The economy of bangladesh a quarter century of development

The Economy of Bangladesh The Economy of Bangladesh A Quarter Century of Development Azizur Rahman Khan Professor Emeritus of Economics, University of California, Riverside, USA © Azizur Rahman Khan 2015 All rights reserved No reproduction, copy or transmission of this publication may be made without written permission No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6–10 Kirby Street, London EC1N 8TS Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988 First published 2015 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS Palgrave Macmillan in the US is a division of St Martin’s Press LLC, 175 Fifth Avenue, New York, NY 110 Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries ISBN 978-1-349-57503-9 ISBN 978-1-137-54974-7 (eBook) DOI 10.1057/9781137579747 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin A catalogue record for this book is available from the British Library A catalog record for this book is available from the Library of Congress For Mohua Contents List of Tables x Acknowledgments xiii List of Abbreviations xiv Introduction The context Successes and failures An outline 1 Growth and Structural Change: An Overview Growth and structure of output Demographic transition Change in the structure of employment 10 10 15 17 Macroeconomic Accounts: The Structure of Demand Issues and puzzles Rising rates of saving and investment The external balance Foreign capital inflow Capital outflow Selected macroeconomic issues concerning prices, budget, money and banking 22 22 22 26 27 30 The Emerging Pattern of Structural Change Historical experience Structural change of the Bangladesh economy in the historical context Desirable direction of the emerging pattern of change 39 39 Agriculture: Past Success and Future Prospects Declining importance of agriculture Production performance Factors behind the growth of agriculture Institutional reform Future direction 52 52 54 60 62 64 vii 33 44 47 viii Contents Structure, Growth and Direction of Manufacturing Industries The size and structure of manufacturing industries Changing structure of manufacturing Labor productivity, factor intensity and profitability y Gender distribution of employment Labor productivity, factor intensity and profitability by size and ownership Cottage industries Incentives and obstacles 67 67 70 74 77 80 82 85 Trade and Global Links Trade regime and development An evaluation of the reformed trade regime Export-led development? Merchandize imports Remittances Global links: foreign direct investment, foreign debt and exchange rate 89 89 91 94 98 100 Infrastructure and Environment Introduction Transport Energy Skill development Environment 108 108 108 112 118 122 Income Distribution, Poverty and Living Standard Introduction Measuring income Measuring inequality and its sources Poverty reduction Indicators of living standard Main findings 126 126 127 129 142 150 156 10 102 Conclusion: Credits, Constraints and Prospects Factors behind the achievements Failures, reasons thereof and challenges Governance The future 157 157 160 163 169 Annex to Chapters and 3: Bangladesh National Accounts 172 Contents ix Annex to Chapter An assessment of the survey data Some additional data on inequality and poverty estimates 177 177 183 Notes 186 Bibliography 203 Index 207 Notes 195 10 11 was quite common to talk about the “gang of four” – the Republic of Korea, Taiwan, Hong Kong and Singapore – thereby focusing only on contemporary cases, relegating the Japanese experience to an earlier historical category Since the early 1990s the World Bank, in its analysis of high performing East Asian economies, not only put Japan back into the category but also added Thailand, Malaysia and Indonesia We would exclude the last three additions on the ground that their growth has lacked the consistent egalitarianism of the earlier cases For the same reason we exclude China even though its growth performance puts even the East Asian pioneers to shame Much of our examples are drawn from the Republic of Korea and Taiwan for the simple reason that the