Development Management Setting The Economy's Take-Off

www.cdss.ingeniousbd.
org
Bangladesh: For A Development Management

Setting the Economy’s Take-off
Dr. S. M. Ali Akkas
Email: akkas54@gmail.com, info@cdss.ingeniousbd.org
Web: www.cdss.ingeniousbd.org
(Abstract: Bangladesh has the potentials for take-off. Many of the preconditions
are already met. Among these are the very high investment-GDP ratio, extensive
network of road and telecommunication, reawakening of manufacturing sectors
along with readymade garments as the lead sector. However, the major limiting
factor is the lack of quest for take-off by the political authority, i.e., the vision
and mission for take-off. It badly needs ‘good governance’. The paper attempts
to identify Bangladesh’s position as regards take-off of its economy and
highlights the need for a development paradigm shift and the need for setting a
revised strategic vision for the country. It also emphasizes the necessity for
resetting the country’s strategic mission for development.)
1. Introduction:
Despite facing ample challenges as encountered by most developing
countries of the world, Bangladesh economy should have consistently
been prepared for take-off. There are quite a number of glaring failures
but the commendable successes it has attained during the last one and a
half decade in macro management of the economy have formed a ground
for take-off, which may pave the way for resolving many of the critical
development problems such as poverty, illiteracy, unemployment and low
productivity within a foreseeable future. This is not an artificial attempt to
altering pessimism into expectation of false hope, rather to help build, on
what has already been attained, a foundation for what ought to be done
next. It is rather some sort of confidence building based on some positive
change that has already taken place in the economy.
1
www.cdss.ingeniousbd.org
Without going into the debate of the soundness of Rostow’s stage thesis,
the concept ‘take-off’ has been deliberately chosen in the present article to
express an emphatic drive that a developing country needs in setting
dynamism in its economy for a sustained development. The prerequisites
for ‘transition’ and the ground setting needed for ‘take-off’ have been
conceived as prompt and timely actions needed for a desperate nation
aspiring quick development of the country.
Section-2 of the paper attempts to identify Bangladesh’s position as

regards take-off of the economy. While Section 3 and 4 highlight the need
for a development paradigm shift and the need for setting a revised
strategic vision for the country respectively, Section-5 emphasizes the
necessity for resetting the country’s strategic mission for development and
highlights the strategic direction of the country’s development. Section-6
outlines the strategic actions the country needs to put in place for take off.
Section-7 concludes.
2. Where does Bangladesh stand in terms of Take-off and the

Pre-requisites – An Analysis from Macroeconomic
Management Perspective
Take-off stage, as Rostow defines, is the third of his five stages of development
viz: traditional, transitional, take-off, maturity and high mass consumption
(Rostow, 1960). It is a short ‘stage’ of development when growth becomes self-
sustaining. Investment must rise to a level in excess of 10 percent of national
income in order for per capita income to rise sufficiently to guarantee adequate
future levels of saving and investment. Also important is the establishment of
what Rostow calls ‘leading growth sectors’. Historically, domestic finance for
take-off seems to have come from two main sources. The first has been from
diversion of part of the product of agriculture by land reform and other means.
The second source has been from enterprising landlords who voluntarily plough
back rents into commerce and industry.
In practice, the development of major export industries has sometimes led to

take-off permeating substantial capital imports. The sector or sectors, which led
to the take-off, seem to have varied from country to country, but in many
2
countries, railway building seems to have been prominent. Certainly, an

