Bangladesh: Development Outcomes and Challenges in the Context of Globalization

by

Wahiduddin Mahmud University of Dhaka

Paper presented at the conference on The Future of Globalization: Explorations in Light of Recent Turbulence co-sponsored by the Yale Center for the Study of Globalization and the World Bank, ctober !"-!!, #""$, Yale %ni&ersity'

1. Introduction Ban(ladesh faces the challen(e of achie&in( accelerated economic (ro)th and alle&iatin( the massi&e po&erty that afflicts nearly t)o-fifths of its !$* million population' Strate(ies for meetin( this challen(e ha&e included a shift a)ay from state-bureaucratic controls and industrial autarky to)ards economic liberalization and inte(ration )ith the (lobal economy' +hese policy reforms )ere initiated in the mid-!,-"s a(ainst the backdrop of serious macroeconomic imbalances, caused in part by the declinin( le&el of forei(n aid and in part by a precedin( episode of se&ere deterioration in the country.s terms of trade' +he policy reforms in the !,-"s included the )ithdra)al of food and a(ricultural subsidies, pri&atization of state-o)ned enterprises, financial liberalization, and )ithdra)al of /uantitati&e import restrictions' +he be(innin( of the !,,"s sa) the launchin( of a more comprehensi&e reform pro(ram, )hich coincided )ith a transition to parliamentary democracy from a semiautocratic rule' +hese later reforms )ere particularly aimed at mo&in( to)ards an open economy 0 such as makin( the currency con&ertible on the current account, reducin( import duties (enerally to much lo)er le&els, and remo&in( &irtually all controls on the mo&ements of forei(n pri&ate capital' Besides, fiscal reforms )ere undertaken includin( the introduction of the &alue-added ta1' 2urin( the !,,"s, notable pro(ress )as made in economic performance' 3lon( )ith maintainin( economic stabilization )ith a si(nificantly reduced and declinin( dependence on forei(n aid, the economy appeared to be(in a transition from stabilization to (ro)th' 4n the !,-"s, per capita G2P had (ro)n slo)ly at the rate of about !'5 per cent per annum6 the (ro)th rate accelerated to #'7 per cent in the first half of the !,,"s, and further to $'5 per cent in the second half of the decade' +he acceleration in the (ro)th of per capita income o)ed itself both to a slo)do)n in population (ro)th and a sustained increase in the rate of G2P (ro)th 8)hich a&era(ed *'#! percent annually durin( the second half of the !,,"s9' 2urin( this time, the pro(ress in the human de&elopment indicators has been e&en much more impressi&e' Ban(ladesh is in fact amon( the top performin( countries in the !,,"s in terms of the e1tent of impro&ement in the :uman 2e&elopment 4nde1 as estimated by the %;2P'! :o)e&er, there are si(ns that continued pro(ress in this respect may pro&e increasin(ly difficult, particularly in the absence of stron( international support and further consolidation of the economy<s (ro)th performance' +he relati&ely stron( (ro)th of the Ban(ladesh economy in the !,,"s )as underpinned by e&en much stron(er e1port (ro)th' +hat performance has no) been put to test by the (lobal economic recession and the threat of post-M=3 competition in the e1port of readymade (arment - the country<s fla(ship in the (lobal market' Gi&en the increased reliance on trade, the country<s o&erall economic performance has come to depend to a lar(e e1tent on ho) )ell it can cope )ith the risks and opportunities in the (lobal market' %ndoubtedly, the country )ill ha&e to deal )ith a )hole ran(e of internal policy issues, from public finance and the financial system to (o&ernance and in&estment climate' But, much
+he absolute increse in the &alue of :24 for Ban(ladesh bet)een !,," and #""! is surpassed only by that for China 8and Cape >erde9 amon( all the countries for )hich such estimates are a&ailable6 cf' %;2P 8#""$9, see the table on ?:uman de&elopment 4nde1 trends?, pp' #7!-77'
!

)ill also depend on the chan(es in the (lobal economic scenario and the )ay domestic policies respond to such chan(es' +his paper is aimed at particularly hi(hli(htin( this later aspect in the )ider conte1t of Ban(ladesh<s de&elopment options and challen(es' . !rends in "acroeconomic Indicators +he stabilization pro(ram )as primarily aimed at reducin( the fiscal and e1ternal deficits to a sustainable le&el, consistent )ith the reduced and declinin( le&el of aid a&ailability' By the end of the !,-"s, the e1ternal current account deficit had been already reduced to about * percent of G2P from bet)een - to !" percent in the be(innin( of the decade, and there )as a similar decline in the o&erall bud(etary deficit' :o)e&er, this )as achie&ed by cuttin( back on in&estment, both public and pri&ate, rather than by mobilizin( lar(er domestic sa&in(s' +he ratio of in&estment to G2P steadily declined, and the (o&ernment<s de&elopment bud(et became almost entirely dependent on forei(n financin(' +hrou(hout the !,-"s, the contribution of the (o&ernment.s fiscal operations to domestic sa&in(s, in the form of public sa&in(s, continuously declined because of the rapid (ro)th in current e1penditures alon( )ith a sta(nant and lo) re&enue-G2P ratio' 3s a result, macroeconomic strains started to reappear to)ards the end of the decade 8Mahmud !,,*9' 3(ainst this backdrop, the macroeconomic indicators sho)ed a marked impro&ement in the !,,"s' 3lthou(h the net flo) of forei(n capital further declined to less than # percent of G2P, indicatin( a further decline in forei(n aid, the in&estment G2P ratio steadily increased from about !@ percent in !,,"A,! to #$ percent in #"""A"!' =urthermore, this increase )as almost entirely due to the dynamism in pri&ate in&estment, )hich increased from about !" percent of G2P to about !5 percent in the abo&e period, )hile the in&estment rate in the public sector remained unchan(ed at around @ percent of G2P' +he increase in the in&estment rate )as backed by an e&en more marked impro&ement in the domestic 8and national9 sa&in( rate' 3 si(nificant increase in the ta1AG2P ratio in the early !,,"s, follo)in( the introduction of the &alue added ta1, helped to increase public sa&in(s and lar(ely reduce the dependence of the (o&ernment<s de&elopment spendin( on forei(n aid' 3lthou(h the later )as also partly achie&ed by an increase in domestic borro)in(, the o&erall bud(et deficit )as mostly )ithin the limit of fiscal sustainability' +he a&era(e annual inflation rate, as measured by the official consumer price inde1, came do)n to about 5 percent in the !,,"s from about !" percent in the earlier decade - a further e&idence of successful stabilization' Clearly, the transition to democracy )as accompanied by impro&ed macroeconomic mana(ement' :o)e&er, there )as some e&idence of periodic lapses in the fiscal discipline related to the timin( of the approachin( national elections, thus producin( the symptoms of the so-called ?political business cycle?' # 4n spite of the o&erall soundness of the abo&e macroeconomic trends, there are some disconcertin( features' While the increase in the in&estment rate )as entirely led by pri&ate in&estment, there )ere at times symptoms of a feeble in&estment response to policy reforms' 4n the early !,,"s, for e1ample, the marked increase in the sa&in( rate )as not matched by
#

