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Event Report

In line with the NIICE Economic Lecture Series, a webinar was held which dealt with the topic of the unfinished agenda for inclusive development in relation to the 50-year independence of Bangladesh. The talk was presented by Prof. Mustafa K. Mujeri, a Senior Expert from Bangladesh and Executive Director at the Institute of Inclusive Finance and Development. Throughout the event, he discussed how Bangladesh experienced development since independence with a focus on the unfinished agenda for inclusive development. He highlighted the challenges and the keys to moving forward.

Inclusive development is a condition wherein exclusiveness in the growth process is countered, in which participation and accountability of all social groups are increased, disparities in knowledge, capacity, and income are reduced, the marginalized and excluded are focused on and there is access to social services and opportunities. However, countries tend to prioritize economic development over distribution and environmental issues in the globalized world. South Asia’s compulsion will be to transform the inclusive development agenda into a comprehensive, sustainable and inclusive socio-economic transformation mechanism for the economy and society.

Bangladesh experienced a high economic growth in the beginning of the 2000s. It has now earned a title of a role model of development. In 2015, it became a lower middle-income country. In 2018, it fulfilled the United Nations’ (UN) criteria for least developed country status, making it possible to be formally recognized as a developing country by 2024. In spite of all of this, Prof. Mujeri took note that this growth process in Bangladesh also experienced substantial economic and social inequalities with unequal access to opportunities. The government has committed to pursue the inclusive development agenda faster, in line with the Sustainable Development Goals’ (SDG) theme of leaving no one behind.

The microcredit movement after independence may be argued to be the root of the focus on inclusive development in Bangladesh. Non-Governmental Organizations (NGOs) provided financial services, such as loans, micro loans and savings, to women in poor households which overtime broadened to cover microfinance and microenterprise loans with social development packages. In addition to that, the NGOs also provided techniques in capacity-building, financial literacy, livelihood promotion, preventive healthcare education and training, water and sanitation and other social development areas. All these helped empower marginalized sections and women, contributing to adding value to their lives.

The problem that Bangladesh is facing is the reality of a growing inequality that shows an unequal development wherein high prosperity exists alongside extreme poverty. The democratic deficit under the new, powerful liberal regime also contributes to the inequality in development. The reality shows that the state remains strongly biased towards the rich and powerful elite. Deep and equitable reforms are needed.

Prof. Mujeri emphasized that the key for Bangladesh to move forward is to ensure that development is inclusive, strong, sustainable and balanced. There needs to be a strong and well-designed universal protection system. An inclusive development framework that is beneficial to all and leaves no one behind should be adopted. The new liberal policies of the Washington Consensus look to a more active government role in in both economic and social policies which brightens the prospect of a shift in designing and implementing inclusive development. The creation of full, productive and decent employment for the labour force is important to promote the agenda because it is a source of income growth and security. Inclusive structural transformation needs a set of coherent macroeconomic trade and labor market policies that all have an impact on wages and employment conditions. This transformation provides an opportunity to achieve environmental sustainability and growth. The path to greater equality can be set through new high productivity sectors and systems with technology disseminated. Ensuring sustainable agriculture productivity and transformation needs policies that cover a wide range of areas which help farmers achieve economies of scale, diversifying to respond to food demand, etc. For the manufacturing strategy, the core component should be shifting to higher technology and higher value products. Cottage, Micro, Small and Medium Enterprises (CMSMEs) have a great potential to contribute to rapid development through greater participation in international production networks and global value-added chains.

The three key dimensions of development has to be integrated for the path to Bangladesh’s growth and development. One is the structural transformation in the production structure. Two is the reduction of both domestic and global productivity and income gaps. Three is the promotion of equality. Countries in Latin America and the Caribbean have made progress on some of these dimensions like reducing income gaps but not technology or productivity gaps.

To conclude, the connotation of structural transformation has to be comprehensive, deeper and wider rather than the traditional, uni-dimensional concept in terms of changing central shares of key macro aggregates. A key requisite for inclusive development in Bangladesh is the implementation of strategies and policies which emphasises the inclusion of the disadvantaged and those living in poverty and social exclusion. Though the country has moved closer to applying the inclusive development tenets in policymaking, there is no generic formula that ensures a path to inclusive development. Prof. Mujeri suggests that experimentation is needed on what works and what does not within the country’s dynamics for Bangladesh to set its own path.

Prepared by Patricia Bianca D. Aguilar, NIICE Intern.