Abstract
Much of the recent growth and development in Bangladesh has been narrowly based; it has been primarily propelled by what is labeled in this study as the four drivers of development: ready-made garments; international migration and remittances: agriculture; and nongovernmental organizations. While these drivers have served the economy well in the past, their robustness is likely to be challenged in the future. This chapter identifies a trifecta of major risks, which are exogenous to the government and largely beyond its ability to manipulate. These are rooted, first, in the rapid changing technology in robotics and artificial intelligence; second, in the evolving global political and economic environment; and third, in climate change and natural disasters. Going forward, for sustained growth, the country needs to further diversify, which will require addressing various social, political, policy, and institutional challenges facing the economy, including poor governance, inadequate physical infrastructure, skill and educational bottlenecks, demographic burden, dwindling social capital, and lack of transformational leadership.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
World Bank, in its Growth Report, highlights 13 miracle economies that achieved sustained growth rate in the post-World War period, but several of them have yet to reach the status of high-income countries—such as Brazil, Thailand, and Malaysia (World Bank 2008).
- 2.
The middle-income trap is the condition in which a country’s growth slows after reaching the middle-income level. Middle-income countries are said to be squeezed between the low-wage poor countries that dominate in mature industries with their low wages and the rich countries that dominate in new industries based on rapid technological change. See Felipe et al. (2014).
- 3.
Mckinsey, in a recent series of reports, has analyzed the impact of automation across countries. The institute suggests that half of human work can be automated by currently demonstrated technology. However, it notes that the pace and extent of automation would be determined by the ongoing development of technological capabilities, the cost of technology, competition with labor including skills, and supply and demand dynamics (Mckinsey Global Institute 2017; Mckinsey Global Institute 2015).
- 4.
This section draws extensively from USAID (2015) and Government of Bangladesh and FAO (2011), which use data from many different sources such as the Ministry of Agriculture; Food and Agricultural Organization; World Food Program; Food Planning and Monitoring Unit; and the Ministry of Disaster Management and relief. Unless otherwise stated, data in this section are drawn from these sources, as cited in the reports.
- 5.
The reason for this imbalance in the use of fertilizer is that poor farmers are often unable to procure and apply balanced inputs for crop production. In addition, farmers no longer use crop residue and cow dung for enriching the soil. These days, crop residues are increasingly being used for households, rather than leaving them in the field as compost; and cow dung is mostly used as fuel, rather than fertilizer (Government of Bangladesh and FAO 2011).
- 6.
A moral hazard issue exists here: There is an expectation that if a state-owned bank becomes insolvent or a large part of the assets goes bad, the government would bail out the bank and inject new capital.
- 7.
Transparency International has produced a Corruption Perceptions Index (CPI) since 1995. The CPI views corruption as the abuse of public power for private benefit. Since 2012, the CPI has ranked 176 countries “on a scale from 100 (very clean) to 0 (highly corrupt)”. In prior years, the scale ran from 10 to 0. The 2012 CPI draws on 13 different surveys and assessments from 12 different institutions. The 13 surveys/assessments are either opinion surveys of business people or performance assessments from risk agencies and international organizations (Quibria 2015).
- 8.
The WGI dataset—which is based on the polls of experts and surveys of businesspeople and general citizens—is an amalgam of governance data from a wide variety of sources. The WGI compile and summarize information from 30-plus data sources of four different types: (i) surveys of households and firms (nine data sources, including the Afrobarometer surveys, Gallup World Poll, and Global Competitiveness Report survey); (ii) commercial business information providers (four data sources, including the Economist Intelligence Unit, Global Insight, Political Risk Services); (iii) nongovernmental organizations (nine data sources, including Global Integrity, Freedom House, Reporters Without Borders); and (iv) public sector organizations (eight data sources, including the CPIA assessments of World Bank and regional development banks, the EBRD Transition Report, French Ministry of Finance Institutional Profiles Database).
- 9.
In his Politics as a Vocation, Max Weber argued that a nation-state can be defined by its monopoly over legitimate use of violence against residents of its territory. However, this monopoly must be acquired through a process of legitimation (Weber 1946).
- 10.
Citing the Daily Star , Khan (2017) noted that in 2014, Beximco, one of the politically connected business groups asked for a rescheduling of its nonperforming loans, amounting to $700 million. Restructuring of $130 million was immediately granted by Sonali Bank and $240 million by Janata Bank. Not only was Beximco granted a two-year grace period but also 2–3 percent interest rate reduction. Another nine politically connected business groups were also granted loan-rescheduling equivalent to $1.8 billion.
- 11.
This draws on Barkat-e-Khuda and Quibria (2015).
- 12.
Political tribalism does not have to be based on ethnic fragmentation.
