On the highway to growth or development?

Dhaka,  Sat,  23 September 2017
Published : 12 Jun 2017, 19:44:22
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On the highway to growth or development?

It is time to stop funding sick banks and industries, and take necessary steps to curb money laundering to the tune of a few billions of dollars, writes Abdul Bayes
In the budget speech in parliament on June 01, Finance Minister AMA Muhith gave us good news that Bangladesh is now on the 'highway to development' (Unnyoner Mohashoroke). The budgetary allocations show that the country may be on the highway to growth but, definitely, not to development.  

The increased allocations to transport and communication, technology and even to agriculture, along with policy stimulus, are steps in the right direction to promote desired growth. Provided that the money is spent productively, the country would witness another bout of growth rate exceeding 7.0 per cent or so to lead us to a highway to economic growth. 

But by the same token, the allocations to social sectors like education, health, social safety, etc., have not been up to the mark to take us to the highway to development.  The health sector has witnessed a marginal increase in allocation to about Tk 210 billion. 

But since health is the only asset of the poor, more allocations to that effect are needed. Besides, the total allocation on health as a share of gross domestic product (GDP) should be as high as 4.0 per cent to take a nation to the highway to development. The finance minister has suggested raising the budget for social safety programmes by 35 per cent to Tk 542.06 billion, compared to the revised one of the outgoing fiscal year. 

It appears that about three-fourths of the increase of Tk 133.49 billion would be spent on public servants' pension benefits leaving the rest (one-fourths)  Tk. 36.24 billion -- for some 100 safety net programmes run by 23 different ministries. However, the social safety net programmes are faced with severe criticisms - wastage of 30 per cent, mis-targeting, politicisation and relief orientation that hardly help the cause of development. 

The most disconcerting is the allocation on education sector. The 2017-18 national budget seemingly leaves us in a zone of comfort with the news that the education sector will get an unprecedented thrust. The proposed allocation of Tk 504.32 billion for education in the budget amounts to 12.6 per cent of the total budget size of Tk 4,002.26 billion. Of the total allocation for the sector, at disaggregated level, Tk 231.41 billion has been earmarked for the Ministry of Education, Tk 220.22 billion for the Ministry of Primary and Mass Education, and Tk 52.69 billion for the Technical and Madrasah Education Division -shown separately this year. 

It is, however, interesting to note that the public in general and media in particular hardly noticed the 'mathematical magic' pertaining to increased allocation for education by 14 per cent, emphasis on heavy infrastructure investment with the aim to improve capacity and quality, and the emphasis on qualitative improvement in teaching methods. But, there is a definite slip between the cup and the lip. 

As an expert on education Manzoor Ahmed argues, "It can be seen that the average actual public spending for education was close to 14 per cent of the total government budget in the four years from FY2012 to FY2015. The revised budget, considering spending possibility for the current year, is almost 1.5 percentage point less than the actual for the past four years as a share of the total government spending." The new proposed budget is proportionately of the same order as the revised budget for the current year, though in absolute amount it has grown since the new budget is larger than last year's. The budget speech refers to the education sector in a short paragraph.   

The budget speech contains some necessary and customary items - computer labs in some 3,550 institutions and multimedia classrooms (meaning provision of a projector and a laptop computer) in 23,331 secondary and primary classrooms, and construction of buildings and classrooms in 500 colleges, 3,000 schools and 1,000 madrasas, stipends for  some 3.8 million students of grade 6 and above. Prof Manzur Ahmed says: "The key questions are whether the allocated funds are actually used and how they are used to improve learning results. Computers and multimedia can be helpful only if there are teachers who can help students to use them, if these are maintained and kept operational and if there is power supply and working internet connectivity. These remain practical problems in most schools."

"Does the new budget break any new ground and provide the resources for a quality leap in the education system?  Not likely, since the proportionate increase barely keeps up with the costs and numbers of students - there has been no marked change in per student public spending. This spending is one of the lowest in the world and is reflected in the low GDP share and government budget share - much below the international benchmark of 4 to 6 percent of GDP and 20 percent of the national budget."   

The eminent professor goes on asking: "Does the budget envision increasing learning time in primary schools which is less than half of the international standard of a thousand hours per year? Is there an assurance of qualified and trained teachers for essential subjects such as math, science and even languages in every secondary school? As long as the budget is planned to provide for some increase within the existing structure and pattern of expenditure, without major reforms, quality changes are unlikely."

New thinking is needed to attract and retain bright young people in school teaching, which is not just a matter of a higher salary. Area-based planning for each upazila and urban areas are needed to ensure sufficient institutions of acceptable quality aiming at universal primary and secondary education befitting an aspiring middle-income country. 

Although Bangladesh is committed to spend 12 per cent of GDP on health and education (6.0 per cent for each sector), at the moment the country spends only 4.0 per cent on average. For example, education's share to GDP has long been clogged at 2.0 per cent which is much less than some neighbouring countries. South Korea has long been devoting roughly 10 per cent of GDP to education and research alone for decades to be on the highway to growth as well as development. The 2017-18 national budget may take us to highway to growth but not to development. Where would the finance minister find funds to finance education and health? It is time to stop funding sick banks and industries, and take necessary steps to curb money laundering to the tune of a few billions of dollars. 

The writer is a former Professor of Economics at 

Jahangirnagar University. abdul.bayes@brac.net/

abdulbayes@yahoo.com
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