=or e&idence, see Mahmud 8#""#9, Chapter !,'

similarly stron( response from pri&ate in&estment, thus leadin( to a situation of a((re(ate demand deficiency' +his )as e&ident from a sharp fall in the inflation rate to a near-zero le&el accompanied by a fall in pri&ate sector credit e1pansion and an unprecedented build-up of international reser&es'$ 4t is difficult to ascertain )hether the rapid reduction in industrial protection throu(h import liberalization at that time had a role in this' +he uncertainty created by these reforms, )hich had no pre-announced tar(ets or time-table, could ha&e been a contributin( factor as )ell' +here )ere also other periods of sta(nation or decline in in&estment in the manufacturin( sectors'7 +hus, apart from the resource constraint to in&estment (ro)th, the ?desire to in&est? factors may ha&e become important in the post-reform era, particularly because of the )ithdra)al of public in&estment from the directly producti&e sectors' +his problem has perhaps much less to do )ith the structure of industrial incenti&es than )ith the o&erall in&estment climate, includin( )hat are kno)n as the ?costs of doin( business?' +he factors ad&ersely affectin( in&estment incenti&es are )ell documented in Ban(ladesh<s conte1tB poor infrastructure, a )eak financial system, corrupt and inefficient bureaucracy, collection of ille(al protection money and an inade/uate le(al system, to name a fe)' +hese factors also inhibit the flo) of forei(n pri&ate in&estment, the &olume of )hich remains insi(nificant despite liberal policies'* +he e1perience of macroeconomic mana(ement in the !,,"s also sho)s the fra(ility of the country<s balance of payments in spite of &ery impressi&e e1port (ro)th' Whene&er there )as a marked dynamism in in&estment and industrial acti&ity le&els, it turned out to be short-li&ed as it came up a(ainst the balance of payments constraint leadin( to a depletion of forei(n e1chan(e reser&es' +his )as true of the t)o episodes of mini-boom that took place around !,,7-,* and #"""-"! respecti&ely' 4n both cases, there )as an upturn in lar(e-scale manufacturin( production associated )ith a rapid e1pansion of pri&ate sector credit and hi(h (ro)th in the import of capital (oods and industrial inputs 8Mahmud #""$a9' 4n both cases, the e1ternal deficits increased and the forei(n reser&es sharply depleted, until stabilization measures led to the subse/uent stiflin( of the (ro)th of in&estment and manufacturin( acti&ities' +he abo&e phenomenon is reminiscent of a dominant trade (ap in the erst)hile popular t)o-(ap model of forei(n aid'5 4t re&eals the hi(hly import-intensi&e nature of in&estment and manufacturin( acti&ities in Ban(ladesh' Most capital (oods are imported and
See Mahmud 8#""!9, Chapter 7' +his can be seen from the (ro)th of machinery import, )hich is a (ood pro1y for industrial in&estment6 see Mahmud 8#""$a9' * =orei(n direct in&estment peaked at about %S dollar #*" million in !,,@-,- accountin( for about "'* percent of G2P in that year6 in #""!-"#, it fell sharply to only %S dollar 5* million'
$ 7

+he problem seems to be that of the e1ternal balance rather than of the a((re(ate resource balance, that is, the sa&in(s-in&estment balance' +his )as more e&ident in the later episode of economic upturn in #"""-"!, in )hich year the domestic inflation rate in fact declined to less than # percent, but the forei(n e1chan(e reser&es came do)n to a critically lo) le&el - e/ui&alent of less than t)o months< import payment6 see Mahmud 8#""$a9'
5

domestic manufacturin( is hi(hly dependent on imported ra) materials and intermediate (oods, )hile finished consumer (oods account for less than !" percent of all imports' +here is thus little room for adCustin( to a lo)er import (ro)th )ithout subduin( in&estment demand or creatin( capacity underutilization in the economy' %ntil hit by the (lobal recession in #""!, there had been robust and sustained (ro)th of e1port earnin(s, a&era(in( about !* percent per year in nominal %S dollar terms in the !,,"s' 3s a result, the ratio of e1port earnin(s to G2P doubled from @ percent to nearly !7 percent' 4n #""!-"#, e1port earnin(s declined in dollar terms for the first time since !,-*--5' 3lthou(h there )as a reco&ery in the follo)in( year, the medium term outlook is that it )ill be difficult to re(ain the e1port momentum of the !,,"s' 3 redeemin( factor is the continued increase in the inflo) of mi(rant )orkers< remittances, )hich (re) from about #'* percent of G2P in the be(innin( of the !,,"s to abo&e * percent in #""!-"# 8amountin( to about #'* billion %S dollars9' #. $ources of Gro%th $timulus 3ll three broad economic sectors 0 namely, a(riculture, industry and ser&ices 0 contributed to the (ro)th acceleration of the !,,"s' +he (ro)th of a(ricultural G2P accelerated from #'* per cent in the !,-"s to $'# per cent in the !,,"s6 industrial G2P accelerated from *'- to @'" per cent, and the ser&ice sector G2P from $'@ to 7'* per cent' @ +he (ro)th in lar(e-scale manufacturin( has been led almost sin(ularly by the ready-made (arment industry' +he national income estimates of manufacturin( &alue-added by sector sho) that, durin( the !,,"s, medium and lar(e-scale manufacturin( (re) at about @ percent annually6 but at only about 7 percent e1cludin( the (arment industry' - +his implies that (ro)th in medium and lar(e-scale manufacturin( has been mainly e1port-led' But it also means that the economy has mo&ed a)ay from, rather than mo&in( to)ards ha&in( a more di&ersified manufacturin( and e1port base' =isheries, )ithin a(riculture, ha&e been another hi(h performin( sector, )ith the annual (ro)th rate increasin( from about #'* percent in the !,-"s to o&er - percent in the !,,"s' 4t is no coincidence that, ne1t to (arments, frozen shrimp has been the only other fast (ro)in( maCor e1port item in the !,,"s 8+able !9' , 4t )ould thus appear that the stron( e1port (ro)th o&er the last decade or so did succeed in stimulatin( some parts of the economy, namely, manufacturin( 8throu(h readymade (arment e1port9 and fisheries 8throu(h shrimp e1port9'