improvement in the internal means of communication is crucial for expansion of
markets that facilitate exports, coal, iron and engineering. However, Rostow
argued that any industry could play the role of the leading sector in the take-off
stage provided four conditions are met. First, the market for the product should
be expanding fast to provide a firm basis for the growth of output. Second, the
leading sector generates secondary expansion. Third, the sector has an adequate
and continual supply of capital from ploughed-back profits. Finally, the new
production functions can be continually introduced into the sector, meaning
scope for increased productivity.
Rostow contends that the beginnings of take-off in most countries can be traced
back to a particular sharp stimulus, which has taken many different forms, such
as technological innovation or more obviously a political revolution, e.g.,
Germany in 1848, the Meiji restoration in Japan in 1868, China in 1949, and
Indian independence in 1947. Rostow is at pains to emphasize that there is no
one single pattern or sequence for take-off. Thus, there is no need for developing
countries today to recapitulate the course of events in, say, Great Britain, Russia
or America. The crucial requirement is that the preconditions for take-off are
met. Otherwise the take-off, whatever form it takes, will be abortive. Investment
must be over 10 percent of national income; one or more leading sectors must
emerge; and there must exist or emerge a political, social and institutional
framework, which exploits the impulse to expansion. Examples are given of
extensive railway building in Argentina before 1914, and in India, China and
Canada before 1895, failing to initiate take-off because the full transition from a
traditional society had not been made.
The main economic requirement for transition phase, the preconditions for
take-off, Rostow says, is that the level of investment should be raised to 10
percent of national income to ensure self-sustaining growth. The main
direction of this investment must be in transport and other social overhead
capital to build up society’s infrastructure. The preconditions of a rise in the
investment ratio consist of a willingness of people to lend risk capital, the
availability of men willing and able to be entrepreneurs and to innovate, and
the willingness of the society at large to operate an economic system geared
to the factory and the principle of the division of labour. On the social front,
a new elite must emerge to fabricate the industrial society and supercede the
authority in the land-based elite of the traditional society. The new elite must
channel surplus product from agriculture to industry, and there must be a
3
willingness to take risks and to respond to material incentives. Moreover,

because of the enormity of the task of transition, the establishment of an
effective modern government is vital. The length of the transition phase
depends on the speed with which local talent, energy, and resources are
devoted to modernization and the overthrow of the old order and in this
respect, political leadership will have an important part to play (Thirlwall,
1994).
2.1. An Investment-GDP Ratio met necessary condition for take-off:
It was the contention that an economy to take-off would require investing
more than 10% of its national income. On that consideration Bangladesh
economy was suppose to Fig-1: Investment: Public and Private
take-off from the
24.5
30.0
24.3
24.2
beginning of the 1990s.
23.4
23.0
23.1
23.1
25
22.2
24
21.6
20.7
20.0
25.0
19.1
18.4
17.9
As % of GDP
17.3
16.9
Unfortunately, that did 20.0
not happen. From that 15.0

10.0
time there has been a 5.0
constant rise of 0.0
1990/91
1991/92
1992/93
1993/94
1994/95
1995/96
1996/97
1997/98
1998/99
1999/00
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
investment-GDP ratio
reaching as high as 25%
in FY05-06 (Fig-1), Total Investment Public Private
showing a declining trend in the last two fiscal years (Ministry of Finance,
March 2008). Where is the problem? Is it due to the lack of political
leadership and/ or the lack of governance or something else?
2.2. Relatively Higher Control on the Economy in financing National

Budget
There has been a steady
Fig-2: Revenue, Expenditure and ADP as Percent
progress in the rise of of GDP
Revenue-GDP ratio from
18
9.6% in the FY2000-01 to 16
14
11.3% in FY07-08(Ministry 12 Rev-GDP Ratio
of Finance, March 2008). The
In %
10
Exp-GDP Ratio
8
Expenditure-GDP maintains 6
4
ADP-GDP Ratio
the same trend as of the 2

0
Revenue-GDP ratio, showing
19 95/9 6
19 97/9 8
19 99/0 0
20 01/0 2
20 03/0 4
20 05/0 6
20 07/0 8
4
some control on the management of national budget. Of course, the

declining tendency of ADP-GDP ratio appears to be a grey area (Fig-2).
Even in a situation of still weak governance in tax administration, there

Fig-3: Revenue-Exp Ratio
has been an improvement
in the Revenue-
80.0
70.0 Expenditure ratio during
60.0
50.0 FY2000-01 to FY05-06
In %
40.0
30.0 (Fig-3). The ratio has had
20.0
10.0
a constant upward
0.0
movement from 60% in
1990/91
1991/92
1992/93
1993/94
1994/95
1995/96
1996/97
1997/98
1998/99
1999/00
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
FY2000-01 to 73.5% in
Revenue-Exp Ratio FY05-06 with a
subsequent deterioration
in FY06-07 and FY07-08 (Ministry of Finance, March 2008).
2.3. Uncontained Improvement in the External Sector of the Economy

Bangladesh economy had Fig-4a: Export-Import trend in Bangladesh
experienced a constant 25.0
improvement from early nineties

