In 1971, it was difficult to guess how far Bangladesh’s economy will reach in the next 50 years. However, it was generally accepted that it will be difficult for Bangladesh to survive. Bangladesh was termed as a bottomless basket at that time. Bangladesh‘s geopolitics contributed more to this than its economy.
Among economists, Norway's Just Faaland was at the top of the list of sceptics on Bangladesh. The book 'Bangladesh: The Test Case for Development', co-authored by Faaland and US economist Jack R Parkinson, was published in 1976. Faaland was the first resident representative of the World Bank in Bangladesh in 1973 and 1974.
Based on some assumptions Just Faaland thought that Bangladesh would not last economically. At that time the rate of population growth of Bangladesh was greater than the economic growth and the country had been dependent on the foreign aid since its birth. Faaland thought Bangladesh would not be able to emerge from this.
Austin Robinson published a research book, "Economic Prospects of Bangladesh" in 1973. He was an Emeritus Professor of the Economics Department of Cambridge University back then. Austin Robinson too, was not quite optimistic about Bangladesh’s future.
Another book edited by Faaland was published in 1981 named “Aid and Influence: The Case of Bangladesh”. In that book too, Faaland said clearly that Bangladesh would have to be dependent on the foreign aid for a long time to survive.
Later in life, Just Faaland became the director general of International Food Policy Research Institute (IFPRI) and the chairman of the UN Committee for Development Planning.
Austin Robinson's comment on Bangladesh
Edward Austin Robinson was even a greater economist than Just Faaland in terms of fame and fortune. He was one of the close associates of John Maynard Keynes, the father of macroeconomics. He was one of Britain's leading policymakers in the economic restructuring during the post-Second World War era. Austin Robinson was the president of the International Economic Association in 1959-62. His wife, Joan Robinson, is regarded as one of the most important economists after Keynes.
Austin Robinson published a research book named "Economic Prospects of Bangladesh" in 1973. He was an Emeritus Professor of the Economics Department of Cambridge University back then. Austin Robinson too, was not quite optimistic about Bangladesh’s future.
He said in his book that the question that is being asked again and again is, will Bangladesh survive? Economists do not have the answer to this question. Besides, a country cannot just collapse. Either it will be a poor country or it will be stagnant. Now the big question is, will Bangladesh move forward with the economic structure and trends that it had in the past. Will Bangladesh be able to achieve acceptable growth and get out of poverty?
Austin Robinson wrote that the answer to these questions is very difficult. According to him, Bangladesh at that time was a perfect example of “Malthusian stagnation”. In other words, the population of Bangladesh was growing at a faster rate than the rate of production. The result is famine, war and death.
Austin Robinson raised the question- what would be the future of Bangladesh then. He wrote that in 1973, the per capita income of Bangladesh was $70. With this per capita income, Bangladesh was one of the 10 poorest countries in the world. Austin Robinson also gave an account of how many years Bangladesh will take to achieve a good per capita income in this situation.
In 1995 the WB conducted a research on Bangladesh titled “Bangladesh 2020: A Long-term Perspective Survey”. In other words, the subject of the research was – how far would the economy of Bangladesh reach in 50 years of independence? The WB said in the research that when Bangladesh became independent in 1971, the general public had high expectations that political independence would bring economic liberation, end poverty, and make the country prosperous.
For example, acceptable per capita income means, how many years will it take for Bangladesh to increase its per capita income to $900. At that time the per capita income of Spain was $900. He calculated that if Bangladesh increases its per capita income at a 2 per cent rate, it will take 125 years to achieve the acceptable per capita income and it will take 90 years if the per capita income of Bangladesh increases at a rate of 3 per cent.
He also wrote that this too would be possible only if the population growth rate of Bangladesh could be brought down to 1.25 per cent. He had a deep doubt about whether Bangladesh would be able to do that.
A research 25 years ago
It may be difficult to predict the economic condition of a country after 50 years. Besides, in 1972-73 Bangladesh’s economy was basically agriculture dependent. There was no garment sector; neither there was much impact of remittances on the economy. Even the agricultural sector was waiting for a green revolution flourish. However, 25 years after the independence of the country, it was easier to predict the future of Bangladesh and the World Bank (WB) just tried to do that.