+he industrial sector includes construction, minin( and utilities, besides manufacturin(' Cf' tatistical !earbook of "angla#esh $%%%, p'7*#' , By the mid-!,,"s, Ban(ladesh accounted for more than 7 percent of commercial shrimp, althou(h producti&ity per acre is &ery lo) by international standards'
@ -

!able 1 Gro%th of &xports in the 1''(s )#*+ear average of annual export earnings in million ,$ dollars-

Export ite& Deadymade (arments E knit)ear =rozen foods 8mainly frozen shrimp E fish9 3ll other e1ports +otal e1ports

!,-,A," !,,!A,# -*!$@ @*! !@7*

!,,-A,, #""A"! 77!! $#@ @*" *7--

F1port-led (ro)th is, ho)e&er, only a part of the (ro)th dynamics' 4n spite of the chan(in( structure of the economy, only sli(htly o&er !" percent of G2P currently ori(inates from lar(e-scale manufacturin( 8and about 5 percent from fisheries9' 3s re(ards other sources of (ro)th, it should be noted that the (ro)th contribution of crop a(riculture remains important, (i&en its still si(nificant share in total G2P - about !* percent' F&en a much lar(er share of G2P ori(inates from the so-called informal sectors outside crop a(riculture, comprisin( of small-scale processin( and manufacturin( acti&ities and &arious informal ser&ices'!" +he breakdo)n of G2P estimates sho)s that the (ro)th rates of these acti&ities ha&e accelerated in the !,,"s, thus contributin( substantially to the acceleration of the o&erall G2P (ro)th' Much of these informal sector acti&ities, bein( e1tremely laborintensi&e and re/uirin( &ery little capital in&estments, are lar(ely demand-dri&en' Where has the demand stimulus come fromG ne can identify at least three maCor sourcesB increase in income from crop production, readymade (arment e1port and )orkers< remittances, in that order of importance'!! 3lthou(h the abo&e informal sectors are lar(ely dri&en throu(h demand linka(es )ith the leadin( producti&e sectors of the economy, they ha&e their internal (ro)th dynamics as )ell' +here is e&idence that the (ro)th acceleration in these sectors in the !,,"s )as accompanied by a tilt to)ards relati&ely up-scaled acti&ities )hich ha&e hi(her labor producti&ity and can cater to more income-elastic demand 8Mahmud !,,5, Mahmud #""$6 smani et al' #""$9' 4mport liberalization is likely to ha&e had a role in infusin( this dynamism by pro&idin( impro&ed access to imported inputs and technolo(y' Within manufacturin(, for e1ample, small-scale manufacturin( acti&ities 8e1cludin( handlooms and cotta(e industries9 ha&e fared better than lar(e-scale manufacturin( in the post-liberalization period, (ro)in( at an a&era(e rate of more than , percent annually in the !,,"s' !# Small industries seem to ha&e benefited from the liberalization of import of capital machinery and
3ccordin( to the official !,,,A"" Habor =orce Sur&ey, these informal sectors currently employ about three-fourths of the country<s non-a(ricultural labor force' !! =or an estimation of the relati&e importance of these (ro)th stimuli, see smani et al' 8#""$9'
!" !#

Cf' tatistical !earbook of "angla#esh $%%%, p' 7*#'

ra) materials, )hile their products, bein( mostly remote substitutes of imported items, had an ad&anta(e o&er those of their lar(e-scale counterpart facin( stiffer competition from imports'!$ +he (ro)th in crop a(riculture, a&era(in( at the rate of about # percent annually o&er the last t)o decades, has been so far almost entirely due to increased rice 8and )heat9 production' Profitability analyses sho) that, beyond attainin( self-sufficiency in rice, there is a potential for acceleratin( a(ricultural (ro)th throu(h crop di&ersification' 4nterestin(ly, the country does not appear to ha&e comparati&e ad&anta(e in products such as edible oils and su(ar that currently enCoy hi(h protection and there is scope for import substitution 8Mahmud et al' #"""9' n the other hand, the hi(h-&alue crops such as fruits and &e(etables can be profitably produced both for meetin( domestic demand and for e1port6 but a shift from rice to such crops )ill re/uire technolo(ical dissemination, better inte(ration )ith processin( and marketin( and pro&ision of other support ser&ices' +he D and 2 acti&ities in a(riculture )ill also need to be stren(thened and )ill need more fundin( and donor assistance than is currently a&ailable' =or these products to enter the e1port market, it )ill re/uire e&en far more impro&ed marketin( infrastructure' .. &xternal $ector /olicies (&pact of (&port Liberalization Startin( from the )ithdra)al of /uota restrictions in the late !,-"s to tariff reductions in the first half of the !,,"s, Ban(ladesh has had one of the most rapid episode of import liberalization compared to other countries durin( their similar period of trade reforms' Yet, at the end of this period, Ban(ladesh still remained relati&ely ?closed? in terms of the e1tent or depth of liberalization 8thou(h ahead of many countries includin( 4ndia, Pakistan, >ietnam, +hailand, and China9' +he un-)ei(hted a&era(e rate of protecti&e import duty declined from @! percent in !,,!-,# to #5 percent in !,,5-,@, )hile that of all import ta1es declined from -$ percent to $, percent 83hmed and Sattar #""$9' =urther liberalization since then has been rather slo)' +he e1tent and the speed of further import liberalization remain a contentious issue in the country<s economic reform a(enda' ne important concern is the possible ad&erse effect of tariff reductions on (o&ernment re&enue' 3lthou(h the introduction of the &alue added ta1 has reduced to some e1tent the dependence on import duties, more than half of total ta1 re&enue still comes from such duties' So far, the reductions in the rates of protecti&e duties 8that is, customs duties9 ha&e been more or less compensated by the (ro)th of import' 4n fact, re&enue from import duties as a proportion of G2P sli(htly increased durin( the period of rapid import liberalization in the first half of the !,,"s 8Mahmud !,,@9' 4f there is no) a slo)do)n in trade e1pansion because of (lobal economic factors, the re&enue concerns )ill become stron(er in further trade liberalization'
Small industries are likely to ha&e (ro)n also at the cost of cotta(e industries, the &alue added from the latter (ro)in( at only #'- percent annually durin( the same period'
!$

