The holocaust of 1971 left Bangladesh a devastated country with her economy in shambles, and her basic social framework and infrastructure badly scarred. With the liberation of Bangladesh on December 16, 1971, the country stepped into the next phase of her national life- the struggle for survival, which can only be described as dramatic and challenging. The first test came over the question of rehabilitation of ten million refugees who had sought shelter in India. This continuous stream had to be provided with instant shelter, food and basic transportation to go back where they belonged. Depleted granaries had to be replenished with overnight imports, and the disrupted communications network restored for flow of man and material. The daily exigencies had to be met and each crisis had to be overcome, one after the other. The above efforts were undertaken at a time when the then US Secretary of State Kissinger had literally written us off as an “international basket case”.Spirit of Victory Day helping us to overcome challenges
The evolving circumstances will however also require improved infrastructural support- in terms of road communication and energy supply. Both these factors are now being addressed with great seriousness
Muhammad Zamir
The holocaust of 1971 left Bangladesh a devastated country with her economy in shambles, and her basic social framework and infrastructure badly scarred. With the liberation of Bangladesh on December 16, 1971, the country stepped into the next phase of her national life- the struggle for survival, which can only be described as dramatic and challenging. The first test came over the question of rehabilitation of ten million refugees who had sought shelter in India. This continuous stream had to be provided with instant shelter, food and basic transportation to go back where they belonged. Depleted granaries had to be replenished with overnight imports, and the disrupted communications network restored for flow of man and material. The daily exigencies had to be met and each crisis had to be overcome, one after the other. The above efforts were undertaken at a time when the then US Secretary of State Kissinger had literally written us off as an international basket case.
Consequently, in December, 2016, I feel great satisfaction and pride in looking back to those difficult days and taking stock of how we have over the past few decades proved Kissinger wrong, moved forward, overcome evolving challenges and emerged as a leader among developing nations. We have taken giant strides towards socio-economic prosperity through commitment and dedication.
Our population has doubled from about 75 million to nearly 160 million. Yet we have tackled this growth sensitively and wisely. Measures related to family planning, better health care, gender empowerment and growth in literacy, particularly functional literacy, have enabled us to achieve constructive growth.
This trend has been especially assisted through the incorporation in Bangladesh of telecommunications, mobile phones and digital technology. One needs to take a step back and think about this. We have just crossed into the threshold of being a lower middle-income country. Our per capita income has crossed US$ 1,450. However, the positive implications of this movement forward are noticed in several important areas.
The classical example of change is most noticed in the context of use of mobile phones. Each year for the last eight years the number of users of this format of connectivity has grown by about 10 million. Today over 133 million Bangladeshis use mobile phones. In terms of numbers that is probably similar to the number of mobile phone users in the Scandinavian countries, Switzerland and the Benelux countries taken together. On 8 December, 2016, The Asian Age has also reported that the number of internet users in Bangladesh, according to the Bangladesh Telecommunication Regulatory Commission has reached 66.8 million. Of them, interestingly, 62.9 million are connected through mobile devices, broad band and wi-max connectivity. These figures have emerged after the completion of the bio-metric registration process.
The second major advance towards a digital economy relates to the fact that 63 per cent of government payments, or about US $ 45 billion, are now being transacted through digital channels. A study jointly carried out by BTCA (a global partnership of governments, companies and international organizations) in association with a2i has found that Bangladesh has experienced 120 per cent year-on-year growth in mobile financial services transactions on average since 2011. It has however been also observed that there is scope for further expansion in terms of products and usage. Apparently, there is a growing popularity in this regard because of the underlying advantage of security. It has been noted by a2i that electronic money is more secure than cash. They have however also remarked that to achieve true success; we need to find the road to further inclusion. This comment assumes importance given the gradual rise of e-commerce in Bangladesh.
The next movement forward has been with regard to payment of income tax by individuals. The National Board of Revenue announced on 1 December that the government had received over Taka 30.26 billion in income tax against 0.93 million individual returns submitted until the end of November this year. Compared to this, in 2015, till 30 November the government had received income tax amounting to Taka 10.83 billion from individual tax payers. It may be added here that the total number of E- TIN holders as on 10 December, 2016 was 2.515 million. Of them, the number of individual tax payers in Bangladesh was 2.421 million, the number of Companies paying tax was 53,760 and the number of Corporate Firms paying tax was 27,069. There was also a total of 14,066 covered under the Others category. This indicates a growing awareness among citizens that paying tax and that too, on time, is the duty of citizens and required for the countrys development. This trend is slowly manifesting itself also within the corporate sector.
