ULLAH Enayet Kazi
Bangladesh is the 50th-largest economy in the world, judged by its gross national income, although it is the 10th-largest state in the world if judged by its population. it has a good environment and climate for the production of various crops and huge potential for developing a tourist industry, the country suffers from scarcity of natural resources, shortage of arable land, regular natural disasters (flooding and cyclones), and a lack of investment.
For decades after independence, political instability, low demand in the local market, and economic stagnation hindered the economic development of the country. Bangladesh need to establish a civil government and they have to struggle to diversify its economy, to reform its agricultural sector, and to expand its industrial sector, as it needs average annual economic growth of at least 7 percent in order to eliminate widespread poverty. As long as Bangladesh is unable to stable the politics, it will be unable to solve its economic difficulties and eliminate poverty, it achieved impressive growth in many areas, including manufacturing and agriculture. Recognizing the difficulties, the Bangladeshi government has to accept structural changes, which included relinquishing its socialist orientation and state control over the economy, decentralization of economic management, and privatization, although many of these changes were painful and implemented only slowly. I would like to take an opportunity to explain my idea about socio-economic reform of Bangladesh; I am going to explain it as per segments’:
01. Political Stability:
A favorable political environment is very essential to the speed and effectiveness of the economic reform process as rapid achievement of the goals of economic liberalization depends upon the sequential implementation of a range of interrelated policy measures. Since liberation in 1971, Bangladesh has been struggling due to: persistent shortages of foreign exchange, poor infrastructure, inefficient public sector and poor governance. To overcome these shortages, Bangladesh pursued a policy of saving foreign exchange. The economy continued to have a chronically low savings rate, poor mobilization of domestic resources and a sluggish rate of export growth. This pushed the country to a no choice point for reviewing business and corporate level strategies and the implementation of structural and economic policy reforms. The government need to act directly to restructure taxation and social provision; intervened in markets to change pricing behavior, and to create a favorable climate for investment and growth. The pace of reform has been reflected particularly in key sectors including agriculture, industry and external trade. In the industrial sector, important policy changes should be introduced with a view to developing a broader and more diversified industrial base should be leaded by the private sector. These may include measures:
(i) to encourage private sector investment by liberalizing sanctions and controls of investment, improving the import regime, and introducing investment and export incentives, and
(ii) to improve the efficiency of public sector industrial enterprises through denationalization, financial restructuring and improvements in pricing policies.
Agricultural Reforms:
Agriculture is one of the largest sectors of Bangladesh economy. Combined contribution of all the sub-sectors such as crop, livestock, forestry and fisheries was around 24% of GDP of our country (Bangladesh Economic Review). Since agriculture is the mainstay of the economy, besides reducing poverty, it contributes significantly to ensure food security for a vast population together with improving their standard of living and enhancing employment
opportunities. Being the prime contributor to the economy, the agricultural sector has to
experience pronounced and visible reforms in its policies as a part of structural adjustment
policy. Restrictions on the imports of minor irrigation equipment should be withdrawn and
import duties on small diesel engines have to be abolished if necessary it need to produce necessary agriculture instruments in the country. Subsidies can not be withdrawn and government has to procure and distribute minor irrigation equipment. The importation of seed has to be liberalized and to encourage the private sector is being involved. The subsidies on fertilizers should be continued. Having fertile land Bangladesh can achieve outstanding success in food production due to efficient uses of high yielding varieties of seeds, irrigation and fertilizer technologies and financial supports to needy farmers on a credit or cash basis and at subsidized prices through commercial Bank. In that case, within
a short time of agricultural reforms it will become a self-reliant country in food grains and vegetables.
