Bangladesh’s Development

Journey
Syed Akhtar Mahmood
The big picture
Substantial reduction in
poverty
• Two very different patterns
• In 2000, one out of two Bangladeshis (49%) were
• GDP
considered growth
poor rates fluctuated
and about widely
a third was in in
living the 1960s
and the 1970s
extreme poverty
• But the pattern changed from the early 1980s
• The situation was slightly worse in rural areas but
• Since then,better
somewhat thereinhas been
urban a steady increase in GDP
areas.
with low year-to-year fluctuations
• In urban Bangladesh, one-third of the population
was• poor,
1980s:
andfluctuated between
one-fifth was 3%-5%
extremely poor
• 1990s:
• The situation hasremained
improvedsteady around 5%
significantly since
• From
then, with 2001rates
poverty onwards: gradually
steadily fallingaccelerating to
reach
• In 2016, 8%25%
about in 2019
were considered poor
compared
• Very to almost 50%
few developing a decade
countries andexperienced
have a half ago such
• sustained
The proportion of people
growth livingfour
rates over in extreme
decadespoverty
fell to about 13%, compared to 35% in 2000
An impressive growth
record GDP growth rate (annual %): 1961-2019
15

• Two very different patterns 10

• GDP growth rates fluctuated widely in the 1960s
and the 1970s 5
• But the pattern changed from the early 1980s
• Since early 1980s, a steady increase in GDP with

% growth rate
0

low year-to-year fluctuations

• 1980s: fluctuated between 3%-5% -5

• 1990s: remained steady around 5%

-10
• From 2001 onwards: gradually accelerating to
reach 8% in 2019
-15
• Very few developing countries have experienced
such sustained growth rates over four decades -20

Year
Underpinned by
agricultural growth …
• The• Crop
Two Production
very different patterns
Index is a good indicator of
• GDP in
developments the agricultural
growth sector
rates fluctuated widely in the
1960s and the 1970s
• Here too we see two very different growth regimes
• But the pattern changed from the early 1980s
• Early 1960s to late 1990s: A period of steady but
• moderate
Since then,growth
thereinhas
the been
production index
a steady increase in GDP
with
• But low
this year-to-year
growth fluctuations
lagged population growth, leading to a
• 1980s:
decline in the fluctuated
per capita index
between 3%-5%
• From • late 1990s
1990s: to now: A
remained periodaround
steady of accelerating
5%
growth, outstripping population growth
• From 2001 onwards: gradually accelerating to
• Thus, per
reachcapita
8% index also increased
in 2019
• This• isVery
truefew
fordeveloping
both rice and vegetable
countries have production
experienced
such sustained growth rates over four decades
… growth of the garment
industry
• The most successful manufacturing and export story of
Bangladesh
• Significant rise in our export earnings in last three
decades has been largely due to garment exports
• In the mid-1990s, garments accounted for two-thirds of
our export earnings
• Now, garments provide more than 80% of export earnings
• The composition of garment exports has changed
• In mid-1990s, 80% of garment export earnings came from
woven garments and 20% from knitwear
• Now the shares of these two categories are equal
• Nonetheless, only five products account for 75% of
garment exports
… and remittances

• Two very different patterns

• Changing pattern of remittance inflow over time
• GDP growth rates fluctuated widely in the
• Remittances grew at a steady but modest rate from mid-
1970s 1960s andofthe
to the end 1970s
the 1990s
• But
• It then theaccelerated
sharply pattern changed
from the from the early 1980s
early 2000s
•• However,
Since then,remittance growth
there has has arecently
been steadyslowed
increase in GDP
• Remittances as % of GDP has
with low year-to-year started declining from 2012
fluctuations
after a sharp rise during the previous decade
• 1980s: fluctuated between 3%-5%
• Remittances haveremained
• 1990s: helped reduce
steady poverty
around 5%
• In 2016, 8% of households had a family member who had
• From
migrated 2001
abroad onwards:
in the previousgradually
5 years accelerating to
reachnot
• Remittances 8%only
in 2019
help increase welfare of recipient
• families;
Very few their spending also
developing boosts local
countries demand
have experienced
• 2000-16: poverty fell
such sustained faster in
growth districts
rates overwhich
four had sent more
decades
migrants abroad
• Study indicated that if 0.1% of a district’s population
migrated abroad, its poverty would fall by 1.7 percent
There has also been impressive
progress on social indicators