As % of GDP
20.0
15.0
in terms of increase in both 10.0
5.0
export and imports as percentage 0.0
1990/91
1992/93
1994/95
1996/97
1998/99
2000/01
2002/03
2004/05
2006/07
of GDP (Fig-4a). Export as a

percentage of import progressed
Import Export Linear (Import) Linear (Export)
from 49% in 1990-91 to 70% in
FY2001-02 but weakened thereafter. The situation improved in FY05-06
Fig-4b: Export-Im port Situation and FY06-07 due to a fall in
import cost relative to export
78.6
100.0
71.4
70.0
69.9
68.4
68.5
68.8
67.7
66.3
earning (Fig-4b) in spite of sharp

66.1
61.5
60.5
58.3
59.1
56.2
55.8
80.0
49.1
60.0
drop in the export-import ratio
In %
40.0
20.0 due to political turmoil in FY 05-
0.0 06. It seems that the country has
1990/91
1992/93
1994/95
1996/97
1998/99
2000/01
2002/03
2004/05
2006/07
gained some real control on

Export-Import Ratio
foreign trade, even if the export
sector heavily relies upon the
5
sole export item, the garment, which is horribly risky by all

considerations.
Further, the balance of payments situation of the country has continuously

been less volatile showing an improvement in the management of the
external sector of the Fig-4c:Balance of Payment Situation
economy by the 2.0
improvement of the
As % of GDP
0.0
-2.0
Current Account Balance -4.0
situation except in FY00- -6.0

-8.0
01 and FY04-05 when the 1990/91
1991/92
1992/93
1993/94
1994/95
1995/96
1996/97
1997/98
1998/99
1999/00
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
C/A balance was
negative. The country has Trade deficit C/A deficit
Linear (C/A def icit) Linear (Trade deficit)
experienced notable
Current Account surpluses in FY05-06 and FY06-07 (Fig-4c). We
observe that there had been a further improvement in C/A surplus in
FY06-07 in spite of the deterioration in trade deficit. That means, it was
not trade, rather remittances that led to surpluses in the Current Account
Fig5: Comparative BOP Scenerio during FY07 Balance in FY06-
& FY08 07. It is also noticed
1000.0 that there was a
500.0 lower C/A surplus
In Million US$
0.0
Trade C/A Capital Financial Overall
during Jul-Dec’08
-500.0 Jul-Dec'07
-1000.0
Balance Balance Account Account Balance
Jul-Dec'08 compared to Jul-
-1500.0 Dec’07 due to
-2000.0
higher trade deficit
-2500.0
during Jul-Dec’08
compared to Jul-Dec’07 (Fig-5).
2.4. On the Plane of Deficit Financing
The Budget Deficit varied between 3.4 – 6.0% of GDP during the past
one and half decade covering three election regimes and the present care-
taker government (Fig-6). Budget deficit tended to be contained by each
elected regime in the beginning of their getting into power but
deteriorated in the terminal years of their offices. We observe a
6
deterioration in budget deficit again in FY07-08, which is likely to

deteriorate further in the coming FY08-09 because of huge deficit
financing in the new budget.
Fig-6 further shows that financing budget deficit through bank borrowing
was never very
significant (i.e., Fig-6: Financing Budget Deficit by Bank
Borrowing
not more than
1.5% of GDP)
3.6
6.0
2.8
1.5
1.5
4.0 1.2
As % of GDP
1.1
1.0
until FY05-06,
0.9
0.9
0.9
0.8
0.6
0.6
0.2
0.2
-0.3
0.0
1
2.0
0.0
but it soared -2.0
during the last -4.0
-3.4
-3.8
-3.7
2002/03 -4.2
2003/04 -4.2
2006/07 -4.2
-6.0
2004/05 -4.4
2005/06 -4.5
1991/92 -4.7
1994/95 -4.6
1995/96 -4.7
1998/99 -4.6
2001/02 -4.7
2007/08 -4.8
2000/01 -5.1
two fiscal years
1993/94-5.8
1990/91-6.0
1999/00-6.1
-8.0
1992/93
1996/97
1997/98
FY2006-07 and
FY07-08
Budget deficit Bank borrowing
(Ministry of
Finance, 2008). This is one of the major causes of recent inflation, others
being price hike in world foods items and internal shortage of food supply
due to floods and cyclone Sidr.
2.5 An Encouraging Performance of the Industrial Sector