Despite reports of a slide in the countrys foreign exchange reserves on 2 December (to US$ 31.37 billion), we have also had the optimistic news immediately afterwards of expectations that the reserves will eventually rise to around US$ 38.7 billion by the end of the current financial year. Analysts have however disagreed with this projection given the recent negative growth in remittances (which has slumped by 17.71 per cent in the first quarter of this fiscal year- partially because of the fall of oil prices affecting recruitment of expatriate workers from Bangladesh). Some have also remarked that this extraordinary increase will be unlikely unless export receipts outpace import payments by quite a margin. This observation assumes significance given the report of 6 December that our current account balance has slipped into the negative territory for the first time in four years due to high growth in capital machinery. The actual import in terms of settlement of letters of credit rose to US$ 15.14 billion during the July-October of FY 2016-17 from US$ 13.19 billion in the same period of the previous fiscal.
Nevertheless, what is important is that despite such a large population and their many needs and requirements, Bangladesh has been able to continue consolidating its foreign exchange reserve and that today it is the second highest in South Asia, after India. This, in its own way has helped us to maintain better our value of Taka against the US Dollar and other major world currencies compared to India and Pakistan. We must not also forget that in December, 1971 we started our journey with less than US Dollar One hundred fifty million.
At this point one also needs to reflect on our export sector. It took us about twenty years after we became independent to reach the figure of about US$ 2 billion. Since then, particularly over the last eight years we have grown steadily despite challenges of different sorts that have confronted our RMG sector. Our media informed us on 7 December that our exports during the July-November period of the current fiscal year had risen by 5.5 per cent for the same period a year earlier. The countrys total aggregate export receipt in this fiscal was US $ 13.69 billion compared to US$ 12.87 billion during last fiscal. This was however 4.1 per cent less than the target set for this period. This happened mostly because of woven garments which missed its notional mark by 12.15 per cent.
We have to take note here that this equation of relying only on RMG for moving forward still has some residual challenges. It is not just finding new markets or resolving the problem of duty free quota free entry into Britain after BREXIT or finding the way out after we lose our Everything But Arms status for access into EU (duty free and quota free access for all our products other than arms- once we reach Middle income status). As pointed out by the US Ambassador on 28 November, the government has to assure the international community that workers associated with the RMG industry are fully protected under Bangladeshi law and also have the right to organize and bargain collectively. These factors will receive similar significant attention also from the EU when they re-consider rules of engagement with imports from Bangladesh after we have gone beyond EBA.
Interestingly however, earning from leather and leather products has grown by 16.62 per cent to US$ 533.91 million during this fiscal year period. This was more than export earnings both from jute and frozen fish. It was also interesting to know in this context that the government has been providing cash incentive to seven sectors on priority basis to bring forth diversification in the export sector. Information Communication Technology apparently tops this list. It also includes Pharmaceuticals (being exported now to nearly 100 countries) and agriculture based products. This is indeed good news and should help us to reach our export target for the current year US$ 37 billion and eventually US$ 50 billion by the year 2021.
The evolving circumstances will however also require improved infrastructural support- in terms of road communication and energy supply. Both these factors are now being addressed with great seriousness.
There has been improvement in road communications and inter-connectivity not only between Dhaka and Chittagong but also broadly between other different sub-regions. That should improve drastically after the completion of the Padma Bridge, dredging of inland waterways and creation of better handling facilities for cargo at the different sea ports.
Similarly, we have definitely gone ahead in terms of energy production. By the end of this December, we would have reached the power output target of 15,000 MW. It is being hoped that this figure might rise to 24,000 MW by 2021. It will need substantial investment but that should not be a problem given the growth in our reputation as a country suitable for foreign investment. Such investment can also assist our efforts towards improved power transmission and distribution.
Former Secretary of State Kissinger is still alive. One can only hope that he will still be with us in 2021 to watch Bangladesh not only savoring its status as a Middle Income country but also as the largest contributor of armed forces and police maintaining peace and security in different parts of the world under the UN Flag.
Muhammad Zamir, a former ambassador, is an analyst specialised in foreign affairs, right to information and good
governance. He can be reached at [email protected]