experience of the city states of Hong Kong and Singapore might not seem quite relevant to countries that start from an agrarian base I M D Little, “A Comment on Professor Toye’s Paper” in Louis Emmerij (editor), Development Policies and the Crisis of the 1980s, OECD, Paris 1987 The East Asian growth was not only high and efficient but also inequality averse This was made possible not simply by an efficient trade regime, which by itself helped egalitarian development by promoting exports that intensively used labor, but by a wide range of development and redistributive policies For a brief summary, see Khan (2009), in Shahabuddin and Rahman (editors), 2009 World Bank, World Development Indicators (1997), Table 5.6, which indicates that the reference date is sometime during 1990–93 Devarajan and Sattar, 2009, in Shahabuddin and Rahman, 2009, shows that unweighted average tariff in 1992 was 57 percent with a total of 17 tariff slabs They cite the National Board of Revenue and World Bank staff work as sources of information It is useful to register our view that it might be foolhardy to assume that all or most of the countries listed in Table 7.2 are immune to some such practice The reduction in tariff on capital goods (including ICT products) and intermediate goods in the 2014 budget are described in BES (2014, p 43) Ibid Ibid Policy Research Institute (2012) ERP is estimated by the study as the percentage by which the observed value added in the domestic market exceeds the value added calculated at world prices (i.e., prices arrived at by deducting the tariff premium from actual prices) Numerous practical problems of estimation, including that of tariff redundancy – the situation in which tariff is so high that the market-clearing domestic price is well below the import price plus tariff – are discussed in the chapter The study also estimates ERPs for domestic sales of two predominantly exported goods, garments and jute textiles, respectively at 25 percent and 76.5 percent The low ERP for pharmaceuticals is explained by the price control imposed on the drugs, a system that has by and large proved successful by allowing adequate profit for the industry while ensuring near self-sufficiency in drugs at reasonable cost to the consumers In the author’s field interviews, especially with RMG enterprises, it was frequently argued by the interviewees that export under-invoicing required collusion with foreign buyers which is difficult to negotiate There is little direct financial benefit of export under-invoicing since the premium on foreign exchange has all but vanished Furthermore, convenient alternative 196 12 13 14 15 16 17 18 19 20 21 Notes methods of effecting capital flight, like hundis – unofficial bills of exchange – were widely available and easier to use These comparative figures are from WDII (2014) See Khan and Hossain (1989, pp 105–06), for the data and reference to the source of the study Should one be concerned that import/GDP ratio under the old trade regime was understated for the same reasons for which, as we have argued, the export/GDP ratios were understated? In the case of imports, different factors have likely worked in opposite directions making the outcome less certain Indeed imports under the old regime were relatively undervalued because they were converted into domestic values at overvalued exchange rates But then there is the counter argument that import over-invoicing under the old trade regime has been replaced by import under-invoicing under the present trade regime, relatively overstating import/GDP ratio under the old regime as compared to the present WDII data show that with US$ 67 billion India was at the top, followed by China, Philippines, Mexico, France, Nigeria, Egypt and Bangladesh Data quoted in BBS (June 2014, p 1) BES (2014, p 341) BBS (June 2014) The survey seriously underestimates the total remittances – the recipients understandably might have under-reported the receipts and the survey may have failed to representatively capture all the recipients – but hopefully the description of the migrants is more accurate FDI figures are