There’s more to FDI than meets the eye
It was last week when I was riding back home by a rickshaw, and “not-so-happy” as the rickshaw-puller asked for more than what I perceived as the fair fare.
The rickshaw-puller, middle-aged and ignorant of my temper, said in a calm and subtle voice: “We buy from the same market as you do … our children go to school just like yours … there’s no separate market for us to buy things at a cheaper rate.”
His words shut me off, as if I was exposed to the real face of wealth inequality for the first time. Unequal wealth distribution is not a unique phenomenon for Bangladesh, because it’s everywhere in the world, irrespective of rich and poor countries.
Bangladesh, as it stands today, has an exemplary journey to development -- with dramatic upsurge in several global development indicators, including education, health, technology, and poverty reduction. Nevertheless, we stand somewhere in between the spectrum of an underdeveloped and a developed country, with some prevailing challenges.
A vital part of this country’s development narrative is intertwined with the influx of aid from other countries and development partners. A quick overview tells us that the total worth of development aid in Fiscal Year (FY) 16 was $3,563 million, followed by a gradual increase to $3,677m in FY17. The Rohingya crisis in FY18 led to a rapid rise in foreign aid, pushing it up to $6125m.
If you are getting excited over your cup of coffee while reading this, please wait until I reveal the other side of the coin. Over the last three fiscal years, Bangladesh has growing external debts -- about $28,337m in FY17 and $33,110m in FY18. Does it then suggest that Henry Kissinger’s label on the country as a “bottomless basket” is not entirely void? I will let you think about that.
With such aid comes great responsibility, accountability, and the need for transparency for those in charge of spending it. It is needless to remind us of the benefits of the continuous inflow of foreign aid since the liberation of Bangladesh, rising from a point where it was on the verge of becoming a failed state.
If you were born in the 80s, you must acknowledge the robust growth of the manufacturing sector and an enormous boom in infrastructure. The lion’s share of the credit goes to the well-thought-out annual development program (ADP) of the Bangladesh government. Interestingly, government data shows that between FY14 and FY18, on average, 30% of the ADP was funded by foreign aid. With new roads and other infrastructural projects reaching out to the most remote corners, the government has more control over the country’s territory than ever.
Bangladesh dreams of becoming a developed country by 2041 -- a dream cherished by 160 million people. “People” essentially stands at the core of this dream. Amartya Sen’s groundbreaking theory of (human) development should be a guiding star in this aspect.
We cannot question the plausibility of substantial growth in Bangladesh, although it is not a good sign that we like to pat our shoulders for simply showing that some of our neighbouring countries’ economic growth is slower than ours. Let’s not forget that we are yet to deal with disquieting signals like increasing public debt, sluggish capital market, and declining remittance flow.
The fact that the government can afford to spend money on boosting industrialization (which is not any new economic growth model) because other major expenditures such as health, education, skills, and nutrition have been “taken care of” by development organizations. Not having to worry about these crucial sectors, it’s easier to say that the dependency on foreign aid for the public investment project is likely to decline.
Does foreign aid have the potential of shedding light on our future? The answer is that it certainly will help us as a country to overcome many challenges. As a citizen, I envision that Bangladesh will become a developed country.
Thus, I would like to call for concerted efforts between the government and development organization to focus on emerging priorities, like threatened mental health, technical education at affordable price, reducing violence against women, mitigation and adaptation of climate risks, creating more employment opportunities, and digital literacy along with the usual ones like fighting extreme poverty, malnutrition, and providing quality education.
Ishret Binte Wahid is a freelance contributor and development worker. She can be reached at [email protected]