Globalization, Poverty, and Growth in Bangladesh
by Janice Hussain
“In Bangladesh, it is not uncommon to see a majhi, a fisherman or boatman, fishing from his boat. Often he is alone. He spends many a lonely hour, casting his hand net into the water, trying to catch a few fish for his family or perhaps to sell some in the market so he can earn money to supplement his family income. When one sees the sight of that majhi against the shining sun, what emerges is a silhouette, a dark human image with no identity. To painters and innocent eyes, the image is quite artistic. But for countless of Bangladeshis, it is a metaphor of life, a shadow of bare survival as it serves as a constant reminder of hardship” 1
In September of 2000, the leaders of the world assembled at the United Nations Millennium Summit. In this three-day meeting, one of the most urgent problems they focused on was global poverty. Of the world’s 6 billion people, almost 3 billion lived under $2 per day. South Asia alone had 44% of the world’s poor. Regarding poverty and inequality, the UN conference set several goals of international development to be accomplished by 2015. Some of these goals included reducing half the proportion of people living in extreme poverty, providing primary education, reducing infant mortality by two-thirds, offering universal access to reproductive health services, and implementing strategies for sustainable development in every country by 2005.
Anwarul Karim Chowdhury, Permanent Representative of Bangladesh to the United Nations, states that poverty is not only defined by having low income. He explains that poverty is also about low national achievements in education, health, and nutrition. These factors are embodied in the lack of opportunity for human development, jobs, credit, markets, and health services. Bangladesh encompasses many of these issues that Chowdhury associates with poverty.
The economy of Bangladesh is dominated by agricultural industries such as fishing, raising animals, and farming. These industries employ over 50% of the labor force and 35% of all export. The majority of the population (80%) lives in rural areas. Bangladesh is the most densely populated country in the world. It currently has a population density greater than 900 persons per km², while the world’s average population density is 42 persons per km². By contrast, Bangladesh has the fewest arable land per capita in the world (.15 acres per person). Among all the crops, Bangladesh produces mainly rice, which occupies up to ¾ of the total cropland and is grown virtually everywhere except for hilly areas. Bangladesh’s tropical climate and abundant water supply allow farmers to cultivate and harvest rice up to three times a year.
Bangladesh faces the challenge of achieving economic growth and reducing the immense poverty that afflicts nearly two-fifths of its 135 million people. To confront this challenge, the government initiated free trade policy in the mid-1980s, which were effectively implemented in the 1990s. These reforms were aimed at creating an open economy that is integrated in the global economy. During the 1990s, progress was made in the Bangladeshi economy. The economy began to expand rapidly while maintaining stable growth. The average annual growth in per capita income had accelerated from 1.6 percent per annum in the first half of the 1980s to 3.6 percent by the late 1990s. A slowdown in population growth and a sustained increase in GDP growth contribute to this economic performance. While most low-income countries depend largely on the export of agricultural goods, Bangladesh has made the transition from exporting jutes, which was a cash crop but land intensive, to exporting garments, which were labor intensive. The country took advantage of its abundant supply of labor, and avoided the disadvantages of having scarce land.
Another benefit to the Bangladeshi economy was the increase in the number of temporary workers working across the border. Migrant workers' remittances amounted to about $2.5 billion from the early 90’s to the year 2001. Migrant workers were mostly unskilled and most of them came from poor rural families, making their remitted savings an important source of family income. However, remittance inflows depend on the economy, policies, and the attitude of the foreign nation towards guest workers. Most of Bangladesh's temporary migrant workers are in the Middle East, most of whom being illegal immigrants.
Since the Millennium Summit, Bangladesh has seen some of the most successful initiatives in reducing poverty. Along with the government, non-governmental organizations have been working in Bangladesh, many of whom have primary focus on issues related to poverty eradication. Despite Bangladesh's innovative programs, poverty, and under-nutrition persist. Trends in the overall poverty has shown signs of improvement, but the standard of living of those in extreme poverty has not improved, which didn’t meet the United Nation’s goals. Within poor households, pre-school age children and pregnant or nursing women face risks of acute malnutrition. More than half of all children in Bangladesh under the age of five are underweight for their age. About one-fifth die before their fifth birthday. Two-thirds of these deaths are related to malnutrition. This is partly due to the high growth rate of the population (an annual 1.8%) and frequent natural disasters such as floods, cyclones, riverbank erosion, and drought. Due to inadequate protection against these disasters, rural households above the threshold poverty line fell below it, and those that were already below it slipped. Much of Bangladesh’s population is landless or owns very little land. There is a huge gap in land ownership. 60 percent of the farm households own less than 25 percent of the land, while the wealthiest 10 percent own 25-50%. The poor farm households produce the bulk of agricultural products, yet they are usually unable to produce enough to feed their family, especially after natural disasters like riverbank erosion, which result in a decrease in arable land. Politically, the majority of these landless people could not voice their opinions in the government, and as a result, their interests cannot be fully represented.
Apart from natural disasters, policies from international agencies also hindered the improvement of the poor. An example of this would be the Bretton Woods Institutions’ Structural Adjustment Programme introduced in the 1980s. Its objective was to control the GDP growth of Bangladesh at 5% per annum to maintain macro-economic and budgetary stability. The government consequently enforced a tight monetary policy to reduce public spending. These policies included the withdrawal of subsidies from food and agricultural inputs, such as fertilizers and pesticides, and also cut back on public schools and hospitals’ spending. Bangladesh was severely hit by the policies of Bretton Woods.
Bangladesh will need to sustain macroeconomic growth at levels higher than in the past to continue on its current path of reducing poverty and improving living conditions. Globalization is increasing the living standards of poor people in Bangladesh. Industries spawned by foreign investments create 10,000 new jobs every year in Bangladesh, and is transforming the economic and social situation of the country, which in turn improves living standards. However, nearly half of its 135 million population stills lives below the poverty line, making Bangladesh one of the poorest countries in the world.
“Building on Progress: Issue Brief: Poverty in Bangladesh Building on Progress” World Bank.
Chowdhury, Anwarul Karim. “Poverty Eradication: The Experience of Bangladesh”..
Global Envision. “Bangladesh Faces the Challenge of Globalization”.
1Shrestha, Nanda. Nepal and Bangladesh. Santa Barbara: ABC-CLIO, 2002.
“Virtual Bangladesh: Economy: Industry” Janice HUSSAIN (’08) is a second year student at Brandeis University majoring in IGS, and minoring in French.
Janice HUSSAIN (’08) is a second year student at Brandeis University majoring in IGS, and minoring in French.