The concept of inclusive growth and its status in Bangladesh

Dr M Abdul Jalil 13 February,2016
Dr M Abdul Jalil

The efforts to initiate inclusive business approach and its implementation have started not long ago. People in general are not well aware about the concept and hence publicity is required for creating awareness. In initiating inclusive development or business, it is desirable that its components should be fully understood so that proper strategies are adopted in the context of each component. Bangladesh Institute of Development Studies (BIDS) has recently undertaken a research studies to make poorer people on business opportunities. Chr. Michelson Institute (CMI) showed their interest to work with BIDS. We hope our development bodies and researchers will be immensely benefited from this research. We can expect for a more appropriate model of inclusive development in Bangladesh from it.
Bangladesh has prioritized 13 goals from the SDGs and put emphasis on securing economic growth that is inclusive, reducing poverty and enhanced equality and improving living conditions of the common people. It would be relevant here to point out that recently Bangladesh Bank has published second strategic financial planning covering period, 2015-2019, with the aim of establishing financial good governance, in which six areas including inclusive growth have been emphasized in its detail. While delivering speech at a Banking Fair, recently held in Bangla Academy on SME sector financial education (financial literacy campaign), the Bangladesh Bank Governor pointed out that without the participation of the mass in growth, sustainable and balanced development of the society cannot be achieved. The Governor emphatically said that banks were not only for the rich but for the common people as well.
Financial inclusion boosts up economic development. Bangladesh provided a role model for many other developing nations, which aspire to ascertain sustainable growth through financial inclusion. The banking sector in this country is supporting the drive through bringing millions of unbanked population under the financial umbrella. It may be noted that Bangladesh Bank plans to speed-up financial inclusion through agent banking. A balanced participation in the economic activity is a far cry without financial inclusion. After the success of Mobile Banking Service, Bangladesh Bank is now moving to the rest of the unbanked people with agent banking and speed-up financial inclusion to make Bangladesh a middle-income country within stipulated time. Kaushik Bosu, Senior Vice-President and Chief Economist, World Bank, in his recent visit to Bangladesh, has also appreciated Bangladesh's attempt for inclusive development.
In November third week, Queen Maxima of the Netherland paid a visit to Bangladesh as special envoy to UN secretary general for inclusive finance for development. During her visit she made some comments which are pertinent here. She rightly pointed out that financial inclusion is not a matter of finance at all; it means opening the door for many opportunities. She called for quick formulation of a national strategy on financial inclusion in Bangladesh to help its unbanked population get financial services easily. To protect the poor from insolvency, to invest for the future and if they are given opportunity to prepare their life according to their wishes, it would be good for all and sustainable for future. Since she has been working on this issue for a number of years, her sharing of experience is very significant. Queen Maxima referred with agony that only around 30 per cent people have the access to formal financial services as opposed 25 per cent female in our country. But she praised that poor people of this country are getting this service. She hoped Bangladesh will take appropriate measures to bring all the unbanked people under the formal financial network. Maxima said, "Through financial inclusion, you will have a more transparent system. I will say financial inclusion makes corruption more difficult".
The greatest hurdle in attaining inclusive growth or development in Bangladesh is the paucity of employment opportunity. Again, the target for expected growth is not being achieved for lack of required rate of investment. The country's present rate of investment is 29 per cent of the GDP, but the country's cherished investment is 35 to 40 per cent. Development of the country largely depends on the progressively higher private investment, but such investment is sluggish currently. For structural weaknesses of the economy, achievement of higher growth is not achieved. No country can be developed without developing economic and social structure. World Economic Forum in its Global Competiveness Report 2014-15 showed a comparison of infrastructure quality, where Bangladesh ranks at 130th, with India at 87, China 46, Cambodia 107, Pakistan 119, Sri Lanka 75, Thailand 48, and Myanmar 137. One can understand comparative position of Bangladesh, so poor.
The development of industries, including the most dominant sector apparel industry, is being hampered for the lack of communication and transport facilities, gas and electricity shortage, political instability, absence of transparency, rule of law and efficiency, and prevalence of corruption. To overcome from the situation narrated above, efforts are needed on various fronts. One optimistic feature worth mentioning here is that after much delay the people and governments of this region (Bangladesh, India, Myanmar, China and Pakistan) have realized the importance of regional integration and connectivity and have taken measures to improve those. Even in meeting the needs of energy and electricity, the surplus producing countries are supplying needy countries on commercial basis.
