Bangladesh at 50: Where does it go from here?

In March, Bangladesh celebrated its golden jubilee of gaining independence from Pakistan in 1971. Despite suffering its fair share of political disorder over the last 50 years, Bangladesh has achieved steady economic growth and has made significant social achievements. This article will look back on the past 50 years, highlight Bangladesh’s failures, challenges and achievements as well as assess what the future might hold for this South Asian country of over 166 million people.

In March 1971, East Pakistan (now Bangladesh) was involved in a nine-month long bitter and bloody Liberation War against West Pakistan (now Pakistan). The war was a culmination of the Bengali peoples’ aspirations for democratic rights, socio-economic rights, cultural identity, and establishing a progressive society based on the underlying philosophy of equality and the rule of law. Bengali nationalism called for the emancipation from economic exploitation, cultural repression, and the denial of Bengali political influence. Bangladesh’s emergence as an independent secular state was about achieving those rights which have been articulated in the country’s constitution. In 1975, Bangladesh experienced political turmoil following the assassination of Sheikh Mujibur Rahman and his family in an attempt to overthrow the incumbent government. Thereafter, diverging political ideologies came to dominate the political landscape. President Ziaur Rahman and President HM Ershad politicised religion in order to create legitimacy and divert attention away from the country’s pressing economic problems coupled with corruption and bad governance. Following a long period of misrule and political instability, Bangladesh transitioned to democracy and held parliamentary elections in 1991. Since then, significant socio-economic and social achievements have been made, however, there is still much room for improvement.

Accomplishments and success stories

Although less visible globally, Bangladesh is emerging as a leader in the humanitarian and development sector. The non-governmental organisation (NGO) sector in Bangladesh emerged during independence in 1971, when many international NGOs commenced programmes in the country, and they gave rise to many indigenous NGOs. Two visionary leaders stand out in humanitarian and development sector – Muhammad Yunus, founder of Grameen Bank, and the late Sir Fazle Hasan Abed, founder of the Bangladesh Rural Advancement Committee, simply known today as BRAC. Founded in 1972, BRAC began its journey by providing assistance to returning refugees post-independence. Later, the sector as a whole shifted away from promoting political mobilisation and accountable government to the more apolitical aim of delivering basic services through innovations in healthcare, education, microfinance as well as advocacy and campaigning. For example, BRAC’s Ultra-Poor Graduation Approach, developed in collaboration with local communities, is a proven and scalable solution to break the poverty cycle within a two-year period, and due to their success, Graduation programmes are today implemented in over 45 countries. BRAC’s low-cost informal primary education model used across rural Bangladesh provides informal education for out of school children. The model has proven to be highly effective and has been employed in BRAC run schools in Afghanistan, the Philippines, and Uganda, with future plans to implement it in a number of other countries. The success of BRAC over the years demonstrates that Bangladesh has innovated a non-Western model for development, which is both valued and adopted internationally. The humanitarian and development sector which supports, uplifts, and empowers the poorest and most vulnerable not only in Bangladesh but all over the world has been transformed by BRAC, and for this reason, the world’s largest NGOs accomplishments and leadership role should be celebrated.

The first United Nations (UN) peacekeepers were deployed in the Middle East on 29 May 1948, however, Bangladesh started its peacekeeping mission in August 1988, when then president general Hossain Muhammad Ershad deployed members of the Bangladesh Armed Forces to the UN Iran-Iraq Military Observer Group. While Bangladesh is no stranger to military coups or political unrest, this has not deterred the country from fulfilling its global responsibilities which originate from its constitutional obligations to support peacekeeping under the UN umbrella. Over the last three decades, Bangladesh has emerged as the second largest contributor of military and police personnel to UN peacekeeping operations. The UN and the international community have proved willing to train, equip, as well as subsidise the Bangladeshi military in exchange for peacekeeping duties, which has enabled the military to modernise and expand. First and foremost, contributing substantially to UN peacekeeping missions has not only enhanced Bangladesh’s global image, it has also provided a lucrative source of revenue for both the military and government as well as for its soldiers and families. This is because peacekeeping plays a crucial role in the overall economy of Bangladesh. In 2011, Bangladeshi peacekeepers stationed abroad sent back $1.24 billion dollars, which made up approximately 10 per cent of all remittances. As of December 2017, more than seven thousand members of the Bangladesh armed forces and police personnel are deployed in ten missions around the world, which is testament to the country’s commitment to international peace and solidarity. By 31 March 2021, a total of 158 Bangladeshi peacekeepers had paid the ultimate price, sacrificing their lives during their peacekeeping duties. On 12 December 2002, the President of Sierra Leone, Alhaj Ahmed Tejan Kabbah, declared Bangla as one of the official languages of the country in honour of the Bangladeshi peacekeeping force stationed there.