Industrial Reforms:
The role of the industry sector, specially manufacturing, is indispensable for enhancing economic growth. The industrial sector accounts for 15.91% of GDP (Bangladesh Economic Review). Now the government has to be committed to make the industry sector competitive in both the deregulated domestic and international market. The vision of industrialization is to ensure the manufacturing sector contributes 25% of GDP by 2010 (Bangladesh Economic Review). Export-orientation is the principal feature of industrial reform. The requirements permission of the Government has to be withdraw to establish industries except those in the reserved sectors such as, defense related equipment and products, production of nuclear power, security printing and minting and reserved forest areas. Besides the local textile sector, government incentive has to be introduced for the leather and IT sectors and recently extended to other export sectors such as, frozen food, agro-based products, vegetables and fruits, bi-cycle and light engineering etc..
State owned enterprises (SOEs) still play a major role in industry, power, gas, transport, communications and service sectors of Bangladesh economy. Though privatization of public
enterprises in line with the government’s economic reforms are well in progress, the total contribution of these enterprises is still substantial in GDP, value addition, employment generation and revenue earnings. A industrial policy should be adopted included new industries in the list of thrust sectors which enjoy certain privileges, such as cash incentives for exports, tax rebates and concessions in utility tariffs and interests on loans Readymade garments, light engineering, pharmaceuticals, optical frame, cold roll (CR) coil, herbal medicine, furniture and handicrafts are among the new entrants that raised the number of thrust sectors. The policy envisages that the contribution of the industrial sector to GDP is expected to increase from the current 16% to 40% in the next decade. The policy has to announce increases in fiscal and financial incentives for agro-based industries and women entrepreneurs, and make special offers for establishing exclusive economic zones. The poverty reduction and faster industrialization programs of the government can be gaining
momentum due to liberalized industrial and investment policies pursued by the government.
Policy Developments:
The Government of Bangladesh has to formulate its interim poverty reduction strategy paper, can be called like the National Strategy for Economic Growth, Poverty Reduction and Social Development, which seeks to reduce by half the incidence of income poverty by 2015. A great deal of compelling evidence can be suggested that the decline in poverty is primarily attributable to growth. However, the data on ‘income-poverty’ does not capture trends in ‘human poverty’, which reflects deprivation in other dimensions of the quality of life (ADB, 2004). Based on this more inclusive metric, Bangladesh is ranked above India and Pakistan for human development. Though Bangladesh lags behind in reducing income poverty, it is one of the few countries on track for reducing human poverty and is likely to achieve the target for enrolment in primary education, and access to improved water sources, female secondary enrolment and reduction of infant mortality rates. The Government has to recognize that providing basic social services such as access to education, health care, potable water, and sanitation is a key to poverty reduction. To help achieve these goals, we need to embark on a program of reform measures aimed at maintaining macroeconomic stability while addressing structural constraints on faster economic growth. These include
(i) further fiscal reforms involving a sustained revenue effort and a shift in spending toward infrastructure and human capital formation,
(ii) reform the banking sector using the suitable IT technology for faster customer services and to bring down the high cost of funding investment,
(iii) reform of SOEs to reduce their burden on the budget and enhance the role of private sector-led growth, and
(iv) trade reforms to improve competitiveness.
Development and Gender Disparity
We should have a comprehensive study to assess the current size of the gender gap by measuring the extent to which women in 58 countries have achieved equality with men in five critical areas: economic participation, economic opportunity, political empowerment, educational attainment, and health & well-being. Countries that do not capitalize on the full potential of one half of their societies are misallocating their human resources and undermining their competitive potential.
The Concern of Bangladesh-France Chamber of Commerce & Industry:
"You can't change the Fate of a Nation, but you can do a great deal to make sure you're not adversely affected by it."