• Two very different patterns

• An example is the drop in the under-5 mortality rate
• This •was
GDP
highgrowth
till the rates fluctuated widely in the
late 1970s
1960s and the 1970s
• 1 out of every 5 baby would die before its 5th birthday
• But the pattern changed from the early 1980s
• From the 1980s, this rate started declining sharply
• Since then, there has been a steady increase in GDP
• It with
was 31
lowinyear-to-year
2019 fluctuations
• This is below that in Pakistan (67) and India (34)
• 1980s: fluctuated between 3%-5% Bangladeshis can now expect to live longer

Life expectancy at birth in years

• But we are way behind Sri Lanka where only 7 out of 76
• 1990s:
1000 babies dieremained steadyage
before reaching around
5 5% 74
72
• From 2001 onwards: gradually accelerating to 70
• Life expectancy
reachhas
8% gone up, especially for women
in 2019 68
66
• 2000: the figure was only slightly higher for women 64
• Very few developing countries have experienced 62
• 2016:
suchnow much higher
sustained growthforrates
women
over(74.3
fourvs. 70.9)
decades 60
2000 2011 2016

• Fertility rate for women has come down Year

• From 5 per woman in 1981 to about 2 in 2019 Life expectancy at birth, female (years)
Life expectancy at birth, total (years)
Life expectancy at birth, male (years)
Education attainments are
increasing
•More children are now attending schools
• 2000-2016: net school attendance rates rose by 20% points for primary school and
22% points for secondary
•The investments in children’s education over many years are now translating into a
more educated working-age population
•Gender gaps are closing
• Gender parity was very low in the 1970s, esp. for secondary enrollment; since then,
a steady improvement in gender parity
• Now, girls are more likely to complete primary and secondary schooling than boys
•Adult females are overall less educated than males, but younger generations are
reversing this disadvantage.
•However, they still underperform in tertiary schooling
•This has been due to expansion in number of schools, targeted stipends programs for
girls, and growth of the RMG industry
•Female primary school enrollment rates exceed the average
in South Asia and lower-middle income countries
•School attendance has grown more rapidly among the poor
Both public and private spending have
helped improve educational attainment

• Bangladeshi household are spending more on education

• Increases in private spending on education occurred at a faster rate
among poor households
• In 2000, the richest 20% of the population spent 22 times more on
education than the poorest 20%; in 2016, this had come down to 6
times
• Public spending has emphasized investments in the
education of poorer children, e.g., through stipend
programs and tuition waivers
• In primary schools, about 57 percent of total spending on the median
child comes from public resources
• For the median child among the poorest 20%, this share is about 75%
• For secondary schools, on average , 43 percent of spending is public
• But for the secondary school students from the poorest 20 percent of
households, the share is 60 percent
• These developments have helped to reduce the gap in
education spending across socioeconomic groups
Looking behind the headlines
The relative importance of
agriculture has gone down
• Since 2000, the sectoral composition and geographical focus of
• Two
economic very different
activity patterns
has changed significantly
• GDP growth rates fluctuated widely in the
• Agriculture’s
1960sshare
andof the
GDP1970s
has decreased from 23% to 14%