More (enerally, tariff reforms ha&e to cope )ith many structural limitations of the e1istin( ta1 system' =or e1ample, the ta1ation of imported intermediate and capital (oods is an important source of re&enue and is often the only means of ta1in( a lar(e part of domestic production' +here is thus a need for remo&in( discrimination a(ainst e1ports, often by selecti&e inter&ention' +he e1istin( schemes of duty-dra)back, bonded )arehouses and selecti&e cash incenti&es for e1ports are essentially means for pro&idin( e1porters access to duty-free imports of production inputs 8or for compensatin( for the payment of such duties9' +he selecti&ity of such inter&ention depends not only on economic criteria, but also, of necessity, on their administrati&e feasibility and effecti&eness' 3lso, the e1istin( import tariff escalation creates room for makin( the incenti&e system discriminatory and (enerally biased in fa&or of producin( finished consumer (oods for the domestic market' Clearly, an acti&e industrial policy has a key role to play, more so in the transitional reform period, as the impact of reforms is bound to &ary considerably across industries and sectors' 4f there is no )ell-de&ised industrial policy, there )ill be one by default' +his calls for adoptin( an analytical approach to trade policy reforms, the capability of )hich is lar(ely lackin( )ithin the (o&ernment' While the impact of e1ternal liberalization in Ban(ladesh has been an acceleration of o&erall industrial (ro)th, that is almost entirely because of the success in (arment e1port, and in spite of substantial contraction in many import-substitutin( industries' +he official inde1 of lar(e and medium-scale manufacturin( industries sho)s that almost half of 7-di(it industries re(istered ne(ati&e (ro)th durin( the first half of the !,,"s - the period of rapid tariff reductions' While there )ere some (ains in the o&erall production efficiency of importsubstitutin( industries, that )as more because of the e1it of the relati&ely inefficient 8and mostly state-o)ned9 industrial units than any firm-le&el technolo(ical impro&ements 8World Bank !,,,9' ne e1ception is the pharmaceutical industry, )hich (re) rapidly as an importsubstitutin( industry by treblin( its output in the !,,"s and is no) )ell positioned to e&en enter the e1port market' 84ncidentally, Ban(ladesh stands to (ain from the W+ a(reement re(ardin( the )ai&er of patent ri(hts for the domestic production of dru(s in the H2Cs until #"!5 and for the production and trade in certain life-sa&in( dru(s amon( de&elopin( countries (enerally'9 3s noted earlier, small industries as )ell as many nontradable sectors also (ained because of better access to imported inputs' Export )utlook +he (arment e1port from Ban(ladesh (re) rapidly by takin( ad&anta(e of e1port /uotas and preferential access in the maCor markets 8the %nited States and the Furopean %nion9 alon( )ith the abundance of lo)-cost female labor' +he impact of the prospecti&e remo&al of M=3 /uotas in the %S market could be si(nificantly ne(ati&e for Ban(ladesh, althou(h the impact could be cushioned to some e1tent by the continued preferential access to the F% market' 4t is difficult to (uess ho) far Ban(ladesh<s (arment industry )ill be able to cope )ith competition from other e1porters'!7 +he dependence on imported fabrics and yarns puts Ban(ladeshi (arment e1porters at a disad&anta(e, by increasin( the lead-time to meet orders
4n recent years, there has been some (ro)th in back)ard-linka(e domestic production of fabrics, but only under hi(h cash incenti&es 8subsidies9 that are no) bein( phased out' Ieepin( stocks of (ray cloth and establishin( domestic capacity for only dyin( and finishin( may be another )ay out'
!7

form forei(n buyers' 3lthou(h the country has the ad&anta(e of the lo)est )a(e rate 8follo)ed closely by China9, it looses out in the marketin( &alue chain 8because of dependence on marketin( intermediaries9' Delati&ely lar(er firms )ith better marketin( ability has a better chance of sur&i&in( the competition and e&en (ainin( in the /uota-free e1port market 8;ad&i #""$9' 3 possible slo)in( do)n of (arment-led industrial and e1port (ro)th poses a threat to Ban(ladesh<s prospects for achie&in( accelerated economic (ro)th' Gi&en the hi(h import-intensity of manufacturin( and in&estment acti&ities, adCustin( to a lo)er import (ro)th )ill not be easy' 3lso, in the e&ent of a slo)do)n in the (ro)th of the (arment industry, the desirability of further import liberalization 8that may hurt o&erall industrial (ro)th9 may be put to /uestion, thus hinderin( the pro(ress to)ards establishin( a more efficient, competiti&e industrial base' +he policy imperati&es are thus clear, namely, 8a9 to make e&ery effort to compete effecti&ely in the post-M=3 (arment e1port, and 8b9 to mo&e to)ards e1port di&ersification by at least preparin( the (round for it in the ne1t fe) years' Ban(ladesh has potential comparati&e ad&anta(e in a number of e1port items like horticultural products 8fresh and processed9, leather (oods, li(ht en(ineerin( products and certain chemical products' +he country should also be able to take ad&anta(e of duty-free access of H2C e1ports to be pro&ided by the F%, Canada, 3ustralia and other industrialized countries' +o take ad&anta(e of these opportunities, attention has to be (i&en to a number of e1port facilitatin( factors, such as better infrastructure includin( efficient port facilities, standardization of product /uality, technolo(ical impro&ements leadin( to hi(her producti&ity, and an impro&ement in the o&erall domestic in&estment climate' =orei(n direct in&estment can also be an important factor not only by brin(in( in in&estment funds, but also by promotin( e1port throu(h product /uality assurance 8e'(' throu(h brand names9' Tren#s in the Real Exchange Rate 3 remarkable aspect of Ban(ladesh<s reform e1perience is in respect of the mo&ements in the real e1chan(e rate 8Mahmud #""!, 3hmed and Sattar #""$9' 4n spite of substantial trade liberalization takin( place at a time of a marked and steady decline in e1ternal deficits, there )as hardly any real de&aluation of taka 8)ith only mild de&aluation up to about !,,@, follo)ed by modest appreciation since then9' +he stren(th of taka )as due to the rapid (ro)th in e1port earnin(s alon( )ith the increasin( flo)s of )orkers< remittances, )hich to(ether more than offset the decline in aid inflo)s relati&e to G2P'!* 2urin( this time, many de&elopin( countries, includin( 4ndia and Pakistan, had massi&e real de&aluation of their currencies' +his has put Ban(ladesh at a disad&anta(e in e1port competition and in promotin( an e1port market )ithin these countries, especially nei(hborin( 4ndia'!5

!*

+hus, the effect of tariff reduction )as not (enerally compensated by indirect protection throu(h real de&aluation' Moreo&er, there )as a steady increase in real )a(es in the or(anized part of the domestic import-substitutin( industries, further erodin( their ad&anta(eous position' 3ccordin( to the 4M= estimates, Pakistan, 4ndia and China ha&e all maintained a lo)er DFFD compared to Ban(ladesh )ith !,," as the base year6 only Sri Hanka and >ietnam had hi(her DFFD'
!5

