Sunday | 12 January 2025 | Reg No- 06
বাংলা
   
Sunday | 12 January 2025 | Epaper

The other side of growth and some thoughts for new year

Published : Tuesday, 31 December, 2019 at 12:00 AM  Count : 637
Haradhan Ganguly
Haradhan Ganguly

Haradhan Ganguly

�Kamarkathi" a remote village of southern part under Nesarabad, popularly known "Sarupkathi" upazilla of Patuakhali. Lives became unease immediate after cyclone Bulbul. Citizenries were having electricity snapped.  Even their IPS did not work. But trouble would soon come over they expect. Their refrigerators, fans, televisions would start working soon.

But apart from this effect of Bulbul, villagers are having with some challenges for long. Surplus farmers have been acutely facing labour shortage. Even at exorbitant wage and other logistics, they are short of needful labour supply. Even middle earning villagers in the meantime are growing habituated in keeping family maid, not to speak of those well off. But they are also unhappy for not getting suitable man power even at daily wage of taka five hundred per day with three times dining.  All I heard from my relatives living there.

One and a half decade ago even then Kamarkathi was an inaccessible village though rich in coconut and betel nut. Now everything is changed. Once which was their hard thinking for one day they will have electricity, paved way for commuters, rapid and developed connectivity with headquarters of both Barisal and Pirojpur through roads and waterways has come true.

Village Kamarkathi is a symbol, largely spreading out of electricity, well connectivity and infrastructure all over the country have acted to be an impetus not only to rapid urbanization but to growing a vast informal sector of the economy. This informal sector is absorbing man power and other resources from traditional sector and cause value addition. This ensuing dynamism creates labour shortage in traditional sector of rural economy. At this people are earning more and spending more with the rise in demand that we see in the buying spree and growth in manufacturing sectors. Since our internal demand is the driver of growth. So this rapid growing informal sector could not be left unaccounted for. Since it is contributing to growth, it must be brought into account in growth enumeration and that is happening. That is why our growth is reaching its peak.

However some experts and think tanks recently are raising doubts over growth performance overlooking this process of reality. They indicate mismatching of macroeconomic indicators that are not supporting higher growth. To them major indices are having down trend movement, so achieving 8.15 per cent growth is contradictory. On 10th December, planning minister informed growth be achieved at a 8.15 per cent in FY 2018-19, a slight 0.02 percentage point higher from a provisional estimation.

They questioned if the economy is really growing in such a high rate, why is revenue growing at 2.3 per cent in real terms? The government says the manufacturing sector is growing at 19.5 per cent, if it is true, then why is VAT falling? VAT is a direct result from the manufacturing sector. VAT collection fell 0.86 per cent year on year in the first quarter of the current fiscal year, according to NBR. Exports are also not satisfactory. The textile sector is in a bad shape because their earnings falling. Exports slumped more than 17 per cent year on year to $3.07 billion in October as the strong local currency continued to depress apparel shipments, government data shows.

If it holds up financial sector, bewilderment gets more rocked. The return on asset in the banking sector was 1.8 per cent in 2010 but it declined to 0.29 per cent last year. Similarly, the return on equity came down from 18.4 per cent to around 4 per cent during the period. Efficiency in banking sector sees declining. So to them, where is the growth coming from?

But this approach is not a holistic one in measuring economic growth. This is monetarist view and trying   to construct growth quantitatively ignoring the potentials of the economy that is constantly empowering the people to create resources and impacting their consumptions behind the veil.  That is constantly adding its might to growth process.

Planning commission has again stated as said before that Bangladesh's road to higher growth is still dependent on internal demand and cumulative effect of strong remittance. In the face of shyness of private investment, enhanced public expenditure, dynamic social sector along with directing resources to need based areas creates a parallel push for growth achievement in Bangladesh." Where does growth come from" could get answer from "how poverty has come down"?

How savings followed a trend similar to investment? In the early years of independence, the country either did not save or saved little. In those years, when domestic savings were negative, foreign aid had to be used to meet some consumption requirements. However, as the economy picked up pace, national savings increased and reached about 30 per cent of GDP in 2016. In recent years, the savings rate went up further, reaching about 31 per cent in 2017. This savings rate is comparable with India and Sri Lanka but ahead of that of Pakistan.

Data shows national savings of Bangladesh are running neck to neck with investment causing decline in the importance of foreign fund flows. Might be at medium stratum, gaining of such self- reliance is possible due to dynamism of other indicators far off monetarists' views. Since financial sectors' contribution to GDP is nearly only 7 per cent. Now time says other left out indicators by critics to be brought out for further numerical study. Among them, rise in informal sectors, off time employment opportunities of rural and urban labour forces and acceleration of demand expenditures would be note worthy. Yet it is top of ice bergs.

Contribution of informal sector which is still remaining nearly unaccounted for, to growth in its way to go up numerically is big enough to planning commission. 8 per cent growth achievement is possible and debate or confusion expressed rather demands supplementary exercise by opposite viewers.

In the meantime Nobel laureate economist Joseph E Stiglitz and like others raise question on the exercise of numerical growth and its substantiality. They feel the need of redesigning the concept of framing "growth" from monetarist views and quantitative analysis.

 Stiglitz questions, "Is growth Passé?" He said desirable changes including positive outcome from climate change would not happen if we just leave it to the market. It will happen only if we combine high levels of public investment with strong regulation and appropriate environmental pricing. Not burdening the poor, it can be achieved only in tandem with efforts to achieve greater social justice.

Mario Pezzini, director of the Paris-based OECD Development Centre said recently in Dhaka, "Governments should redesign development strategy by reducing reliance on growth oriented thoughts in order to tackle social and political discontents. They also need to take comprehensive approach to building development strategies, which effectively meet people's need. Ensuring social protection with productive human resources and providing required public services, including education and health, could be the indicators for development."
Avoiding sophistry on quantitative achievement of growth, let us see the new reality,that is, evolving of large informal sector that demands insight articulation of both objective and subjective phenomena--the other side of growth.

The writer is a freelance contributor






LATEST NEWS
MOST READ
Also read
2019 marked a rise in border killings
China’s sea claims to face stiff test in 2020
India’s rising surge of ‘Hindu’ nationalism!
Renewable energy next important global power source
Is BD worried of Indian issues?
Single digit interest rate dilemma
The other side of growth and some thoughts for new year
Finance and more for SME
Editor : Iqbal Sobhan Chowdhury
Published by the Editor on behalf of the Observer Ltd. from Globe Printers, 24/A, New Eskaton Road, Ramna, Dhaka.
Editorial, News and Commercial Offices : Aziz Bhaban (2nd floor), 93, Motijheel C/A, Dhaka-1000.
Phone: PABX- 41053001-06; Online: 41053014; Advertisement: 41053012.
E-mail: district@dailyobserverbd.com, news©dailyobserverbd.com, advertisement©dailyobserverbd.com, For Online Edition: mailobserverbd©gmail.com
🔝
close