• But
• In 2000, 64% the
werepattern changed
employed fromnow
in agriculture, the down
earlyto1980s
40%
• Growth
• Since
pattern changed
then, therebetween 2000-05
has been and 2005-10
a steady increase in GDP
• 2000-2005:
with lowLow average growth
year-to-year in agriculture, high but jobless
fluctuations
growth in industry, and moderate, job-creating growth in services
• 1980s: fluctuated between 3%-5%
• 2005-2010: High growth in agriculture, high job-creating growth in Agriculture Industry Services
• 1990s:
industry, and veryremained steady
high, but low aroundgrowth
job creating, 5% in services. Start 2000-2005 Low growth High, but job less, Moderate, but job-
of Bangladesh’s
• From 2001boomonwards:
in the creation of manufacturing
gradually jobs to
accelerating
growth creating, growth
2005-2010 High growth High, job creating, Very high, but low
• 2010 to reach
2016: Lower
8% in agricultural
2019 growth, high growth in growth job-creating,
manufacturing, and moderate service sector growth growth
• Very few developing countries have experienced 2010-2015 Lower growth High growth Moderate growth
• These had implications for poverty reduction
such sustained growth rates over four decades
• Poverty reduction in 2000-2005 was driven by the service sector In
2005-2010, by high agricultural growth, in 2010-2016 by rural non-
farm growth
Composition of agricultural
production has changed
• Boro•hasTwoemerged as the patterns
very different most important rice crop
• In 1990/91, Boro production was 6.3 million metric tons. This
• GDP growth rates fluctuated widely in the
was about three times that of Aus (2.3 million MT) but less than
1960s
that of Aman (9.2 and the
million 1970s
MT)
• But the
• Aus production has pattern changed
not increased much infrom thethree
the last earlydecades
1980s
while Aman has increased by about 50%
• Since then, there has been a steady increase in GDP
• However, Boro year-to-year
with low production has fluctuations
increased more than three times
during this period
• 1980s: fluctuated between 3%-5%
• There have been other changes too in the composition
• 1990s: remained steady around 5%
of agricultural production
• From 2001 onwards: gradually accelerating to
• Some traditionally important products have gone down in
importancereach
while8% in 2019
others have emerged as important products
• Very
• For fewsugarcane
example, developing countries
was an importanthave experienced
crop in the 1990s
such sustained growth rates over four decades
while potato was much less important
• But the roles have now been reversed as sugar production has
declined over time while potato output has increased sharply
Rural nonfarm activities
have expanded
• Rural
• non-farm activitiespatterns
Two very different now an important source of
income for ruralgrowth
• GDP peoplerates fluctuated widely in the
• In 2010,1960s
almost halfthe
and (47%) of all rural households were
1970s
primarily engaged in agriculture.
• But the pattern changed from the early 1980s
• By 2016, this proportion had fallen to one-fourth (27%)
• Since then, there has been a steady increase in GDP
with low year-to-year fluctuations
• Thus, it is• now a major
1980s: driver
fluctuated of rural3%-5%
between poverty reduction
• 2005-2010:
• 1990s:69remained
percent ofsteady
rural poverty
aroundreduction
5% was
among households
• From primarily engaged
2001 onwards: in accelerating
gradually agriculture to
• 2010-2016:reach598%
percent was among households whose
in 2019
primary sector of employment was industry or services
• • Households
Very few developing
with higher countries have experienced
shares of non-farm income were
such sustained growth rates over four
less likely to remain in or fall into poverty decades
Road connectivity has
expanded considerably
• The national and regional highway network has expanded
at a modest rate since independence
• The national highways link Dhaka to the divisional capitals and the
capitals of the old districts
• The regional highways connect the old district capitals to the new
district and upazilla towns
• These networks together have expanded from 3609 kms to 8613
kms during 1972-2010; i.e., by only 104 kms. each year
• However, the feeder roads have seen a huge expansion
• These link district & upazilla towns to villages and smaller towns
• The network had a huge growth spurt during the 1990s; expanding
from 3245 kms. to almost 16000 kms in 10 years
• It has shrunk a bit after 2000 but remains significant
• The huge expansion of the feeder roads have substantially
increased rural connectivity with the rest of the country
More people now have
access to electricity
• Electricity
• Two generation
very differentcapacity
patternsincreased at a modest
rate between
• GDP 1995/96
growth and
rates2009/10
fluctuated widely in the
1960s
• It increased fromand
2908theMW
1970s
to 5271 MW
• This is• anBut the pattern
average increasechanged from
of about 170 theper
MW early
year1980s
• The •rate
Since then, there
accelerated has2010
after been a steady increase in GDP
More people now have access to electricity
with low year-to-year fluctuations
• About 14000 MW capacity was added during 2010/11 – 100
• 1980s: fluctuated between 3%-5% 94

