Extra push can erase extreme poverty in urban areas

An additional push can help Bangladesh bring down the number of urban extreme poor across the country by 2021, a leading economist said yesterday.

Bangladesh had 7.7 percent urban extreme poor in 2010, according to the government’s statistical agency.

Binayak Sen, research director of Bangladesh Institute of Development Studies or BIDS, said the number came down to 4.98 percent in 2016, as per his own projection.

“So, urban extreme poverty eradication is around the corner, with a little extra push, before 2021,” he said at a workshop at The Daily Star Centre in Dhaka yesterday.

Urban consumption poverty eradication is also possible well before the UN-set deadline of 2030, as it came down to 14 percent this year from 21.3 percent in 2010, he added.

The sustainable development goals called for eradication of extreme poverty for all people everywhere by 2030; internationally, poverty incidence below 3 percent is considered zero poverty, he said.

“But in a highly populated country like Bangladesh, 3 percent of the total population is a huge number. So, we have to work in both urban and rural areas to bring down the poverty level to zero percent to attain the SDG target on poverty.” Sen, however, said multiple risks persist.

“The issue is not just poverty reduction via temporary poverty escape, but one of permanent poverty escape.”

Apart from consumption poverty eradication, other deprivations in areas such as quality of education, health, nutrition, housing and transport have to be taken into consideration, according to Sen.

“The issue is to transform a middle income country into a middle class country.”

Mihir Kanti Majumder, chairman of Palli Sanchay Bank, said the declining trend of extreme poverty is encouraging.

If the country can reap the benefit of the demographic dividends, develop skills of the youth population, and properly use its resources, Bangladesh would become a developed country, he added.

“So, we need a concerted effort on fronts such as education and health. Agricultural machination is a must as many people are leaving the agricultural sector and engaging in non-farm activities.”

At the workshop, Sen presented an impact of a project run by Dushtha Shasthya Kendra (DSK) with support from the Shiree project funded by UKaid from the Department for International Development and the Bangladesh government.

‘Moving from extreme poverty through economic empowerment’ started in 2009 and worked in several slums such as Karail, Kamrangirchar, Lalbag, Hazaribag, Mohammadpur and Mirpur. The project ended in 2016.

Under the project, a non-refundable fund of Tk 14,000 was transferred to the beneficiaries. They were given training on income generation and were given access to health care facilities, said Masudul Quader, chief executive of DSK.

“There are many people who are not deemed credit worthy or don’t know how to utilise the credit properly, largely because of a lack of capacity. We have identified them. Now they are able to run businesses on their own,” he said.

Under the project, 30,000 households have come out of extreme poverty, said Prof Mahfuza Khanam, vice-president of DSK.

Sen first conducted pilot surveys in the slums in 2011. In December, he carried out a final survey to measure the impact of the project. This time, the number of households was 950, including 200 households under a control group.

The study showed annual income, savings and capital formation and assets have gone up for the beneficiaries compared to the controlled group. Access to sanitation and washing habits also improved.

Beneficiary households registered 24 percent higher income compared to controlled households. The weekly consumption propensity for protein and micronutrient-rich items such as eggs, meat, dairy products and fruits is significantly higher in case of programme members, said Sen.

“The members also have higher aspiration than the non-members for their children.”

Sen said: “It seems that DSK-Shiree should now try to lift their members from moderate poverty given their past success in attacking urban extreme poverty.”

“Yesterday’s extreme poor are today’s moderate poor, and they are already dreaming of becoming a part of the middle class. Can we support their aspiration?”

Mofizul Islam, director general of the Department of Cooperatives, said it is really tough to reduce urban extreme poverty compared to rural extreme poverty, as most poor people live illegally or do informal trades. “DSK-Shiree has done the difficult task.”

Setara Begum, a community leader in the city’s Karail slum, said she has been living in the slum for 25 years after she lost her home in Barguna to river waters.

“I have been given training. I have been given Tk 14,000 as grants, which I used to start a teashop. I also started selling saris with their help,” she said.

“If the government can allocate land to the rich, why can’t it do the same for the poor?”

“But we are always fearful that the slums might be demolished anytime.”

“If the slum is demolished, there will be no place for us to go. We don’t want to become zero from hero.”

Source: Daily Star

বাংলাদেশে মধ্যবিত্ত শ্রেণির বিকাশ (Bangladesh’s expanding middle-class)


Prothom-Alo: সাড়ে তিন কোটি মানুষ এখন মধ্যবিত্ত
বাংলাদেশে দ্রুত মধ্যবিত্ত শ্রেণির বিকাশ হচ্ছে। এ মধ্যবিত্ত শ্রেণির বিশাল অংশ চাকরি করে। তারা এখন ফ্ল্যাটে থাকে কিংবা জমির মালিক। তারা ইন্টারনেটও ব্যবহার করে। টাকাপয়সা রাখে ব্যাংক হিসাবে। সব মিলিয়ে বাংলাদেশের ২০ শতাংশ জনগোষ্ঠী এখন মধ্যবিত্ত। ২০৩০ সালের মধ্যে দেশের এক-তৃতীয়াংশ মানুষ মধ্যবিত্ত হবে। এ তথ্য বাংলাদেশ উন্নয়ন গবেষণা প্রতিষ্ঠানের (বিআইডিএস)। গবেষণাটি করেছেন প্রতিষ্ঠানটির গবেষণা পরিচালক বিনায়ক সেন। গতকাল বৃহস্পতিবার গবেষণার এ ফল প্রকাশ করা হয়। যাঁরা দৈনিক দুই থেকে তিন ডলার (পিপিপি হিসাবে) আয় করেন, তাঁদের মধ্যবিত্ত হিসেবে বিবেচনায় আনা হয়েছে। আন্তর্জাতিকভাবে এ হিসাবটি স্বীকৃত। বিআইডিএস এ গবেষণাটি করেছে ঢাকা শহরের ১২টি এলাকায়। গবেষণার নমুনার সংখ্যা ৮০৯। গবেষণাটি নিয়ে যোগাযোগ করা হলে বিনায়ক সেন প্রথম আলোকে বলেন, মধ্যবিত্তের সেই হিসাবটি ২০১০ সাল ধরে করা হয়েছে। অতীতের একই প্রবণতা ধরে নেওয়া হলে ২০১৫ সালে এসে মধ্যবিত্ত জনগোষ্ঠী মোট জনগোষ্ঠীর সাড়ে ২২ শতাংশ হবে। বিস্তারিত ->

সমকাল (Samakal): ২০৩০ সালে মধ্যবিত্ত হবে ৩৩ শতাংশ
দেশে মধ্যবিত্তের হার ক্রমান্বয়ে বাড়ছে। গত দুই দশকে মধ্যবিত্ত জনসংখ্যা দ্বিগুণের বেশি বেড়ে ২০ শতাংশ হয়েছে। এ ধারা অব্যাহত থাকলে ২০৩৩ সালে মোট জনসংখ্যার এক-তৃতীয়াংশ এ শ্রেণীর অন্তর্ভুক্ত হবে। বাংলাদেশ উন্নয়ন গবেষণা প্রতিষ্ঠানের (বিআইডিএস) এক গবেষণা প্রতিবেদনে এমন প্রাক্কলন করা হয়েছে। গতকাল বৃহস্পতিবার রাজধানীর আগারগাঁওয়ে বিআইডিএসের এক বছরের গবেষণা প্রতিবেদন প্রকাশ নিয়ে আয়োজিত সেমিনারে ‘বাংলাদেশে মধ্যবিত্তের আকার ও প্রবৃদ্ধি’ বিষয়ে গবেষণা প্রতিবেদনে এ তথ্য তুলে ধরেন প্রতিষ্ঠানের গবেষণা পরিচালক ড. বিনায়ক সেন। বিস্তারিত ->

