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Bangladesh - Its Future and Possibilities

PART - C


A Model For Economic Development

Industrial Zones
At Each Upazilla

In this chapter the argument is that high rate of development and thereby change cannot be attained only with people's participation, technical knowledge and expertise. All these factors are to be integrated with capital to bring about spectacular development.

Thus, we are now introducing the concept of capital, because we have experienced that only labor or expertise does not work in isolation. All factors must move in an integrated manner to bring about economic development. The factor we consider critical or a 'necessary condition' (other factor being sufficient condition) is: capital. But, again capital is of two types - (a) physical capital and (b) human capital. In our current model we are arguing that without development of human capital we cannot achieve development.

Now, economists have agreed that only physical capital (dollar) is not the main factor of development. They tell us that a dollar invested on education brings a greater increase in national income than a dollar spent on dams, roads, factories, etc. Therefore, utilization of knowledge and expertise, vis-à-vis investment in human capital can only bring about the desired change and it is the combination of physical capital (investment) and human capital that gives the maximum result. Finally, physical capital becomes more productive if the country possesses sufficient human capital.

Conversely, human capital cannot attain its potential or cannot be maximized without physical capital. It is the combination of both skill-technology-manpower and investment that produced the desired result.

In this model we are arguing that labor is given i.e. is available in unlimited supply (Lewis Model) but capital is scarce, making it imperative to mobilize and induce capital for investment.

Production Function for Two-Factor Economy.
K = Capital
L = Labor*
Q = Quantity of Goods & Services
A, B = Goals in shifts of production in term of quality.

*Labor also includes skill, technology, knowledge embedded in it.

In the diagram shown, our goal is to move from lower production function Q1 to higher production function Q2 with the same contribution of capital (K) and labor (L). How is it possible? It is only possible with increase in productivity of both capital and labor. Capital can be made more efficient by appropriate investment-complimentary to the capital investment, e.g. in a village or Upazilla (sub-district) in Bangladesh, a farm or school must be provided with marketing and transport facilities respectively.

In the last two decades the main thrust of development was on human resource: namely, expertise, knowledge and managerial capability. In the current one we have introduced the factor capital to enhance the human skill.

In this regard, we propose the mobilization of resource from abroad by Non-Resident Bangladeshis (NRB). Here our assumption is adequate availability of investment capital from broad. This coupled with training and skill formation of large number of labor force (labor and expertise-labor) will bring about unprecedented change in the economy of Bangladesh.

Preliminary investigation reveals that each non-resident Bangladeshi (NRB) can invest Taka One Crore (Two Hundred Thousand Dollars). Assuming a mobilization of 100 NRB 100 Crore taka can be invested in 1 Upazilla of Bangladesh.

Our suggestion is that if Taka 100 crore can be mobilized in the private sector in each Upazilla, the public sector may provide matching funds in building infrastructure and back-up services. In this way, there will be a public-private economic co-operation to obtain the maximum benefit in the attainment of change and development which can be made available from gas, oil, and other natural resources. Thus, 50,000 crore taka investment in 500 (approx.) Upazilla, is virtually ensured. Another 50,000 to 60,000 crore taka in ten to twelve years time as joint-venture investment in gas, oil, coal, and other fields is sure to come. Along with this resources 50,000 to 60,000 crore taka is potentially inevitable as forward and backward linkages e.g. transport, electricity, schools, colleges, Universities, technical schools, service centers, banking, training centers, real estate business and roads-highways, hotels, recreational fields (educational park and technological park) etc.

Concept And Feasibility Of NRB Investment

Unit
Taka
Non-Resident Bangladeshi (NRB)
50,000 Crores
Gas + Oil + Others
50,000 Crores
Backward & Forward Linkage
50,000 Crores
Total
1,50,000 Crores

A favorable environment has to be created to attract NRB investment in concrete terms. This means the following:

  1. A broad national political consensus about the political and economic governance, with all sections of the society (social forces) must participate in the decision-making process.

  2. Appropriate infrastructure in terms of power, transport, communication, housing, financial institution and human resource development is needed to attract productive investment.

  3. The NRBs must be provided with the facilities and opportunities like those of present time EPZ investors inside Bangladesh.

  4. A cultural environment where the investors role is acknowledged and rewarded as CIP (commercial important person).

  5. Political and social recognition of NRBs, which include, among others, their to voting franchise and to have representation in the Upper House of the Parliament.

Investment is some infrastructureal investment are late yielding, which do not attract private investment. The public sector has to take care of them.