- Harry Browne
This sampling of newspaper headlines reflects a deep anxiety even at abroad about the future of Bangladesh in the face of global challenges in the 21st century. Members of the business community, particularly younger ones, are also gravely concerned. We have taken initiative to confer on various socio-political issues, problems of governance, infrastructural and other development issues, political and business ethics, economic opportunities, export opportunities in Europe specially France and general principles of institutional reforms necessary to create a more business-friendly Bangladesh. The role & interactions of BFCCI is with the business community of Bangladesh and France those are involve with businesses in Bangladesh. These discussions were confined around what is to be done to prepare the nation for a better future in a highly competitive global environment. BFCCI has been working hard with simplistic ideas and suggestions for social, political and economic development. You might ask how this compilation of ideas and suggestions BFCCI could be any different from countless other ideas and suggestions put forward through newspaper articles, keynote papers and speeches in seminars or publications that sermonize on how to eliminate social ills, democratize our polity and develop our economy. But I would like to say that our ideas and imaginations about Bangladesh is more refined because of having business & global experiences in international field, having a true love & sympathy for our roots, our people and our nation.
Reforms in one sector alone will not produce optimum results. As a matter of fact, isolated sectoral reforms can be counter-productive. There is no single prescription on how economies are supposed to build wealth or how nations solve social and economic problems. We have witnessed spectacular social and economic growth in many countries in the recent past, but each country has taken a different route to development. Thus, in BFCCI interactions with the business community, we have made a conscious attempt to look at the reform needs of Bangladesh. Furthermore, we've attempted to develop a system-bound norm for Bangladesh. BFCCI is identifying some major opportunities and weaknesses, are derived from my practical experience over the last 30 years doing business in European countries. BBCCI believe that a nation-state can be run essentially like a corporation and, as such, it can benefit from adopting a strategic management approach. That does not mean that we ignore the much broader cultural, social and political complexities of running a nation. But a strategic management approach will allow the nation to undergo a continuous self-correcting process by conducting periodic reviews of its progress. Too often, national policies fail to recognize the perceptions and preferences of ordinary citizens. More often than not, the nature of the relationship between the government and the private sector is not conducive to socio-economic development. Sometimes desperate situations drive government and business leaders into adversarial and mutually suspicious frames of mind. This must be avoided. The solution is to enlarge the scope of people's participation through appropriate consultations and public hearings, as has been suggested by the BFCCI. We also recognize the critical role played by cultural and political aspirations of the people in the making of Bangladesh and suggests an essential alignment of economic policies with those driving forces. It puts particular emphasis on the removal of a whole range of impediments to economic growth.
Ultimately, our goal is to obtain a meeting of minds and contribute to more integrated policy-making by the government in socio-economic development. We will be happy if we can raise important questions in the business community and inspires a passion for change among Bangladeshi business comminuty. BFCCI suggests historical evolution of the political economy and social anthropology of our nationhood and we ask for an intimate involvement of the private sector in public policy debates. The private sector approach has been markedly different because it necessarily looks to the future, whereas the ruling elite of this country is conservative and habitually
looks to the past, oblivious to today's hard realities. BFCCI recommends a regular seminar in Bangladesh "Agenda for Change: Development Bangladesh" where both business community living home and abroad can participate and can adopt agenda for change. We are ready to rearrange our recommendations, fill gaps, and add more thoughts and suggestions, all in consultation with my colleagues in politics,
business and industry.
Recommendation and appeal to European Union:
Bangladesh is a paradow having 150 million people. As a developing partner of Bangladesh, I would request to EU to take programs for social mobilization continue to expand rapidly, and to build ever-stronger national coalitions for gender, the environment and for political reforms to strengthen local democracy. Bangladesh has followed the prescription of the Millennium Project and drafted their official poverty reduction strategy. On the other hand, political corruption is rampant, there is a growing breakdown of law and order, violence is rising from religious extremists (though it is silent during the period of interim government) and the government appears unwilling or unable to address it.
EU should have program of focusing on specific unions (clusters of villages) and strengthening women’s leadership and local democracy in those unions – while achieving and measuring progress in the breadth of goals. EU should have courageous leadership team is staying the course – continuing to move forward with the strategies, and looking for every opportunity to contribute to building authentic, stable and peaceful democracy in Bangladesh.
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