Financial Express: BIDS study reveals growing middle class BD’s dramatic success
There has been a significant rise in the share of middle class group in the country over the last one decade (1992-2000). If the trend continues, the middle income class will comprise about 25 per cent of the country’s total population in 2025 and 33 per cent in 2030. Bangladesh Institute of Development Studies (BIDS) Researcher Director Dr Binayak Sen revealed the information while presenting a keynote paper on “Size and Growth of Middle Class in Bangladesh” at BIDS Research ALMANAC, 2014-2015. Read more ->

Daily Star: Bangladesh’s middle-class expanding
One-fourth, or 25 percent, of the total population will belong to the middle-class income category by 2025, thanks to greater access to education, finance and IT services, and private sector employment, a recent study found. At present, 20 percent of the population belongs to the middle-income category in Bangladesh in contrast to 24.1 percent in neighbouring India. Read more ->

Dhaka Tribune: BIDS: Middle-class people to reach 33% by 2030
The middle-class group is expected to stand at 33% of the country’s total population by 2030, says Bangladesh Institute of Development Studies (BIDS). Over the last two decades, the country witnessed a remarkable rise in middle class group, it said, adding that if the trend continues, the country is expected to add 25% of its total population by 2025. It said only 9% of the population belonged to this category decades back and in 2010, this group accounted for 20%. BIDS Research Director Binayak Sen revealed the information in his keynote paper on “Size and Growth of Middle Class in Bangladesh” at the BIDS dissemination event on presentations from the BIDS Research Almanac 2014-2015, at BIDS yesterday. Read more ->

One-third population to be middle-class by ’33
The size of middle class population in the country may soar to one-third of the total population by the year 2033, which is now 20 percent, says a latest BIDS study. The study entitled: ‘Size and Growth of Middle Class in Bangladesh: Trends, Drivers and Policy Implications,’ published on Thursday, considered those in the segment whose per day income is 2 to 3 US dollars. Research Director at the Bangladesh Institute of Development Studies (BIDS) Dr Binayak Sen, who conducted the study, said the middle-class size now more than doubled to 20 percent from 1990 level of 9 percent and it could soar to 25 percent by 2025 and to 33 percent by 2033, according to their assessment. Read more ->

How political culture matches “Poor Economics”

Binayak Sen

It is often said that “every nation gets the government it deserves”, a quote popularly misattributed to diverse commentators such as Alexis de Tocqueville and Abraham Lincoln but that is in fact derived from Joseph de Maistre’s publication in the Lettres et Opuscules. There is a grain of truth in this. Governance conditions improve more in the context of active citizenry empowered with actionable rights, than in the context of passive citizenship. Political leadership of a given nation-state is a reflection of its constituency i.e. “endogenous” to the characteristics of its citizens. A more nuanced epigram stems from Leninist dialectics where Ulyanov said that “politics is the concentrated expression of economics”. One should not interpret this as yet another iteration of economic determinism where economics dictates what happens to politics. Articulated in the height of the New Economic Policy amidst civil war, when the survival of the new born Socialist state was at stake, the Leninist epigram defined protecting economic peace at any costs as the cornerstone of political governance. There is only a very limited zone of subjectivity within which politics can be truly free and independent of the compulsions dictated by economic interests. The present intervention further narrows down on one aspect of such economic moments by focusing on poverty dynamics and the consequences that such dynamics hold for the nature of political culture.

This article makes two main points. First, the central narrative of the last two decades of economic development can be summarized by a silent but dramatic ascent of the poor. Second, this ascent of the poor, although deservedly celebrated in its own right, has implications for the nature of Bangladeshi politics as seen in the persistence of the overall low-level of democracy.

It may be noted that the poor’s rapid ascent has also made its footprints in the sphere of cultural productions, notably in the rising significance of religion in the context of a weak but moderate Muslim democracy. But, this question will be dealt with in a separate essay.

1. Structure and Agency

Bangladesh has been subjected to oscillating pessimism and optimism in the last 42 years. At one time Bangladesh was dubbed the test case for development. In another time it was seen as the role model of least developed countries (LDCs) in making progress on economic and social fronts. Such oscillations between positive and negative appraisals is not exceptional – it is arguably a common characteristic of many low income countries passing through the phases of stagnation, renewal and retrogression. Sometimes economic institutions grow but political institutions lag behind, displaying the complex interrelations between economic, social and political indicators. Underdevelopment is conceptually expressed not just at the level of low income but also in the unpredicted mismatches between economic and political dimensions of development. Since early last year, the country has been viewed mainly through a pessimistic lens.

This essay glosses over the acuteness of the currently burning issue of post-election political settlements. There has been endless commentary on the subject, especially on the critical importance of an inclusive, free and fair election that would ensure the participation of the historically two major nationalist political parties. The relevance of party-inclusiveness can be seen from the fact that each of these major parties had roughly about 33 to 40 percent share of the votes cast, even when they failed to win majority seats in the parliament (as per 2001 and 2008 elections). The interest in the present intervention however lies in examining the forces of inertia—why things remain as they are—that tend to reproduce the disconnects between economic progress and political regress.

Early entrants into the global capitalist system had the initial advantage in maintaining the complex dynamics between economic and political developments. Historically, in developed countries of the West, economic development could be given exclusive primacy for a long time while paying little attention to political development. Early capitalist transformations of these economies did not require the commensurate – by now established as a universal standard – practice of liberal politics. This was not only true in the case of policies adopted in the New World (colonies) but also in the case of political practices adopted in the Old World (metropolis)—the terms old and new being used originally from the European perspective. Comparative economic history shows that there has been a significant time lag between economic and political moments in the development of Western modernity. Market capitalist institutions developed much earlier than the political institutions of democracy based on universal suffrage. In contrast, developing countries saw the nationalist acceptance of the “idea of democracy” based on universal suffrage much earlier than the corresponding capitalist institutions found their roots in such societies. Although the idea of free and fair electoral democracy based on multi-party system remained popular in these societies it lacked other “institutional ingredients” that make democracy work. Part of the problems stems from ignoring participation and public reason as a precondition to democratic order. The ruling coalition typically lacked imagination and authenticity, and as a result, it lapsed mainly into a “mimicry of democracy” compared to the Western standard achieved today (the problem of mimicry has a pervasive existence in early stages of development, including in articulating nationalism and the idea of Nation).