from BES (2003) (Annex table 45) and 2014 (Annex table 55) GDP figures are from Bangladesh Bank (May 2014, p 48) See Khan and Hossain (1989, p 101) The Bangladesh Bank does not have autonomy in making monetary and exchange rate policies So in effect it is the government that determines the framework for such interventions The uncertainty relates to the adjective “effective” in the title of the index which suggests adjustment for factors beyond relative rates of domestic and foreign inflation Real effective exchange rates (REERs) take into account effects of tariffs and taxes and subsidies and are calculated for different exports and imports to gauge the different rates of support they receive It is hard to see how this might be done for the overall rate of exchange We therefore interpret the index as the real exchange rate: e(p*/p) where e = units of taka exchanging for foreign currency unit(s), p* is the price index of the country (countries) abroad, and p is the Bangladesh price index Infrastructure and Environment The WDII (2014) shows that, for the year 2011, Bangladesh had 166 kilometers of road per 100 square kilometers of land area, second only to Sri Lanka’s 174 kilometers The average for South Asia was 119 kilometers Rahman (April 2014) These data are from BES (2014, p 149) Rahman (2014), cites total cost per unit of power generation to be 6.00 taka for domestic coal used as fuel and 7.20 taka for imported coal as fuel It also cites the cost per unit of imported power to be 6.40 taka Nothing is known about the method of arriving at these costs Notes 197 Mujeri et al (2014, p 3), estimates that in fiscal year 2012 energy subsidy “on and off budget” was 1.62 percent of GDP ADB (2014) The data are from WDII (2014) The first grade enrolment rate is for 2012 and the survival rate to the terminal year is for 2011 The very high 130 percent intake at the beginning means that huge numbers outside the relevant age group have enrolled This may be the perverse outcome of the monetary incentive provided to children enrolled in primary schools The puzzle, however, is that the same monetary incentive is unable to hold them until the final year of schooling It is possible that the perception of the earnings foregone by staying at school increases with the age of the student WDII (2014) Concrete evidence for these apparently sweeping observations on educational quality are not available even though hardly anyone with experience of working in the education sector differs with them in popular discourses 10 It should be noted that there are a handful of excellent private colleges, but they constitute an exception to the general rule All data in the above paragraph are from BES (2003), Annex table 35 and BES (2014), Annex table 41 Unless otherwise stated, data for the remainder of this section are from the same sources 11 The student/teacher ratio in private universities may be somewhat misleading because they have a large dependence on part-time instructors Student/ teacher ratio for 2000 is not shown because the number of students reported in our source for that year appears to be obviously erroneous 12 The amount for the first child is 100 taka and for multiple children 125 taka per month (BES, 2014, p 186), which is less than a day’s wage for an agricultural worker An increase in the amount is likely to have questionable effect and may leak out in the form of false enrolment, something that may already have been happening 13 Besides these madrassahs under public regulation, there is a large number of the “Qaumi” maddrasahs in which a large, but undetermined, number of students are enrolled These institutions are financed privately, allegedly by funds from conservative Arab countries It has been alleged that they belong to an extreme sharia school, far removed from the mild sharia system dominant among the Muslims in Bangladesh They not constitute a burden on public resources, but they allegedly remove a large number of youth from learning the basic skills important for economic development 14 Bhattacharya et al (2009) 15 Much information used in the following paragraphs