+he real &alue of the Ban(ladesh taka as a(ainst 4ndian rupee is estimated to ha&e appreciated by as much as #* percent or more bet)een the late !,-"s and the mid-!,,"s' +his, combined )ith the fact that Ban(ladesh has (one for a much faster import liberalization compared to 4ndia, resulted in a dramatic increase in Ban(ladesh.s trade deficit )ith 4ndia' By the late !,,"s, Ban(ladesh.s e1ports to 4ndia could pay for a mea(er 7 percent of its imports from that country compared to more than !* percent a decade or so earlier' :o)e&er, from the po&erty perspecti&e, there has been one benefit arisin( from these mo&ements in bilateral real e1chan(e rate' With the liberalization of rice import, commercial imports of rice from 4ndia can no) miti(ate the potential ad&erse effects of food price hikes at times of poor rice har&ests in Ban(ladesh 82orosh and Shahabuddin !,,,9' While the past e1perience )ith the success in (arment e1port may ha&e raised the specter of a 2utch disease, the prospect of any lar(e real de&aluation caused by an e1port debacle is of a much more serious concern' Most parts of the Ban(ladesh economy in effect represent semi- or non-tradables6 these include not only ser&ices accountin( for nearly a half of G2P, but also small-scale manufacturin( producin( poor substitutes for imports and many a(ricultural products includin( rice in )hich there is no commercial forei(n trade in most years'!@ 2e&aluation )ill ad&ersely affect production incenti&es in these sectors by increasin( the price of imported inputs and turnin( the domestic terms of trade a(ainst these sectors &isJ-&is the tradable sectors - not an encoura(in( prospect for achie&in( accelerated G2P (ro)th, let alone pro-poor (ro)th' +his underlies the importance of international support to tide o&er the ad&erse balance of payment effect of an e1port slo)do)n' 4t also hi(hli(hts the importance of promotin( e1port (ro)th and di&ersification throu(h &arious non-price incenti&es and measures as mentioned abo&e, rather than relyin( on an a((ressi&e e1chan(e rate policy as is often ad&ocated' 3n added implication is that, in an economy that has yet to complete a transition from non-tradable-based to tradable-based (ro)th, the use of e1chan(e rate as a tool for e1port promotion needs to be treated )ith caution'!0. /overt+ 1eduction and $ocial Development Tren#s in *overty With the acceleration in the (ro)th of per capita income, there has been considerable pro(ress in po&erty reduction' +he head-count national incidence of po&erty )as reduced from about *" percent to 7" percent durin( the decade of the !,,"s, compared to a relati&ely much slo)er reduction in the pre&ious decade 8+able !9' +he pro(ress in the !,,"s )ould ha&e been more, had there not been a )orsenin( of income distribution both in rural and urban areas' F&en if po&erty reduction continues in its present pace, it )ill fall short of the national tar(et set in line )ith the Millenium 2e&elopment Goal 8Go&ernment of Ban(ladesh #""$9' +his underlies the importance of stren(thenin( G2P (ro)th and makin( such (ro)th more pro-poor'

+he nontradable nature of these a(ricultural products arises from the lar(e spread bet)een e1port and import parity prices caused by poor marketin( infrastructure and limited access to the e1port markets 8Mahmud et al' #"""9' !n this, see, for e1ample, :arber(er 8#""!9, p' **,'
!@

!"

+he analysis of past trends in income (ro)th and ine/uality sho)s that the relati&ely rapidly (ro)in( parts of the economy happen to be the ones )ith more une/ual income, such as the urbanAor(anized sector &is-a-&is ruralAinformal sector or the dynamic part of the rural non-farm sector &is-J-&is a(riculture 8Mahmud #""$, smani et al' #""$9' =or e1ample, the rural economy sho)ed some dynamism in the !,,"s due to income (ro)th in the relati&ely up-scaled non-farm acti&ities that yielded hi(her labor producti&ity and could better respond to income-elastic demand' :o)e&er, non-farm income )as not only more une/ually distributed compared to rural income as a )hole, but also it became increasin(ly so throu(hout the !,,"s6 as a result, income distribution )orsened' !, Ban(ladesh thus seems to be precariously positioned in the (ro)th-ine/uality link as in the initial sta(e of the ?Iuznets process?'
!able !rends in /overt+ and Income Distribution in 1ural and ,rban 2reas3 1'4#*4. to ((( Year Percent of population under po&erty line Dural *$'*#', 7$'5 %rban ;ational 7"', *#'$ $$'5 #5'7 7,'@ $,'Gini inde1 8K9 of consumption e1penditure Dural %rban #7'5 #,'#*'* #,'@ $!', $@', Mean consumption e1penditure as K of po&erty line Dural %rban !"5 !$! !", !#, !*$ !,@ %rban-rural ratio of mean e1penditure !'$, !'5" !'@7

!,-$A-7 !,,!A,# #"""

ourceB Fstimated from data reported in smani et al' 8#""$9 and Go&ernment of Ban(ladesh 8#""$9'

+he remedy seems to lie in the simultaneous (ro)th of both lo)-producti&ity selfemployment, such as throu(h pro&ision of microcredit, and )a(e employment in relati&ely more producti&e Cobs throu(h the (radual scalin( up of enterprises' 3 hi(her a(ricultural (ro)th can also ha&e an e/ualizin( effect, )hile stron(er (ro)th of the rural economy as a )hole can fa&orably affect the o&erall income distribution in the economy by re&ersin( the obser&ed increasin( trends in the rural-urban per capita income (ap 8+able !9' =urthermore, )ith hi(h, employment-oriented G2P (ro)th, there is e1pected to be a ti(htenin( of the labor markets in the informal sectors includin( in a(riculture, thus leadin( to an increase in the )a(e rates for the poorest sections of the labor force' So far, ho)e&er, this trickle-do)n effect has not been realized and the )a(e rates in real terms in the informal labor markets ha&e remained stubbornly sta(nant 8Mahmud #""$9' 3 (reater inte(ration )ith the (lobal economy seems to fit )ell )ith the abo&e kind of po&erty-alle&iatin( (ro)th' +he e1port-oriented (arment industry presently employs
4n contrast, the (ro)th of employment in the rural non-farm sector in the pre&ious decade seems to ha&e been in the e1tremely lo)-producti&ity acti&ities, resultin( in an o&ercro)din( in these acti&ities and o&erall lo) and declinin( a&era(e labor producti&ity in that sector' 3lthou(h there )as &ery little )orsenin( of rural income distribution, there )as little impro&ement in po&erty incidence because of sta(nation in income 8as can be seen from the trends in the mean le&el of consumption as a proportion of po&erty line consumption e1penditure in +able !9'
!,

