Bangladesh at Fifty: Moving beyond Development Traps

588 Pages·2020·5.139 MB·English

by  Mustafa K. Mujeri, Neaz Mujeri

PALGRAVE STUDIES IN ECONOMIC HISTORY
Bangladesh at Fifty
Moving beyond
Development Traps
Mustafa K. Mujeri · Neaz Mujeri
Palgrave Studies in Economic History
Series Editor
Kent Deng
London School of Economics
London, UK
Palgrave Studies in Economic History is designed to illuminate and enrich
our understanding of economies and economic phenomena of the past.
The series covers a vast range of topics including financial history, labour
history, development economics, commercialisation, urbanisation, indus-
trialisation, modernisation, globalisation, and changes in world eco-
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Mustafa K. Mujeri • Neaz Mujeri
Bangladesh at Fifty
Moving beyond Development Traps
Mustafa K. Mujeri Neaz Mujeri
Institute for Inclusive Finance & Centre for Research Initiatives (CRI)
Development (InM) Dhaka, Bangladesh
Dhaka, Bangladesh
ISSN 2662-6497 ISSN 2662-6500 (electronic)
Palgrave Studies in Economic History
ISBN 978-3-030-56790-3 ISBN 978-3-030-56791-0 (eBook)
https://doi.org/10.1007/978-3-030-56791-0
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For Zinnatoon Nadira and Hasib, Moonzeba, Aliyah and Rayhan who
have always been our source of inspiration and joy
P
reface
Bangladesh is celebrating its fifty years of independence in 2021, following
a nine-month long liberation war with the Pakistani army in 1971. During
the war, there was extensive destruction and damage to the economy and
all types of establishments and infrastructures in both rural and urban
areas across the country. During the period, the economic viability of
Bangladesh as a nation was in question. In sharp contrast to the initial pes-
simism, Bangladesh has achieved much in development over the last fifty
years. The acceleration in development over the last three decades has
generated significant optimism about Bangladesh’s growth potential. The
country is much ahead today, relative to the rest of the world, than it was
during its independence in 1971. In fact, the country stands at a new
threshold, with greater triumphs and achievements in many aspects of
social and economic life.
This book examines the unfolding of Bangladesh’s development drama
over the past fifty years. The drama is full of development surprises and
extraordinary resilience of the people in the face of frequent natural disas-
ters and man-made calamities. In reality, the country has moved beyond
the multiple development traps that it faced during its fifty-year journey to
create one of the world’s happiest development stories. Bangladesh
achieved an inflection point within a short time. Rising from the ashes, the
country has now emerged as one of Asia’s most remarkable phoenixes and
has become one of Asia’s amazing and unexpected success stories of
recent years.
The book further explores the diverse experience of Bangladesh’s
development over the last fifty years and comes up with systematic
vii
viii PREFACE
explanations of its success in socioeconomic development, and assesses
future trends. The book asserts that explaining Bangladesh’s development
is not for the simpleminded; any single mono-causal explanation for
Bangladesh’s development is bound to fall down in the face of reality.
As with all large-scale historical changes, there are many factors and no
definite answers can emerge. Still, the book argues that Bangladesh’s eco-
nomic transformation over the last fifty years has largely been driven by
social changes, initiated by women empowerment. A large number of
micro-level success stories of innovative, low-cost solutions, such as social
development-intensive microfinance programmes targeted towards
women empowerment and social mobilisation both by the government
and the NGOs; women labour-intensive, export-based garments industry;
and the boost to earnings and human capital provided by labour migration
and inward remittances that has made significant strides towards educat-
ing girls and giving women a greater voice, both within the households
and in the public sphere.
The book argues that the decades of the 1970s and 1980s—having
slow economic growth and adverse macroeconomic fundamentals—may
appear as ‘lost decades’ in Bangladesh’s growth history in terms of tradi-
tional development yardsticks. On the contrary, the book asserts that these
two decades had played important roles in Bangladesh’s development
through creating the initial condition state at the micro-level by initiating
