Economic Development Essay Research Paper LocationBangladesh is

Economic Development Essay, Research Paper

Location

Bangladesh is located in South Asia and shares borders with India to the west, the north and the east. To the southeast lies Burma. The southern shores are washed by the Bay of Bengal. Bangladesh occupies a fertile delta created by two of Asia’s largest river systems, the Ganges and the Brahmiputra.

Politics

Bangladesh is one of the youngest nations in Asia. Until two and a half decades ago, it formed the eastern half of Pakistan; the western half lay over 2,000 km away, on the other side of India. In 1971, Pakistan’s army attempted to subdue an East Pakistani movement for regional autonomy which led to a bloody civil war. India joined the war in early December of that year and, later that month, Bangladesh became an independent nation. A parliamentary democracy was established and Sheikh Mujibur Rahman came to power.

Mujib was assassinated in August 1975 during a military coup. Afterwards Bangladesh went through a turbulent period characterized by a series of military coups. The last military ruler Gen. Hussain Mohammad Ershad, ruled for nine years, eventually toppled by a civilian movement in December 1990. Elections were held in 1991 under a neutral government and Khaleda Zia of the Bangladesh Nationalist Party (BNP) became the country’s first elected Prime Minister in 16 years.

In the parliamentary election held in June 1996, the Awami League, led by Sheikh Mujibur Rahman’s daughter Sheikh Hasina, came to power. The Awami League won 51 percent of seats in parliament; trailing behind the Awami League were the BNP with nearly 36 per cent of the seats and Hussain Mohammad Ershand’s Jatiyo Party with 10 per cent. The rest of the seats were won by other small parties and individual candidates. The Bangladeshi parliament has a single legislative chamber with 330 members. Three hundred members are directly elected on the basis of adult franchise while 30 women members are elected indirectly.

Bangladesh has emerged as a leader of the movement of developing countries. The country maintains close ties with Saudi Arabia and other Middle Eastern countries, which employ large numbers of Bangladeshi workers. Relations with India have improved considerably due to the pragmatic approach taken by the current government. More recently, an influx of Burmese Muslim refugees across the Southeastern border has created tensions with the Burmese authorities.

The Economy

Bangladesh is one of the most populous and poorest developing countries. The annual per capita income is about US$265. With its newfound political stability, Bangladesh has undertaken an ambitious program of economic reforms, and opened its doors to foreign investment. A large workforce, and low wages and costs make Bangladesh an attractive base for setting up manufacturing and assembling facilities.

The present government has initiated several measures to stimulate economic growth. New businesses are being encouraged and there are generous tax incentives for exporters. Foreign-exchange restrictions have been eased. Overseas businesses are being wooed as foreigners are now allowed to own ventures wholly and are permitted to invest in the stock market. The mobilization of domestic resources is a key priority of the program.

The results have been satisfactory. Economic growth has improved steadily since 1991. Inflation has been substantially reduced and the external current account balance has also improved.

As a result of more rapid growth in the services sector, overall real GDP growth was 5.5 per cent in 1996, 5.9% in 1997 and 5.6% is the preliminary estimate for 1998. Encouraged by the government’s policies of deregulation and financial sector reform, both private and public sector investments and national savings have increased steadily. Investment was equivalent to 12.1 per cent of GDP in 1992, 12.7 per cent in 1993, 14.6 per cent in 1994 16 per cent in 1995, 16.5 per cent in 1996 and 16.75 per cent in 1997. The national savings rate was 9.6 per cent of GDP in 1992 and continued to grow through the years to 12.95 per cent in 1997.

With a steadily improving external environment as the world economy slowly recovers, as well as a more stable political environment and speedier implementation of policy reforms, gross domestic investment is expected to increase to 17.4 per cent of GDP in 1997.

Developmental Situation

Against this background of poverty and underdevelopment, rapidly growing numbers of people are finding themselves without enough land to satisfy their basic needs and without any substantial hope of gainful employment. This fundamental problem of landlessness and unemployment is in large part caused and perpetuated by high population growth (1995: 2.4% p.a.), low educational levels and socio-economic power structures resulting in the concentration of productive lands in the hands of a relatively small number of wealthy households.

As a consequence, the poorest are forced in growing numbers to settle on lands that are particularly affected by the yearly recurring natural disasters like floods and cyclones. But there are creeping disasters as well which have more dreadful implications on the environment, the population, and the economy than the sudden ones: riverine erosion and drought.

In a situation of increasing landlessness, high rates of unemployment, natural disaster threats, especially embankment people as well as the floating people have been compelled to live with poverty, hunger, disease, illiteracy, and homelessness. Human misery is everywhere in the country. This is mostly felt by women, because they additionally face cultural forces which severely impact on every sphere of their lives.

NGOs

In many developing countries, the social system is characterized and based not only on gender, but also on class. Rural Bangladesh presents an especially pronounced social hierarchy. The economic and political power is rooted primarily in the ownership of land. The uppermost class, possessing five acres or more of land, accounts for only about 8% of all rural households in the country, yet it controls almost 48% of all the cultivable land.