Bangladesh’s experience of the last two decades, however, suggests that decent long-term economic development can take place even under political regimes engaged in such a mimicry of democracy. That raises a legitimate question: what explains the continued democratic mimicry in the face of such economic development? In other contexts, arguably, such a mismatch between economic and political moments (unstable political equilibrium) would not have lasted long: it would lead either to authoritarian rule or to a more acceptable order of inclusive democracy. What is it in our past development that makes democratic mimicry persistent? It is easy to invoke the continued personal rivalry between the two main leaders of the country—recent telephonic conversation expressed it more clearly–as explanation for the persistence of democratic mimicry. This answer is too easy to be taken seriously. There must be some “structural factors” that underline such democratic mimicry. The interest, therefore, is in understanding the persistence of democratic mimicry in such dynamic economic contexts as Bangladesh where economic conditions for full-blown democracy are not ripe as yet. The problem is analogous to explaining the trend towards mean reversion in finance literature. It is useful to know why things do not improve although (unlike some countries of Sub-Saharan Africa) they do not fall apart either here.

The article takes a long term view on current disillusionment, arguing that the very factors that gave rise to our economic success also contained elements that contributed to democratic underdevelopment or even backtracking, marked by dysfunctionality of political institutions with negative spill-overs on the society at large through sporadic uncontrolled outbreak of extremist violence. In taking this long term view, it specifically focuses on the “structure-agency” framework whereby the main actors of economic development also shape the nature of political subjectivity.

For the purposes of this essay, the term “upper class” denotes the governing class and consists of the political elite, the higher echelon of the business class, the top government functionaries and NGO leaders, and the upper crust of military bureaucracy. The term “middle class” refers to routine business and factory owners, self-employed family entrepreneurs, English-educated salaried workers, managers, teachers, doctors, engineers and other professionals, medium level NGO functionaries, as well as civil society think-tanks and opinion makers. This is in contrast to the “lower class” which consists of peasants, industrial workers, day laborers, transport workers, petty commodity producers, and in general diverse mix of subaltern and marginal social groups.

2. “Poor” Economics

Abhijit Banerjee and Esther Duflo in their influential book “Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty” explored the micro institutional arrangements that benefit the poor most and drew our attention to the choice that policy makers have in designing pro-poor programs and plans. Their phrase “poor economics” is borrowed here to exemplify a path of economic development which rests primarily on the productive use of relatively unskilled labor, resulting in their rapid economic mobility and quality of life improvements. This is “poor” economics because it works well for the poor both as beneficiaries and actors as opposed to a path of development–which can be termed “non-poor” economics–where the main actors and beneficiaries are the middle class and the rich. The uniqueness of Bangladesh’s development that drew global attention is the way poor economics worked particularly well for the poor, resulting in a rapid movement out of poverty within a short span of time with commensurate improvements in social indicators and/ or human development.

The basic narrative of Bangladeshi economic successes is well known, but like most stories of success it can be told differently. “Seeing like the poor” would mean tracing how these economic successes impacted the economic lives of the poor. The four main economic drivers of growth and development in the past two decades have been improvements in agriculture, rural non-farm sector, export led industrialization and remittances. Bangladesh’s efforts in giving impetus to its poor through these four economic drivers was supported by simultaneous social investments in basic health and human development, such as providing decent coverage of preventive health care and primary through secondary education, especially for the female population and the poor. Without the latter, the poor’s participation in those sectorial drivers would not have been successful – for example, exposure to basic literacy and primary education is required for an average female laborer to participate in the ready-made garments (RMG) sector.

While agriculture and rural non-farm sector were the mainstays of development in the 80s and 90s, beginning with the 2000s, export led industrialization and foreign remittances began to play a more prominent role. Rise in agricultural productivity freed up surplus farm labor for non-farm jobs and resulted in rapid internal migration to cities, a development that was supported by export growth and a mode of urbanization where construction sector growth was backed up by remittance. This process of transformation is mentioned elsewhere by the author in a collaborative paper with Mahabub Hossain and Yasuyuki Sawada for the WDR 2013 for Jobs. The truly striking facet in this story of transformation is the crucial role of relatively unskilled labor, noticeably including female labor from the 2000s onwards, in the agriculture, rural non- farm, export led industries, and construction sectors.

This has resulted in the economic ascent of relatively unskilled labor — the poor and the poorest — along the poverty and human development ladder. The mystery of the success in meeting the MDGs at a relatively low level of income, for which Bangladesh is so applauded at home and abroad, lies herein. Bangladesh’s development irrespective of political regimes and ideological orientations cannot be understood merely by looking at macro growth figures – it requires close examination of micro statistics of the ascendancy of the poor across the four main drivers previously mentioned.

While this story is well known to close economic observers of Bangladesh, less discussed is the impact of “poor” economics on other aspects of economic, social and political lives. The virtual lack of rapid and mass public transport in urban areas is one of the most striking economic expressions of inadequacies of democratic culture in Bangladesh. The poor simply lacked the citizen voice to demand decent public transport both in terms of intra-city travel and inter-city connectivity. The absence of citizen voice has been a general problem afflicting the entire range of public services. Had the middle class been the driving force of economic development, the likelihood is that it would have been more successful in extracting better quality public services from the state. In most countries of the world there is a broad correlation between the level of middle class activism and the development of urban transportation. A cursory comparison of the capitals of the two Bengals, Kolkata and Dhaka, illustrates this point well with the former enjoying far greater choices of public transport services. In all advanced democracies where the middle class remains an influential voting constituency, the creation and/or maintenance of a decent and inclusive public transport is regarded as a political good.

The corollary question is why the voices of the non-poor have also not been strong enough to extract better quality public services in Bangladesh? Given the faster poverty reduction in the last two decades, with the poverty headcount declining from approximately 62% in 1991/92 to 32% in 2010, one might have expected a significant qualitative change in the supply of public services. This has not happened because of two factors, one economic and the other sociological. Rapid moving out of poverty was not matched by an equally rapid increase in the population share of the middle class since there is an analytical gap between crossing the poverty line and becoming part of the middle class. Recall that the non-poor is a mixed category comprising of vulnerable non-poor (those in the vicinity of $1.25-2 line), lower middle class ($2-3 line), upper middle class ($3-4 line) and upper class (above $4 line). This article deliberately deviates from the internationally suggested definition of measuring middle class as being in the range $2-10 line because of the low average income of Bangladeshis. In the last two decades, of those who escaped poverty very few entered into the stratum of upper middle class, but instead most of them found themselves in the vulnerable non-poor and lower middle class categories. Swelling in the ranks of specifically these two categories is one reason why poverty reduction was not translated into improved quality of public services measured in terms of broad-based access, beneficiary satisfaction, significant impact, and low corruption. However, the issue is not only the relatively small size of the upper middle class. The middle class is not just an economic category but also a sociological category. The core of the middle class was classically defined by the English-educated workers and those employed in salaried jobs. The proportion of workers with English education (loosely defined as educated above class 10) and salaried jobs has increased much less dramatically than the rate of poverty reduction, thus effectively explaining the smaller traction of the sociological middle class with regard to improvement of public services and the democratic politics of public goods provisioning.

