A Quest for Technology-driven Economic Development
The development saga of Bangladesh is more than the traditional development stories
Bangladesh celebrates its 50 years of independence in 2021 with greater pride and prestige. After a nine-month long bloody war, the country acquired independence in 1971 from Pakistan. With a long history of deprivation from British colonial rules, the fresh deprivation from Pakistani regime along with the war-torn economy led to pessimism about the country's existence and development. The then US secretary of state, Mr. Henry Kissinger at that time dubbed Bangladesh as a 'basket case', which has become popular among the quarters who did not believe in Bangladesh. The new-born country was plagued with chronic poverty, high population growth, low literacy rate, paucity of natural resources and many other limitations as a result of long-term deprivation and negligence from the rulers. However, the development pessimism about the new-born country has now been proved a historical mistake. The country, after its 50 years of journey, has now become a "development surprise". The politicians of colonial states had undermined the strength of the people's aspirations and hard-work and therefore attempted to enforce various unscrupulous acts to subservient the potentials of this region. Bangabandhu Sheikh Mujibur Rahman, the great leader and Father of the nation, at that time in his historical prolific speech on March 7th in 1971 rightly threatened the politicians of the west that they cannot halt the Bengali nation by their conspiracy ("tomra sare sat koti manushere dabiye rakhte parbana", Bangla Speech, 7th March, 1971)".
The development saga of Bangladesh is more than the traditional development stories. Confronted with political ups-and-downs and instabilities, huge population, scarcity of natural resources, the country has been able to reduce its poverty from over 80% in 1971 to 24% in 2019, rise in per capita income from US$133 in 1971 to US$2064 in 2020 (which was higher than India in 2020), and impressive improvements in social indicators, such as life expectancy, literacy rates and per capita food production. Progress has been underpinned by steady growth in GDP, thanks to macroeconomic stability and to some extent achievement of political stability through the country's democratic transition since 1991. Bangladesh reached the lower middle-income country status in 2015. Bangladesh fulfilled all three eligibility criteria for graduation from the UN's Least Developed Countries (LDC) list and is on a good track for graduation in 2024 despite being afflicted by Covid-19 crisis.
The impressive growth performance of the Bangladesh economy (over 6% GDP growth rate in the last two decades) along with remarkable progress in attaining several MDG targets especially in social indicators, in which the country has done markedly better than neighboring countries, have received widespread attention of development practitioners, policy makers, researchers, and so on.
The impressive growth and development of Bangladesh is mainly the story of hard working and aspirant people who contributed through hard-earned remittances from abroad, generous RMG exports with significant rise in female participation in labour force, acquaintance with modern agricultural technologies, and so on. Therefore, remittances, RMG exports and agricultural modernisation with widespread NGO interventions are thought to have contributed greatly to poverty alleviation and growth, and overall development of the country. However, overburdened with a huge population, high unemployment rate, and lower financial asset holding among a large section of population poses a greater risk of poverty and development traps. Various reforms, such as trade and financial reforms undertaken in the 1980s and 1990s have uplifted the economy from the bottom, but further uplift requires some innovations and productivity gains in order to escape from development traps. This calls for a technology-driven development strategy.
As the country is gifted with an abundance of population, such a population can be turned into human capital with proper skills development policies. Information and communications technologies (ICTs) is the sector that can provide a path to developing nations to catch-up with industrialised nations by skipping regular development stages. The Bangladesh government, led by the Bangladesh Awami League, pushes it hard as a shifting development strategy by pledging to achieve "Digital Bangladesh" by 2021 at its fifty. Adopting the "digital Bangladesh" initiative in 2009, the government undertook a massive digitalisation process by investing in e-governance, ICT infrastructure, building ICT parks, skills development programs and so on. The higher growth trajectories in the 2010s could be the outcome of digitalisation of the economy that has contributed to total factor productivity. Digital Bangladesh has now become a buzzword of development. This is another important policy framework that has been pursued by the government with its demographic dividend by exploiting its abundant pool of talented youths, favourable policy diffusions and appropriate technological skills.
However, despite a notable progress in digitalisation, Bangladesh still lags far behind south Asian and Asia-Pacific comparators. For example, only 18% people are using the Internet whereas it is 44% in Asia and Pacific. Household with a computer is 11% and household using internet is 19%, which are much lower than Asia and World standard. Without greater access to the Internet or computer, it will not be possible to address the digital divide. Though mobile phone access is almost 100%, access to smartphones is much lower, which limits the benefits of digital economy. As a result, Bangladesh ranked 135 in network readiness index in 2020. Under its sub-index, Bangladesh ranked 107 in technology, 115 in people, 94 in governance, 89 in ICT regulatory environment and 77 in e-commerce legislation. Therefore, there are more scope for improvement in the digitalisation process.
To avoid the middle-income trap in the pathways to a developed nation, emphasis must be given on faster ICT adoption and turning the economy into a knowledge economy. The following issues appear to be important for further enhancement of digitalisation.
Firstly, ensure an effective last mile connectivity through expanding broadband internet connectivity at the Union Parishad level. Though several projects are underway, the connectivity will be effective if people get easy access to the Internet in rural areas. Free internet connection to schools, colleges and other educational institutions; free wifi hotspots at market places; continuous content development to engage more people in internet activities and so on could be some ways of fruitful connectivity.
Secondly, as only 11% households have access to computers, this is a serious bottleneck in creating a knowledge-based economy. Policies need to be undertaken to provide free computer access to a large section of rural population through schools/colleges/madrasas. Further, incentives should be given so that the prices of smart mobile phones and computers/laptops come down to an affordable level. Some scholarships or student loans can be arranged for this purpose.
Third, to contribute effectively to the objective of the growth of the economy, it is important to assess the current situation of skills/employment in the ICT industry and evaluate the means to integrate the ICT sector as a dynamic sector in the economy. At least four issues pertaining to skills development are important: the current level of skills and the gap in skills in terms of availability and quality; the supply side capacity of the academic and training institutions to mitigate the gap in skills; an estimate of demand for skilled workforce in the next five years considering the growth of the industry; identify the emerging thrusts of the ICT sector, and assess the training needs and ways of implementing the training programs. There has been a roughly 40% gap in skills need and availability of ICT skills. This gap must be addressed with better industry and academia linkages.
Dr Monzur Hossain is Research Director at Bangladesh Institute of Development Studies (BIDS). He can be reached at monzur@bids.org.bd
