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‘Economic activity must be decentralized’

  • Published at 10:04 pm October 18th, 2018
Economists on Wednesday speak at a discussion of PRI on Bangladesh's Economic Geography at PRI's office at Banani, Dhaka COURTESY

The paper further said that monthly wages, on average in other districts, were about 30% lower than Dhaka

In a discussion held at the office of Policy Research Institute of Bangladesh (PRI)  on Wednesday, economic experts remarked that all of our economic activities were Dhaka and Chittagong based, and they must be decentralized to achieve inclusive growth. These remarks came at a discussion session titled Bangladesh’s Economic Geography: some patterns and policy Issues.

Dr Akbar Ali Khan, the former caretaker government advisor, spoke as chief guest. He said, “Our land resources are limited, and we are not taking any steps to protect agricultural land. The first issue should be about how we can use our land properly. Throughout Bangladesh, we should establish compact villages.”

He remarked that slums were a major problem in Dhaka, and outside the two major cities, zila and upazila porishod were failing to function effectively. He also said Dhaka had no specific boundaries at all.

Dr Ahmad Ahsan, director of PRI presented the keynote paper, which noted that 32% of Bangladesh’s urban population lived in large cities compared to 3.1% in China and and 6% in India. However, China has 102 cities with populations of over one million, and India has 54 cities. By comparison, Bangladesh has only 4 cities whose population is over a million -- an indicator of centralization.

The paper further said that monthly wages, on average in other districts, were about 30% lower than Dhaka.

PRI director (research), Dr MA Razzaque, also pointed out that over 80% of manufacturing GDP was contributed by the two major cities (Dhaka & Chittagong), a grim scenario of our economic geography. The idea of Special Economic Zones aligns with decentralization, but only 18 SEZs have been allocated around Dhaka. He suggested that SEZs should be spread throughout the country and stressed on the need to develop skilled human resources outside Dhaka. Otherwise, these economic zones will have little effect.

PRI chairperson and chair of the discussion session, Dr Zaidi Sattar, pointed out that Dhaka contributes roughly 40% of total GDP, and Chittagong about 20%. With 60% of the total GDP of the country coming from only two cities, it was imperative to start thinking about our future economic geography, to best support inclusive economic growth.

Economist Dr Binayak Sen added that it was possible to develop large cities through exclusive growth, but in order to achieve inclusive growth, it was necessary to pay attention to the development of smaller cities as well. He said in the last seven to eight years, there has not been enough effort to decentralize, and empowering local governments was very important. He also mentioned the importance of local government elections, and giving it importance alongside national elections this season.

Former Finance Minister M Syeduzzaman, former Finance Secretary Dr Mohammad Tareque, PRI director Dr Sarwar Jahan, Adam Smith International country director Suvojit Chattopadhyay, and World Bank economist Wameq A Reza, also spoke at the meeting.