2.5.1 Growth of Industrial Sector
How far the industrial sector would come up in the way to take-off?
Statistics shows that
the contribution of Fig-7a: Growth of Manufacturing Sector
11.19
10.77
the industrial sector 12

8.21
8.19
to GDP has grown

7.01
10
6.75
5.64
5.48
from 17.31% in 8
In %
6
1980-81 to 29.77 % 4
in 2006-07, of which 2
the contribution of 0
1992-
1997-
2001-
2002-
2003-
2004-
2005-
2006-
2001
96
02
03
04
05
06
07
manufacturing
sector is 17.79 %. Growth Rate
The estimated
growth of manufacturing was 11.19% in FY06-07 compared to 5.64%
7
during 1997-2001 and 5.48%, 6.75%, 7.01% and 8.19% during FY01-02,
FY02-03, FY03-04 and FY04-05, respectively (Fig-7a) (Ministry of
Finance, 2007).
Fig-7b shows that the

Fig-7b : Industrial Growth Rate
growth of the small and
cottage industries sub sector 14
12
has accelerated from 5.4% 10
In %
8
in 1999-00 to 10.28 % in 6
4
2006-07, while that of the 2
0
medium and large scale sub
1999/00
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
sector went up from 4.4%
to 11.56% during the same Small & Cottage Medium& Large
period.
2.5.2 Growth of Foreign Direct Investment (FDI) and Private Sector

Investment (PSI)
There has been a phenomenal Fig-8: Foreign Direct Investment (FDI)

growth of both FDI and PSI. 900
845
792
The immediate past 800
In Million US$
700
600
government inherited an 500
460
FDI
400 280
economy with an FDI of only 300 190 180
268
200 79
US$79 million, which soared 100
0
52
to US$ 845 million in

1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
FY2004-05. There was a

slight decline in the flow of
FDI in FY05-06 due to political turmoil (Fig-8). FDI grew on an average
Fig-9: Private Sector Investment in Bangladesh
by 170 percent each year
during FY00-01 to FY04-05
87570
77700
100000
(Ministry of Finance, 2008).
59370
51720
In Crore Tk.
80000
45840
40150
37010
33990
30560
60000
24750
40000 PSI, on the other hand, grew

20000
0
at an average annual rate of
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
13%. Starting with an amount

of Tk. 24,750 crores in
Private investment
FY1996-97, the PSI
8
increased consistenly every year, reaching Tk. 87,570 crores in FY05-06

(Fig-9). This gives a very encouraging picture as regards the prospect of
industrialization if planned efforts are geared to its growth (Ministry of
Finance, March 2008).
The quality of private Fig-10 : Import of Capital Good

investment can be perceived by
2500
the growth of capital goods
In Million US$
1927
2000 1539
imports. Import of capital 1500 1211
786
goods increased from US$ 582 1000
333 285 294 314 482
562 568
500
million in FY2001-02 to 0
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
US$1539 million in FY2005-06
and US$ 1927 million in
FY2006-07 (Fig-10) (Ministry Import of Capital Good
of Finance, 2008).
2.6 Garments & textiles emerged as lead export sectors

One can easily notice from the Fig-11 that there has been a
phenomenal growth in the production of readymade garments and
textiles as backward linkage industry. As evident from the figure that
the index number of readymade garments has doubled or even more
within ten years. The same is the case with the production index of
textiles (Ministry of Finance, 2006).
Readymade Garments is Fig-11: Production Index of Textile and Readymade

now a lead sector in the Garments during FY1995/96 to FY2004/05
(Base Year: 1988/89=100)
exportable items. The
890.77
943.7
811.67
804.94
766.32
770.28
710.61
sector has already proved 1000

544.89
507.17
432.98
800
its sustainability by
Index
600
177.43
144.92
118.06
facing successfully the

