Bangladesh, a developing country, has proven many sceptics wrong, including former U.S. Secretary of State Henry Kissinger. We have not withered away as he had uncharitably anticipated. Instead, in more ways than one, we have progressed despite many challenges. However, we are not out of the woods yet.
In recent weeks we have had some welcome news which has provided encouragement in our efforts to find solutions to existing problems.
The first related to our gas reserves. The Chairman of Petrobangla in an interview clarified that the term 'reserve' was dynamic in connotation and that it 'changes from time to time'. In this context it was indicated that Bangladesh has 12 to 15 trillion cubic feet of recoverable gas reserves left in its known 25 gas fields. He also added that the last three and half years had seen accelerated exploration by Petrobangla as it arranged to pump an additional 691 mmcfd of gas into the national grid. This was made possible because of the discovery of two new gas fields - Shahbajpur and Srikail. The other good news was the confirmation of an economically viable reserve of oil in Kailashtila and Haripur. Apparently, BAPEX after a 3-D seismic survey is convinced of an extractable reserve of 55 million barrels. It has also been stressed by the Chairman that with a higher growth rate in economic development, the rate of consumption of gas and oil will go up. Consequently, special emphasis is being given within the medium-term plan towards off-shore oil and gas exploration in the undisputed blocks in the eastern Bay of Bengal.
The second piece of good news was the report that inward remittances, according to the Bangladesh Bank, had grown by 25 per cent to US $ 5.01 billion in the July-October period of the current financial year as compared to the corresponding period of last fiscal. It was also mentioned that the country's foreign exchange reserve now stood at over US$ 12 billion. It appears that the transfer of money through formal channels has helped the country attain a growth momentum.
The next piece of good news was that despite the continuing global economic recession, the country's merchandise shipment value in October 2012 had marginally increased by 5.25 per cent to US$ 2.077 billion compared to that of the corresponding period of last fiscal (US$ 1.954 billion). The export receipts also surpassed the target set by the Export Promotion Bureau by 2.72 per cent. Statistics also revealed that export earnings in the first four months (July-October 2012) totalling US $ 8.36 billion also showed a nominal growth of 3.08 per cent. This cumulative total was however 3.34 per cent below the set strategic target of US$ 8.65 billion. It would be important to note here that while knitwear and woven garments were almost at par with expectations, the frozen food sector failed to achieve the target as well as the growth rate. Some other major foreign currency-earning products, especially jute and jute products, jute yarn and twine, rubber, ceramic products, glass and glassware, stainless steel ware, plastic products and plastic waste and specialised textiles also fell short of their respective targets.
In all likelihood, this reduced export performance in recent times as compared to fiscal 2010-11, has been due to the global economic crisis prevailing in Europe and other countries in the developed world. The other factor that cast its shadow in this regard might have been the crippling energy and power crisis that led to the rising cost of production of local goods.
From that point it has been fortunate that our import bill has risen but has remained generally within manageable limits.
Another factor that plays a significant role within our economic paradigm has also shown some improvement. I refer here to the overseas employment sector. Relevant authorities have indicated that 0.54 million workers have gone abroad in the last 10 months. The Expatriate Welfare and Overseas Employment Minister has indicated in this context that 1.978 million Bangladeshi workers have joined new avenues of employment abroad in the last three and half years. It might have been more had existing unresolved issues with Malaysia and some other Gulf countries been resolved.
The Economist, the British journal, which is critical of several aspects of governance in Bangladesh, has recently summed up the gradual change within Bangladesh. It has noted that 'Bangladesh has made some of the biggest gains in the basic condition of people's lives ever seen anywhere'. They have also noted that in the past 20 years, life expectancy in this country has risen by 10 years from 59 to 69 which is four years longer than in India, despite their per capita income being nearly twice as much as Bangladesh. It was also acknowledged that Bangladesh had taken long strides in family planning, education (particularly female) and health. The report highlighted the fact that during this last two decades, child mortality has fallen by two-thirds and maternal mortality by three-quarters. The journal has also pointed out that these achievements were 'remarkable' considering that economic growth in Bangladesh has been 'sluggish' and income had risen only 'modestly'. It probably overlooked the data in this regard that yearly economic growth had generally been around 5.5 per cent, much better than many other countries.
The flip side: There is a flip side to the coin. A proper analysis will also have to include the criticism that has come the way of Bangladesh in the recent past. We have had charges levelled against us of having politicised administration and governance and having failed in reducing corruption. Some observers have also drawn our attention to the lack of observance of all expected human rights obligations.
These aspects assume their own importance when viewed with certain other facts. It was reported in early November that Bangladesh had slipped three places to 110th in the 2012-13 edition of the Country Brand Index prepared by UK-based brand consulting firm, Future Brand. Their methodology was based on the prevailing elements within each country's industrial, economic and public affairs sectors. It may be mentioned here that Maldives is at 16 and India at 42. We also need to remember that branding is very important in the presentation of a country in the world stage as a suitable place for possible Foreign Direct Investment (FDI). Consequently, it is not surprising that we are experiencing a lower than expected investment scenario in our country.
Another element that has become a cause for anxiety is the fall in the commitment of foreign aid. It is true that disbursement of foreign aid has increased by 80.58 per cent during the July-September this fiscal, compared to the corresponding period of last fiscal, but the aid commitment during this period was less by almost US$ 1.0 billion compared to last fiscal. The level of concern assumes importance given the impact of international recession on prospective donors.
Both the above factors have received particular attention during the recent review of our Sixth Five Year Plan (SFYP- 2011-2015). It is now generally agreed that the current pace of foreign aid and FDI will not be sufficient in helping the country to achieve either the GDP (gross domestic product) growth target in the Plan or the middle income status sought by 2021. In addition, it is also being blamed that inflation has been exceptionally high and that service sector growth has declined during the first two fiscal years of SFYP.
It is this scenario that has lent special importance to the recently published World Bank report entitled 'Bangladesh towards Accelerated, Inclusive and Sustainable Growth - Opportunities and Challenges'. As anticipated, it focused on some important obstacles to faster economic growth - poor infrastructure, limited FDI, weak economic governance and rising costs of rapid unplanned urbanisation. It also underlined skill shortages and possible adverse future effects of climate change. It was pointed out that unless these fault lines were addressed adequately, in near to medium terms, in a more planned manner, the effects might deteriorate the situation even further.
The Report accepts that poverty has been reduced by 26.4 per cent in the past two decades but also warns that intermittent political turmoil and weak governance, unless reduced, would add to the country's vulnerability.
One hopes that the relevant branches of the government will initiate on urgent basis a review of their macroeconomic management, introduce required reforms and arrange greater investment in the development of human resources, particularly skills through vocational training.
There has to be inclusive growth and multiple channels used through which services can be provided to take our development agenda forward. We also need to focus on how FDI can be increased to meet the needs within our infrastructure. BOT (Build-operate-transfer) and the PPP (public-private partnership) principle can be effective tools for this purpose. A simplified regulatory regime would help.
Everyone agrees that we have done better than expected in our agricultural and educational sectors. There is no reason why we cannot replicate this success in other areas.
Muhammad Zamir, a former Ambassador, is an analyst specialised in foreign affairs, right to information and good governance. email@example.com