has been obtained from Tareq (2014) 16 This figure is from table of Tareq (2014), which mentions several sources of the data in the table without specifying the source of this particular statistic 17 Islam (2001) Income Distribution, Poverty and Living Standard The principal documents are the BBS reports on the 1991/92 and 1995/96 HES and the 2000, 2005 and 2010 HIES; and the World Bank, Bangladesh Poverty Assessment 2000–2010 198 Notes See, for example, Dreze and Sen (2013) See, for example, Piketty (2014) See Khan (2005), for estimates of consumption and inequality measures based on them for the first four HIES As is well known, the Gini ratio cannot be directly decomposed to make it possible to derive the overall Gini ratio from the Gini ratios of the regional or other kinds of components But indirect “decomposition” is possible insofar as the Gini ratio is the weighted average of the “concentration” or “pseudoGini” ratios of the components: G = ∑qiCi, where G = the Gini ratio; Ci = the concentration ratio of the i-th component of income which is calculated from the distribution of the i-th component among individuals who are ranked by their per capita overall income, nott per capita income from the i-th source; and qi = the share of the i-th component in overall income If Ci > G then the i-th component is disequalizing; a rise in qi would increase the overall Gini ratio Conversely, if Ci < G then the i-th component is equalizing; a rise in qi would reduce the overall Gini ratio For more on this, see the references cited in Khan and Sen (2001) Income from farming includes return to land, family labor, entrepreneurship and other inputs but excludes payments for hired labor which are shown under wages This is shown by the declining concentration ratio for landholding among individuals ranked according to landownership For years prior to 2000 information on the amount of land rent cannot be separated from total income from property although a look at the data makes it clear that its share of income must have increased sharply until 2000 whence it fell a little with the decline in the access to tenanted land This is discussed more fully in the annex to the chapter 10 For example, successive surveys have established that this is the case in China See Khan and Riskin (2001) 11 This information is separately available for only a few years and not shown in Table 9.1 12 Urban areas have significant farming activity within their geographical limits See actual income sources in the annex to the chapter Agricultural wages are included in and account for most of “Other Wages” 13 This is not shown in Table 9.2 14 This is strongly suggested by the dip in the share of this component in rural income as well More on this is discussed in the annex to the chapter 15 Farm income for Bangladesh as a whole has been equalizing right from the beginning even though for rural areas it was disequalizing in the 1990s and again mildly so in 2010 This is because, in the overall Bangladesh context, rural households themselves are concentrated among the lower income groups 16 The residual sources of income taken together have also been disequalizing in all years except 2000 17 We adopted a very rigorous method by defining the per capita income of each member of a household as the same, ranking the j members of the poorest household as to j, then ranking the k members of the second poorest household as j + to j + k and so on We are unsure if the BBS adopted a similar approach Notes 199 18 The terms “significantly” and “insignificantly” not represent rigorous probability estimates Less than percent difference in the Gini ratio – for example, a difference less than between 0.40 and 0.38 – is called insignificant 19 These are based on our estimates According to BBS estimates they would be a little higher as can be seen from the data shown in the annex to this chapter 20 The argument is rendered empirical strength by the information, derived from those who organized the 2010 HIES, that not a single household from Gulshan, Baridhara and Banani housing areas – where the richest people of the