Numbers and Narratives in Bangladesh's Economic Development

Description

This book focuses on socio-economic developments of Bangladesh by challenging the dominant international narrative of the case being termed as “development surprise”, “development paradox” or “development conundrum,” given the absence of good governance. In doing so, the book examines the political economic dynamics and offers valuable insights into the current state of the Bangladeshi economy in light of stability, transformability and sustainability. Pointing to the ‘high’ rate of growth in gross domestic product (GDP) in Bangladesh, there is wide belief that economic growth can be obtained even without functioning institutions, and is more important than an inclusive political system. Advocates go on to argue that authoritarianism may be condoned as long as a steady course of development is perused. However, the inadequacy of comparative analysis in to the state of the economy of Bangladesh vis-à-vis other relevant economies makes such claims myopic and parochial. This book thus investigates the numbers and narratives to ascertain the validity of such assertions and lamentations by looking at the necessary and sufficient conditions of development. The necessary conditions imply an incisive inquiry into the factors of economic growth— land, labour, capital and technology while sufficient conditions warrant a penetrating incisive inquiry into the factors of economic growth— land, labour, capital and technology. As such, the book explores development by drawing variables of politics and economics to find out a causal relationship, and interjects these variables have on themes such as growth, agriculture, manufacturing industry, financial sector, health, education, poverty and inequality. Preface and Acknowledgements Introduction Introducing the Framework Scope of the book Contents Abbreviations List of Figures List of Tables 1 Economic Growth in Bangladesh Introduction Stability Conditions Labour Utilisation and Migration Consumption-Led Growth from Shifts in the Labour Force Incongruent Improvements in the Social Sector Jobless Growth Higher Concentration in Informal Employment Stagnant Investment and Savings Declining Capacity of Public Spending Weak Revenue Collection Regressive Tax Structure Institutional Weakness in Public Spending Discrepancies in Accounting Methodology Covid-19 and Risks Transformability Conditions Political Settlement Competitive Clientelism Investment in Human Capital Productive Expansion Sustainability Conditions Institutions for Conservation of Natural Resources Growth and the Environment Concluding Remarks References 2 Agriculture in Bangladesh Introduction Stability Conditions Fragility in Food Security Slow Rate of Structural Transformation Increasing Land Fragmentation Overuse of Fertilisers Differential Access to Credit Declining Agricultural Productivity with Concentrated Output Basket Low Utilisation of Technology Loss from Covid-19 Transformability Conditions Diversification of Output Integrated Irrigation Optimum Use of Fertilisers Formalising Credit Mechanisation in Harvesting Integrated Agricultural Marketing System Sustainability Conditions Sustainable Irrigation Methods Shifting Towards Bio-Fertilisers Diversification Towards Cash Crops Concluding Remarks References 3 Manufacturing Industry of Bangladesh Introduction Stability Conditions Production Capacity A Decelerating Trend A Below Mark Productivity A Narrow Product Basket Regulatory Uncertainty and Lack of Transparency Transitional Challenges from LDC to a DC Market Diversification Concentration in Export Market Employment Generation A Dominant Informal Sector Technological Catch-Up COVID-19: A Havoc in the Manufacturing Industry Transformability Conditions Increasing Competitiveness Augmentation of Technological Deepening Dual Circulation and Market Diversification Clean Production Sustainability Conditions Circular Production Equalising Returns Whole of Society Concluding Remarks References 4 Financial Sector of Bangladesh Introduction Banking Sector: A Framework Stability Conditions Deterioration in Quality and Soundness Capital Adequacy Ratio Non-Performing Loans (NPLs) Non-Performing Assets (NPAs) Rescheduled Loans Shortfalls in Access and Functioning Domestic Credit Credit to Private Sector Branches of Banks Net Foreign Assets Transformability Conditions Performance and Profitability Return on Assets (RoA) Return on Equity (RoE) Net Interest Margin (NIM) Regulatory Reforms for Reversing the Trends Sustainability Conditions Diversification of Investment Portfolio Strengthened Policies for Risk Management Capital Market: A Framework Stability Conditions Size of the Market Market Capitalisation Ratio Turnover Ratio Trade by Foreign Investors Access to the Market Concentration in the Market Transformability Conditions Efficiency of the Market Risk Control Mechanisms Volatility of the Market Price-Earnings (P/E) Ratio Sustainability Conditions Linking the Banking Sector and Stock Market Growing Importance of Financial Sector in Pandemic Era Concluding Remarks References 5 Education in Bangladesh Introduction Stability Conditions Increasing Access to Education Low Skill Formation and Innovation Waning Citizenship Education Disruptions Caused by the COVID-19 Pandemic Transformability Conditions Augmenting Secondary Education Vocational and Technical Education for Skilled Workforce Emphasis on Tertiary Education Quality Provisioning Access to Educational Infrastructure Sustainability Conditions Concluding Remarks References 6 Health in Bangladesh Introduction Stability Conditions Low Public Expenditure Inequality in Health Outcomes and Access High Out of Pocket Expenditure (OOP) Transformability Conditions Budget Allocation for Universal Healthcare Ensuring Universal Healthcare System Sustainability Conditions Moving Towards Quality Health Service Capacity to Absorb Shocks: Healthcare During the COVID-19 Pandemic Concluding Remarks References 7 Poverty and Inequality in Bangladesh Introduction Stability Conditions Slow Reduction Persistent Regional Differences New Poor Due to COVID-19 Inadequate Investment in Education and Health Declining Real Wage and Rising Inequality Absence of Universal Social Security Rising Trend in Income Inequality Growing Concentration and Centralisation of Income Consumption and Nutritional Inequality Inequality in Food and Nutrition Intakes Gender Inequality in Literacy and Education Gender Disparity in Participation and Earnings Fiscal Policy—Dependence on Regressive Taxes Low Tax-GDP Ratio New Poor Driven by Covid-19 Inequality Propelled by Covid-19 Transformability Conditions Policies of Active Restraint Institutional Provisioning for Skilled Labour Public Financing for Coping Strengthening Coping Mechanisms for Climate Displaced Communities Social Security in the Post-pandemic Era Sustainability Conditions Policies for Resilience Accountable and Equalising State Strengthening Social Contract A Human-Nature Compatibility Concluding Remarks References 8 Conclusions: Institutions, Political Settlement and Economic Outcome Power, Institutions and Economy Institutions and the Economy Growth and Real Sectors Financial Sector Education and Health Poverty and Inequality References Index