102.5
110.6
92.38
98.07
400
84.13
86.45
45.16
200
vulnerable situation 0
created by post-MFA
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
phase-out. Considering
its further growth Textiles Readymade Garments
9
potential and the backward linkage impact on textile industries in the

country, this sector can certainly work as one of the thrust sectors of
the country for take-off of the economy.
2.7 Transport and Communication Sectors’ Boom
The country may be considered to be ready for take-off on another plea
that it has already come under extensive network of road
communication Fig-12: Growth of Transport Sector in
providing easy access Bangladesh
for marketing facility
8.24
7.97
7.98
7.92
10
6.85
6.56
6.21
6.08
within the country
5.61
5.9
8 5.5
In (%)
and abroad. The 6
6.63
6.51
6.27
5.98
5.96
4
5.37
5.23
5.27
5.26
process is still on 4.87
4.42
2
with the growth 0
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
pattern of transport
and communication
sector compared to Grow th of Transport Sector GDP Grow th Rate
GDP growth as
noticed in Fig-12. The transport and communication sector achieved a
growth rate of 8.24% in FY2006-07, which was 7.98% in previous
year (Ministry of Finance, March 2008).
2.8 Steady Remittance earning from work force export

There has been a spectacular growth of remittance earning in Bangladesh
in the last five years
Fig-13: Remittances in Bangladesh
(Fig-13). Remittance
7000
has been one of the 6000
InMillion US$
leading sectors for 5000

4000
foreign exchange 3000
2000
earning, contributing 1000
significantly to the 0
1999/00
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
improvement of balance
of payments. It has a Remittances
tremendous potential to grow further and may contribute further in easing

the investment-saving gap of the country (Ministry of Finance, 2007).
10
3. Need for a Paradigm Shift: From Macroeconomic

Stabilization to Development Management
3.1 Why Development Management rather than economic
management needed?
Development is a multi-dimensional problem, of which economic

development is one of the major concerns
Economic development presupposes prior and/or simultaneous

development of socio-political, cultural and environmental
development
Economic development has been deviated from/de-linked to

environmental development
Development in all spheres is steered and managed by political

authority
Politics itself needs to be developed for being conducive to economic

development
Development is ultimately an overall management problem involving

integration of economic and non-economic factors such as
maintenance of law and order, good governance at all levels,
promotion of appropriate socio-political and cultural attitude, skill and
vision conducive to development, and formulation and application of
pragmatic policies at home and abroad supporting economic
development.
All these call for a management concept, which is more than a concept
of economic management, comprising factors not only of economic
but also the non-economic factors of social, political and cultural
concerns. That means, we need to develop a development
management framework having key variables capable to capture the
11
whole dynamics of development which can be eventually be used as

progress monitoring tool.
3.2 Development Management as a Framework

Development management is something plus economic management, when
Economic management or Macroeconomic management is expressed in
terms of
Y1 = C + I + G + X – M ………………….…………….………….. (1)
Development management, on the other hand, may be expressed

incorporating in the above equation few additional notations such as S, P,
K and E, which may take the form as:
Y2 = {(C + I + G + X – M) ± (S, P, K, E)} …………………….. (2)
Where, S, P, K and E stand, respectively, for social, political, cultural and
environmental factors. The difference between expressions 1 and 2 is that
the latter has four extra factors influencing positively or negatively each
of the independent variables thereby finally shaping the dependent
variable Y. It means that managing S, P, K and E in a way conducive to
independent variables C, I, G, X and M produces a bigger Y i.e., making
Y2 > Y1. Alternatively, exertion of negative impact from any of the extra
four factors S, P, K and E will lead to a situation making Y2 < Y1.
It should be noted that while notations used in the expression 1 show

quantitative relations between the independent variables (C, I, G, X and
M) and dependent variable (Y), notations S, P, K and E depict qualitative
changes.
3.2.1 Role of ‘S’ in the Development Management Framework
S, the social factor, is comprised of social investments, social
norms/values/behaviours exerting impacts either positively or negatively
on the national income, Y. Social investment such as in education
(particularly for girls) and in health (particularly in maternal health)
contributes to human development leading to productivity enhancement
and finally contributing positively to Y. Negative social values such as
fatalism, undervaluation and repression of women, son preference and eve
12
teasing contributes negatively to the Y. On the other hand, patriotism,

industriousness, achievement motivation, caring for others, religious
tolerance etc. contributes positively to a higher Y.
3.2.2 The ‘P’ in the Development Management Framework