The WB first published a report on Bangladesh’s economy on 25 September 1972. At the time the WB said, “Even in the best conditions, the development problem of Bangladesh is very complex.”
Again in 1995 the WB conducted a research on Bangladesh titled “Bangladesh 2020: A Long-term Perspective Survey”. In other words, the subject of the research was – how far the economy of Bangladesh will reach in 50 years of independence?
The WB said in the research that when Bangladesh became independent in 1971, the general public had high expectations that political independence would bring economic liberation, end poverty, and make the country prosperous. But 25 years later, it is clear that despite some significant developments in some specific areas, there is still much to be disappointed with. More than half of the country's people still live below the poverty line, more than 60 per cent are illiterate and the (gross domestic product) GDP growth of the country had been 4 per cent for 25 years.
For these, Bangladesh had been regarded as one of the poorest countries in the world and Bangladesh was literally dependent on foreign aid. The question was – will Bangladesh remain the same in the next 25 years?
In that research, the WB said the year 2020 would be a significant year for Bangladesh. It would be the 50 years of Bangladesh’s independence. At this time, the first and biggest challenge of Bangladesh is to increase investments in human resources, because strong people are needed to build a strong society and economy.
But the people of Bangladesh, especially the mothers and children are victims of extreme malnutrition. Bangladesh spends only 2 per cent of its gross domestic product (GDP) on education and health. Asia's average is 3.3 per cent in this regard. So it is needed to invest much more on the human resources and it is also very important to establish a good governing system for overall progress.
The research also mentioned some targets for Bangladesh to achieve in the next 25 years. Those targets are – reducing the poverty rate rapidly, to increase the GDP growth up to 7-8 per cent, to create 50 million new job opportunities, to diversify exports, effective conservation of the environment, to bring $8 billion direct foreign investment annually by 2020 and so on.
In the same year, the WB made an index on how the economy of Bangladesh will be in the year 2020. At present, we are seeing that Bangladesh has achieved almost all the targets. In some cases, the country has surpassed the targets by far. However, Bangladesh is still lagging far behind in several sectors including private investment, expenditure in education and health sectors, creating new job opportunities and foreign investment. The job opportunities are not sufficient in comparison to the GDP growth. The disparity in income has not lessened either.
Things which have not changed in 50 years
Just Faaland was not an employee of the World Bank. Despite that, he was made the resident representative on Bangladesh’s request in 1973. Although Bangladesh had a warm relationship with the WB, it soon started to decline. The tension in the relations between the two came to light when the WB published a report on the economic circumstances of Bangladesh in 1974.
In that report, the WB made some harsh comments about Bangladesh’s political policy, economic targets, inefficiency of the cabinet and the administration and severe corruption. It said, “These new people have come into power for the first time and do not know anything other than using power for their own benefits. Such is the political situation here that it is nearly impossible to complete any foreign currency transaction without depositing some money in the foreign bank accounts of one or any other politicians, businessmen or influential persons. This government does not have the capacity to accomplish anything even at a moderate level.”
The first vice-president of the planning commission, Nurul Islam, has written in detail about this in his book, "Bangladesh Jati Gathankale Ek Arthanitibider Kicchu Katha.” Nurul Islam wrote in the book published in 2007, “If anyone remembers the bank's report and the government's response back then, it would seem that nothing much has changed in Bangladesh in 30 years. Corruption is still a major topic of discussion between Bangladesh and its development partners.”
Not only after 30 years, it can be said that the content has not changed much in 50 years. Corruption still occupies the centre of discussions in Bangladesh. This is accompanied by lack of democracy, lack of rule of law, obstruction in freedom of expression, new restrictive laws, lack of accountability, ineffective parliament, weak institutions, politicisation, conflicting and patronising politics.
It is said that a democratic infrastructure reduces corruption and increases economic growth. Again, sustainable economic growth gradually develops the democratic institutions. However, such was not the case in Bangladesh. Bangladesh has shown remarkable economic development despite all odds. It is because of this coexistence of development and corruption that some people now call Bangladesh a “surprise”, some call it a “mystery” or a “riddle”, while others call it a “paradox”.
The goal of Bangladesh is to become a developed country by 2041. The question is - can any country be really developed with these shortcomings?
*This report appeared in the print and online editions of Prothom Alo and has been rewritten in English by Ashish Basu