Migrants, RMG workers, farmers, main drivers of economic miracle: Speakers
Business Report :
In the last 50 years in Bangladesh, there has been remarkable growth in the economy, with the main drivers being farmers, readymade garments and migrant workers, said economists.
But during this economic transformation of Bangladesh, there have not been any major positive changes in institutional development; rather, it has been deteriorating.
Speakers said these at a book launching programme titled “Fifty Years of Bangladesh: Economy, Politics, Society and Culture” organised by Centre for Policy Dialogue (CPD) at its Dhanmondi office on Thursday.
Improvements in social and economic outcomes are not accompanied by institutional development in Bangladesh, this book highlighted it well and focused on as challenges for sustainable growth of the country, said Dr Zahid Hussain, former lead economist, World Bank, Dhaka office, in his remarks as a reviewer.
The challenges of the first generation have been well met, now the second generation strengthens institutions and if that is not done properly, Bangladesh may fall into the middle-income trap. Bangladesh’s growth will not be sustainable, said Prof Mustafizur Rahman, distinguished fellow, CPD in his remarks as author.
50 years of Bangladesh’s growth
Selim Raihan, professor of Economics at University of Dhaka and executive director at Sanem, also an author in the book, explored the relationship between Bangladesh’s institutional developments and improvements in economic and social outcomes.
He questioned the use of the much-discussed hypothesis of Bangladesh’s “development paradox” i.e. economic growth with weak institutions and governance.
He offered an alternative hypothesis and argues that despite weak formal institutions it was the actual working of informal arrangements which have facilitated the growth of the economy.
Selim Raihan identified two institutional features of Bangladesh, the supremacy of a “deals environment” over coordinated industrial policy and the supremacy of pockets of functional informal institutions over weak formal institutions as enablers of the steady economic growth of the past decades.
But he cautioned that the dividends from these informal institutions are on the decline and the country needs to undertake a host of measures to strengthen formal institutions.
He particularly focused on building state capacity, and an effective regulatory frame- work. He posits that unless formal institutions are strengthened it would be difficult for Bangladesh to achieve its vision of attaining developed country status by 2041.
Prof Rehman Sobhan, founding chairman, CPD, in his remarks as co-editor said: “The interesting point is how much change took place in this last 25 years in the economic front. Twenty five years ago, during the first 25 years of Bangladesh, there was recognized progress.”
However, the situation was still at that point and not very promising. The RMG sector was also the main source of earnings for the country. Bangladesh imported fabric from abroad and manufactured it as clothes.
“It was uncertain about the value addition of the RMG sector and industrial diversification.
We are talking about 1996, when our migrant workers came forward and brought foreign currency,” he added, saying that the annual remittances were less than $10 billion, as well as the export earnings,” he added.