For a recent book on political tribalism in the United States, see Chua (2018) who describes how American society has become increasingly fragmented into tribes, and its democracy into “an engine of zero-sum tribalism”.
- 13.
Durability is a double-edge sword. In a good leader, it represents continuity and credibility of policies, leading to a virtuous cycle of higher savings, higher investments, and higher growth. In a bad leader, it may mean perpetuation of bad policies, wastage of resources (both natural and fiscal), leading to a spiral of corruption and cronyism and economic stagnation—or, even worse, economic decline. An interesting short account on the decline of Zimbabwe is found in Power (2003).
References
Acemglou, D., and J.A. Robinson. 2013. Why Nations Fail: The Origins of Power, Prosperity and Poverty. New York: Crown Publishing Group.
Anner, Mark. 2018. The Sourcing Squeeze: Workers’ Rights and Building Safety in Bangladesh Since Rana Plaza. Research Report. University Park: Center for Global Workers’ Rights, Penn State University.
Asian Development Bank. 1997. Emerging Asia: Changes and Challenges. Manila: Asian Development Bank.
———. 2017. Meeting Asia’s Infrastructure Need. 50th Anniversary Publication. Manila: ADB.
Bangladesh Bureau of Statistics (BBS). 2017. Quarterly Labor Force Survey 2015–16. Dhaka: BBS.
Barkat-e-Khuda, and M.G. Quibria. 2015. Reaping Demographic Dividend. The Daily Star. March 08. https://www.thedailystar.net/reaping-demographic-dividend-18430. Accessed 27 Oct 2018.
BBC (British Broadcasting Corporation). 2012. Bangladesh Rail Minister Resigns in Corruption Scandal. April 12. Accessed 1 Oct 2018.
Brady, David, and Michael Spence. 2010. Leadership and Politics: A Perspective from the Commission on Growth and Development, 1–17. Washington, DC: World Bank. https://openknowledge.worldbank.org/handle/10986/2404
Chua, Amy. 2018. Political Tribes: Group Instinct and the Fate of Nations. New York: Penguin Random House.
Daily Mail. 2018. Saudis Are Forced to Work as Mechanics, Tea-Sellers and Burger Flippers for the First Time as Austerity Bites. July 31. https://www.dailymail.co.uk/news/article-6013627/Burger-wheels-Saudis-try-lowly-jobs-economy-bites.html. Accessed 29 Sept 2018.
Dhaka Tribune. 2018. NCPSSR: Road Accidents Killed 4284 People in 2017. January 2. https://www.dhakatribune.com/bangladesh/2018/01/01/ncpsrr-road-accidents-2017. Accessed 6 Oct 2018.
Fan, Qimiao, and Martin Rama. 2017. Seize the Opportunity Now to Make Dhaka a Great Modern City. The Daily Star, July. https://www.thedailystar.net/opinion/society/seize-the-opportunity-make-dhaka-great-modern-city-1435108. Accessed 6 Oct 2018.
Felipe, Jesus, Utsav Kumar, and Reynold Galope. 2014. Middle Income Transitions: Trap or Myth? ADB Working Paper Series, No. 421. Manila: Asian Development Bank.
FPMU (Food Policy Monitoring Unit). 2013. Bangladesh Country Investment Plan. Dhaka: Food Division, Ministry of Food and Disaster Management.
Government of Bangladesh. 2015. Seventh Five Year Plan-FY 2016–2020. Five Year Plan. Dhaka: Bangladesh Planning Commission.
Government of Bangladesh and FAO. 2011. Towards a Food Secure Bangladesh. Rome: FAO (Food and Agriculture Organization).
Hallward-Driemeird, Mary, and Gaurav Nayyar. 2018. Trouble in the Making? The Future of Manufacturing-led Development. Washington, DC: World Bank.
Hobbs, Michael. 2014. Welcome to the Traffic Capital of the World. The New Republic, July 2.
International Labor Organization. 2016. ASEAN in Transformation: The Future of Jobs at Risk of Automation. Geneva: International Labor Organization.
International Monetary Fund. 2018. Saudi Arabia: Selected Issues. IMF Report No. 18/264, Washington, DC: IMF.
Islam, Nurul. 2014. Overview. In Ship Adrift: Governance and Development in Bangladesh, ed. Nurul Islam and Mohammad Asaduzzaman, 11–31. Dhaka: BIDS (Bangladesh Institute of Development Studies).
Khan, Mustaq. 2017. Anti-corruption in Bangladesh: A Political Settlements Analysis. Working Paper 003. London: SOAS, University of London.
Legatum Institute. 2017. The Legatum Prosperity Index 2017. The Legatum Prosperity Index. London: Legatum Institute.
Lin, Justin. 2012. Youth Bulge: Demographic Dividend or Demographic Bomb in Developing Countries? January 5. http://blogs.worldbank.org/developmenttalk/youth-bulge-a-demographic-dividend-or-a-demographic-bomb-in-developing-countries. Accessed 29 Oct 2018.
