Exceptionalities of Bangladesh development: What are the contributing factors?



For two reasons development in Bangladesh has received applause from the global community: improvements in its human/social development indicators are exceptionally higher than the same income-level countries’ including India and Pakistan, and this development has been achieved despite its poor governance.  It is surprising because its GDP per capita remained low still below Pakistan’s in all World Bank measures although it has entered into Lower Middle Class in 2015. Comparison of Bangladesh’s achievement with Pakistan’s makes much sense because Bangladesh started from a much lower position in terms of economic, developmental and social indicators with an economy devastated by the Pakistani army during the war of independence in 1971. As a new country, it lacked basic infrastructure and institution.

To understand how Bangladesh has performed, it’s a good idea to look at a number of individual development outcomes rather than just looking at the HDI; otherwise, we may miss some interesting details. Bangladesh stands out in terms of progress in female secondary schooling, fertility decline and two health indicators, namely infant mortality and child immunization, which, if compared with India and Pakistan, looks extra-ordinary. In secondary school enrolment of female Bangladesh was far below in 1980 but has surpassed the developing countries’ average in 26 years while its per capita income has remained below India, Pakistan and developing country average.  Over 1981-85, infant mortality in Bangladesh was much higher than that in India and Pakistan but it fell from the percentile rank of 92 to 54 in cross-country data in 2010 while it rose in Pakistan from 80 to 85 and it fell in India only slightly (77–75) in the same period. Bangladesh surpassed India in infant mortality by the end of 1990s when per capita income and rate of growth were much higher in India. The immunization rate in Bangladesh increased from 1% in the early 1980s to over 70% within ten years. Dramatic increase in contraception prevalence (from 10 to 60 over 1980-2010, which became 30 for Pakistan and 53 for India in 2005) has been followed by a sharp decline in female fertility. Bangladesh development described above is exceptional also because its government expenditures on health and education as percentage of GDP have remained low— lower than India and Pakistan.

For a country to achieve such social and human development, good governance is essential because delivery of services in health sector, utilization of funds in health, education and family planning are directly related to the quality of governance but governance in Bangladesh has remained extremely poor.

In an effort to find the factors which have contributed to this surprising development some scholars put forward the fact that no other countries have such wide and extensive community-based NGO programmes as Bangladesh has, which offer free and/or low-cost education, healthcare, low-cost solutions (to diseases) such as ore saline,  natural birth control technique. The dissemination of this knowledge has been expedited and spread by the improvement of transportation (e.g. significant increase in paved road coverage) and communication (e.g. extensive use of cell phone) creating a multiplier effect. Health outcomes and reduction in fertility have been accelerated by exceptional increases in literacy rate and school enrolment of female which are much higher than the same income level countries. Women empowerment which played a key role in development, has transpired through NGOs which target mainly women, expansion of garments industry where 80% are women, election of larger number of females as people’s representative in all layers.  Awareness programmes on health, education, birth control, women’s rights launched by the government and NGO’s through various media, have contributed to the development outcomes.

Rapid urbanization taking place in Bangladesh, has promoted a huge migration from villages to towns.  According to an estimate of Bangladesh Institute of Labour Studies, as of 2007 there are 2 million domestic workers working in cities and towns. These workers 83% of which are females, come from Villages. These workers living in an educated family atmosphere, learn the modern way of life in terms of health & safety, receive education from watching cinema, drama, awareness programmes on television and develop a desire for better life. They disseminate this knowledge to family members and others in villages and inspire and finance their younger siblings for schooling. This process is even wider and stronger in garment sector where more than 5.1 million rural workers work in towns.  

How has it been possible for Bangladesh to gain such development outcomes with such poor governance? The view that corruption may have positive effect on economic growth, does not fit here because here we consider development outcomes (not economic activities) to which causality might run to.  Now, what happened in Bangladesh is: delivery of services and to some extent goods bypassed the corrupt bureaucracy because the job was done by NGOs; therefore, poor governance could not prevent development in Bangladesh. Bangladesh expert, Geof Wood   describes it as ‘franchising out’ of government responsibility. Another example provides support to this view: to facilitate and expedite the activities in garment sector Bangladesh Garment Manufacturers and Exporters Association (BGMEA) opened an office inside its corporate building, which has been delegated power by the government to issue and deliver all documents required for manufacturing and trading. It has been possible by an agreement between the association and the government. Here BGMEA office has been doing what was supposed to be done by a government office bypassing regulatory burden and corrupt bureaucracy. When Avinash Dixit suggests that if private sector investors were united, they would be able to get around the corrupt bureaucracy if they wished, he actually emphasizes the necessity of reducing reliance on bureaucracy.

To overcome the problem of poor governance and corruption is not easy— not possible in a short time. Therefore, as long as bureaucracy remains inefficient and corrupt, involving NGOs and private sector in the delivery of certain services and public goods may be a short-term solution.  However, at the same time, it should be noted that NGO involvement does not address the structural causes of poverty, deprivation and inequality, which is reflected in the fact that there has been the highest rate (17.3) of growth of ultra-rich people in Bangladesh from 2012 to 2017 in the world while Bangladesh is still having 24.1 million ultra-poor people who fail to earn even $1.90 a day.  NGOs have not enabled peasants to shift significantly to a new (non-firm) sector and develop new occupations, and thus have not done much in reducing structural unemployment. Therefore, reducing reliance on NGOs and developing governance and institution, and reforming political and economic structure is a must for sustaining growth and development in Bangladesh in the long run.   

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N N TARUN CHAKRAVORTY Professor of Economics, Siberian Federal University, Russia. He has studied Economics in Leeds, London School of Economics and Bath. Author’s PhD thesis looks into the growth-corruption link in Bangladesh perspectives. Research interests include growth, development, governance, institution, well-being, inequality, migration. As an economist he has Presented papers in Royal Economic Society Conference, American Economic Association Conference, Development Studies Association (UK) Conference, Canadian Economics Association Conference. Forth-coming books: 1) Comparative analysis of Russian citizens’ well-being before and after the collapse of the Soviet Union; 2) The causes of the fall of Soviet Union You can reach the author via [email protected]