Standing at the country’s Golden Jubilee of independence, the policymakers of Bangladesh can breathe a sigh of relief that it has put an end to the stigma of the 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 the index of Bangladesh increased by 60.4% from 0.394 to 0.632 in 2019. Accordingly, the index now positions Bangladesh as the medium human development category.
After the catastrophic war resulting in bloodshed and millions of lives, the nation’s infrastructure was down on its knees. The father of the nation felt the urge to rebuild the country and immediately after returning to the country on January 10 1972, Bangabandhu issued an order on the 31st of that month to establish the Bangladesh Planning Commission. The first Five Year Plan was prepared within one and a half years of the liberation of Bangladesh.
To put things in perspective, over 80% of the population of Bangladesh was living in poverty, only ahead of one country-Burkina Faso at that time. In the first five year plan, poverty reduction although no specific target was set and reconstruction was the major objective while GDP growth was targeted to be 5.5% per year.
Bangabandhu focused on prioritizing agriculture and established the Bangladesh Agricultural Research Council, Bangladesh Agricultural Research Institute, Bangladesh Rice Research Institute, Bangladesh Rural Development Board and Bangladesh Agricultural Research Council.
Against the economic protectionism of leaders in the West, since 2009 Prime Minister Sheikh Hasina envisaged Bangladesh to be a prosperous country that our father of the nation dreamt of in a generation.
She initiated an era of New National Planning, which started with Vision 2021. Vision 2021 articulates a transformed Bangladesh by 2021, towards establishing a knowledge-based society, the need for addressing climate change and promoting innovation under Digital Bangladesh.
Bangladesh is now on the verge of achieving most of the targets set in Vision 2021. For example, power generation capacity was targeted to reach 20000 MW by 2021, which is now above 24000 MW, with access to electricity about 99.5% population and per capita consumption of 560 kWh.
Life expectancy now reached 72.8 against the target of 70. The long term vision is followed by a medium-term interval plan. Furthermore, the philosophical foundation of the plans had been derived from the five basic human needs. Poverty reduction, employment generation at home and abroad, human resources development and inclusive growth remain at the centre of discussion in the plan document.
Additionally, to address the adverse impact of climate change, formulation of a long term plan was felt necessary. This whole perspective of formulating strategic plans we termed this as the New National Planning Era. Five Year Plans from first to fifth are basically investment plans void of specific time-bound targets of any vision.
Bangladesh has the paradigm shift in planning from investment to a strategic one, making the plan a living document. This helped accelerate the implementation process due to the fact that Ministries are now more aware of their responsibilities and targets set for them because the budget allocation has a direct linkage to the plan.
Projects have to be prepared based on the targets outlined in the plan and the result is evident. Bangladesh entered into an era of new economic development.
Bangladesh is now one of the fastest-growing economies in the world. During Covid-19, very few countries have been able to register positive growth. Bangladesh not only achieved positive growth but recorded top performance in Asia. Chinese President Xi Jinping delivered a message on the Golden Jubilee of independence of Bangladesh by saying: “Under Prime Minister Sheikh Hasina’s leadership, Bangladesh has focused on reform and development and entered a fast lane of growth”.
One of the biggest successes of Bangladesh in the MDG era was the reduction of poverty, the achievement particularly underpinned by the investment in the marginalized and the poor.
According to the World Bank, 25 million people were lifted out of poverty in the last decade and a half. 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 rate, reduced infant and maternal mortality and improved living standards.
One of the significant roles by the government was heavy investment in girls’ education. Now, the net enrolment rate of girls in primary education reached 98%, well above boys. An article in The New York Times suggested the Biden Administration look to Bangladesh for lessons in reducing child mortality.
Leading Indian newspapers also seem to be complementary of Bangladesh’s advancement, particularly of robust economic performance in the last decade. Times of India wrote Bangladesh has left India far behind on the social and economic front in just ten years.
Former chief economic advisor of India Arvind Subramanian hailed Bangladesh as the global paragon of economic development as the country’s per capita GDP was half of Pakistan’s three decades ago, and two-thirds of India’s; one and half-decade ago, surpassing the former and are set to overtake the latter. Bangladesh’s journey of development through uneven track over the 50 years to a take-off stage had been solidified by a multitude of factors- stable macro and fiscal policy, remittance, women economic empowerment, supportive regulatory policy, readymade garments and pharmaceuticals taking advantage of surplus labour, investment in social and physical infrastructure particularly maternal and child health, birth control, connectivity in rural areas.
The majority of the narratives focus on the social dimensions and economic growth but few credited the rural connectivity that had happened over the few decades. For example, during the period 2009-2018, over 55000 kilometres of roads were constructed under the Local Government Division and a massive drive in establishing drinking water facilities and sanitation helped achieve improved sanitation coverage to 99%.
Bangladesh economy underwent a gradual structural transformation from the dominance of agriculture to the 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% in the early years of independence to 12% in recent years.
The industry sector now constitutes 31% which is expected to reach 40% by the end of 2030.
In the last decade, a drastic change in Bangladesh’s development has been possible due to a larger extent of political stability and the government’s plan based development programs/projects.
There were critical economic turning points throughout the 50 years journey. The first critical turning point was the setting of Desh Company and Daewoo- a Korean company-pioneering ready-made garment industry in the 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 the garments industry. With the support of export earnings by RMGs and remittance began to gradually increase since the 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 last decade.
Reform in the 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 earned praise from global academicians and thinkers. The former chief economist of the World Bank and former adviser to the government of India Kaushik Basu credited political factors for success in economic growth, particularly the leadership of Prime Minister Sheikh Hasina. He also called the growth model of Bangladesh that is inclusive and driven by grassroots-level human development.
Bangladesh has made remarkable progress in reducing the percentage of stunted children under-5 years by almost half from 60% in 1996-97 to 28% in 2019. The proportion of wasted children has gone down to 9.8% in 2019 from 14% in 2014. The proportion of underweight children under five years also reduced by half between 2007 (41%) and 2019 (22.6%).
Globally, Bangladesh ranks seventh in terms of women’s political empowerment. Bangladesh has been ahead of its South Asian neighbours for the fifth time consecutively, indicating significantly better performance in promoting women empowerment.
For attaining SDG 5, the government has adopted several legal and policy actions to advocate the rights of women. Some of the key challenges of achieving gender equality in the country are – the eradication of violence against women and inequalities in opportunities, prevention of child marriage and promoting financial empowerment 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 compared with 24.4). The leader of Bangladesh does not seem to be complacent about 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 a 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 industrialization 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, the urban transition, efficient energy and infrastructure, building a Bangladesh resilient to climate change, establishing Bangladesh as a knowledge hub country.
A paradigm shift in the planning process has shown Bangladesh a new era of development. Building on the success in the last decade, Bangladesh will be moving to the dream path of the father of the nation.
Essentially, there remain huge challenges in the sustainability of economic transformation, ease of doing business, and improved regulatory framework for attracting FDIs, institutional reforms, governance, climate change, and expanding fiscal space.
A new era of development in Bangladesh will be defined by transformative mega projects.
Padma Bridge, Metro Rail, Karnaphuli tunnel are projected to be completed by 2023. So it can be assumed 2023 will be a landmark year for the Bangladesh economy.
These projects are capable of only increasing GDP by 1.32%. If other first track projects can be finished on time, double-digit growth figures in a few years will be a reality.
Dr Shamsul Alam is the Minister of State, Ministry of Planning