Thoughts on the nation's economy
Shahid Alam studies a plethora of ideas
Let me begin this review by being facetious. Every time I come across the somber-sounding term "leading issues" I am tempted to wonder whether they are really leading, or, if they are, what are they leading to, or if they are misleading, or why should they, and not other factors, be considered leading, or whether the issues are anointed with the tag of "leading" to serve and/or advance someone's personal or institutional agenda. Therefore, with some trepidation, I leafed through the 300-plus pages of Leading Issues in Bangladesh Development, and although, admittedly, the going was not always smooth (more my problem in comprehending easily all that has been written than the authors' expertise in presenting them), I have come away convinced that some serious issues requiring serious attention regarding Bangladesh's development have been covered in the book. The editor, Sadiq Ahmed, invited eight contributors (including himself) to shed light on "these contemporary issues and challenges in a comprehensive yet succinct manner." As with many anthologies, the essays in this volume are not of uniform quality, but, overall, they analyze some critical issues and suggest ways of successfully tackling their ailments, although, regrettably, a few fall into the trap of offering a huge plethora of panaceas that might appear impressive on paper, but would be difficult to implement in practice in their entirety. The book comprises nine chapters, in chronological order. In the preface, as well as in the introductory chapter, Sadiq Ahmed worries about the deteriorating macroeconomic condition of Bangladesh. He provides several evidences underscoring his concern: rising rate of inflation that has gone over the double digit mark, an unstable stock market, increasing public enterprise deficits, rapidly rising subsidy provision in the budget, growing imbalance in the balance of payments trade account, depreciation of the taka, and difficulty in attracting international financing. Yet, as the author points out, macroeconomic stability is essential for rapid and sustained growth. And, for over a decade, steady economic growth had been taking place in Bangladesh, although, in Ahmed's words, "with coordinated efforts and sustained policy and institutional efforts, achieving an 8-10 average growth rate is a feasible target." But the country has been faltering as of late, and the author urges the government to take "quick actions to correct the situation." Having said so, Ahmed then proceeds to place a spanner in the works of his own suggestion. He believes that two factors make it difficult to restore macroeconomic stability at present: one, the 8-10 percent growth plan is far more complex than that of a 5-6 percent pattern, and, two, rising commodity prices and depression in industrialized countries have turned the global economic situation rather gloomy. Not much can be done with regard to the second point, except by the advanced countries themselves, but, with regard to the first, are we to take it that it would be more prudent/safe to target the relatively modest 5-6 percent rate rather than risk the more ambitious 8-10 percent rate and, in the process, possibly court disaster? The worry regarding this country's current macroeconomic predicament is that, as Ahsan Mansur stresses in Chapter 2, "Bangladesh has had a long track record of macroeconomic stability. Despite numerous economic shocks of external and domestic origin, the authorities have generally been successful in macroeconomic stability." Consequently, Bangladesh achieved increasing real GDP growth, transformation of its economic structure from a primarily agrarian one, steady decline in its debt to GDP and debt service ratios, and engendered higher levels of domestic investment and national savings. However, continued macroeconomic stability, along with its consequent benefits, will be imperative for this country to achieve middle-income country status by 2021. That stability has now suddenly become elusive. Mansur suggests tighter monetary policy stance, increasing and rationalizing prices of petroleum products, and enhancing electricity tariff and prices of fertilizers and diesel in agricultural use, but admits that "implementing unpopular measures of this sort in the middle of the government's term will be extremely difficult politically." Zaidi Sattar brings up the issue of trade liberalization and the problems it has encountered in Bangladesh: "Trade liberalization policies that were begun with gusto seem to have petered out in recent times. Somewhere along the way, the message about the benefits of trade openness perhaps got lost in the hailstorm of often misplaced critique that emboldened the lobbying efforts of vested quarters for whom the status quo ante yielded immediate gains at the expense of long-term improvements in productivity and competitiveness for the economy." He then purports to provide answers to some key questions in relation to trade policy developments: Why did trade liberalization markedly slow down? What are the prospects of resumption in the agenda of trade reform to carry it forward to its logical conclusion --- a trade policy regime approaching that of high performing emerging market economies? After dealing with these two queries and a few other related topics, he ends with another question, "Will policymakers rise up to the occasion and give Bangladeshi export entrepreneurs the opportunity they so rightfully deserve?" Selim Raihan and Bazlul Haque Khondker deal with the crucial socio-economic factor of poverty and inequality in Bangladesh. Theirs is an exercise in sobering reality, one that will eventually determine where Bangladesh stands among nations. They note that this country has made significant progress in reducing poverty, has established a credible record of sustained growth within a stable macroeconomic framework (a phenomenon that, as other authors have noted, has come under threat in recent years), and graduated to the medium human development category. However, "despite the progress, poverty rates remain...high.... There are pockets of extreme poverty with inequality as a rising concern." And, "despite progress, there is still a long way to go to ensure gender parity and women's development." Sarwar Jahan focuses on what has turned out to be, at least in the context of Dhaka, a nightmarish scenario: rapid urbanization and managing the urban transition. The remedies he suggests to combat rapid urbanization and its effects are so wide in scope and all-encompassing that, realistically, they will probably be consigned to gather dust in the files of most policymakers and implementers. Sayema Haque Bidisha focuses on the state of human development in Bangladesh (one that, as already noted, deserves plaudits), notes the major problems that offset its progress, and suggests ways things could further improve. Leading Issues in Bangladesh Development dwells on economic issues. Obviously there are other leading issues concerning this country's development. However, within the parameters it has chosen to concentrate on, the book brings to light important issues affecting the development of Bangladesh.
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