country live – was included in the urban sample 21 These estimates are reported in UNDP, Humanity Divided, Confronting Inequality in Developing Countries, 29 January 2014 (online), Chapter titled “Income Inequality” The figures are for late years of the first decade of the 21st century Examples are: China 0.421; Thailand 0.394; Nepal 0.485; Turkey 0.400; Mexico 0.472 22 The HIES definition of consumption should more appropriately be labeled “expenditure” It includes non-consumption components of expenditure If the definition was adjusted by systematic correction for this problem, we are unaware of it 23 See Khan (2005), which shows that the ratio of consumption Gini to income Gini fell from 0.90 in 1991/92 to 0.69 in 2005 in rural Bangladesh and from 0.95 in 1991/92 to 0.73 in 2005 in urban Bangladesh That study did not estimate the ratios for 2010 It should also be noted that there were minor differences in the methods of estimate in that study and in the present study To the best of the knowledge of the author, those differences should not have influenced the reported outcome 24 World Bank (2013, p 13) 25 This description of the CBN poverty lines is from BBS, HIES Report (2010, pp 59–60) 26 For 2005 and 2010 there were six rural and ten urban strata In earlier years the numbers were fewer 27 Weights are proportional to strata populations 28 One consequence of this procedure is that we had to use the same CPI for all the strata 29 All the estimates above have shown only the headcount estimates of poverty This can be misleading especially if the depth of poverty changes In the annex to this chapter we show some estimates of poverty depth They show that their changes are generally in line with the changes in the headcount rates 30 There is some difference between the World Bank and the Asian Development Bank about the countries included in the South Asian region World Bank includes Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka The ADB excludes Afghanistan and Pakistan As the note at the bottom of Table 9.10 shows, the first six indicators are from the World Bank source while the other ones, except female/male population ratio, are from the ADB source 31 BBS, Statistical Yearbook (2012, p 59) 200 Notes 32 The CIA, World Fact Book (online) reports for 2014 life expectancy of 72.63 years for women and 68.75 years for men, an advantage in favor of women of nearly four years 33 See, for example, “‘Missing Women’ Revisited” British Medical Journal, 327 34 Dreze and Sen (2013, p 60) The figure they show for Bangladesh is 997 women per 1,000 men for 2011 As the note to Table 9.10 states, our figure from the BBS source is 998 35 BBS, op cit., p 46 36 ADB, op cit., Table 2.5 under the section “Framework of Inclusive Growth” 37 Dreze and Sen (2013, pp 58–64) 38 Dreze and Sen were using the PPP$ income estimates of the World Bank Since the date of their work, the PPP$ income estimates of countries have been changed by the World Bank by changing the base year of the prices used This affected estimates for different countries at different rates Current estimates show a lower income difference between India and Bangladesh because of this adjustment 39 Besides the seven named above, the remaining four indicators are life expectancy, access to improved sanitation, infant immunization against DPT and infant immunization against measles In all these four Bangladesh was already ahead of India in 1990 40 The index is prepared under the supervision of Professor Michael Porter of The Harvard Business School See http://www.socialprogressimperative.org/ data/spi/methodology 41 The WDI shows these data for one year which does not allow us to document whether or to what extent the inequality between the rich and the poor in indicators of health and educational development has changed over time 10 Conclusion: Credits, Constraints and Prospects The latter was not always an unambiguous advantage As we argued in Chapter 7, for import, incentive for misinvoicing changed from overinvoicing to under-invoicing while, in the case of exports, the exchange rate itself ceased to be a reason