The Development Issues of Bangladesh

The Development Issues of Bangladesh

Question 3, Page 201

Describe how both trade and aid are helping Bangladesh to develop

Both trade and aid are helping Bangladesh to develop. The UK spent £114 million on direct aid to Bangladesh in 2008/9. The aid that the UK has spent here has lifted over half a million people out of poverty. In the 70’s the UK and other partnership programs were trying to reduce the cost of food for the poor, aiming to keep people out of poverty  constructed 14,000 classrooms, provided a basic education to 4.5 million children and improved access to markets. Education gives people work prospects, lifting people out of poverty gives them the means to enter the work market and similarly improving market accessibility opens up new opportunities for trade. NGOs have been extremely important in the health successes for Bangladesh, largely in the areas of family planning and immunisation. It now has a lower child mortality, higher access to safe drinking water, sanitation and even a higher contraceptive use than India. Aid also mitigates natural hazards such as flooding, e.g. raising houses to above the flood level, Natural disasters can put a halt to trade putting people in debt or loosing wealth in such a case. Aid in the form of Micro-finance comes from NGOs such as Action Aid. This supports many new industries ensuring that they can set up and develop. It is built n the idea that the poor have skills which are untapped When the poor start earning profit they can repay their loan. It is effectively the catalyst to trade.

Trade itself promotes development, by working with foreign markets; it increases the GDP per capita and allows each individual person to lead more prosperous life. The textile industry has become the nation’s number one export. It employs 2.2 million people and has accounted for 75% of Bangladesh’s exports (valued at $10.53 billion) in 2005-2006. The export based model has also been utilised within policy, for example, companies operating in the area which agree to export are given tax cuts to encourage trade, to which some of the money will be fed into the system by local workers and taxations, along with the other services that the company will tap in to.

Discuss the view that trade and aid have to go hand in hand to ensure that Bangladesh develops for its people, including the very poorest.

Trade and aid are necessary in convergence for many businesses require monetary funding in order to take place. Without aid, from microfinance projects for instance, such as The Grameen Bank and Action Aid and other NGOs, the skills of the poor may be unutilised. For example, a lot of women have skills in the textile industry, where there are about 5 million borrowers, of which 90% are women. Without this aid they will have been unable to enter the business market. Similarly, aid cures various illnesses and reduces childbirth through various health initiatives such as promoting contraceptive use; this decreases dependency and allows each person more money to fund their own life, including trade prospects. Aid has also targeted education, for example, UK aid alone has created 14,000 new classrooms, this provides people with a skill set to enter in to the business world and also stops gender discrepancies imposed by typical cultural traditions. Aid also provides the poor with access to work, where as they may have prior been unable to access them. Initiatives that the UK and other NGOs have taken are focusing on new agricultural development, such as seeds that grow in the dry season, as well as the development of small scale infrastructure such as connecting markets with small scale growers as well as working to improve transport of products. The rich however already have the funding, the quality of health and the education to succeed and hence aid needs to go hand-in-hand in order to mitigate polarization.

Discuss how environmentally sustainable Bangladesh’s development is.

A lot of Bangladesh’s development is agriculturally based; it has been growing at a constant 5.4% in recent years. The resources that it uses are largely sustainable, such as seeds and other organic matter. However, the land on which it is based isn’t necessarily so. The land on which a lot of the agriculture takes place on fertile land, which is only so as it is deltaic. Being based on a delta, the land is low-lying and with the possible threat of sea level rises if climate change theory is to be accepted, the land loss is a serious threat to this growth rate. The growth rate is also due to technological advances, with the mechanisation of faming, it is arguable that pollution levels make it not environmentally stable. Furthermore with the tax rebates being given to large industry it is highly possible that their pollution could go ignored due to poor environmental planning laws and the will of the Government to keep them in that country.

Compare Bangladesh’s road to development with that followed by India, China and/or the Asian Tigers. Refer in particular to the roles of trade and aid in stimulating development.

Bangladesh’s road to development differs from that followed by China, India and the Asian Tigers, yet holds some similarities. They are all fundamentally on different roads as they were at different levels of development. I mostly find that Bangladesh has cherry picked the successful policies of countries such as China, India and the Asian Tigers. As an NIC Bangladesh’s development was largely agriculturally based, as it did not have the natural resources that some of the other countries had to exploit. For example China had a great input in to the energy industry, with 80% in 1980 being generated from non-renewable fossil fuels. Bangladesh itself is now undergoing gas exploration, but is yet to find a market there.

Similarly to the Asian Tigers, education was singled out as a way to drive development through arming people with key skills in order to develop in the work field. Alike this, agriculture was also a key component in the development of the country. The Tigers protected it by subsidies; they also secured land tenure for famers and further allowed investment in mechanisation in order to increase productivity. Although not by the same means, Bangladesh provided loan facilities in order for farmers to take a step on the ladder for themselves.

Another similar aspect is the attraction of TNCs in to the area, Taiwan for instance, one of the Asian Tigers, attracts TNCs such as Panasonic and the development of Infosys in Bangalore, India. All are located there due to various Governmental incentives such as tax breaks. Bangladesh is much alike; they have set up export-processing zones where companies are offered big tax reduction if their goods are exported from the country. This is very similar to the open market policy of the Asian Tigers, whose speed of development was fuelled by opening up their economy and trading on a global scale. It was criticized for developing at the expense of the market within the country; this seems to have been limited in Bangaldesh by creating the EPZs.

Bangladesh and China also have something further in common. Even thought their modernisation within their relative fields (China’s steel and Bangladesh’s textile industry) most of their produce come from  small-scale production centres, solely due to it being one of the countries key markets and making up a large proportion of their exports. Within Bangladesh’s development however, it has been subject to far more aid than the other aforementioned countries. This is highly likely due to its lack of natural resources to attract FDI and so needed greater monetary assistance.