From Dhaka with hope…
By Junaid Ahmed*
The biggest surprise at the recent SAARC summit was not China’s quasi-entry into this South Asian body. It was Bangladesh’s quiet transformation. Lost in all the noise about South Asian strategy was the story of a South Asian turnaround. Consider these facts:
Considered once the test case of development, Bangladesh has quietly undergone a major transformation. Bangladesh has eliminated the gender bias in primary and secondary education — achieving this MDG at a historic rate — and attained dramatic declines in infant and maternal mortality. Similarly, once considered a population time-bomb, Bangladesh has achieved one of the fastest declines in fertility rates in the world. Overall, many of the country’s human and social development indicators place Bangladesh at the top for low income, developing countries and for South Asia in particular.
What have been the ingredients of this success story? Not enough work has been done to determine with accuracy, the factors responsible for Bangladesh’s transformation. We know with certainty, however, that no silver-bullet can be pinpointed. Rather it is probably an amalgamation of history, accidents and policy choices that has enabled Bangladesh to shed its burden of being a “bottomless basket.”
History must begin with the war of independence. The post-war construction saw the emergence of independent service providers funded through aid and self-help that catalysed a unique process of community mobilisation. History must also acknowledge the trials of economic and natural shocks common to a deltaic system have given rise to a risk-taking and innovative population. Mobilisation of an innovative and risk-taking population, therefore, has surely been an important contribution to Bangladesh’s success.
But, history is also replete with accidents. Two have been particularly important for the country’s development. First, the oil-boom saw labour migration to the Middle East and in return, a flow of remittances directly to the rural economy. Second, was the arrival of the garment industry to Bangladesh, jumping over Sri Lanka, then in the midst of ethnic tension and India still immersed in import-substitution. Single, rural women suddenly found employment in the formal sector. The remittances and garment industry saw an infusion of private income and wealth into the rural economy with social and economic transformative powers that should not be underestimated.
History and accidents alone cannot account for all the changes. The active choices made by policy-makers to capture the opportunities presented by the country’s history and accidents have been equally vital. The remittances allowed Bangladesh government to manage the unification of its exchange rate system and provide incentives for the economy to become outwardly oriented. While this shift would have happened on its own merits, the remittances enabled it to be implemented at a faster pace. An important beneficiary was the rural sector. Similarly, garment exports were scaled up by the decision of government to provide “free trade zone” status to garment producers in general, breaking the inward looking mentality of the nation in a significant fashion.
Equally important has been the willingness of policy makers to enable a partnership between government and the non-government service providers. From education, health, to the provision of micro-credit, this partnership has led to the scale-up of direct service provision to rural households. This was an important political economy choice. The alternative could well have been to invest solely in line agencies and the traditional public health engineering departments, commonly found across South Asia.
To be sure, public sector line agencies were supported, but balanced by an important investment in alternative providers. This partnership was around community mobilisation and service delivery directly to rural households. It was not based on the notion of free goods but one of respecting the poor as clients, consumers, and decision-makers avoiding, to paraphrase the great Akthar Hameed Khan, “the disabling promise of (charity) from government.” But even as service delivery was pro-poor, so were the structural policy changes.
Agricultural liberalisation coupled with the technological benefits of the Green Revolution enabled Bangladesh to shift from a food-deficit to a self-sufficient nation. This enabling environment for the rural economy dovetailed well with the emphasis on community-centered rural service delivery and the support provided by remittances and wealth of private, rural individuals that participated in the international labour market. In parallel, and very quietly, Bangladesh dismantled its “licence raj” in the 80s through a forward looking industrial policy.
The final boost to the rural sector has come from a sustained macro setting, actively achieved through interventions that enabled growth to stabilise around 5 per cent through the 90s. The lessons are clear. The turnaround in social indicators is a result of multiple changes over three decades.
But the pace of change is impressive as Bangladesh had to address issues of post-conflict democracy for close to two decades of its development history. The lessons also suggest that while economic growth is needed to support social development, it is not sufficient. The nature of growth — its stability, labour intensity, and rural focus — was also important in spreading the benefits of growth.
In addition, the focus on growth was matched by an equal focus on service delivery, recognising that growth does not automatically lead to service delivery improvements. But, the focus on service delivery was not simply one of more public sector expenditures — it was based on a willingness to engage in institutional reform of service delivery that strengthened the accountability of providers to the citizens and communities. It was also based on the evidence from history that without the State as a partner, it would be difficult to support and scale-up the innovations of communities.
There is a growing recognition that the changes in policy were not a result of a well-oiled policy apparatus. It was a result of political economy clashes — of dialectics — between stakeholders within and outside the country. Donors have been an important player in this midst, accounting for the good and the difficult, but without any doubt an important player in Bangladesh’s successes.
It is within this fluid context that Bangladesh’s political and administrative policy making system has emerged, and continues to emerge. And here the lessons of many countries are relevant. Decades of gains can be erased quickly if a country’s political and administrative systems do not keep pace with the demands of its citizens and the ever- changing global context. Indonesia and Argentina are two examples. If the past decades have been a challenge for Bangladesh in catalysing its social transformation, the next decade will be a test to sustain it. If history is any indication, Bangladesh has the capacity to deliver!
>>The writer, a Bangladesh national, is Manager, Social Development in the World Bank. The views expressed are personal.