for misinvoicing Of course there remained many other incentives to under-invoice exports, for example, to finance capital flight There are several ways of documenting this challenge The average growth rate for the first four years of the present half-decade, as estimated by the BBS, June 2014, is 6.28 percent For 2014/15, the latest projection by the World Bank, reported in the New York Times on 13 April 2015 is 5.6 percent, which would make the current half-decade growth rate 6.14 percent, lower than the same for the preceding half decade More ominously, the threeyear average growth rate ending in 2014/15 would be 5.91 percent Note, however, that of these three years, the growth rate of the first year is the final estimate; the growth rate of the second year is still a provisional estimate and the growth rate of the third year is only a projection So the estimated threeyear average can change These estimates are based on the revised new GDP series at 2005/06 constant prices Notes 201 This applies not only to the earlier cases like Japan, the Republic of Korea, Taiwan and Singapore, but also to more contemporary ones like China and Vietnam Inequality aversion was, however, a characteristic of the earlier cases As a Korean researcher put it to the author during the latter’s first visit to the ROK: “the authoritarian government of Park Chung-hee promoted capitalism but not individual capitalists; it bashed the workers’ organizations but protected individual workers” Annex to Chapters and 3: Bangladesh National Accounts See BBS, National Accounts Statistics (Gross Domestic Product, 2000–2001), Dhaka, June 2001, for an account of these revisions Much of the information in this annex is based on this report, similar report by the BBS on national accounts for later years and discussions with the officials of the BBS BBS, National Accounts Statistics (Provisional Estimates of GDP, 2013–2014 and Final Estimates of GDP, 2012–2013), Dhaka, June 2014 The World Bank has several distinct definitions of savings Its definition of gross savings is the same as GNS of the BBS It also estimates “adjusted net savings” which includes public expenditure on education but excludes depreciation of assets, depletion of assets and the effects of the degradation of natural resources and carbon emission This definition goes beyond the SNA system and is way lower than the estimate of gross savings Annex to Chapter See Khan and Sen (2001, pp 13–15), for the details Our redefinition of income was based on the examination of components of the questionnaire for the 1991/92 Survey for which we had access to the necessary details We applied these revised definitions to all the subsequent surveys to ensure comparability The term “HIES” is used here to describe all five surveys even though the first two were called HES Note that the comparison of the constant price estimates of the variables measured from the HIES and the constant price estimates of the variables from the GDP accounts should be avoided because of the use of deflators that are not the same Even if this is true, there can be problems in using the CPI as the deflator One issue is the relevant time period Depending on the months in which different households in the sample were enumerated, the weights of different months in the CPI would vary We have used the average CPI for fiscal 1991/92 and 1995/96 and calendar 2000, 2005 and 2010, each calendar-year index being the average of the adjacent fiscal-year indices Note that the CPIs 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115 concentration ratios, 130, 198 constitution, 1, consumption poverty, 142, 143, 144, 146, 147, 148 contraceptive prevalence, 16 corruption, 88, 124, 136, 152, 160, 162, 165, 167, 169, 170 corruption perception index, 170 cottage industries, 82 Cottage Industries Survey, 67 Coyle, Diane, 203 cropping intensity, 55 Bakht, Zaid, 203 balance of payments, 28 Bangladesh Bank, 24, 28, 33, 34, 35, 91, 97, 98, 105, 106, 188, 189, 196, 203 Bangladesh Bureau of Statistics, see BBS Bangladesh Institute of Development Studies, see BIDS banks commercial, 37 domestic