!!

around !'- million )orkers )ho are mostly female and are dra)n from lo)-income, often rural, back(round' +he industry is also hi(hly labor-intensi&e )ith a si(nificantly hi(her share of )a(e in &alue-added compared to the a&era(e of the or(anized manufacturin( sector'#" +he rapid employment (ro)th in this industry has been a contributin( factor to the obser&ed trends to)ards feminization of the labor force, )hich is a )elcome de&elopment so far as the (ender dimensions of po&erty are concerned' Shrimp farmin(, the second dominant e1port-oriented acti&ity, is also &ery labor intensi&e, presently employin( nearly half a million rural poor' More (enerally, e1ternal liberalization is likely to ha&e contributed to the creation of producti&e employment for the poor throu(h the stren(thenin( of many smallscale and informal sector acti&ities as discussed earlier' +he other important e1ternal factor ha&in( a fa&orable impact on po&erty is the rapid (ro)th of )orkers< remittances' Most mi(rant )orkers come from relati&ely poor rural families and the remittances ha&e been a means of up)ard mobility for these families' Besides, there is e&idence that the spendin( out of remitted funds has helped the (ro)th of the rural economy, particularly in localities )ith a concentration of families ha&in( mi(rant )orkers abroad 8Mahmud !,-,9' +u&an Develop&ent Compared to pro(ress in reducin( income-po&erty, there has been more si(nificant pro(ress in human de&elopment indicators, and this pro(ress has been particularly marked in the !,,"s 8B42S #""!, Go&ernment of Ban(ladesh #""$9' Ban(ladesh is in fact amon( the fe) de&elopin( countries )hich are on tar(et to)ards achie&in( the Millenium 2e&elopment Goals in respect of most of the social de&elopment indicators 8+able $9' +he decline in infant and child mortality rates, for e1ample, is amon( the fastest in the de&elopin( )orld' Ban(ladesh has already eliminated (ender disparity in primary and secondary school enrolment and has made remarkable pro(ress in pro&idin( uni&ersal basic education' +he success in reducin( the population (ro)th rate throu(h the adoption of birth control methods is also /uite uni/ue for countries at similar per capita income le&els' Ban(ladesh belon(s to a re(ional belt stretchin( across northern 3frica, the Middle Fast, Pakistan and northern 4ndia )hich is particularly characterized by patriarchal family structures alon( )ith female seclusion and depri&ation' +hat makes Ban(ladesh<s achie&ements all the more note)orthy' +here are, ho)e&er, some doubts about )hether these trends in the human de&elopment indicators can be sustained' +he pro(ress achie&ed so far is attributed to fa&orable bud(etary allocations )ith donor support and a stron( presence of non(o&ernmental or(anizations that characterizes the de&elopment scene in Ban(ladesh' +hese impro&ements in part represent ?catchin( up?, since t)o decades or so a(o, Ban(ladesh )as in fact a la((ard in these indicators amon( countries )ith similar per capita income le&el 8World Bank #""$9' While the situation has no) re&ersed, maintainin( this rate of pro(ress )ithout a more rapid reduction in income-po&erty may become increasin(ly difficult' #! +here
+his can be seen from the results of the official Census of Manufacturin( 4ndustries' =or most social de&elopment indicators, the actual &alues of the indicators achie&ed by the country are found to be far superior to the ?predicted? &alues at the (i&en le&el of per capita income6 see Go&ernment of Ban(ladesh 8#""$9, +able !, p' *'
#" #!

!#

is ample e&idence that lar(e disparities e1ist in health and educational achie&ements amon( households of different income (roups and that po&erty and deficiencies in human de&elopment perpetuate each other'
!able # Improvements in $ome 5uman Development Indicators during the 1''(s )Bangladesh compared to $outh 2sia-

;et primary enrolment ratio 8K9 Datio of (irls to boys in primary and secondary education 8K9 %nder-* mortality rate 8per !,""" li&e births9 Population )ith access to impro&ed sanitation 8K9 G2P per capita 8#""! PPP %SL9

Ban(ladesh outh ,sia Ban(ladesh outh ,sia Ban(ladesh outh ,sia Ban(ladesh outh ,sia Ban(ladesh outh ,sia

1''(6 57 -. @# 0/ !77 2$0 7! $$ !!5" 2/3-

((16 -, -/ !"$ -1 @@ /0 7.0 !5!" $-.%

M r closest year )ith a&ailable data' ource: %;2P 8#""$9 and Go&ernment of Ban(ladesh 8#""$9'

4t is also note)orthy that some of the spectacular achie&ements in health indicators could be achie&ed )ith the a&ailability of lo)-cost technolo(y 8&iz', oral rehydration technolo(y for diarrhea treatment leadin( to a decrease in child mortality9 and by creatin( more a)areness 8&iz', immunization, contracepti&e use9' But, lo)erin( maternal mortality rate, for e1ample, re/uires pro&ision of relati&ely costlier health ser&ices, so that the le&el of public health e1penditure and the /uality of health ser&ices )ill become an important factor beyond merely creatin( a)areness' Similarly, remarkable pro(ress has been made in school enrollment, especially for (irls, but there are serious concerns no) about the /uality of education' Clearly, the challen(e in these areas increasin(ly lies in mobilizin( more resources and impro&in( the /uality of ser&ice deli&ery' +he trends in the (o&ernment<s bud(et allocations sho) that the shares of both health and education sectors out of total bud(et e1penditure ha&e increased considerably as a result of fiscal adCustment' +he increase has been particularly rapid for education, )hose share has doubled from - percent in the first half of the !,-"s to !5 per cent in the second half of the !,,"s, )hile the share of health and family plannin( has increased from * percent to @ percent durin( the same period'## :o)e&er, the absolute per capita e1penditure in these sectors 8say, in dollar terms9 is far too lo) e&en by the standards of de&elopin( countries' 3lso, the structural shift in the bud(et to)ards lar(er social spendin( has come about from a
##

+he fi(ures are *-year a&era(es based on ?re&ised bud(et? estimates'

