capitalization of listed domestic companies (% of GDP)						4.1	36.1	31.8	34.5	28.2
Mobile cellular subscriptions (per 100 people)						0.2	44.6	83.4	91.7

Source: World Bank (2019)

In fact, as a developing country, Bangladesh seems to have surpassed pundits’ assessments and expectations on the way to achieving this development. That’s why they are nowadays referring to Bangladesh as a development ‘Surprise’ (Asadullah et al. 2014) or ‘Unexpected Success’ or ‘Bangladesh Paradox’ (Hossain 2017), or even ‘miracle’ (Sawada et al. 2018). This is patently a contrast to the messy picture Bangladesh brought to our mind in previous years. The description of its worst—‘a basket case’⁴ (Smith and Keefer 2005) or a malevolent ‘Test Case of Development’ (Faaland and Parkinson 1976).

However, it may not be that surprising that the alternative ‘not so friendly perception’ arose when one looks at the whole realm of the functioning of Bangladesh as a sovereign economic, social, and political entity since its independence in 1971. By its geographic size, Bangladesh is a small country, but by population count, it is the eighth largest nation in the world or the largest least developed country (LDC). In the 1970s, Bangladesh looked like ‘the poster-child for Malthusia’ (Hossain 2017: 7), and “was ranked near the bottom of all economic and social indices” (Mahmud et al. 2018) as it had all the classic problems a developing country has—low income, low access to finance, high poverty, illiteracy, high birth rates with higher mortality, lack of hard and soft infrastructure, scarcity of health and hygiene facilities, lack of awareness, and so on. Politically, there was the assassination of the Father of the Nation Bangabandhu Sheikh Mujibur Rahman and the rule of authoritarian military regimes, to dysfunctional democracy and chaos. Therefore, it looks like a sheer paradox that Bangladesh has turned around to become the largest economy among the LDCs and is now projected to turn into the 26th largest of all by 2030, leaving behind the baggage described above.

So the question that puzzles the pundits is—how has this about-face taken place? Understandably, Bangladesh has just not grown organically in a void. According to Rahman (2018), “Both positive internal and external factors made this stunning transformation a reality.” Though attempts have been made to identify and explain the factors behind the ‘unexpected development’ of Bangladesh, they have tried mostly on a piecemeal basis to include one or a few explaining variables. Hence, they do not present Bangladesh’s development case inclusively. The broader objective of this book is to offer a systematic and empirically informed analysis of the development story of Bangladesh by its content, scope, and organization. This should help readers understand ...

Table of contents

• Cover
• Front Matter
• Part I. Introduction
• Part II. Drawing the Boundary of Bangladesh’s Development
• Part III. Finance and Development
• Part IV. Economic Sectors and Development
• Part V. Role of Government and NGOs for Development
• Part VI. Conclusion
• Back Matter