private, 37 foreign, 37 state-owned, 37, 158 basic metals, 72, 76 Bayes, Abdul, 19, 203 BBS, 11, 12, 16, 18, 24, 26, 33, 54, 56, 57, 58, 59, 60, 67, 69, 71, 97, 101, 110, 126, 127, 129, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, 151, 172, 173, 174, 175, 177, 178, 179, 180, 187, 188, 191, 193, 196, 197, 198, 199, 200, 201, 203 Bhattacharya, Dipen, 203 BIDS, 69, 191, 192, 193, 203, 205 Boyce, J K., 204 BRAC, 159 budget deficit, 37 business environment, 167 The Daily Star, 191, 192, 194, 203 deforestation, 60, 192 democracy, 1, 2, 171 demographic transition, 15, 16 dependency ratio, 15 Devarajan, Shantayanan, 203 development expenditure, 36 distribution of income, 6, 44, 54, 62, 63, 91, 126, 141, 144, 145, 155, 156, 169, 180 domestic savings, 23, 24, 25, 26, 27, 28, 176, 187 Dreze, Jean, 150, 154 East Asian development model, 89 The Economist, 186, 203 electrical equipment, 73 employment, 4, 5, 6, 8, 17, 18, 19, 20, 21, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 52, 67, 68, 69, 70, 71, 72, 73, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 120, 134, 142, 154, 157, 162, 163, 165, 169, 170, 187, 189, 190, 193, 194 capital flight, 30, 31, 32 child mortality, 151 207 208 Index employment – continued agriculture’s share of, 4, 5, 20, 39, 43, 44, 45, 48, 50 share of manufacturing in, energy, 1, 7, 9, 13, 50, 55, 64, 88, 100, 108, 112, 113, 115, 116, 117, 160, 161, 197 energy subsidy, 117 environment, 7, 8, 9, 70, 96, 108, 117, 122, 167, 168, 196, 203, 205 ERP, see protection, effective exchange rate, 29, 31, 32, 38, 91, 94, 95, 102, 105, 106, 107, 158, 196, 200 effective, 90, 196 overvalued, 32, 94 real, 105, 107 export-led development, 94 exports composition of, 95, 96, 97, 98, 160, 161 discrimination against, 90 external assistance, 22, 28 external balance, 22, 26 factor intensity, 74, 80 FDI, see foreign direct investment fertilizer, 57, 60, 61, 64, 65, 116, 124, 192 fishery, 11, 12, 40, 42, 53, 59, 61, 64, 191 food energy intake, 64 food products, 72, 75, 82, 83 food security, 55 foreign capital inflow, 27 independent of, 22 foreign debt, 102 foreign direct investment, 28, 30, 102 foreign exchange reserves, 28, 29 forestry, 7, 11, 12, 40, 42, 53, 59, 60, 61, 191 garments, see RMG gas, 7, 12, 18, 99, 109, 113, 114, 115, 116, 117, 125 GDP accounting, 14, 21, 23, 26, 40, 172 agriculture’s share of, 13, 40, 43, 44, 65 composition of, 4, 5, 12, 118 elasticity of agriculture with respect to, 11 elasticity of large and medium scale manufacturing, 13 elasticity of small-scale manufacturing, 13 expenditure account of, 5, 22, 27, 173 growth in, 10, 15, 40, 49, 112, 130, 186 product account of, 11 share of agriculture in, 11, 15, 18, 40 GDP deflator, 13, 33, 68, 95, 106, 173, 178, 180, 189, 201 Gini ratio, 63, 126, 129, 130, 131, 134, 141, 183, 184, 192, 198, 199 global climate change, 122, 123 governance, 163 Grameen Bank, 159 Griffin, Keith, 192, 203 Hossain, Mahabub, 19, 204 Hossain, Monzur, 193, 203 Household Expenditure Surveys (HES), 127 Household Income and Expenditure Surveys (HIES), 53, 127 Hurley, Gail, 204 Ickowitz, Amy, 192, 203 import quotas, 90, 94, 105 imports composition of, 98, 99 quantitative control on, 91 import-substituting industrialization, 2, 6, 90 incentive system export hostility of the, 97 income distribution, 126, 197 income poverty, 145, 146, 147, 184, 185 index of industrial production, 71 India, 6, 10, 46, 47, 48, 49, 61, 65, 92, 103, 104, 106, 107, 112, 114, 116, 121, 126, 141, 144, 148, 150, 152, 153, 154, 155, 167, 170, 186, 187, 188, 189, 191, 196, 199, 200, 203 Index 209 inequality, 6, 7, 9, 30, 44, 45, 47, 62, 63, 66, 100, 126, 127, 128, 129, 130, 131, 132, 133, 134, 136, 137, 138, 139, 140, 141, 144, 146, 148, 149, 155, 156, 161, 162, 163, 165, 169, 170, 179, 183, 184, 195, 198, 200 infant mortality, 151, 155 inflation, 33, 189 information technology, 7, 50, 88, 121, 170 infrastructure, 7, 8, 55, 65, 88, 100, 103, 108, 109, 110, 111, 118, 121, 122, 142, 161, 162, 165, 166, 168, 170, 171 IT, 121, 170 innovation system, 118 interest rate, 37, 194 international competitiveness, 29, 77 International Rice Research Institute, 