!$

redefinin( of the role of the (o&ernment and is, therefore, of a once-and-for-all nature 8Mahmud #""#a9' 4n future, hi(her allocations to social sectors )ill re/uire more difficult reforms for public resource mobilization' 7. 1ole of 8oreign 2id 4n order to tide o&er the problem of e1port slo)do)n, Ban(ladesh has ne(otiated a multiyear loan pro(ram be(innin( from #""$-"7 under the so-called PDSP-PDG= facility of the World Bank and the 4M=' +he continuation of the loan facility is subCect to conditionalities in&ol&in( reforms in areas ran(in( from bud(etary deficits to pri&atization, financial system, public administration and other institutions of economic and political (o&ernance' +here is no ar(uin( that many of these reforms are /uite essential for impro&in( Ban(ladesh<s economic performance, but most of them ha&e no pro1imate relationship )ith the current balance of payment problem created by the (lobal economic factors' ne could thus le(itimately /uestion the )isdom of ta((in( such a broad reform a(enda to )hat is essentially a balance of payment support' Ban(ladesh<s macroeconomic reforms in the !,-"s and the early !,,"s )ere implemented under fairly ri(id aid conditionality' #$ +he articulation of the rationale for such reforms and their e&aluation ha&e come almost entirely from the donor side and &ery little from the side of the (o&ernment' 4t is, therefore, difficult to assess the e1tent to )hich the reforms )ere actually ?o)ned? by the (o&ernment, and ho) much )ere imposed by the e1ercise of e1ternal aid le&era(e'#7 4t is a fair assumption that the later factor )as the dominant one' +he current Bank-=und approach is supposed to encoura(e more local ?o)nership? and participation in the reform process6 but it is difficult to see ho) this )ill happen in reality' While aid conditionalities are mainly re(ardin( economic policy reforms, donors try to influence the bud(etary allocations throu(h proCect aid, )hich is the predominant form of forei(n aid recei&ed by Ban(ladesh' +he scope for such tar(etin( of aid to priority areas is, ho)e&er, limited by the possibility that local funds may be di&erted to less-priority areas in response to the a&ailability of forei(n funds 8so that forei(n funds substitute rather than add to local funds - the so-called fungibility problem9' F&en then, the allocations for public de&elopment spendin( do represent donor priorities to a considerable e1tent, since forei(n aid is spread o&er a lar(e number of proCects to meet only the forei(n e1chan(e component of those proCects, thus re/uirin( the (o&ernment to commit local resources' &er the years, donor priorities ha&e chan(ed )ith the chan(es in aid ideas' =or e1ample, the pre&iously hi(h donor support for public in&estments in industry and po)er has drastically fallen, reflectin( the policy shift in fa&or of pri&ate sector 8Mahmud #""#a9' n the other hand, health and population control seems to (et the hi(hest donor priority' +he
Besides 4M=<s Structural 3dCustment =acility 8!,-5--,9 and F1tended S3= 8!,,"-,$9, there )ere se&eral credit facilities from the World Bank durin( this time in&ol&in( conditionality re(ardin( economic reforms' #7 n this, see Mahmud 8#""#a9'
#$

!7

most recent chan(es in these aid ideas are to)ards more emphasis on the /uality of aid utilization and on po&erty alle&iation' +here is a le(itimate concern of the ta1payers in donor countries to see that the benefit of forei(n aid (oes to the poor 4ithin the poor countries' While this shift of emphasis is )elcome, a narro) interpretation of this approach may lead to a kind of ?aid populism?' +his ne) po&erty concern has sometimes led donors to chase the same proCects, namely, those directly tar(eted to the poor' Surely, the (o&ernment needs assistance to be able to pro&ide safety nets and essential social ser&ices to the poor' But, in a pro-poor (ro)th strate(y, there are many le(itimate areas of de&elopment spendin( besides directly po&ertyalle&iatin( acti&ities' 3dapti&e research for increasin( crop yields, for e1ample, has the potential to benefit the poor much more than many directly po&erty alle&iatin( pro(rams possibly can' 4ncidentally, a(ricultural research is one of the most under-funded bud(etary heads in Ban(ladesh'#* F&en more importantly, the )ithdra)al of forei(n aid from such areas as ports, po)er or natural resource e1ploration did not lead to the en&isa(ed (ro)th in pri&ate in&estment, includin( forei(n direct in&estment, to fill in the (ap' +his has pro&ed to be a serious constraint to industrial and e1port (ro)th' Yet another ne) aid idea is to impro&e the /uality of public ser&ice deli&ery and proCect implementation by incorporatin( mechanisms for accountability, beneficiary participation and people<s empo)erment' +he incorporation of these ideas can definitely impro&e the desi(n of de&elopment proCects' :o)e&er, institutional inno&ations of these kinds ha&e to be based on intimate kno)led(e of (round realities6 these can hardly be transplanted from outside, less so throu(h the le&era(e of aid conditionality' 2onors could perhaps make more use of local e1pertise in determinin( )hat )orks and )hat does not6 and in the process, they could also reduce their o)n e1cessi&e deli&ery costs' Ban(ladesh<s :ealth and Population Sector ProCect 8:PSP9 for !,,--#""$ is a (ood e1ample of )hat can happen )hen an other)ise )ell-intentioned initiati&e lacks o)nership and kno)led(e of (round realities' +he proCect )as desi(ned to pro&ide inte(rated healthcare includin( population ser&ices alon( the (uidelines adopted at the %;.s 4nternational Conference on Population and 2e&elopment 84CP29 held in Cairo in !,,7' +he pro(ram pro&ed to be o&er-desi(ned in terms of both resource needs and )ide-ran(in( institutional chan(es6 one result is that the family plannin( &isitors ha&e been )ithdra)n before the alternati&e system of reproducti&e healthcare could be put in place' 3lso, in order to o&ercome the so-called fungibility problem, the pro(ram stipulated for a fi&e-year period the amounts of both local and forei(n fundin( as )ell as the minimum le&els of allocations to the priority areas like primary health care' But the arran(ement pro&ed un)orkable because of its lack of fle1ibility' #5 +here seems to be little alternati&e for donors but to encoura(e the (o&ernment, throu(h concerted efforts, to de&ise its o)n plans and strate(ies for efficient public spendin('
Ban(ladesh spends an e1tremely tiny proportion of its a(ricultural G2P on a(ricultural research, )hich )as "'$- percent durin( !,,*-#"""' +his is far belo) the recommended # percent tar(et for de&elopin( countries' #5 Such a fate for :PSP )as predicted by many )ell in ad&ance6 see, for e1ample, Mahmud and Mahmud 8#"""9'
#*