From the view-point of public economics, the issue of distributive justice is an important consideration in explaining the quality of growth and development. Successful democracies cannot afford to ignore the issue of distribution even from the electoral angle of winning over the “median voter”. Bangladesh has been experiencing sharp rises in inequality of income and assets over the last two decades. But, equally striking has been the simultaneous increase in the “tolerance for inequality”. Here too poor economics played a role of crucial difference. In a sense, the success of poor economics came as part of a Faustian bargain. While poverty was reduced, inequality in the distribution of income, assets and power rose sharply. It can be argued that the latter was an outcome of an attitude of political permissiveness towards corruption. Inequality of unearned incomes is likely to be higher than the inequality of earned incomes. It is likely that inequality of unearned income sustained by corruption and violation of legal norms–rather than human capital and skill based differences in income and asset acquisition—has fueled this sharp rise of inequality in income and assets. Widespread media coverage of the wealth statements of the ruling coalition candidates that were submitted to the Election Commission in the recent January 2014 election indicates that possibility. This has possibly been a reflection of the wider pattern of the accumulation process that underpins the formation of upper class and upper middle class. Such a process of wealth accumulation and the causal role of illegal incomes are likely to be captured inadequately in the HIES data, thus misleading the true extent of worsening ground realities in this respect.

The ultimate consequence of sharp rise in inequality was the diversion of focus of the politically influential upper and upper middle classes from improving the public services by holding the state actors accountable. Inequality enabled these privileged classes to rely more on private exclusive services (such as private transport, private security services, private clinics, and private schools) to form an enclave of their own with little traction with the system of distribution of public services.

Nevertheless, such elitism in the Bangladesh context was different from similar situations in Africa in that it also permitted a considerable degree of economic mobility for the poor. This helped to mitigate the bite of inequality on social peace and stability to some extent. Essentially, the poor did not object to the unprecedented concentration of economic power so long as they could also improve their fortunes. Politically, such an appeasing “class compromise” translated into subservient acceptance of the low quality of political culture. Such a class compromise on the part of the poor was, in turn, additionally rewarded by the governing coalition through implementing anti-poverty programs. The latter include social protection transfers and basic human development programs that benefited the poor families. Admittedly, such programs were not successful in equal measures between the poor and the poorest, rural and urban areas, and between ethnic majority and minority identities.

To summarize, in this implicit social contract, the poor benefit but the middle class and upper class benefit much more on the backs of the poor. Tolerance of such inequality will depend on the durability of success of this covenant. As long as this basic compact holds on, the poor economics shows a path of development that is much better than economic stagnation with worsening poverty along with exclusive reliance on a wasteful rent-seeking path of development. The sustenance of Bangladeshi democracy, up till now, rested on the political marketing of this covenant. The next section will argue that the success of this compact also contains elements that undermined itself, as reflected in political culture.

3. “Poor” Politics

Poor economics had significant footprints on the entire ensemble of relations that contribute to the low quality of political culture: the choice of political candidates, the relationship between the major political parties, the degree of inner-party democracy, the pattern of personal loyalty to the leaders and leader-worship, the rhetoric of political leaders, and, in general, the level of political discourse. Democratic mimicry is apparent in all of these.

The process that contributed to the low quality of public services in Bangladesh, as described in the previous section, is equally applicable to the production of low quality political governance. As long as the political class regarded the poor to be the median voter, the leaders did not feel enough electoral pressure to change the existing political and administrative practices both within the party and within various branches of the state. This is paradoxical since rapid poverty reduction in the last two decades also meant that a typical median voter now would actually be a potentially demanding non-poor (the new class of “movers” out of poverty). Nevertheless, the basic power equation underlying the political economy of public policy has not varied. This is because the new median non-poor voter still does not represent the electoral power of the middle class and is likely to be a representative of the vulnerable non-poor variety, lacking economic and political allies. Furthermore, his demands and psychology do not vary significantly from those of the poor voter. As a result, even though the country’s political scene has witnessed the practice of democratic mimicry for the last two decades, the procedural practice by itself did not lead incrementally to desired democratic transformation. The latter seems to be a tall order to attain for poor economics.

Not only has the social dynamics, seen through the angle of changing profile of the median voter, failed to create sufficient political pressure for political reform, it may have become an excuse for the political leaders to evade and postpone institutional changes that are being demanded of them. For example, the need for modernization in politics—campaign finance reform and inner-party democracy for instance–has been indefinitely postponed by invoking the argument that such reforms while desirable are not practical given the stage of economic development. This political underdevelopment was not addressed by the prevalent strategies, articulated in the global discourse, which focused instead on basic needs in the 1970s, structural adjustment in the 1980s, and MDGs in the 1990s. These strategies, while vastly different, nevertheless operated within a narrow definition of development and did not give equal priority to easily monitorable political indicators along with economic and social indicators. This further reduced the compulsions to improve political culture. Instead, the focus of politics and politicians turned towards appealing to the lowest common denominator of the population, thus preventing a higher level of political discourse corresponding to the standards of the sociological middle class.

The failures of the poor and vulnerable non-poor in this regard are perhaps understandable, but why was the middle class not able to change political culture? The small size of the middle class segment cannot be invoked as an adequate explanation here. In the 1960s, the Bengali middle classes could provide political leadership during the national liberation movement, even though it was proportionately smaller then than it is now. Why then is the comparatively larger middle class now incapable of effecting political reforms? After all, the share of the economic middle class has increased from about 8% to 19% between 1991/92 and 2010 (according to author’s estimates using the Chen-Ravallion line for middle class). Back in the 1960s, the newly formed middle class or the vernacular elite were the children of peasants and the consequent national liberation movement drew on the resources of a deeply peasant Bengali nationalism, which had broad based national appeal. This is no longer the case. The urban middle class is now distant from the peasant mode of economic and cultural lives. They may walk on the streets of Dhaka but actually feel more at home in living in the global village of the advanced countries. A vast Bangladeshi diaspora continues to feed the dreams and aspirations of this class. In short, formation of economic middle class per se does not mean the growth of political middle class willing to fight for the modernist ideals of political democracy. In addition, the middle class has also been a beneficiary of the system of poor economics, especially through urban property development, exports and remittances, and enjoyed their share of the spoils of corruption and rent-seeking. Ultimately, this has subdued and defused their reformist potential to take on both parties of the political equation–the government and the opposition alliance–even on basic libertarian issues such as political repression by the state and opposition violence against ordinary citizens, including ethnic and religious minorities. A recent telling example is the inability of the business class to enforce discipline on the political process even at the cost of their own financial interests. Arguably, the democratic activism by the middle class would have been more likely in the context of economic decay. This has been a central thesis of Benjamin Friedman in his book “The Moral Consequences of Economic Growth”. On the other side, the political class could easily disregard the demands of the middle class because political leaders are aware of and rely significantly on the support of the lower class when it comes to electoral democracy.

Perry Anderson once noted that the economic causes underlying the dynamics of Tahrir Square movement were linked with vast educated unemployment along with rural distress. The Bangladesh scenario has been different (so far) from that context because of the success of poor economics, as discussed in the preceding section. This description should not mean that the members of the lower class have no agency of their own against the profit, power and privileges of the upper class. In fact, in the past two decades the members of lower class have repeatedly demonstrated their agency by replacing one party by another in successive elections but stopped short of demanding a higher quality of political representation. Their surprisingly enthusiastic turnout in past elections under the guise of festive participation can then be interpreted also as a subversive activity of the lower class corrosive to one-party rule. In the West, such subversion has been tamed by the ruling classes, resulting in low voter turnout and political apathy. In our case, participation in elections has been an art of popular resistance. This is the key reason why the people feel so disenfranchised by the prevalence of uncontested seats in the recently held one-sided election.