Since P stands for political environment set by the political system and
institutions, governance, political culture and the role of political actors, it
(i.e., P) has a tremendous direct impact on development. Development of a
country is sometimes defined as the outcome of political management of the
resources (natural, social, economic and human) of that nation. It means, the
speed and quality of development also depends on the capability of political
authority in managing those resources. Speed and quality of development, on
the other hand, depends on the standard of vision and mission of a nation,
which again come through the political process. Thus a political process,
charged more and more with improved and renewed vision, sets new and
new missions for development. It is effectively the P, which greatly
influences all the variables in the right hand side of the Equation-2 finally
putting effect on the Y.
3.2.3 The ‘K’ in the Development Management Framework

Culture, K, plays a crucially important role in the development of a country.
For any progress, native culture, if positive, can play a driving role towards
development. A nation confused with cultural identity can not progress rather
it suffers from lack of motivation. To have benefited from a culture working
as driving force, a nation belonging to a particular culture must have full
confidence and great love for it. Of course, the more the culture forms a
complete way of life, the more it is able to motivate the nation for its nation
building. Islam, a divinely proclaimed complete code of life, if pursued, can
lead humanity towards the highest level of development.
3.2.4 The ‘E’ in the Development Management Framework

Any development effort today must be environment friendly. Otherwise, it is
destined to be unsustainable. Therefore, any developmental effort to be
sustainable must be conducive to eco-system maintaining balance in the
nature. Otherwise, the development would have environmental costs thereby
outweighing development benefits.
13
4. Need for setting a strategic development vision for

Bangladesh
Bangladesh has an expressed vision of poverty reduction documented in the
Poverty Reduction Strategy Framework of its Poverty Reduction Strategy
Paper (PRSP). The vision is expected to be realized under a macroeconomic
environment of pro-poor growth through strategies like (a) boosting
critical sectors such as agriculture, rural non-farm activities, water
resource development and management, small and medium size
enterprises, informal sector, rural infrastructures and development of ICT;
(b) effective safety-net programmes; and (c) ensuring social development
This is a medium-term strategic policy agenda for the goal of accelerated
poverty reduction constituted of the following eight points:
Employment
Nutrition
Quality education (particularly primary, secondary and vocational
levels with strong emphasis on girls’ education)
Local governance
Maternal health
Sanitation and Safe water
Criminal justice
Monitoring
The above-mentioned 8-points strategic policy agenda form the Policy

Triangle having the elements of:
1. Nutrition, sanitation and safe water
2. Human development, and
3. Governance
The policy triangle is to work under the macroeconomic environment of

(i) Accelerating Growth for Poverty Reduction; (ii) Employment and
Poverty Reduction; (iii) Economic Growth, Investment and Savings; (iv)
14
Macroeconomic Stability, and (v) Facilitation of Fair and Competitive

Business.
This is neither sure nor spelt out anywhere in the PRSP that the vision of
the Pro-Poor Growth would lead to take off of the economy within a
specific target period. Nor is anything said about the fulfillment of
necessary conditions of the take-off anywhere in the PRSP document.
That means Bangladesh should have a revised vision with a target period
of take-off that fits with the strategy for pro-poor growth. Without such a
vision, the country may suffer from shortage of self-esteem and resources
sufficient enough to work for an accelerated reduction of poverty.
Thus without a desperate vision of take-off, the country may not achieve
even a moderate growth rate thereby keeping the goal of accelerated
poverty reduction unrealized. Any way, Bangladesh needs a vision, a
dream to march forward, a target to reach desperately somewhere on and
above a soft target of accelerated poverty reduction.
Establishing a ‘hunger- and poverty-free nation’ very often uttered in

public meetings of political parties is yet to translate into action plan.
The vision of pro-poor growth, as set in the PRSP, is poor, because it

regards growth as a usual phenomenon and tags it with the poverty
reduction process. This will limit the growth as well as the take-off
prospect of the economy and lock, instead of unlocking, the potential of
an economy already trapped in poverty cycle. Rather, pro-poor growth
could have been one of the allied strategic missions of the country’s take-
off vision making more sense to strategic planning. The country wants to
be one of the middle-income countries of the world by 2020. But how?
Does it not require a revised strategic planning setting a new vision – a
vision of take-off?
5. The country must have strategic missions for

development
15
As mentioned above, pro-poor growth could be one of the strategic

missions under a vision of take-off. That means, instead of being vision
itself, pro-poor growth could be one of the couple of strategic missions set
under the vision of take-off. If so, then what could be the other strategic
missions of our economy? We can list the following among the probable
strategic missions that we may have for our economy:
1) Growth bringing the economy to the level of middle-income
countries
2) Nutrition, sanitation and safe water for everybody
3) Human development
4) Employment, and
5) Governance
5.1 Setting the country’s strategic direction of development
A country setting its vision for development and accordingly devising