!*

9. Concluding 1emar:s +he discussion in this paper hi(hli(hts the importance of many (lobal economic issues in Ban(ladesh<s de&elopment challen(es' While most lo)-income countries depend lar(ely on the e1port of primary commodities, Ban(ladesh has made the transition from bein( primarily a Cute-e1portin( country to a (arment-e1portin( one' +his transition has been dictated by the country<s resource endo)ment characterized by e1treme land scarcity and a &ery hi(h population density, makin( economic (ro)th dependent on the e1port of labor-intensi&e manufactures' +he issue of access of labor-intensi&e manufacturin( e1ports from de&elopin( countries to the maCor (lobal markets is, therefore, of utmost importance for Ban(ladesh' 4t is not easy, ho)e&er, for a Heast 2e&eloped Country 8H2C9 like Ban(ladesh, to specialize in manufactured e1ports' :a&in( lo) )a(e costs can hardly compensate for its relati&e disad&anta(e in marketin( skills and infrastructure 8includin( transport, ports, standards and certification facilities9' Moreo&er, the hi(h de(ree of dependence of domestic industries on imported ra) materials and intermediate (oods makes it difficult for Ban(ladesh to satisfy the so-called ?rules of ori(in? in (ettin( preferential access for its e1ports in the markets of the de&eloped countries' +hus, most of Ban(ladesh<s (arment e1ports are not eli(ible for GSP in the F% market, since its (arment industry is lar(ely dependent on imported fabrics'#@ +his problem has not (ot ade/uate attention, since the other maCor players in te1tile trade amon( de&elopin( countries are hardly affected by it' Ban(ladesh can potentially benefit from the Furopean %nion<s decision to allo) dutyfree import of ?e&erythin( but arms? from the H2Cs, and it )ould like to see the replication of such trade concessions in other industrialized countries' #- But, since the same rules of ori(in as under GSP apply here as )ell, Ban(ladesh has not so far been able to take ad&anta(e of this facility' Ban(ladesh has also to )orry about non-tariff barriers such as those relatin( to the en&ironmental or labor standards' 3nti-dumpin( actions are already under )ay a(ainst e1ports from Ban(ladesh and they are an important latent threat )hen the M=3 is dismantled' +he tou(h sanitary and phytosanitary re(ulations are also an impediment for di&ersifyin( into the prospecti&e a(ro-processed e1port items' Clearly, the so-called +rade Delated +echnical 3ssistance sou(ht by H2Cs like Ban(ladesh cannot a&oid lookin( at these issues in a comprehensi&e manner' Ban(ladesh<s de&elopment e1perience also brin(s into focus the issues surroundin( the role of forei(n aid, such as the fundin( needs for achie&in( the Millenium 2e&elopment Goals, po&erty-tar(etin( of aid, supportin( the lo)-income countries to absorb economic shocks and the effecti&eness of aid conditionality' Ban(ladesh stands to (ain from an increase in the (lobal flo) of aid and its distribution accordin( to the criteria of po&erty pre&alence and the presence of conditions that make aid effecti&e in reducin( po&erty
Within the te1tile cate(ory, a rela1ation in the rules of ori(in for knitted (arments since !,,, has led to a sur(e of e1ports of knit)ear from Ban(ladesh to the F% market' #4ncidentally, the fact that ?e&erythin( but arms? e1cludes rice, su(ar and banana is not of much concern to Ban(ladesh, as it is to some H2Cs'
#@

!5

8Williamson #""!9' But, since the country is not included amon( the so-called hi(hly indebted poor countries 8:4PC9, it )ill not benefit form the current debt relief initiati&es' 4f, therefore, the debt relief )ere to be financed out of e1istin( aid funds, it )ould be at the e1pense of countries like Ban(ladesh' Hastly, Ban(ladesh is also (reatly concerned )ith the issue of freer mo&ement of temporary )orkers across borders, (i&en the important role of )orkers< remittances in its economy'

!@

1eferences 3hmed, S' and Sattar, N', ?+rade liberalization and po&erty reductionB the case of Ban(ladesh?, Paper presented at the World Bank<s 3nnual Bank Conference on 2e&elopment Fconomics, Ban(alore, May #""$' B42S 8#""!9, Fighting +u&an *overty: "angla#esh +u&an Develop&ent Report $%%% , 2hakaB Ban(ladesh 4nstitute of 2e&elopment Studies' 2orosh, P' and O' Shahabuddin 8!,,,9, ?Price stabilization and public food(rain distributionB policy options to enhance national food security?, Workin( Paper ;o'!# of =ood Mana(ement and Desearch Support ProCect, 2hakaB Ministry of =ood and 4nternational =ood Policy Desearch 4nstitute' Go&ernment of Ban(ladesh 8#""$9, , 5ational trategy for Econo&ic Gro4th6 *overty Re#uction an# ocial Develop&ent 8the 4-PDSP document prepared for the World Bank and the 4M=9, 2hakaB Fconomic Delations 2i&ision' :arber(er, 3' C' 8#""!9, ?+he &ie) from the trenchesB de&elopment processes and policies as seen by a )orkin( professional?, in Meier, G' M' and P' F' Sti(litz, Frontiers of Develop&ent Econo&ics: The Future in *erspective, Washin(ton, 2CB World Bank and ;e) YorkB 1ford %ni&ersity Press' Mahmud, W' 8!,,*9 QDecent macroeconomic de&elopments. in Centre for Policy 2ialo(ue, Experiences 4ith Econo&ic Refor&: , Revie4 of "angla#esh7s Develop&ent 2//3 , 2hakaB %ni&ersity Press Himited' Mahmud, W' 8!,,59, ?Fmployment patterns and income formation in rural Ban(ladeshB the role of rural non-farm sector?, The "angla#esh Develop&ent tu#ies, >ol' RR4>, ;os' $E7, Sept'-2ec' Mahmud, W' 8!,,@9, ?Macroeconomic update?, in Centre for Policy 2ialo(ue, Gro4th or tagnation: , Revie4 of "angla#esh8s Develop&ent 2//0, 2hakaB %ni&ersity Press Himited' Mahmud, W' 8!,-,9, ?+he impact of o&erseas labour mi(ration on the Ban(ladesh economy?, in 3mCad, D', To the Gulf an# "ack9 tu#ies on the Econo&ic (&pact of ,sian Labour :igration, ;e) 2elhiB %nited ;ations 2e&elopment Pro(ramme and 4H - 3sian Fmployment Pro(ramme' Mahmud, W' 8#""!9, ,#;ust&ent an# "eyon#: the Refor& Experience in outh ,sia , Basin(stoke, %'I' and ;e) YorkB Pal(ra&e-Macmillan in association )ith 4nternational Fconomic 3ssociation' Mahmud, W' 8#""#9, *opular Econo&ics: Unpopular Essays, 2hakaB %ni&ersity Press Htd' Mahmud, W' 8#""#a9, ?;ational bud(ets, social spendin( and public choiceB the case of

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