The sustainability of maintaining this democratic mimicry based on poor economics would be eventually challenged in the process of development. The essay takes a long-term of view on political reforms based on class formation, class dynamics and class action. The dialectics of poverty reduction contains the seeds for such change – as education and literacy increases, the first generation movers out of poverty who have relied on the four economic drivers of poor economics will graduate into the category of English-educated salaried middle class in a more industrialized and urbanized settings. Alternatively, the current middle class could become more active in demanding political change. This evolutionary path of transition from poor economics to middle class economics is not devoid of tensions, slippages, conflicts and revolutions. Studying other countries experiencing rapid poverty reduction under democratic mimicry may hold some useful lessons in this regard but will have to remain a topic for another article.

Binayak Sen is Research Director at the Bangladesh Institute of Development Studies (BIDS).

7.2pc GDP growth hinges on three criteria

Achieving 7.2 percent economic growth in the next fiscal year is possible if three criteria are met, Akbar Ali Khan, a former caretaker government adviser, said yesterday.

Bangladesh will achieve the GDP growth target if: there is no natural disaster, global fuel prices fall at least 20 percent and the fiscal and monetary policies are managed prudently, Khan said.

Khan’s optimistic remark comes at a time when many economists were sceptical of the high economic growth target.

Addressing a discussion on the proposed budget organised by the Bangla-language newspaper Prothom Alo, Khan said the economic growth will not be in a linear fashion.

“There may be ups and downs, but there should be reasons for them though.”

He is not too supportive of the government’s expansionary fiscal policy on the grounds that exchange rate would shoot up giving way to a higher inflation, which, in turn, would create uncertainty in the economy and have a negative impact on investment and sustainable development.

On the government’s recent agreement with the International Monetary Fund (IMF), Khan is doubtful of whether the targeted economic growth could be achieved or inflation could be controlled.

“But the government should still fulfil the promises it has made to the IMF to get assistance. Otherwise, it will create a big problem for the economy,” he said.

Dependency on fuel import is another big predicament for the economy and the government should take a measured approach over it, he added.

Dr Binayak Sen, a research director of Bangladesh Institute of Development Studies (BIDS), said the 7.2 percent GDP growth mostly depends on private sector growth.

“There is no connection between the economic growth and other components such as investment and export growth prediction.”

A big portion of the annual development programme remains unimplemen-ted every day, Sen said.

“If the central government cannot implement it, then it should be passed on to the local government. ADP implementation through local government will also increase government’s popularity,” he said.

Mustafizur Rahman, executive director of Centre for Policy Dialogue, said if the government wants to achieve a higher economic growth, it needs to bring out more reforms.

“We have seen the first generation reforms such as privatisation, and now it is time for second generation ones such as demutualisation in the capital market and formulation of financial reporting act,” he said.

“The proposed budget mentioned 1,027 projects, of which only 35 are new, while the rest of them are the projects that have been either carried over or need to be conducted in the next fiscal year,” he cited.

From a political viewpoint, implementation of next fiscal year’s budget would be vital for the government itself, he added.

Subsidy zooms, again

Rejaul Karim Byron

The growing dominance of subsidy in budget allocations in recent times has started to worry the finance minister.

In the proposed budget for next fiscal year, subsidy, at 18 percent of the total outlay, yet again stands to become the highest single expenditure for the government.

The allocation for subsidy has been kept at Tk 34,533 crore for fiscal 2012-13, a 14.5 percent rise from this year’s Tk 30,154 crore.

For fiscal 2011-12, the original allocation for subsidy was Tk 20,477 crore, which was then revised to Tk 30,154 crore, making it the highest single expenditure for the year.

The steep increase in subsidy is mostly in fuel, electricity and agriculture sectors, with the upward trend mainly due to soaring petroleum prices in the world market and an increase in fuel consumption by rental power plants.

Extension of support to the jute sector by the government also accounts for the inflated figures. The sector’s subsidy — historically in the range of Tk 200 crore to Tk 300 crore — went up to Tk 2,900 crore in 2011-12. For the next year, the government set aside Tk 1,700 crore.

“Our subsidy payment is spiralling due to lack of sufficient price adjustment to match the increasing fuel prices in the international market,” the finance minister said in his budget speech.

“This is intensifying pressure on the financial sector, government budget and the economy. We must, therefore, cut down on subsidy, especially on fuel,” AMA Muhith said.

Some economists, however, have opposed the proposed move and would like the subsidy carried into the future. Their premise is that the price adjustment will push up inflation which, in turn, will hurt the poor.

On the other hand, Binayak Sen, research director of Bangladesh Institute of Development Studies, would like the subsidy to be reduced for the sake of macroeconomic stability.

“If subsidy pushes inflation up it will not bring any benefit,” he said.

On certain quarters’ demand for equal subsidy to the power and agricultural sectors, Sen said a greater weight must be given to the power sector in the interests of investment and growth.

The government should reconsider its decision on rental power plants if the fuel price continues to spiral in the world market, Sen said. “If the price does not increase further there is no need to assign more subsidies.”

For fiscal 2012-13, the government has allocated Tk 6,200 crore for energy subsidy and Tk 6,400 crore for power.

‘In our economic reality we cannot avoid foreign assistance, at least for now’

Dr. Binayak Sen

Dr. Binayak Sen is a Research Director at the Bangladesh Institute of Development Studies (BIDS). He was lead consultant in the preparation of I-PRSP for Bangladesh and also a Member of the Public Expenditure Review Commission. His main areas of work cover growth, poverty, inequality, labour and governance issues. Here, he talks on the upcoming ADP with A.B.M. Shamsud Doza and Zaheen Zaema Khan of The Daily Star.

The Daily Star (DS): Government has allocated Tk. 55,000 crore for the ADP of fiscal 2012-13. How do you evaluate the upcoming ADP compared with the performance of the current ADP?

Binayak Sen (BS): The low inflow of foreign aid this year and rising fuel prices in the international market are reasons for the current macroeconomic instability. Both are external. We need to convince the donors so that we can get aid for our development budget. That needs political skill and robust economic diplomacy. We need to understand the psychology of the donors. In our economic reality we cannot avoid foreign assistance, at least for now. China also applied for IDA even as late as 1995!

ADP implementation requires foreign currency. It also needs access to concessional source of finance. We are not getting it. For example, we have deficit financing of 5% of GDP, of which 2% is financed through foreign aid, and the rest 3% comes from domestic borrowing. In this fiscal year we had shortfall on account of the former, and hence we had to rely heavily on domestic borrowing. That has created problems in ADP financing. Our ADP implementation is now critically dependent on the availability of foreign assistance. In 2007-08 a similar situation prevailed. The prices of food, fuel and energy were rising in the international market and the government was constrained fiscally. During that time, major donor agencies provided at least 3 major budget-support loans, which helped to ease our problems in ADP financing and also in meeting stresses that built up on balance of payment. Unfortunately, this did not happen in 2011-12, and it may not happen in 2012-13 either. This is the time to recognise fiscal realism as a virtue of good rule. I am trying to draw attention to this aspect of governance so that the government can start addressing the trust deficit between the major donors and the government, between the West and Bangladesh, or at least stop creating new tensions or re-igniting old sore points.

DS: In the next ADP the total number of projects is 1037, of which 1002 is a backlog from the current ADP of 2011-12. It seems that the ADP is burdened with projects while the implementation is poor. What is your view on that?