By Junaid Ahmed*
The biggest surprise at the recent SAARC summit was not China’s quasi-entry into this South Asian body. It was Bangladesh’s quiet transformation. Lost in all the noise about South Asian strategy was the story of a South Asian turnaround. Consider these facts:
Considered once the test case of development, Bangladesh has quietly undergone a major transformation. Bangladesh has eliminated the gender bias in primary and secondary education — achieving this MDG at a historic rate — and attained dramatic declines in infant and maternal mortality. Similarly, once considered a population time-bomb, Bangladesh has achieved one of the fastest declines in fertility rates in the world. Overall, many of the country’s human and social development indicators place Bangladesh at the top for low income, developing countries and for South Asia in particular.
What have been the ingredients of this success story? Not enough work has been done to determine with accuracy, the factors responsible for Bangladesh’s transformation. We know with certainty, however, that no silver-bullet can be pinpointed. Rather it is probably an amalgamation of history, accidents and policy choices that has enabled Bangladesh to shed its burden of being a “bottomless basket.”
History must begin with the war of independence. The post-war construction saw the emergence of independent service providers funded through aid and self-help that catalysed a unique process of community mobilisation. History must also acknowledge the trials of economic and natural shocks common to a deltaic system have given rise to a risk-taking and innovative population. Mobilisation of an innovative and risk-taking population, therefore, has surely been an important contribution to Bangladesh’s success.
But, history is also replete with accidents. Two have been particularly important for the country’s development. First, the oil-boom saw labour migration to the Middle East and in return, a flow of remittances directly to the rural economy. Second, was the arrival of the garment industry to Bangladesh, jumping over Sri Lanka, then in the midst of ethnic tension and India still immersed in import-substitution. Single, rural women suddenly found employment in the formal sector. The remittances and garment industry saw an infusion of private income and wealth into the rural economy with social and economic transformative powers that should not be underestimated.
History and accidents alone cannot account for all the changes. The active choices made by policy-makers to capture the opportunities presented by the country’s history and accidents have been equally vital. The remittances allowed Bangladesh government to manage the unification of its exchange rate system and provide incentives for the economy to become outwardly oriented. While this shift would have happened on its own merits, the remittances enabled it to be implemented at a faster pace. An important beneficiary was the rural sector. Similarly, garment exports were scaled up by the decision of government to provide “free trade zone” status to garment producers in general, breaking the inward looking mentality of the nation in a significant fashion.
Equally important has been the willingness of policy makers to enable a partnership between government and the non-government service providers. From education, health, to the provision of micro-credit, this partnership has led to the scale-up of direct service provision to rural households. This was an important political economy choice. The alternative could well have been to invest solely in line agencies and the traditional public health engineering departments, commonly found across South Asia.
To be sure, public sector line agencies were supported, but balanced by an important investment in alternative providers. This partnership was around community mobilisation and service delivery directly to rural households. It was not based on the notion of free goods but one of respecting the poor as clients, consumers, and decision-makers avoiding, to paraphrase the great Akthar Hameed Khan, “the disabling promise of (charity) from government.” But even as service delivery was pro-poor, so were the structural policy changes.
Agricultural liberalisation coupled with the technological benefits of the Green Revolution enabled Bangladesh to shift from a food-deficit to a self-sufficient nation. This enabling environment for the rural economy dovetailed well with the emphasis on community-centered rural service delivery and the support provided by remittances and wealth of private, rural individuals that participated in the international labour market. In parallel, and very quietly, Bangladesh dismantled its “licence raj” in the 80s through a forward looking industrial policy.
The final boost to the rural sector has come from a sustained macro setting, actively achieved through interventions that enabled growth to stabilise around 5 per cent through the 90s. The lessons are clear. The turnaround in social indicators is a result of multiple changes over three decades.
But the pace of change is impressive as Bangladesh had to address issues of post-conflict democracy for close to two decades of its development history. The lessons also suggest that while economic growth is needed to support social development, it is not sufficient. The nature of growth — its stability, labour intensity, and rural focus — was also important in spreading the benefits of growth.
In addition, the focus on growth was matched by an equal focus on service delivery, recognising that growth does not automatically lead to service delivery improvements. But, the focus on service delivery was not simply one of more public sector expenditures — it was based on a willingness to engage in institutional reform of service delivery that strengthened the accountability of providers to the citizens and communities. It was also based on the evidence from history that without the State as a partner, it would be difficult to support and scale-up the innovations of communities.
There is a growing recognition that the changes in policy were not a result of a well-oiled policy apparatus. It was a result of political economy clashes — of dialectics — between stakeholders within and outside the country. Donors have been an important player in this midst, accounting for the good and the difficult, but without any doubt an important player in Bangladesh’s successes.
It is within this fluid context that Bangladesh’s political and administrative policy making system has emerged, and continues to emerge. And here the lessons of many countries are relevant. Decades of gains can be erased quickly if a country’s political and administrative systems do not keep pace with the demands of its citizens and the ever- changing global context. Indonesia and Argentina are two examples. If the past decades have been a challenge for Bangladesh in catalysing its social transformation, the next decade will be a test to sustain it. If history is any indication, Bangladesh has the capacity to deliver!
>>The writer, a Bangladesh national, is Manager, Social Development in the World Bank. The views expressed are personal.
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