Sustained economic growth has made Bangladesh one of the fastest growing economies in the world over the past decade. Despite this, in February 2020, Union Minister of State for Home Affairs, G. Kishan Reddy was quoted saying, “Half of Bangladesh will be empty (vacant) if India offers citizenship to them (Bangladeshis)”. Reddy’s comments were not only undiplomatic and offensive, but he seemed ignorant of the fact that Bangladesh was performing better in several indices that determine quality of life compared to India. For example, life expectancy for male and female citizens of Bangladesh are 71 and 74 respectively, while in India the figure is 67 and 70. Furthermore, Bangladesh has made significant strides for the benefit and enhancement of women’s health. Neonatal mortality in India is 22.73 per 1,000 live births; infant mortality is 29.94 and under-five mortality is 38.69. In comparison, Bangladesh has lower figures of 17.12, 25.14, and 30.16. Bangladesh also leads the way in female literacy where 71 percent of women above the age of 15 are literate, while 66 percent are so in India. Female labour participation is also higher in Bangladesh with 30 percent and rising, while in India it currently stands at 23 percent, having dropped by over 8 percent over the last decade. Finally, a measure which indicates future development, the ratio of high school enrolment for boys and girls is 0.94 percent in India and 1.14 percent in Bangladesh. It seems that not only are indicators suggesting that things are looking well for Bangladesh, but they are going to get better still.

Opportunities for continued improvement

From the ‘sick man’ of South Asia, Bangladesh has emerged as a development success story that has averaged 6% economic growth since 2003. Between 1991 and 2016, poverty declined from 44 percent to 15 percent. Despite the development of the ready-made garments industry, income from foreign remittances, and developments in the agricultural realm, the pressing issues of economic and social inequalities remain. There were 37 million people living in poverty, with 21 million of those living in extreme poverty based on the international poverty line of earning less than $1.90 per day, even before the coronavirus pandemic. Bangladesh remains a country with a substantial rise in income inequality even though the country prospers economically. There is an absurd concentration of wealth where a small section of the society enjoys most of the country’s affluence. If the wealth from questionable sources that is taken offshore and hidden away in offshore tax havens such as Panama (The Panama Papers include names of Bangladeshi citizens), and if Lichtenstein and the Cayman Islands were also included, then the wealth concentration of the minority would be even higher. With wealth taken out of the country, a large number of the very wealthy evade paying tax and escape public scrutiny. A report by Global Financial Integrity estimates Tk 5.3 trillion black money have been illicitly taken out of Bangladesh between 2005 and 2015, averaging around Tk 500 billion per annum. According to a 2019 report by research firm Wealth-X, in the next five years Bangladesh would record the third quickest growth in the number of high-net-worth individuals in the world.

Even though Bangladesh has made substantial economic progress, this cannot be the only indicator of a country’s success. Especially if there is lack of good governance, mere lip service being paid to democratic principles, and the well-being of its citizens being neglected, this endangers the political and social fabric of the country. Provisions for good governance are included in Bangladesh’s constitution, but the policies, institutions, or practices to establish good governance have not been developed, in other words democracy has not been institutionalised. Politics in the country continues to be dominated by big money, criminal elements, and by people with little background or formal training in politics. Both leaders of the two main political parties were handed top leadership positions by virtue of their inheritance and association, while at the same time corruption has become so endemic it has engulfed every strata of society. Despite the drawbacks and the deficiencies in governance, Bangladesh’s economy has experienced sustained economic growth since late 1990s. At play have been domestic and international policies as well as the hard work and resilience of Bangladeshi people, which together have transformed the economy amidst political unrest, natural disasters, and global financial meltdown. However, this is not true of all sectors. For example, the absence of good governance in the banking sector has made it susceptible to corruption, particularly in relation to high value non-performing loans usually taken out by politically connected defaulters. Furthermore, the cost of doing business in Bangladesh is high due to red tape, corruption and bribery, all of which have discouraged foreign direct investment. According to the World Bank “Ease of Doing Business Index”, Bangladesh has consistently failed to overtake its regional competitors like China, India, and Vietnam.