Maplecroft. 2014. Climate Change and Environment Risk Atlas. Bath: Verisk Maplecroft. https://www.maplecroft.com/portfolio/new-analysis/2014/10/29/climate-change-and-lack-food-security-multiply-risks-conflict-and-civil-unrest-32-countries-maplecroft/
Mckinsey Global Institute. 2015. Four Fundamentals of Workplace Automation. Mckinsey Global Institute.
———. 2017. A Future that Works: Automation, Employment and Productivity. Mckinsey Global Institute.
New York Times. 2016. Bangladesh’s Other Banking Scam. April 16. https://www.nytimes.com/2016/04/12/opinion/bangladeshs-other-banking-scam.html. Accessed 1 Oct 2018.
Power, Samantha. 2003. How to Kill a Country. The Atlantic. https://www.theatlantic.com/magazine/archive/2003/12/how-to-kill-a-country/302845/
Putnam, Robert. 2000. Bowling Alone. New York: Simon and Schuster.
Quartz. 2017. Rise of Sewbots. August 17. https://qz.com/1064679/a-new-t-shirt-sewing-robot-can-make-as-many-shirts-per-hour-as-17-factory-workers/. Accessed 23 Sept 2018.
Quibria, M.G. 2003. The Puzzle of Social Capital: A Critical Review. Asian Development Review 20 (2): 19–40.
———. 2015. Governance in Developing Asia: Concepts, Measurements, Determinant and a Paradox. In Governance in Developing Asia: Public Service Delivery and Empowerment, ed. Anil Deolalikar, Shikha Jha, and Pilipinas Quising. London: Edward Elgar.
Rashid, Salim. 2014. Suicidal Land Loss. Daily Star. March 15. https://www.thedailystar.net/suicidal-land-loss-16162. Accessed 30 Sept 2018.
Rodrik, Dani. 2016. Premature Deindustrialization. Journal of Economic Growth 21: 1–33.
The Daily Star. 2018. Owners Bankrupting Private Banks: Crony Capitalism at Its Worst. September 1. https://www.thedailystar.net/news/editorial/owners-bankrupting-private-banks-1627201. Accessed 1 Oct 2018.
The Economist Intelligence Unit. 2014. High University Enrolment, Low Graduate Employment. London: The Economist.
The Wall Street Journal. 2012. World Bank Cancels $1.2 Billion Bangladesh Loan. June 12. https://www.wsj.com/articles/SB10001424052702303561504577498363128959728. Accessed 2 Oct 2018.
———. 2018. The Robots Are Coming for Garment Workers. That’s Good for the U.S., Bad for Poor Countries. The Wall Street Journal. February 16. https://www.wsj.com/articles/the-robots-are-coming-for-garment-workers-thats-good-for-the-u-s-bad-for-poor-countries-1518797631. Accessed 24 Sept 2018.
Transparency International Bangladesh. 2018. Corruption in Service Sectors: National Household Survey 2011. National Household Survey. Dhaka: Transparency International Bangladesh.
UN (United Nations). 2016. The World Cities in 2016. New York: United Nations. http://www.un.org/en/development/desa/population/publications/pdf/urbanization/the_worlds_cities_in_2016_data_booklet.pdf
USAID. 2015. Food Security Country Framework for Bangladesh (Fy 2015–2019). Washington, DC: USAID.
Weber, Max. 1946. Politics as a Vocation. In Essays in Sociology, ed. H.H. Garth and C.W. Mills, 26–45. New York: Macmillan.
World Bank. 2006. Economics and Governance of Nongovernmental Organizations in Bangladesh. Bangladesh Development Series, Paper No. 11. Dhaka: The World Bank Office.
———. 2008. The Growth Report: Strategies for Sustained Growth and Inclusive Development. Washington, DC: World Bank.
———. 2013. Enterprise Surveys: Bangladesh 2013. Washington, DC: World Bank. http://www.enterprisesurveys.org/data/exploreeconomies/2013/bangladesh
———. 2018. Human Capital Project. Washington, DC: World Bank. http://www.worldbank.org/en/publication/human-capital
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 2019 The Author(s)
About this chapter
Cite this chapter
Quibria, M.G. (2019). Risks and Challenges. In: Bangladesh's Road to Long-term Economic Prosperity. Palgrave Pivot, Cham. https://doi.org/10.1007/978-3-030-11587-6_4
Download citation
DOI: https://doi.org/10.1007/978-3-030-11587-6_4
Published:
Publisher Name: Palgrave Pivot, Cham
Print ISBN: 978-3-030-11586-9
Online ISBN: 978-3-030-11587-6
eBook Packages: Economics and FinanceEconomics and Finance (R0)