Another feature is that these countries have felt the urgency of improving productive capacity of labour, without which survival in competitive markets would be at stack. Although Bangladesh has been able to gain a position in the apparel market, but only in recent time she stated skill development training for the employees with the assistance of ILO and different bodies. In materializing the targets in all these fields huge investment would be required. Since various developed countries are investing in our country in near future, the benefits would be enjoyed by them and hopefully they will extend assistance and Bangladesh will have to take lead role in this regard.
Inclusive development will be more meaningful when the capacity building of the concerned people will lead to higher earning ability. For sustaining inclusive growth in Bangladesh, it is essential to make adequate public investments in social sectors, especially in education and health along with other essential services for the poorer section of the people so that they can avail the newly created opportunities. Bangladesh's public spending in social sectors as a share of GDP is low even when compared to other low-income countries.
World Economic Forum has recently published 'The Global Gender Gap Report-2015', that shows that the status women in Bangladesh in 2015 rose four steps from the position in 2014. In case of health and life expectancy indicators, Bangladesh occupies first position in the Asia-Pacific region. But in case of economic participation and opportunity, the country is lagging behind. But, the report presents a dismal picture when it says that the women of the world will earn equal to what male are earning today after 118 years. It is not a divine message; human civilization can change this to create a new world. Among the four indicators of health, education, economic opportunity and political empowerment, the women as compared to men have advanced to 96 per cent and 95 per cent, but in other two indicators they are far behind --- only 59 per cent and 23 per cent respectively. So is the position of women globally. Inclusive development, especially for the women can contribute a lot in this regard.
According to Rushidan Islam Rahman of BIDS, for the participation of women in economic activities, availability of sufficient better job opportunities is meagre in Bangladesh. Befitting job opportunities should be created both in public and private sectors. In another article on 'Inclusive Development and Vulnerable Occupation, A Focus on Agricultural Labors', she argues for the necessity of 'drastic change in the entire agricultural sector, both crop and non-crop. It must evolve modernization through mechanization but also diversification into high value products which are skill-based and integrated into an efficient value chain'. Women are engaged mostly in household and family level activities. Along with these activities, women should be engaged in wage earning activities. Recently, we came to know from a TV programme that 12 banks are now providing loans to milk farmers at 5 pc interest rate under the initiative of Bangladesh Bank. In this sort of activities women's contribution will be more; although such earning will be family earning but women should get more credit.
Economic and Social Survey of Asia and the Pacific 2015 report indicates that in the achievement of inclusive growth Bangladesh has done fairly well when compared to India and Pakistan. But Bangladesh will have to go a long way. In a thickly populated country like ours, there are enough scopes of employment generation. Another feature of our economy is that we are less dependent on foreign trade and internal consumption play dominant role. So there are more scopes left for inclusive development. These should be kept in mind in our policy formulation. And we should try to lessen income and property inequality and establish rule of law and transparency in society.
Since Bangladesh is an agrarian country and our rural people is about 70 per cent of the total population, private investment plays the major role in inclusive development in agricultural sector. To make quality agricultural products, including fish, vegetables and fruits, available to the consumers at fair prices, private entrepreneurs should come forward. This will ensure fair prices for the growers and create enough job opportunities and alleviate poverty. Bangladesh is now the world's third largest vegetable producing country. We have more potentiality to produce and our development should benefit people of different strata as they expects. Likewise, in all sectors of the economy either in production unit or service inclusive development can be pursued but with cares.
Bangladesh has been achieving progress quite satisfactorily. She is not only a signatory of the SDG summit documents, but also a proud country for her achievement in MDGs, especially on social indicators. In SDGs, she is highly committed. Interestingly, the country has launched Seventh Five Year Plan recently. On many issues, the goals of both are similar. So, efforts to attain them can go on simultaneously, twining them more vigorous efforts will be economical also. But one of the pre-conditions should be wide awareness among the stakeholders and also general public on the necessity and benefits of inclusive growth/business. This is because the beneficiaries of the growth model now being pursued will try to perpetuate their advantages and keep people in dark. The role of Bangladesh Bank is laudable in popularizing the inclusive development ideas. In different sectors of the economy, particularly in SMEs and in the initiative of services of the common people, proliferation of core ideas, benefits and status in Bangladesh of inclusive business idea is required. (Concluded)

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