© bdnews24.com/Md. Asaduzzaman Pramanik
Bangladesh is a story of defiance, of beating the odds, a story of 160 million mutinies against conventional wisdom and global gloom. Bangladesh has been a consistent story of inclusive innovation and bottom-up growth, lifting the lives of its 160 million people. It is an untold story of resilience amid adversities, a tale of the resolute victory of hope over helplessness.
Since Bangladesh’s birth in 1971, defying pundits’ predictions, growth has consistently risen in every decade, exceeding 6 percent in the decade till 2015, with the lowest volatility relative to peers. Our focus on social inclusion and the ingenuity of home-grown innovations in health, agriculture and finance have transformed Bangladesh into a positive outlier in human development. We have combined growth with equity.
The recent global financial crisis and its aftermath have acutely reminded all policymakers that, yes, growth matters. But equally, if not more, important is the quality of growth. It is important that no one is left behind.
We are fortunate that our growth drivers — manufacturing (e.g., garments), agriculture, and remittance — are labour-intensive and, hence, inherently inclusive. The government’s and the Bangladesh Bank’s focus on domestic demand helped Bangladesh to stand tall despite the global crisis.
The current growth momentum remains solid at around 7 percent, one of the highest in the world. Export is picking up, defying weak global growth; machinery import is growing in robust manner; private sector credit grew by 14.2 percent in December last year, a three-year high. With steadfast reforms, growth can maintain this upward march. Unlike many frontier economies, our growth did not involve sacrificing monetary, financial or fiscal prudence. The discipline explains why our growth spell has lasted long.
On our way forward, our past achievements can guide us but certainly cannot lull us into complacency.
True, we have converted our erstwhile challenges into strengths. And these are the areas where we have done that: population size and density, demographics, agriculture and food security, and geographic location.
True, we are now a lower-middle income country with a $200+ billion GDP, larger than Vietnam and ten times that of Cambodia; we have a domestic financial system of around $150 billion, with a savings rate of around 30 percent and on the rise, a tech-savvy young and growing middle class, a competitiveness buffer from demographics and location, and a renaissance in our rural farm and non-farm enterprises.
As we enter a new phase of growth toward a higher middle-income country status, we are mindful of history’s lessons on the need to be alert about wading into new waters.
First, consider the external environment. Looking ahead, the global outlook remains uneven and challenging. China’s growth is softening as it transitions from investment and manufacturing to consumption and services. With some exceptions such as India, emerging and developing countries continue to slow.
The implication for us is that, for the same level of growth, we will need to row harder; we need to continue with our reforms to increase productivity, investment, and diversification. To ensure uninterrupted development journey, the government has been fostering another strong engine — domestic demand — to complement our export-led growth model. To avoid any confusion, let us stress the point: it is not either or; it is and.
The government’s focus on raising both domestic and foreign investment, regional and global integration — through easing infrastructure gaps, energy and skills supply, and land constraints (e.g., SEZs) — is precisely a reflection of that goal.
As always, the Bangladesh Bank remains committed to its proven strategy of ensuring financial stability and inclusion. Finance and innovation will continue to serve all people, including the poor, the marginalised, the distant (non-resident), and the excluded. As a developmental central bank, our view is that societies and pyramids are as strong as their base. Finance will also serve the environment, as we live so close to mother nature in this crowded, connected, and moody delta.
Defying all predictions and through their countless mutinies of innovations and sweat, our farmers, our workers at home and abroad, and our entrepreneurs have made sure the proverbial “basket case” is transformed into a “basket of plenty”. They have filled the “basket” with confidence and with their aspirations for a better tomorrow.
We strive towards a more inclusive society, underpinned by growth with equity and macro stability. All of us travel together so that we can go far.
Dr Atiur Rahman is currently Governor of Bangladesh’s central bank, and has been a top researcher on poverty as well as a professor of development studies at Dhaka University. Dr Rahman has won several international awards as a central banker.