Lowest in the scale are the 50% of marginal landowners and landless people, who hold only about 3.7% of the total acreage. Lacking formal education and any kind of resources, they enjoy scant social prestige. Most of them earn their living as daily workers and represent an enormous oversupply of labor, so that they are locked into dependence on the rural elite.

Given such social structures, it is not surprising that the socially and economically privileged hold political influence in addition to economic power, and also control whatever development aid comes to the rural areas. In bilateral projects between foreign donors and nongovernmental organizations (NGOs), there is a certain probability that funds will be siphoned off by those who have more influence than the poor do. To keep the money tap flowing, when applying for funds many organizations are quick to adopt the latest "fad" in development cooperation, from "sustainable development" to "empowerment of women" and "participation of target group".

Closer inspection often reveals, however, that the actual target groups-the poor-lack any possibility of influencing the planning and designing of projects and that power is concentrated largely in the hands of the organization’s founder. When decisions are made, the poor are underrepresented, but when the actual work has to be done they are conspicuously strongly represented. NGOs have a General Board and an Executive Committee that supposedly prevent the exclusive exercise of power in allocating resources. The selection criteria for members of these supervisory bodies, and project personnel too, have frequently less to do with competence than with loyalty, however.

At present, there are more than 1,000 NGOs in Bangladesh. Two factors account for the NGO boom: first, the private and the public job markets offer the rapidly expanding population fewer and fewer opportunities for gainful employment; second, development policy that is oriented toward the satisfaction of basic needs has fallen well short of success.

Non-governmental Organizations are perceived to be better able to focus their efforts more directly on the poorest people groups in the countries in which they operate and respond to the needs of these groups in a more flexible and innovative manner. In Bangladesh, this seems to be the case. An example of such an NGO is the Mennonite Central Committee (MCC) that has been active in Bangladesh for many years and has focused mainly in encouragement to farmers to adopt improved cropping techniques, a sanitation program and jute handicraft projects.

In a brief reference to one of their activities, cropping techniques, MCC has made sure that its efforts will be relevant to the local farmers in the region and that the effects of their efforts reach the target group. MCC has also attempted to make its activities more relevant to poorer farmers. This NGO, along with its other successful endeavors in the way of the sanitation program and the jute handicrafts of Bengali women, has been able to reach the poorest groups in Bangladesh with innovative programs.

Microfinance

A new phenomenon amongst NGOs that has aided many countries and has helped the people of Bangladesh is micro-credit. Microcredit is designed to give buying power to the rural poor. Using small loans to purchase basic inputs such as seed, fertilizer, tools and nets, or to start up microenterprises, millions of rural men and women are lifting themselves and their families out of extreme poverty and into a more productive life.

Where it is criticized for it efforts, the repayments of the loans speak a world of success for the process. Loan repayments in countries as diverse as Bangladesh, Benin and Dominica are at a remarkable level of 97% ? about 20% higher than agricultural credit repayments in some industrialized countries. This clearly shows that microfinance can be a powerful tool in overcoming poverty.

Other NGO Efforts

This year during the monsoon season, the heavy rains in South Asia resulted in what could have been the worst natural clamity for Bangladesh of the century. The massive amounts of flooding experienced pushed rivers to record heights which remained high for over 70 days. This flooding affected over 30 million people and left 10 million homeless. Infrastructure of all types was severely damaged. The flooding is predicted to result in a three to four percent decrease in the country?s gross domestic product and obviously a very negative impact on the economy of Bangladesh.

The agricultural sector was by far the most devastated. It is estimated that 1.5 million acres of production was lost, most of it being the main monsoon rice crop. Food security is of great concern since this will leave them with a shortfall of 4.5 million metric tonnes of food.

?MCC is planning a major post-flood rehabilitation project in its working areas to assist in rebuilding the lives of those most distressed due to the flood, through food-for-work projects to rebuild rural infrastructure and provide work, through rebuilding homes of the poorest beneficiary families so they can return to their farms, and through provision of seed and fertilizer to enable farmers to begin food production.? Wayne Bremner, MCC Abbotsford.

As the research shows, NGOs are playing an important role in the development of Bangladesh. Because of this, the government is making various attempts to include NGO efforts in their own development work. On the negative side, there are many new NGOs being formed. Some of which have primary interest in chasing available funds and not in helping the people.

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BRAC: Who Gets What and Why: Resources Allocation in a Bangladesh Village. (Dhaka, 1979).

M. Cain, "Risk Insurance: Perspectives on Fertility and Agrarian Change in India and Bangladesh," Population and Development Review, Vol. 7, No. 3, September 1981, S. 435-474

Samiul Hasan et al., "Voluntary Organizations in Bangladesh: A Profile," Environment and Urbanization, Vol. 4, No. 2, 1992.

Harrison, Paul. Inside the Third World. London, England: Penguin Group. 1988.

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