BS: The quantity of the projects is also a problem in ADP implantation. There are projects that do not have adequate financing. Some are even “token projects” with symbolic allocations of funds, waiting to be funded in some near or distant future. My proposal is to rank the projects in order of priority. Priority should be given to ADP projects that were started but not yet finished. In any case, the whole process of ADP project selection needs to be reformed. It should not be just limited to the judgment of the sectoral ministry. There should be broader consultation, with participation from specialists and civil society representatives on the relevance of a particular ADP project, especially if it is a major project in terms of size and impact.

By March, 2012 only 50-60% resources under ADP were implemented, and the rest will be spent hurriedly by June. This has been the feature for the last two decades. It is very difficult to monitor the implementation from “one centre” in a country with 160 million people. The former Soviet Union failed to manage its economy from “one centre.”

Our economy demands fiscal decentralisation because of our enormous population (population-wise it is ranked 7th in the CIA World Fact Book). Hence, for the speedy implementation of the development budget, at least 10-15% of ADP resources should be earmarked to go directly to the local governments as conditional matching grant. The condition is that local bodies will be given 80% of the local development budget from the centre if they agree to generate at least 20% of that. This is practiced routinely in most developed countries as well in some of the South Asian countries, especially in the Indian state of Kerala where one-third of the budget goes directly to the local governments. The Union Parishads and Pourasavas will be able to make their own ADP according to their local needs. The local physical infrastructures that are not covered by either LGED or Roads and Highways Department can be covered under the local ADP. The ADP budget is inadequate for large number of Union Parishads and Pourasabhas.

There has been some positive experience in Bangladesh in supporting local governments through innovative projects like Local Government Support Project (LGSP); but such projects need to be scaled up across the country with adequate fiscal empowerment, especially with regard to local-level revenue mobilisation. But, for that, we need to reform also a few taxation codes so that the local governments have the legal entitlements to raise local revenues.

DS: In the next ADP, Tk. 33,500 crore of the total allocation is projected to come from domestic resources and Tk. 21,500 crore will come from external resources. Do you think the share of external resources is realistic given the non-availability of external assistance in the current fiscal year following World Bank’s suspension of funding over corruption allegations?

BS: It is not unrealistic, and this I say even after the dismal Padma Bridge affair. But, the government needs to apply more efforts so that all the issues could be settled in a congenial way and without further delay. That is the national priority. I have two points to make. First, the economy should dictate the terms of politics and the nature of our external diplomacy. Economics is the concentrated expression of politics. Even for China, good relationship with World Bank is vital. Considerable efforts are needed here because the domestic resource for financing the ADP will not be enough. Tax collection has increased, but there is a long way to go before we can say that we are self-reliant fiscally. This we realise even more in times of economic slump, which is now happening again worldwide.

Secondly, we cannot rely too much on domestic borrowings because we have already built up considerable internal debt on account of interest payment on government loans from domestic sources. This has become a large component of our revenue budget already. Hence, we cannot go for domestic borrowing infinitely. Besides, there are other implications of this mode of domestic financing for the private sector borrowers.

Finally, the amount of external resource that we currently receive is within our “resource absorption capacity,” i.e. fiscally realistic, but steps must betaken, especially on government’s compliance standards, so that the concerns of the donors are met.

In defence of the current government I would say that sometimes the donors give too much weight to anti-corruption measures than to pro-human rights and democracy measures. In 2007-08, the donors did not pay much attention to the violation of human rights that was taking place then, or that the democracy standard was not always upheld during that period. I always had a debate on this. My point is that anti-corruption, human rights and quality of democracy should be given equal weight in judging a borrowing country’s performance standard. I also maintain that these measures of good life and decent liberal democratic society should not be traded against one another.

My point is that Bangladesh is still maintaining a decent though different democracy, and that it has not derailed to autocracy or to any military driven development, so some positive credit and some pro-active support by way of aid and other economic advantages need to be given to Bangladesh, at least for upholding the standard of liberal democracy. Even on the human rights performance — although the current situation is getting increasingly murkier — I would argue that it is still better than it would have been under autocracy, and that may also be taken into account. Bangladesh has a negative image in relation to corruption, but corruption cannot be discussed without discoursing on largely corruption-driven income inequality concerns, and I agree that this needs to be addressed.

DS: In this ADP, among the 17 development sectors, the power sector gets highest fund followed by communication, education and religion, and rural development and rural institutions in terms of priority. Do you think the prioritisation is reasonable?

BS: I think these are broadly in right direction. As I said, whatever is half-done needs to be fully completed, whether it relates to power sector or to communication. But this applies only in the case of the major ones. One of the key sources of ADP corruption is the small infrastructural road projects, which often tend to be undertaken from political consideration. For instance, some road projects in the ADP may be included because of the requests of the local members of parliament: such projects may not have any national or regional significance so we need to be cautious about it, and strike a balance between what is needed from the national point of view and what is being motivated from a political point of view. This is the last full budget before the next election, and there will be obvious political pressures for undertaking projects from local or national political exigencies. Normally, those projects tend to be of lower quality and need to be discouraged. The ministry of finance is also aware of this and that may the reason why many of those projects have been included under the ADP, but they have not been allocated resources or at most given only token resources “on the book.” This may reduce the political influence on the infrastructural and other projects in the ADP.

DS: It seems that the government formulated the ADP eyeing the next elections. Do you think that political consideration has got priority over economic consideration?

BS: I don’t think that was the major driving force. In the last three to four years’ ADP budget economic consideration drove the ADP selection process and not the usual political consideration. However, in this year’s budget, we apprehend there will be strong political pressure, and some quarters might want to see ADP being flushed by politically “imagined” projects, especially by national or local political functionaries and their cronies. On the whole, I don’t think that the ADP is motivated by political consideration, simply because, if you look at how the public expenditure-GDP ratio has increased over the last several years, you’ll see that there has been only a gradual increase, i.e. there has not been any dramatic increase which would have suggested that there is a spending spree on the part of the incumbent government and spending spree always helps the political contractor. I don’t think, in an analysis of the fiscal expenditure of twenty years, we will find any trend towards fiscal profligacy: the budget deficit was always maintained within the parameter of 5-6%. The inflation rate, until recently, was maintained in the range of 5-7% and the growth was accelerating gradually by half percentage point every five years. I think that has been the record for the last twenty years.