In early 2020, the economy came to a standstill due to the onset of the coronavirus pandemic. As a result, there was a discernible change in consumer behaviour, where the contactless economy became a necessity for survival. The pandemic created an environment where consumers and businesses formed and adopted new habits such as using digital technology to work from home or order essential staples for everyday use online. According to Statista, a German market and consumer data company, the combined value of the e-commerce market in Bangladesh in 2019 stood at $1.65 billion dollars, and by 2023 the market share is expected to reach over $3 billion dollars. According to a recent Bangladesh Bank report, e-commerce transactions in June 2020 was Tk 491.4 crore and in July 2020 it was Tk 640.4 crore. The upward trend has meant that in January 2021 transactions totalled Tk 660.4 crore. The new possibilities for a thriving e-commerce sector have attracted interest from foreign investors. HungryNaki, a Bangladeshi food delivery start-up is the first to be fully acquired by a foreign investor, Daraz, a concern of Alibaba Group. Generally, foreign investments through knowledge transfer improve productivity, efficiency and turnover. Nevertheless, the one key unresolved issue in the sector remains that of trust. Increased online consumerism has significant problems associated with it – such as scams and fraud, fake and low-quality products, unexplained delays in delivery, and unsympathetic customer services. With so many challenges, regulators and policymakers need to establish a set of uniform laws, including an online consumer protection act with an enforcement mechanism to strengthen, flourish, and give confidence to consumers.

Imminent challenges and critical issues

The future economic growth of Bangladesh will be determined by the level of technological adoption associated with Fourth Industrial Revolution (4IR) technologies such as Artificial Intelligence, big data, robotics and automated platforms, virtual reality, blockchain, 3D printing and the Internet-of-things. The successful implementation of this new digital landscape will depend on the culture, value systems, economic capacity and political will of the country that will determine the direction in which it will be heading. Previously, Bangladesh has utilised significant technological innovation to tackle poverty alleviation using computers and mobile telecommunications in order to create opportunities for people in rural areas. For example, adaptation of technology in the agricultural sector contributed to increased food production, which has made Bangladesh achieve food self-sufficiency. However, with the evolution of technology and the role of automation, developing countries such as Bangladesh are vulnerable to loss of employment opportunities in many more traditional sectors, which will lead to reduced employment and stagnant wages, in turn further worsening existing inequalities. A recent report by global management consultancy McKinsey concluded that by 2030, automation would substitute 800 million unskilled workers – more than a fifth of the global labour force. The report also states that while technology is disruptive, it also creates opportunities, particularly in healthcare and technology, which would see a massive growth in jobs, between 8% to 9% of all new jobs by 2030. A lack of talented resources, huge unskilled workforce, poor ICT infrastructure as well as lack of legal and policy support will all need to be addressed, particularly as the ongoing Covid-19 pandemic has accelerated the pace of the 4IR in Bangladesh. The country has to prepare itself in the upcoming decade as the 4IR will have a significant impact on national politics and economics.