One billion taka (One hundred crore) investment in one Upazilla is going to revolutionize the whole catchments area. Whatever enterprises are built, they will have their forward and backward linkage formation, which would multiply investment five times within a short span of time. This will enhance our economic growth; from the current modest rate of 5%-6% to as much as 18%-20%. This means Bangladesh's GDP will be quadrupled (four times) in twenty years time. In terms of employment and other corollary effects this would radically change the socio-economic fabric of our countryside. In this way, we can get rid of the distortions and crisis that Bangladesh has been experiencing so far in the form of rural-urban migration, concentration of resources and population in few centers and increasing disparity and alienation between the city and the country-side. In a decade Bangladesh will emerge as a middle-income country with a per-capita income of over USD 2000.00 (two thousand dollars) which is equivalent of four thousand dollars in World Bank (WB) standard.

This will give Bangladesh more confidence, self-respect and will enhance its image internationally.

Bangladesh is located at the center of developing South Asia. Its strategic location amongst the surrounding state of India and Nepal, Bhutan and Myanmar has put it is a unique situation to steer a process of economic advancement that would bring a large market within its hold. The potential of these surrounding areas also can be properly and evenly developed for their respective economic and cultural growth by forming a sub-regional economic zone within SAARC. In course of time these sub-regional economic zones can be extended to South East Asia in the East and Afghanistan in the West.

Bangladesh achieved its independence in 1971. That was virtually our first and most important achievement in our thousand-year history. Independence has opened the 'doors' and 'windows' for overall development.

The recent data Information Technology (IT) and other scientific and technological developments have given Bangladesh a new opportunity to stand on its own feet and thus to be a partner of the new civilization of this millennium.

Present Figures
Per Capita Income
Growth Rate
Gross National Product GNP
  US $ 380.00
5% - 6% Per Year
US $575 Billion
Targeted Figures
Per Capita Income
Growth Rate
Gross National Product GNP
  US $ 2,000.00
18% - 20% Per Year
Four times in 20 yrs.

Structure Of Upazilla Industrial Zone Administration

Notes

  1. Industrial zones in each Upazilla to be established by the enactment of the Parliament.
  2. Industrial zones will have elected chairmen.

SUB-REGIONAL ECONOMIC CO-OPERATION GROUPS WITHIN SAARC

SUB-REGIONAL ECONOMIC CO-OPERATION GROUPS WITHIN SAARC

SUB-REGIONAL ECONOMIC CO-OPERATION GROUPS WITH MYNANMAR (BURMA) AND AFGHANISTAN


Administrative structure for implementing the Economic Plan

To implement the above model, a dynamic administrative structure is needed with associated democratic institutions that ensures fundamental rights protecting people and property. It is needless to say that such huge and dynamic infusion of man and material, requires a modern and superior technological framework in the political, managerial and administrative structures of the country.

To manage the new economic process a suitable administration has been proposed. In the proposal a Bi-cameral Parliament, Federal Structure of Govt., strong Local Govt. (upazilla, municipality, village parishad) national economic council (NEC), peoples consultation committee (PCC) etc. are to be worked out. Formation of provinces with elected provincial assemblies, independent Judiciary, National Security Council (NSC), Constitutional Court are to be set up by the amendment of the constitution.

Secondly, democratically people's participation has been proposed by the formation of different occupational and professional groups for protecting their self-interest and interactions among different social groups. All groups and all social classes are incorporated for their participation in the economic development.

Finally, sectoral planning have also been incorporated into economic and administrative framework, without which investment cannot be channelized. For a balanced growth these elements must work in synergy: (1) people's participation (knowledge-based) (2) fair and efficient administration and lastly, but very critical ingredient of growth (3) capital. This theoretical work aims to synthesize the variables required for the growth process e.g. human resource, people's participation and the infusion of capital. It is the balancing act of the above factors that gives the best possible result.

Conclusion

Bangladesh emerged as a nation-state of the Bangalees (Bengalis) in 1971 from a province and hence now has to develop political institutions that reflect this new state. Bengal for the last thousand years maintained a provincial identity except for a short period during the reign of the two Muslim rulers in the 13th and 16th centuries. Due to its provincial form it never had the chance to develop as a country with national characteristics. So Bangladesh became independent with all colonial legacies. With the independence in 1971 only the rulers and ruling parties were changes from those of British and Pakistani rulers and ruling parties. No colonial rule, by laws were changed (except university autonomy, upazilla [sub-district] system and film-publication censorship act). As a result, Bangalee (Bengali) rulers and parties like the past colonial masters became the masters of the people.

Due to lack of basic changes at the political mechanism and societal level the people who are now identified as professional-occupational people (social forces) have become not only aspirant but the 'sufficient factor' to be in the law making (policy formulation) mechanism along with political parties which are the 'necessary factor' for governance of the newly formed nation-state.

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