I feel that the ministry of finance and the Bangladesh Bank are more or less insulated from political cronyism. But, there have been disturbing instances of undue influence of politically powerful business groups during successive regimes. For instance, due to pressure of such groups, the government waived all taxes on the profits earned by individuals who had invested in the secondary share market. This year, there is pressure by the big propertied class to remove the provision of “property tax” (imposed in the form of additional 10% surcharge on taxes paid by people owning properties exceeding Tk. 2 crores). There are also implicit financial concessions given to large-scale borrowers/defaulters who pay very little by way of “cash payment” and get away with periodic “rescheduling” of their overdue loans. Those powerful actors who profited from the share market scam of 2010 have not been pursued by the government following the preliminary report on the same by the Ibrahim Khaled Committee. New banks are being allowed to open at a time when the existing banks are suffering from liquidity shortage. These banks are not necessarily bringing any new financial products to the market, say, by addressing the needs of the SMEs and/or addressing any missing social segments not serviced by the existing banks. I am told that the ministry of finance and the Bangladesh Bank are currently under tremendous pressure from politically influential lobbies to allow a few more new banks in the private sector. People with political affiliations with the ruling party have been made “directors” of the nationalised commercial banks (NCBs). That this has been the case in the successive regimes since 1991 does not justify such a decision. NCBs should be run mainly by professional bankers. Why can’t these NCBs get out of the mess of “sick industry” loans and “classified” loans? What happened to the proceeds of privatisation from units that were privatised two decades ago? Why is there no policy talk about privatisation of state-owned enterprises anymore? Is there a chairman of the Privatisation Commission at present? Has one been appointed? In Din Bodoler Pala I think the government said that to reduce losses of the public enterprises many of them will be privatised and divested. What has happened to the mission of privatisation? Why is nobody talking about whether there has been any progress in this respect? These are examples of many unanswered questions. Even the World Bank does not talk about debt default and privatisation anymore. In those areas I find that the progress has been much less than satisfactory.

But this is not all. Not only could we not reform the bad economic institutions, we also managed to undermine the good economic institutions. Thus, a few economic institutions of excellence with sound financial health, proven track record and global recognition have to face unreasonable and unfair interference “from above” — probing through committees, commissions or otherwise, which are perceived widely as being politically motivated — as in the recent probe into Grameen Bank and its subsidiary companies! The unfortunate part of these investigations is not the tension that often persists between the state and the NGOs. It is not about institutional rivalry about the command over service delivery. It is taking the form of an apparent crusade by the state machinery to undermine the fame and the moral authority of Professor Muhammad Yunus.

Our world’s greatest misery is often caused not by the fight between good and evil, but marked by the fight that takes place between two key players on the same side. By that, I mean the liberal-democratic side that took part in the struggle for our independence and for its subsequent development. It is one of the most unfortunate events that I have witnessed in my professional life as an economist.

DS: In the next ADP, 10 projects have been included under PPP though the government has failed to utilise a single penny from the Tk. 3000 crore of the current fiscal so far. What do you say about this?

BS: We need to find out whether these PPP projects did not happen because of lack of interest on the part of private sector or because of the macroeconomic stabilisation concern that the government could not allocate enough resources to play its own part in order to support these PPP projects. We need to find out the real causes. Is it the lack of interest on the part of foreign or domestic private sectors in those projects? Since there are ten projects of Tk. 3000 crore, which means Tk 300 crore on average, that makes them big projects. We need to know what the main cause is behind non-implementation of each of these big PPP projects.

DS: Our ADP implementation rate is poor. This time the Planning Commission has taken initiative to form a body to monitor ADP implementation. How do you evaluate this move? How can we do better in implementation of the ADP?

BS: I have heard about it and the finance minister has been saying that there have been certain institutional changes in this regard, but we need to find out more about what actually took place. I was a member of the Public Expenditure Review Commission in 2001-03, which was led by Mr. Hafizuddin Khan. I recall that we made a number of suggestions with regard to institutional monitoring of major ADP projects. For example, we suggested new institutional mechanism — an improved process for the selection of ADP projects (especially exceeding certain size thresholds) and also how they need to be implemented and monitored. For that, there has to be a civil society, government and academic partnership programme so that these project implementations (especially for large projects) can be monitored. In India, for instance, in the last fiscal year they created an Independent Evaluation Office outside the orbit of their planning commission to monitor a selection of major central government projects every year. The idea is that the Planning Commission needs to be supplemented by evaluation office that would run very much like the evaluation offices in international agencies such as World Bank or ADB.

Our own version of IMED in the Planning Commission is not up to this task for a variety of reasons (it is actually used as a dumping ground for the civil servants; the IMED has been provided with very little incentives and resources, and is also deficient in evaluative skills). I strongly suggested earlier that a similar office as in India needs to be created here as well. In fact, we could go further than that.

There is a need to have an independent evaluation commission — similar to Human Rights Commission and Information Commission — which would be a permanent set-up for monitoring the implementation of ADP projects and testing the rationale for a particular ADP project in consultation with specialists, media and the civil society. It will perform a very important role in ensuring the quality of ADP projects and can be chaired by a fiercely independent minded person, as should be case with other commissions. Such an institutional body can perform very important development functions. Unfortunately, as I said earlier, reform has become an ugly word for the present government, which has apparently lost its appetite for institutional reforms. So, even though my proposal may carry economic rationale, it is likely not to be accepted. As Paul Krugman once put it, we are actually passing through an “age of diminished expectations.”

Rabindra Utshab 1419: Chhayanaut holds two-day programme

A group rendition by young artistes of Chhayanaut (top); Sharmila Banerjee led the dance performance to live music. Photo: Mumit M. Zahangir Alom

To celebrate Rabindranath Tagore’s 151st birth anniversary, his works and philosophy, Chhayanaut held a two-day ‘Rabindra Utshab’ (festival) at the main auditorium of Chhayanaut Sangskriti Bhaban in Dhanmondi, Dhaka. The festival began on May 8. Leading and upcoming Tagore artistes of the country as well several cultural organisations participated in the event.

This is the fourth ‘Rabindra Utshab’ by Chhayanaut. The organisation was founded in 1961, on the occasion of the Tagore birth centenary.

The festival began with a song-and-dance presentation by the young artistes of Chhayanaut. Several dancers performed to a live rendition of the song “Momo Chittey Niti Nritye”.

Dr. Binayak Sen presented as essay, titled “Bhinno Mot-er Rabindranath: Chithi Potrer Shakkho”, on the opening day. President of Chhayanaut, Dr. Sanjida Khatun, welcomed and thanked all at the event.

Dr. Binayak Sen meticulously pointed out the excerpts of the constructions of alternative that Tagore created, especially in his letters written to several litterateurs, his friends and family members including Priyonath, Sudhindranath Dutta, Buddhadev Bose, Amiyo Chakraborty, Sanjay Bhattacharya (editor of Purbasha), Kadambini Devi, Indira Devi and Hemanta Bala Devi.

“We find Tagore’s viewpoints on political, social, economic, agricultural and theological opinions and philosophies in his letters. The bard was absolutely a free thinker and was never stuck to certain ideas. He had even gone against the societal customs too. Sometimes, he clarified his visions with a hint of ambiguity but never leaving out humanity. Tagore’s love for entire humanity was his unique religion,” said Dr. Binayak Sen in his essay.

A cultural programme followed the presentation. The event featured dance performances, poetry recitation and rendition of choral and solo songs.

Artistes of Chhayanaut performed “Kothao Amar Hariye Jawar Nei Mana” that seemed to reverberate with the presentation of Binayak Sen, in tune.

Noted dancer and teacher Sharmila Banerjee, her daughter and also a Chhayanaut teacher Sudeshna Swayamprabha, and four other artistes of Chhayanaut danced to a Tagore song “Bajey Bajey Romyobeena Bajey” at the event. Chhayanaut artistes, Rafia Sultana and Sonia Rashid, also presented a duet dance.

