Bangladesh aims to become a middle-income country by 2021. But given its political instability and social crises, is this a bridge too far?
Vision 2021 is starting to seem like a bleak prospect
The vision of a new Bangladesh before it celebrates its golden jubilee in December 2021 is an interesting phenomenon. Lifting the country from abject poverty and under-development is the cornerstone of the Bangladesh Perspective Plan (2010-2021) (BPP) approved by the National Finance Commission and also supported by the members of European Union. The Awami League (AL) government led by Prime Minister Sheikh Hasina is determined to pursue Vision 2021 so as to seek reelection in polls due in 2014.
The Bangladesh Nationalist Party (BNP) is polarized and is in the grip of demonstrations launched by the opposition against what it perceives as political victimization. In this backdrop it will be an uphill task for Prime Minister Sheikh Hasina’s government to lure foreign investment and transform Vision 2021 into reality. Armed with a two-thirds majority and witnessing better economic indicators, the AL government is confident that it will push through major tasks under vision 2021. Can Bangladesh transform from a least developing to a middle-income country and how will the political standoff between BNP and AL, which is considered as a major destabilizing factor, impact projected economic growth in coming years?
According to UNB, PM Hasina recently told an 11-member delegation led by Planning Minister A K Khandker that the BPP aims to transform Bangladesh into a middle-income country by 2021 when the country will celebrate its golden jubilee. She expressed her optimism that many investors from abroad are interested in investing in Bangladesh but at the same time lamented that “the country could not achieve the desired development even after 40 years of independence as the political party that led the liberation war was out of power for a long time and undemocratic governments and anti-liberation forces had ruled the country for a long time.”
It is another story that the AL government, which ruled the newly independent country from 1972-1975, was accused of political repression, corruption and bad governance. Likewise, the second AL government from 1996-2001 was also blamed of loot and plunder while neglecting the issues which kept the country poor and under-developed. Therefore, critics argue that AL wants to use BPP for political consumption and as a means to seek re-election and is not serious in alleviating the plight of the com-
mon people or promoting economic growth in the country.
In order to get a clear picture about the much publicized 2021 plan for Bangladesh, one must know basic facts in this regard. According to Abdur Rahim Harmachi’s report published in The Bangladesh Chronicle, the first ever long term plan of the country entitled, “Perspective Plan of Bangladesh 2010-2021: Making Vision 2021 a Reality” was approved at a meeting of the National Economic Council. The plan envisions making Bangladesh a middle-income country with $2,000 per capita income by 2021. According to the Bangladesh Economic Review 2011, per capita income was $818 in 2010-11 fiscal year and $751 in 200910. The plan targets annual real GDP to rise by 8% by 2015 and 10% by 2021. According to the plan, the contributions of agriculture, industry and services sectors to the GDP have been fixed at 15, 32 and 52.5% by 2015 and at 15, 17 and 48% by 2021. The plan also expects power generation to rise to 15,375 MW in 2015 and 20,000 MW by 2021. In terms of literacy, the plan hopes to eradicate illiteracy from Bangladesh by 2014, reduce the fertility rate to 2.2% and bring the number of people below the poverty line to 13.5% by 2021. In the area of trade, the plan aims to attain around 40% of GDP from export earnings and remittance by 2021.
Some of the ideals of BPP include establishing a corruption free society, rule of law, modern infrastructure, egovernance, high economic growth rate, significant rise in per capita income, GDP, GNP and a marked alleviation of poverty. How these ideals are to be accomplished in a span of 9 years time and how domestic fault lines which impede the process of development will be removed, must be contemplated. It is wishful thinking to assume that Bangladesh, which is grappling with the menace of political instability, violence, rampant corruption, poverty and absence of rule of law will transform in a decade’s time as a “success story” in South Asia.
When uncertainty looms large on the horizon of Bangladesh in terms of political stability and a peaceful environment, favoring large-scale investments and entrepreneurship will not match with ground realities.
Foreign governments, including those representing European Union recently pointed out the dangers and threats faced by Bangladesh in order to meet the goals and objectives envisioned in the 2021 plan. For instance, on the occasion of celebrating Europe Day on May 9 and 40 years of partnership between Bangladesh and Europe, the European Union delegation in a press conference in Dhaka called upon the government and opposition to initiate political dialogue in order to promote better investment conditions. The EU delegation comprising the Ambassadors of Netherlands, Germany, Denmark, Sweden, Italy, Spain, France and the British High Commissioner stated that, “our role is to encourage and support dialogue. And we believe parliament is the best place for dialogue.”
EU is Bangladesh’s biggest development partner providing 500 million Euros of assistance every year. Trade between EU and Bangladesh is huge as Bangladeshi goods, particularly garment products, are a source of enormous foreign exchange income. The concern of European Union visà-vis growing political polarization in Bangladesh is two-fold: first, strikes and political agitation in Bangladesh will raise a question mark about its capability to sustain the 2010-2021 perspective plan and second, the global image of Bangladesh is also negative. The French Ambassador to Bangladesh, Michel Trinquier stated, “my concern is the image of the country which is required to attract foreign investment for the country’s private sector as private sector’s growth is imperative for Bangladesh as it wishes to be a middle-income country by 2021.” On the issue of corruption, the Dutch Ambassador said in the same press conference that, “corruption is ingrained in the society and we want our tax payer’s money used in best ways.” EU envoys in Dhaka during the May 9 press conference made it clear that without political peace, control over corruption, good governance and rule of law and infrastructure, Bangladesh cannot proceed to attain the goal of becoming a middle-income country by the year 2021. The issues faced by Bangladesh are not any different than those experienced by many postcolonial states. However, one cannot expect better quality of life unless those at the helm of affairs are able to perform better so that foreign investment and support for developmental projects is smooth.
Since its inception as an independent state in 1971, Bangladesh is heavily dependent on foreign aid and assistance. Money has flowed in from different external sources to Bangladesh since 1972 but rampant corruption, poor planning and lack of professionalism and expertise failed to make purposeful use of billions of dollars of aid and assistance, which was provided to Bangladesh in the last forty years.
The message delivered by EU envoys in Dhaka on the occasion of “Europe Day” was clear: they were not optimistic about the government’s confidence about 2010-2021 plans unless the fault lines which cause political schism, violence, corruption and bad governance are removed. Foreign investors will not invest in Bangladesh unless a stable and peaceful environment is ensured. To what extent, the government in Dhaka and the opposition parties adhere to the advice and caution of EU envoys is yet to be seen.