1971 and the independence of the country triggered a transformation of the mind-set – a citizenry steeped in fatalism became aspirational and scripted a story of initiative-driven transformation of a poverty-stricken country into a resilient economy. But on the cusp of starting a new 50-year journey, are we stuck in a 'cheap labour economy' syndrome?
As an economist, I have always marvelled at a little commented-upon feature of our 50-year journey. Our political journey has been steeped in blood and upheavals but our economic journey has been remarkably stable. Bangladesh has not witnessed a single year of negative growth except for the war-devastated year of 1972. The growth trajectory too has been remarkably stable, incremental in the first two decades and accelerating somewhat from the 1990s.
The political ups and downs did not, it seems, translate into ups and downs in the growth trajectory. The developmental transformation of Bangladesh has been more an initiative-driven story than a policy-driven one. Policies certainly had a role, but it was more of a supportive role, not the leading role. That is the key story of 50 years of Bangladesh.
The initiative-driven transformation was not a linear journey. There were many sub-stories, many drivers. From the outset, Bangladesh could not afford to just focus on growth. A disaster-prone, poverty-prone nation like ours had to constantly look both ways – behind and front. Why looking back? Because if another disaster hits, then we are undone. Or, if there is constant worry for food security, how can we concentrate on growth.
So, we had to think about food security, create what I have called a "growth cushion" – a safety boundary for the pursuit of growth – while exploring, innovating and labouring to open growth windows. That is why the word which is most evocative of our achievements over these five decades is "resilience". Refusing to give up. Always looking for new opportunities. Innovating on the go.
From being known around the world as a disaster victim, we have won justified recognition as a disaster manager. And resilience is not just about confronting natural disasters but also about confronting economic disasters. In the 1970 cyclone in Bhola, the death toll was 3 lakh. Twenty years later in the "flood of the century" in 1998, the death toll was 1,100.
Individuals, communities and the state – at all three levels, effective knowledge of managing disasters and their aftermath had been learned. Fast forward six years. In 2004 when the multi-fibre agreement guaranteeing quota benefits was phased out, many predicted the collapse of the garment sector. Instead, entrepreneurs dramatically rose to the challenges of a competitive market-place, transforming Bangladesh into a key player in the global apparel industry.
How did we become an initiative-driven society?
The explanation essentially has to be looked for in our becoming an independent country. 1971 and independence had an enormous impact on the national psyche, triggering a deep transformation of the mind-set – a citizenry steeped in fatalism became aspirational. Even the poorest person no longer accepted poverty as destiny.
It is remarkable when we go into slums as economic researchers and ask the women about their families' aspirations, invariably a key emphasis would be on the education of their children. Farmers – always toiling in the shadow of disasters – no longer are content with a one-crop agriculture, pursuing two or three crops from the same land and embracing the opportunities of mechanisation. Women, used to the boundary of the home, saw an economic opportunity in micro-credit and embraced it wholesale. The young girl in the village dared to venture into a new future in the factory line of the emerging garment industry.
Rural women make up most of our female migrant workers. Can you imagine a woman from a conservative rural area daring to go to an unknown foreign country to earn money? These are all the expressions of the aspirational minds-set which made initiatives and innovations the key drivers of our developmental journey.
Bangladesh has seen three waves of connectivity innovations. The first was the LGED feeder roads pioneered by Quamrul Islam Siddique, chief engineer of the department, in late 1980s and 1990s which connected villages to towns and banished the curse of remoteness from significant areas of the country. Isolated villages became integrated into the national economy.
The second connectivity wave was triggered by mobile telephony from the late 1990s onward. Mobiles are now a near universal-phenomenon, powering social as well as economic interactions from the micro to the macro.
The third connectivity wave is the more recent digital connectivity. This is yet to reach its full potential but important windows have opened though disparity in access is a big concern.
Social sector achievements too have come through initiatives and innovations. Oral rehydration therapy laid the foundations for bringing down child mortality. GO-NGO partnership created a momentum in immunisation and bringing children into schooling. Primary and secondary stipend programmes innovated in the 1990s saw Bangladesh achieving MDG targets of enrolment in general and girl enrolment in particular ahead of many comparable countries. Innovative social campaign on sanitation has largely done away with the blight of open defecation, a problem that regional neighbours are struggling with.
Four groups of drivers stand out in the story of our transformation. Farmers and agricultural scientists. Women. Private sector – not just the big players but also the smaller ones who brought into being the rural non-farm sector. And also innovation-minded and innovation-supporting state actors who provided the policy boost at critical junctures.
Looking back, we can be justly proud for having created firm foundations of a resilient economy. But going forward, will this suffice to meet our enhanced aspirations of a middle income country?
The preceding decade has seen a significant worsening of inequality. Yesterday's pride in school enrolment indicators is having to contend with the realisation that schooling is not translating into adequate learning. Quality divide in education has become the new driver of inequality. Even as nearly a third of our youth are neither in education nor in employment or training, a significant proportion of mid-to-higher level employment in the leading apparel sector is being held by skilled workers from other countries. Lack of confidence in health care is driving a large segment of the solvent population to seek health care abroad.
One feature of our economic success so far has been that we have successfully utilised the advantages of being a "cheap labour economy". This is what has driven the RMG sector. This is what has driven the remittance sector. But after 50 years, we have unmistakably arrived at a fork in our development journey. The challenge for Bangladesh today is to graduate from being a "cheap labour economy" to a "skilled labour economy".
It is not as if this realisation is lacking among policymakers or within society at large. But realisation or talking about it is one thing, successfully transiting from a "cheap labour economy" to a "skilled labour economy" is another matter altogether. No amount of policy seminars or development rhetoric will take us to our destination unless we can address the critical issues of institutional reforms.
In a cheap labour or low-cost economy, the initiative driven mindset was perhaps enough. But when we talk about a skilled labour economy, the issue of quality, particularly in the creation of human capital, arises. Achieving quality is critically dependent on governance, both institutional governance and political governance. The statistics on the quality of our education provide a stark reminder that the prevailing governance scenario is failing to address the challenges of achieving quality.
That's why the nature of the state has also become an important issue. The rise of VIP culture is antithetical to our foundational dream. The dream of 1971 was not only about GDP, it was also about the type of society which ensured the respect for the average citizen unlike in colonial society. Women have been central to our transformation but today gender-based violence has reared its ugly head due to a rampant culture of impunity.
So, when we look at our journey of 50 years after independence, we have to fix the indicators on which we would base our analysis to assess our progress. One set of indicators is about the economic structure, another set of indicators is the type of dreams that we set in 1971, the type of society that we wanted to build. The society which would not only be an egalitarian society, but would also secure the dignity of the average citizen. We must remain engaged on both sets of indicators.
Dr Hossain Zillur Rahman is Executive Chairman, Power and Participation Research Centre (PPRC), an independent policy centre in Bangladesh