% of population with access

90 90.2
2018/19, bringing total installed capacity to almost 19000 MW 81.2
80
by end• of1990s: remained steady around 5%
2018/19. 70
75.9
66
60
• This is• anFrom
average increase
2001 of 1521
onwards: MW peraccelerating
gradually year, i.e., almost 9 50
59.6
45.6
times higher than incountries
tveloping the preceding
havedecade and a half.
experienced such 40
32
30
• Leading to asustained
significant increase
growth ratesinover
access
fourto electricity
decades 20
16.7
10
• Three-fourths of Bangladeshis now have access to electricity, 0
2000 2011 2016
compared to one-third in 2000
Year
• The increase is particularly significant for rural Bangladeshis –
from 17% to 66% over the same period Access to electricity, rural (% of population) Access to electricity, urban (% of population)
Access to electricity (% of population)
No scope for complacency
Uneven reduction in
poverty across Bangladesh
• Wide•regional variation
Two very in incidence
different patternsof poverty
• Poverty•remains high in northern Bangladesh and some parts of western and
GDP growth rates fluctuated widely in the
southern Bangladesh
1960s and the 1970s
• Also differences in rate of poverty reduction over time
• But the pattern changed from the early 1980s
• For example, the poverty rate increased in the Rangpur division during 2010-
• although
16 it decreased
Since then, thereinhas
the rest
beenof the country increase in GDP
a steady
• Rangpur was already the poorest division in the country in 2010; it has
with low year-to-year fluctuations
become even more in 2016
• However,• poverty
1980s:dropped
fluctuated between
substantially 3%-5%
in Barisal. It was second poorest
division in 2010; in 2016 it was the fourth poorest.
• 1990s: remained steady around 5%
• Differences• between the eastern
From 2001 andgradually
onwards: western regions of Bangladesh
accelerating to
has now widened
reach 8% in 2019
• This reverses the trend during 2005-2010 when the difference had narrowed
• Very
• The few developing
re-emerging countries
divergence between haveand
the East experienced
West has occurred
largely
suchin rural, insteadgrowth
sustained of urban rates
areas over four decades
• The gains in rural areas were not uniform: the rural West recorded slower
progress on education and demographic change, contributing to the re-
emergent East-West divide.
Vulnerability remains
high; inequality is rising
• Twopoverty
• Although very different
has gonepatterns
down, the share of
vulnerable• GDP
people,
growthi.e.,rates
those who maywidely
fluctuated become poor
in the
again, is high andand
1960s increasing
the 1970s
• But
• In 2000, the40%
it was pattern changed from the early 1980s
• In 2016, it rose to 50%
• Since then, there has been a steady increase in GDP
• Consumption
with lowgrowth
year-to-year fluctuations
has slowed and become more
unequal • 1980s: fluctuated between 3%-5%
• During
• 2000-05, the average
1990s: remained consumption
steady aroundlevel
5% of
Bangladeshis increased by 2.3% each year; during 2010-
2016,• this
Fromrate2001
cameonwards: gradually accelerating to
down to 1.6%
reachconsumption
• The average 8% in 2019level of the poorest 40% of the
• population
Very few was the samecountries
developing as the national
haveaverage during
experienced
2000-2005
such sustained growth rates over four decades
• But, during 2010-2016, their consumption growth rate was
slower than the national average; 1.2% annually vs. 1.65