Development issues in countries at very low levels of economic development. – Case study Bangladesh

 LIC classification

LICs are classified by the UN if it meets three criteria;

1) Low income (three-year average income per capita of less than US$750)

2) Human resource weakness (based on indicators of nutrition, health, education and adult literacy)

3) Economic vulnerability (based on instability of agricultural production, instability of exports, economic importance of non-traditional activities, handicap of economic smallness and percentage of population displaced by natural disasters)

Developing countries in general have not achieved a significant degree of industrialisation and have, a medium to low standard of living. There is a strong correlation between low income and high population growth, low education standards, low life expectancy, etc.

BASIC FACTS – Bangladesh  

Key population facts:

Total population: 144.2 million (in 2005)

Annual population growth rate: 1.7%

Total fertility rate (births per woman): 3.2%

No. of people living below US$1 a day: 36.0%

No. of people living below US$2 a day: 82.8%

Gross national income per capita: US$400

Life expectancy at birth: 63.3 years

Infant mortality rate: 41/1,000 live births

Human Development Index rank: 137 out of 177 countries

Key economic facts:

	GDP – composition by sector (%)	Labour force – by occupation (%)
Agriculture	20.5	65
Industry and mining	26.7	10
Services	52.8	25

 The UK and Bangladesh- info from Dfid

 According to Dfid the UK has a ‘long-standing and positive relationship with Bangladesh, with strong cultural ties.’ The UK focuses on the areas which they can make the greatest difference, rather than trying to shape overall policy. As the largest grant donor, the UK is a significant role among development partners. The UK supports governments to lead donors and improve consistency with national strategies, budgets and planning. Bangladesh is not aid dependent, as aid only makes up 2% of its GDP. The development partnership is key to the UK’s objectives, as well as promoting prosperity and security, and works with Bangladesh’s own goals. The programme will help more than 15 million very poor Bangladeshis, as well as lift 5 million people out of extreme poverty and help at least help at least 1.15 million people to cope with the devastating effects of floods. This will be done by giving children get a better quality education as 1.5 million more girls and boys complete full cycle of primary education. Also by improving family planning and reducing deaths in childbirth as 1.2 million births are assisted by skilled carers. ‘Before (the project) maternal death was dangerously high. But now, the rate has gone down thanks to facilities offered under the ongoing maternal health programme’. Zohra Akhater, a nursing supervisor. Project: Accelerating Progress of Maternal Health (DFID). Furthermore by encouraging private investment, helping more people adapt for the future. Also strengthening key democratic systems and institutions, and strengthening the Government’s ability to provide basic services to its people, by advising the government on how to raise taxes to invest in healthcare and other essential programmes. In addition to this the UK hope to provide access to improved water sources for at least 1.2 million people and improved sanitation for at least 600,000 people. However Bangladesh is most off track on MDG7 (access to water and sanitation) and MDG5 (improving maternal health), although data from the 2010 maternal mortality survey show is showing significant progress. State capacity to finance and deliver social services is weak and hampered by unstable politics and extensive financial risks.

 

Bangladesh – development priorities

Bangladesh is developing, however it’s at a much slower rate than its neighbouring countries such as India. Therefore poverty remains widespread, especially in rural areas. Among the most of the country’s problems are:

>Many poor farmers are in serious debt, mostly caused by attempts by farmers to commercialise their farming by using more fertilisers, pesticides and machinery. However in an area where frequent floods and cyclones occur a farmer’s whole crop can be destroyed for a season leaving the farmer unable to pay back money. On top of this commercial banks often charge high levels of interest to these poor farmers, because it was felt that loans were insecure.

>Social problems, which include poor provision of education and health care

>The position of women in this Muslim society, means that women find it very difficult to find work outside the immediate confines of the home. 

In the 21^st century, investment has concentrated on four main areas of development:

>Education: the transition to democracy in 1991 has seen significant improvement in primary education particularly for young girls. Spending on education has been the largest item in the development budget, and has become an important part of the programmes of all the main parties.

>Health care: Bangladesh has improved life expectancy, child mortality and reproductive health. Bangladesh has lower child mortality rates, higher access to drinking water and sanitation, lower maternal mortality and higher contraceptive use than its neighbour, India. The national health programme has, over the years focused on the provision of affordable rural primary health care (through Family Wealth Centres) and on developing partnerships with NGO’s. NGO’s have been key in the development of Bangladesh particularly in the area of family planning and immunisation services. 

>Agricultural development: especially through provision of loan facilities for all farmers, even the poorest, also liberalisation of the market. This means that now high yielding variety seeds have spread to about 65% of rice cropped area, and irrigation facilities are available to over 40% of the cultivated area. Fertiliser use has grown by 10% per year over the last 30 years. Some of the most important developments have been in the production of ‘dry-season’ rice varieties. As floods can destroy crops during the rainy season this fall-back crop has been vital in increasing food security for the poor.

>Micro-finance projects: these have become widespread throughout Bangladesh. The Grameen Bank is the biggest of these, but several others are run by NGO’s such as ActionAid. These loans support a range of enterprises linked to farm production, processing and marketing. However, the biggest portion is in the garment industry, often producing clothes for export. One recent estimate suggests that the total number of borrowers is 5 million, of whom about 90% are women. As most of them are poor rural their enterprises play a vital part in stabilising their family economies. It is important that the work can take place in and around the home because of the need for modesty among Muslim women. 

 

Bangladesh – industry and trade

Agriculture in the remoter rural areas of Bangladesh needs aid from the
Bangladesh government, foreign governments and NGO’s if it is to develop and feed the growing population. However, the country’s industry is developing quickly from a very low base. This development has come largely because of trade liberalisation. The Bangladeshi government continues to court foreign investment, something it has done fairly successfully in private power generation and gas exploration and production, as well as in other sectors such as cellular telephony, textiles and pharmaceuticals. The government has also set up a number of export processing zones (EPZs) around the country. Companies operation in these areas are granted big reductions in taxes and in bureaucratic restrictions as long as all production is exported from the country. It was hoped that the EPZ’s would help attract foreign direct investment in industry. However, the main trade union organisation in the US (AFL-CIO) has asked their government to deny Bangladesh preferential access to US markets. They cite Bangladesh’s failure to meet promises to allow trade unions to operate in EPZs. They are concerned that un-unionised companies will undercut prices in those countries where workers are allowed more rights.