A number of Chhayanaut and several guest artistes including Swati Sarkar, Nilotpal Shadhyo, Chhaya Karmakar, Fahmida Khatun, Jhuma Khandakar, Elora Ahmed Shukla, Pratik Endo (Sylhet), Samapti Roy (Faridpur), Kanchan Mostafa, Tania Mannan, Saikat Mukherjee, Shusmita Ahmed Borna and Suman Chowdhury and others staged solo performances. Artistes of Jatiyo Rabindra Sangeet Sammilan Parisad (Dhaka City) also performed a group song at the event. Meer Barkat and Israt Jahan recited at the programme.

Almas Ali on violin, Asit Biswas on esraj, Iftekhar Hossen Shohel on keyboard, Pradip Kumar Roy on mondira and Enamul Haque Omar, Swarup Hossain, Gautam Sarkar and Iftekhar Alam Prodhan Dollar on tabla accompanied the singers.

The curtains came down on the opening day of the festival with a rendition of the national anthem. Dance performances, poetry recitation, and renditions of songs by leading and upcoming Tagore artistes marked the concluding day (May 9) of ‘Rabindra Utshab 1419’ that drew a large number of Tagore enthusiasts. Mobile phone operator Robi assisted the programme while ATN Bangla was the media partner of the festival.

Economists warn govt of banking problems

An economist yesterday warned the government of “uneasiness” in the banking sector.

“It seems the banking sector is facing some uneasiness, particularly nationalised commercial banks,” said Binayak Sen, research director of Bangladesh Institute of Development Studies (BIDS).

“For them, problems are piling up,” Sen said. “We have to be cautious right now. The cash recovery of NCBs is low. In most cases, the recovery is being shown through rescheduling. The operating profit exists only in books.”

Sen urged the government to be stringent about issuing permission for new banks.

He spoke at a seminar that focused on socio-economic development in the first three years of the grand alliance in power, organised by the ruling Awami League at the auditorium of the Bangladesh Medical Association in Dhaka.

Sen said it was not wise to allow banks to get involved in the capital market. It was a wrong decision, he added. “A limit has been enforced now, but it should have been done earlier.”

He said tax exemption for large investors was not proper in respect of social justice and growth.

“I still think that proper steps should have been taken against people who were found guilty in the report submitted by the Ibrahim Khaled-led panel after an investigation,” Sen said. “There should not have been any compromise on the issue.”

Sen said the country’s tax-GDP ratio should be increased by mobilising resources from domestic sources to take the investment-GDP ratio to 32 percent from 24 percent now.

“Otherwise, we will not be able achieve 8-8.5 percent economic growth to take Bangladesh to a middle-income country,” he said.

“Steps have been taken, but they are not sufficient. Bangladesh has still the lowest tax-GDP ratio in South Asia,” Sen said.

Keynote presenter Mashiur Rahman, economic affairs adviser to the prime minister, said it would not be possible to run the economy without long-term accountability.

“In the past, our economic policies addressed only immediate and short-term challenges. We have now made mid-term and long-term policies. We should not deviate from this.”

He said it is a matter of pride that the country’s reliance on foreign aid is on the wane. “But the government has to borrow from the banking sector to finance the budget deficit, which can squeeze credit flow to the private sector.”

“We have to look at whether we are failing to spend foreign aid due to our limitation in implementation,” Rahman said. “We cannot borrow from the banking sector or the central bank excessively.”

“The government should enhance its capacity to use foreign aid,” Rahman said.

Finance Minister AMA Muhith said the economy of Bangladesh reached a level different from 2008.

The government was unable to spend much of the $14 billion foreign aid in the pipeline, he said.

“We could spend only $2.5 billion. If we can spend more, our investment will go up. However, the capacity of spending of our ministries has increased 30 percent.”

Bangladesh’s exports might grow by 14 percent in the current fiscal year, Muhith said. “If it is 14 percent then I would say it is still commendable, given it is based on the high growth of 40 percent we achieved in the last fiscal year.”

Moazzem Hossain, editor of The Financial Express, said Bangladesh would not be totally immune to the persisting global economic crisis, as 40 percent of the country GDP is linked with international business and trade.

Urban poverty deserves more attention: economist

The government needs to pay attention to urban poverty alleviation and policymakers need to take long-term and sustainable measures to combat the problem, a leading economist said yesterday.

“We lack sustainable measures to eradicate extreme poverty in the urban slum areas. Instead of taking intermediate steps to eliminate poverty, the government needs to make long-term policies to fight poverty at large,” Binayak Sen said.

“Simultaneously, we have to overcome the present culture of ‘tokenism’ in programmes taken by the government to alleviate poverty. Most of the time, the allocations are very poor and hence, do not make any difference.”

The government needs to rearrange the size of allocations it makes under different safety net programmes, pointed out Sen, research director of BIDS.

He suggested the government ensure better access to capital and healthcare, so the urban poor living in slums can improve their livelihood and quality of life.

He also stressed the need to create sustainable income generating activities for these people.

Sen was presenting the insights from the midterm evaluation of a project titled Breaking the Cycle of Urban Chronic Poverty, jointly organised by the Dustha Shasthya Kendra (DSK), a non-government organisation, Shiree and UK Aid at the Samabai Bhaban in Dhaka.

The DSK-Shiree project conducted the survey on 1404 people living in Kuril and Kamrangirchar in Dhaka, where the project spent Tk 28,000 for each person over a period of two years.

The survey found that the additional income has made a qualitative impact on the targeted people, improving their standard of living. It also found that the notion of extreme poverty is gradually disappearing in these areas although a qualitative difference is yet to be perceived.

Bangladesh on a rising tide

Noted economist Binayak Sen said Bangladesh is now on a rising tide; there are a few countries in the world that are both rising socially and economically.

Sen was speaking at a national seminar on rural employment opportunities at Bangabandhu International Conference Centre styled ‘Sharing of REOPA experience, results and lessons learnt’.

The project, REOPA (Rural Employment Opportunities for Public Assets), is a social safety net programme arranged by the Local Government Division with United Nations Development Programme (UNDP) and European Union (EU) as development partners.

Sen said development should not be measured from economic data alone; rather, it should consider the confidence levels or helplessness of the people. These are not considered in the Millennium Development Goal (MDG) of the United Nations, he said.

He also said if the local governments work well, then the social safety net programmes will work better.

The REOPA project is ending this December and the seminar was arranged to share experiences, results and the lessons learnt, with project stakeholders. At the seminar, a report was also published.

Speakers at the programme highly appreciated the people who implemented the workforce, as it was a successful one. A beneficiary of the project, Nurjahan Begum of Belkuchi in Sirajganj district, expressed gratitude as she is now a self-employed woman. She makes compost fertiliser at home.

In response to a question, she said she wants to see herself as a local government representative in the future. A number of women of her village are self employed under this project, she added.

The REOPA project was designed to respond to the needs of the most vulnerable groups of people in rural Bangladesh. It focused on generating employment and alleviating poverty through effective local government institutions, community partnerships and pro-poor service delivery, said Goran Jonsson, international team leader of the project.

Jahangir Kabir Nanak, state minister of the local government, rural development and cooperatives ministry (LGRD), said 15 percent of the national budget is allocated for the social safety net programmes, where more than 80 programmes are currently going on.

Abu Alam Md Shahid Khan, LGRD secretary, Milko Van Gool, head of cooperation of EU, and Stefan Priesner, country director of UNDP, also spoke at the programme.