socioeconomic transformation at the grassroots level by both the govern-
mental and nongovernmental efforts. These created the essential building
blocks for developing critical linkages between micro- and macro-levels
which were the unique features of Bangladesh’s development model that
ignited the rapid transformation of the later years. The structural and pol-
icy reforms, both economy-wide and sector-specific, carried out since the
mid-1980s, prepared the macro-economy to effectively respond to the
micro-signals for change and adopt appropriate transformations. These
micro–macro transmissions and their role in overall development are sel-
dom acknowledged in the traditional development literature.
While the controversy about the effectiveness of microfinance in pov-
erty reduction in Bangladesh is deep, an adequate assessment of the capac-
ity of microfinance to reduce poverty needs to employ an economy-wide
framework. Although microfinance can provide some short-term relief
from poverty, it is probably not a long-term solution for poverty, especially
in situations where the poor households own small amounts of land or
other productive assets. A more important aspect of microfinance is its
PREFACE ix
role in increasing the status of women and their bargaining power in the
family as most micro-loans are given to women. The overall picture in
Bangladesh society is more positive, where many women have been
empowered and became successful microentrepreneurs through using
microcredit as their stepping stone.
Bangladesh’s agricultural modernisation model characterises the
sequencing of chemicalisation and mechanisation. The successful case of
land-saving technological change occurred after independence with the
Green Revolution through an intensifying of input-based production
characterised by the use of high-yielding and fertiliser-efficient new variet-
ies of seed (rice and wheat). The policymakers in Bangladesh initiated this
variety of agricultural transformation to increase food production and
reduce poverty since the 1970s. Mechanisation has come with higher capi-
tal intensity later on, as chemicalisation has enabled the farmers to adopt
practices that increased both the application and efficiency in the use of
chemical fertilisers and other modern inputs required to produce higher
levels of output per unit of land. The pattern of industrialisation, on the
other hand, has been closely linked with urbanisation resulting from a host
of factors. Bangladesh’s urban growth dynamics was thus profoundly
influenced by the key or strategic industry sectors (including the ready-
made garments). The developments have been more akin to the ‘produc-
tion cities’ paradigm in contrast with the ‘consumption cities’ approach.
We would like to express our deep gratitude to many of our teachers,
friends and relatives from whom we have benefited through discussions
and exchanges over the years. In particular, we would like to remember
Professor Mosharraf Hossain, the eminent economist, professor, scholar
who always inspired us whenever we met him; and Professor Sanat Kumar
Saha who is a role model for us and always guides our thinking process.
We are grateful to Dr Qazi Kholiquzzaman Ahmed, Chairman of the
Institute for Inclusive Finance and Development (InM) and the Palli-
Karma Sahayak Foundation (PKSF) for his encouragement and support to
complete the study. We also express our gratitude to Sifat-E-Azam,
Farhana Nargis, Ifrat Jahan, Sadia Afreen Proma, and J. Joha for providing
valuable assistance with research and graphics. Finally, we would like to
thank Ruth Jenner and Lavanya Devgun of Palgrave Macmillan for com-
missioning the manuscript and for their help and encouragement through-
out the process of finalising the book. We would also like to acknowledge
the very helpful editorial and other comments and excellent support given
by Palgrave Macmillan.
x PREFACE
Finally, the largest part of the credit for writing this book goes to our
parents, brothers and sisters, and other family members; especially to
Zinnatoon Nadira; without her valuable encouragement and support,
especially through shouldering all responsibilities of the family in the
absence of which we could not have written the book. We should also
mention the encouragement and support provided by Hasib and
Moonzeba as well as Aliyah and Rayhan who, despite their busy activities
and different professions, helped us in numerous ways to nurture many of
our thoughts and ideas.
Dhaka, Bangladesh Mustafa K. Mujeri
Neaz Mujeri