Bangladesh Then
Bangladesh became independent in December 1971 following a bloody war of liberation. Prior to independence, Bangladesh was one of the most impoverished and least developed countries in the world, having experienced little or no growth in its per capita income in the past two decades. Except for natural gas, it had no major mineral or natural resources; its factor endowments had been extremely unfavorable. In a geographical area of 55,000 square miles, the country housed 75 million people. Barring the city-states, Bangladesh was the most densely populated nation in the worldâit had then 25 times as many people per square mile as the average of the United States, two and half times as many as that of the United Kingdom, and three times that of the average of India.
The situation worsened further with two major external shocks the economy suffered: one from the war of independence and the other from a colossal cyclone that preceded the war. The latter, known as the 1970 November Bhola cyclone, was the deadliest tropical cyclone in recorded history, which resulted in the deaths of up to half a million people (World Meteorological Organization 2017). It also destroyed or severely damaged hundreds of thousands of homes, fishing boats, and agricultural implements, along with most of the agricultural harvests of the country.
At independence, the vast majority of the people in Bangladesh lived in poverty and a large proportion of them in abject poverty.1 This was reflected in a low per capita income, which was estimated to be less than $70 (in current prices at that time), and about 20 percent of the population subsisted on an annual income between $15 and $20. Nearly half of the population was severely malnourished, and more than 80 percent was suffering from some form of micronutrient deficiency.2 Life expectancy at birth was about 49 years for males and 47 years for females. Child mortality was staggering, exceeding 140 per 1000, nearly seven times the average for developed countries at that time. Illiteracy was widespreadâonly 20 percent of the population was literate. At least 30 percent of the population was either unemployed or underemployed.
The housing situation was equally dire. For the vast majority of the people in rural areas, housing barely provided much-needed protection against nature. The urban situation was no better: about 70 percent of the population lived in temporary constructions that had little or no sanitary facilities, 80 percent lacked water connections, and 97 percent had no electricity. About 40 percent of the population in Dhaka lived in slums and squatter settlements (Hasnath 1977).
Agriculture was the primary source of income for the people, contributing 56 percent of gross domestic product (GDP) and providing 80 percent of employment. Though most of the people were employed in agriculture, the country did not produce enough food to feed itself. The juxtaposition of low productivity in agriculture and a rapidly expanding population led to increasing food deficits.
Compared with agriculture, the country had a relatively small manufacturing sector, dominated by large enterprises that contributed about 60 percent of its output; the lionâs share of this output stemmed from jute processing. Thus, in pre-independence Bangladesh, manufacturing and jute processing were largely synonymous.
At independence, the state of physical infrastructure in the country was poor. Transport and communication infrastructure was woefully inadequate. The country had about 1800 miles of railroad, 2400 miles of paved road, and 5000 miles of river routes, which was then the dominant mode of internal transport. Access to electricity was very lowâlimited to a paltry 3 percent of the population. During the 1971 war, transport and communication suffered the most: most road and railroad bridges were either destroyed or damaged, as were a large proportion of the existing stock of trucks and buses. The two main ports of the countryâChittagong and Monglaâsuffered significant damage during the war and were rendered dysfunctional for almost two years, with more than 40 sunken ships in Chittagong harbor alone.
At independence, the telecommunication system was extremely rudimentary, with minimal coverage. The damages the war inflicted on the network further weakened an already fragile communication system and severely impaired the governmentâs capacity to run an efficient administrationâincluding its ability to distribute food and agricultural inputs in the face of rising food shortages.
The war wreaked havoc with the rural economy. It not only destroyed or damaged much of the agricultural productive capacityâincluding draft animals, fishing boats and nets, and irrigation pumps and appliancesâbut also brought about a substantial depletion of the stocks of food, seeds, and agricultural inputs. To further exacerbate an already difficult situation, Bangladesh suffered a massive crop failure in 1972. The disruptions in the transport system, combined with the mix of adverse supply shocks in agriculture, created a condition of dire food scarcity in the second half of 1972. However, with the timely arrival of imported food from abroad, this crisis did not erupt into a runaway famine. Though this famine was momentarily averted, the specter of food shortages loomed large on the horizon. With continuing depletion of food stocks and another devastating flood in mid-1974, the country found itself engulfed in a massive famine in the second half of 1974. This famine resulted in the deaths of 1.5 million people.3
In the early years of its existence, Bangladesh looked like an absolute economic disaster. There was widespread concern, both within and without, regarding the viability of the economy. Bangladesh was widely seen as a Malthusian dystopiaâa hopeless situation in which a mostly agricultural country cannot feed itself. A well-meaning authority on development from Cambridge University likened Bangladesh to âthe textbook example of Malthusian stagnationâ, with little hope of escaping that impasse unless the population growth could be drastically reduced (Robinson 1973).4
The US State Department held a similarly pessimistic assessment of the prospects of Bangladesh. In the face of impending famine and social disorder, an official in the State Department, of which Henry Kissinger was the Secretary, derisively described Bangladesh as âan international basket caseââa country likely to be perennially dependent on foreign aid (US Department of State 1971).
Similarly, the World Bank was not too optimistic either, about the countryâs development prospects. Its first Country Director, Just Faaland, coauthored a book, Bangladesh: The Test Case of Development. In an otherwise sympathetic treatment, the subtitle took a not-too-subtle dig at the economy, on which they remarked: âIf development can be made to succeed in Bangladesh, there can be little doubt that it could be made to succeed anywhere else. It is in this sense that Bangladesh is the test case for developmentâ (Faaland and Parkinson 1976, 197).
However, as time has proven, the doomsday predictions for the Bangladesh economy were utterly premature. This event has also brought to the fore a much-overlooked fact that linear thinking in economic development, merely extrapolating past performance into the future, can often be misleading.
Bangladesh Now5
Fast Forward to 2018
Although Bangladesh, with many challenges, is still a poor country, it has made great strides in economic and social transformation. In recent years, Bangladesh has emerged as one of the fastest-growing economies in the world. Since 2005, it has, on average, grown at a rate of higher than 6 percent, despite various external shocks such as recurrent natural di...