203 investment rate domestic, 22 irrigation, 55, 56, 60, 61, 64, 65, 124, 125 Islam, R., 18, 203 Jahan, Rounaq, 204 Jamuna bridge, 108 Japan, 40, 89, 101, 103, 195, 201 Jatio Shangshad, jute textiles, 70, 72, 195 Khan, Azizur Rahman, 97, 98, 186, 187, 188, 192, 193, 195, 196, 198, 199, 201, 203, 204 knitwear, see RMG knowledge economy index, 88, 118 Korea, Republic of, 41, 45, 89, 90, 103, 118, 160, 165, 194, 195, 201 labor force, 5, 15, 17, 18, 19, 45, 48, 49, 50, 52, 66, 70, 84, 100, 103, 119, 153, 187 labor market agricultural, 20 labor productivity, 74, 80, 83 land reform, 62, 66 Levine, S., 204 Lewis transition, 20, 44, 187 life expectancy at birth, 6, 15, 151, 152 Little, I M D., 89, 204 livestock, 11, 12, 42, 53, 59, 61, 66, 129, 173, 177, 191 living standard, 126, 197 indicators of, 150 LNG, 114, 115 Maddison, Angus, 40, 204 madrassah, 121, 197 male/female ratio, 16 manufacturing, 4, 8, 11, 12, 13, 18, 46, 67, 68, 69, 70, 74, 78, 192, 193, 204 structure of, 67 maternal death, 151 mean age at marriage, 16 money supply, 34, 37, 189 mortality rate, 15, 154 Mujeri, Mustafa, 204 Ndikumana, L., 188, 189, 204 NGO, 22, 23, 27, 28, 135, 159, 174 non-metallic mineral products, 72, 73 nuclear power, 115 output per worker, 18, 19, 41, 42, 43, 76, 82 Pakistan, 2, 65, 92, 103, 104, 112, 114, 167, 187, 189, 191, 199 para tariff, 87, 91, 92, 93, 102 Paul-Mazumdar, Pratima, 205 per capita income growth in, 4, 10, 15, 156 Piketty, Thomas, 204 Policy Research Institute, 91, 195, 204 population, 1, 2, 4, 5, 10, 15, 16, 49, 55, 56, 57, 64, 109, 110, 111, 116, 118, 122, 123, 126, 129, 143, 152, 155, 185, 199, 202 population growth, 4, 10, 56, 57, 123 poverty, 126, 142, 143, 197, 203, 204, 205 power generation by type of fuel, 114 210 Index profitability, 74, 80, 81, 90, 103, 105, 107, 168, 170 protection effective, 90, 93, 94 nominal, 90, 91, 92, 93, 99, 102 Prothom Alo, 204 public expenditure, 36 purchasing power parity dollar, 1, in China, 42, 43, 44 in East Asia, 41 in mature industrial countries, 39 Sub-Saharan Africa, 30 Sunderbans, 122 supplementary import duties, see para tariff Survey of Manufacturing, 67 Rahman, Md Mizanur, 204 Rahman, Rushidan Islam, 205 real agricultural wages, 150 remittances, 26, 100, 131, 135, 174, 181, 182 RER, see exchange rate, real rice area, output and yielf of, 56 RMG, 68, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 86, 87, 97, 153, 159, 160, 161, 193, 194, 195, 203 road density, 109 rural inequality, 63, 179 Russia, 115 Taiwan, 89, 90, 104, 118, 195, 201 tariff rates, 6, 32, 90 textiles, 72, 73, 75, 82, 83 TFR, see total fertility rate Thailand, 65, 103, 141, 191, 195, 199 Theil index, 129 total fertility rate, 15, 151, 153, 155 trade and industrial regime, 10 trade misinvoicing, 31 trade regime, 6, 32, 89, 90, 91, 92, 94, 95, 96, 98, 105, 158, 195, 196 East Asian, 89, 90 Turkmenistan, 114 Sabet, Daniel, 204 Sattar, Z., 91, 195, 203, 204 savings gross domestic, 23, 175 gross national, 23 seed, 57, 60, 61, 64, 65 Sen, Amartya, 150, 154, 203, 204 Shahabuddin, Quazi, 205 shipbuilding, 73, 87 skill development, 118, 121 social indicators, 126, 151 soil degradation, 123 structural change in Bangladesh and India, 44–47 UNDP, 30, 31, 102, 104, 155, 189, 199, 204, 205 urban inequality, 139, 140 Vietnam, 61, 65, 160, 161, 164, 167, 170, 191, 201 water pollution, 124 World Bank, 1, 6, 9, 10, 31, 45, 112, 126, 127, 129, 143, 144, 145, 146, 147, 151, 158, 167, 186, 190, 191, 192, 195, 197, 199, 200, 201, 203, 204, 205 Zohir, Sajjad, 205 ... rules of the game Internationally this was the period of the triumph of globalization Again, the process of integration into the global economy had The Economy of Bangladesh started earlier in Bangladesh, ... officials of the National Income and Industries Wings of the Bangladesh Bureau of Statistics; several staff members of the Bangladesh Bank; and members of the BIDS staff have helped in many ways The. . .The Economy of Bangladesh The Economy of Bangladesh A Quarter Century of Development Azizur Rahman Khan Professor Emeritus of Economics, University of California, Riverside, USA © Azizur Rahman