The ‘Blue economy’ (ocean-based industries) contributes $1.5 trillion dollars and provides hundreds of millions of jobs in fishing, shipping, marine tourism, and renewable energy. A study published in 2020, commissioned by the High Level Panel for a Sustainable Ocean Economy on “Ocean Solutions That Benefit People, Nature and the Economy”, states that by 2050, sustainable investment in the ‘Blue economy’ could produce $15.5 trillion in net benefits as well as generate six times more food and 40 times more renewable energy. Bangladesh has the potential to tap into the ‘Blue economy’, particularly after its legal victories over Myanmar (2012) and India (2014), which increased its maritime zones and Exclusive Economic Zone (EEZ) by three times and has opened the door to further increases in economic prosperity. For Bangladesh to take advantage of emerging domestic and global opportunities, it must pursue strategic industrial and trade policies. Its marine fisheries sector, which is a vital component of the ‘Blue economy’ can be a higher source of foreign exchange, as it provides one of the most traded food commodities globally. However, to date, the marine fisheries sector has made a very poor contribution to the overall national economy, despite the maritime zones comprising over 500 marine species and with more than 90 commercially important fish species. This is primarily due to the lack of suitable vessels, modern technology, skilled manpower, and the lack of necessary survey and research regarding the availability of fish stocks. For Bangladesh to provide food for its growing population it has to forge joint ventures with foreign countries to explore the unexploited EEZ, invest and grow sustainable aquaculture technology, which all have the potential to reduce environmental and economic waste.

Tackling the impact of climate change will be the most imminent and important task for Bangladesh. Located on the delta of three major rivers, Bangladesh has been identified as the seventh most affected country in the world due to an ‘extreme weather event’. With a high population density and land below sea level, the impact of climate change makes the country extremely vulnerable to natural disasters such as floods and cyclones that can inundate coastal regions. More than 70 percent of the population is exposed to cyclones, and the economic impact is significant. According to a 2015 global study estimate by Internal Displacement Monitoring Centre, floods and cyclone are likely to increase in frequency and intensity and one out of every seven Bangladeshi will experience displacement by 2050, an issue which is not addressed by national policy documents. Bangladesh needs to address displacement as it primarily affects the poor, women and children. Bangladesh also needs to pursue its Climate Change Strategy and Action Plan and develop projects adapted to climate change. Bangladesh’s 8th Five Year Plan will need a stronger focus on tackling environmental degradation and low carbon development in order to further strengthen the country’s resilience to climate shocks. Large investments in technologies will be needed to tackle climate related vulnerabilities. The Bangladesh Climate Change Trust Fund is an example of a national climate fund that institutionalises national climate finance. In 2010, the central Bank of Bangladesh made available a $250 million refinancing scheme for investments in green energy, encouraging commercial banks to access low-rate capital and profit exclusively from green lending. Although Bangladesh has already shown leadership in international forums on climate issues, it will nevertheless have to continue to claim its share in climate finance available to victims of climate change because of the actions and inactions of other countries.

Conclusion

On the occasion of Bangladesh’s golden jubilee, the country has been on a dynamic journey since its independence in 1971, when former Undersecretary of State for Political Affairs, Ural Alexis Johnson dismissively called Bangladesh an “international basket case”. Steady economic growth, social achievements such as the reduction in infant mortality rates and increased primary school enrolment are just some areas where Bangladesh has set examples for other developing countries. Although there is much to be proud of, many concerns remain, especially due to the impacts of the Covid-19 pandemic and its long-term economic implications, loss in learning and education, and heightened financial sector vulnerabilities. Instead of an over-reliance on trickle-down economics, experiential indicators are a good measure of the state of development on the ground. Economically, more than 22 million Bangladeshi’s remain in poverty, inequality has increased between the ‘haves’ and ‘have nots’, job creation has been stagnating, revenue generation is weak, and persistent trade imbalances remain. Economic development must be assessed both quantitatively and qualitatively in terms of the environmental and social costs in order to measure the impact it has on people’s lives. The economic and political process has to be inclusive and democratic with a participation of the broader section of the population. Otherwise, blanket criticism of ‘development’ would just be viewed as a mechanism for government-bashing. With sound and honest leadership, Bangladesh, in time, can overcome challenges such as climate change, shortcomings when it comes to the rule of law and good governance, and address the need for affordable and accessible healthcare for all. Progress in all these areas would make the past 50 years of economic growth and development even more meaningful.

About the GPI

The Global Policy Institute is a research institute on international affairs. It is based in the City of London, and draws on both a rich pool of international thinkers, academics as well as policy and business professionals. The Institute gives non-partisan guidance to policymakers and decision takers in business, government, and NGOs.

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