strategic missions needs to strategize the direction of development. For
this, it has to do the following:
• Creation of favorable environment for continuous higher
investment
• Social movement for quality human development
• Motivating people to work for achieving prestige of the nation
• Governance for a prosperous economy and caring nation
5.1.1 Creation of favourable policy environment for continuous higher

investment
For leading the country towards take-off, policies are to be formulated to
attract both internal and external investment - one of the necessary
conditions for take-off. Monetary and fiscal policies are to be devised
towards fulfilling the triangular objectives of macroeconomic stability,
accelerated growth of the economy and poverty alleviation setting a
proper distribution mechanism.
5.1.2 Social movement for quality human development
16
Abundant human resources of Bangladesh may turn into a strategic

advantage if attention is paid to appropriate human development and
planned exploitation of the current work force export potentials. This can
contribute to the bridging of investment gap by attracting more foreign
private investment and enhanced remittance earning. A judiciously
planned social movement for quality human development would therefore
be utterly needed. The expected social movement should ensure a kind of
human development that incorporates values of work culture, labour
productivity and vision for developing the country.
5.1.3 Motivating people to work for raising the prestige of the nation
The country needs dreamers who have dreams with our country and
motivate the nation to dream and work for it transforming it into a
prestigious nation. The dreamers have to be honest in thinking and
practice and be examples for others. The human development process of
the country should have a built-in mechanism to create dreamers of such
requisite quality so that we can have continuously these visionaries across
generations.
5.1.4 Governance for a prosperous economy and caring nation

Governance should not be merely for governance’s sake. It should gear up
administrative support services needed for an emerging economy seeking
prosperity and taking care of its people. For this, we need government
machinery free of corruption. Otherwise, governance may turn into
oppression and counterproductive to development and progress.
6. To have strategic actions in place for the take-off

The country would require a modification in the PRS Framework in order
to fit it to the requirement of the proposed Development Management
Paradigm with a vision of Take-off. This can be done by revising the
17
current PRS Framework in its Vision and the Strategic Block-1 as

depicted in the following section.
6.1 Shaping overall development paradigm

The newly proposed Development Management Paradigm would have a
changed vision i.e., Take-off, in place of Poverty Reduction as mentioned
in the PRS Framework. Accordingly, the revised strategic blocks 1 & 2
should be read as ‘Ensuring higher investment for accelerated growth’
and ‘Boosting critical sectors for take-off’. These two strategic blocks
would now work as a get-in-through for take-off.
Take-off
Key issues in Vision for Development Management (DM)
Macroeconomic framework
building strategies
Medium-term
Block I Block II Block III Block IV
Four Ensuring Boosting Devising Effective Ensuring
Strategic higher Critical Sectors Safety Nets & Targeted Social
Blocks Investment for for Take-off Programs for poverty Development
Accelerated eradication
Growth
Monitoring and Evaluation of

Ensuring Participation, Social Inclusion and Improvement
DM Implementation
Four Promoting Good Governance
Supporting
Strategies Providing Service Delivery
Caring for Environment and Sustainable Development
Consultation at Various Levels
6.2 Patterning socio-political management

In spite of introducing a participatory process in the preparation of the
PRSP, the document has been largely a technocratic one failing to bring in
its fold the politicians. Whatever might be the vision of the economy, it
must come through the window of politics particularly from the political
party in power. This is because the politicians coming through an
electoral process represent the country and they are the real development
18
managers. Thus, any strategic planning for a nation must involve the
politicians in order to have the vision of the economy owned and
implemented by them. For the same reason, they must be an integral part
of any strategic planning process. It is noted that the vision of the
economy should be a common one shared and owned by each citizen of
the country. The politicians should be able to motivate the nation
accordingly.
6.3 Putting new macroeconomic management in place

The macroeconomic policy package as suggested in the PRSP needs to be
revised to meet the requirement of the economy’s new vision, i.e., take-
off. Similarly, changes are to be made in the policy objectives and
strategies formulated in the macro chapter of PRSP.
6.4 Having a linked microeconomic management/sectoral

management
There must be reformulation in the sectoral objectives and strategies as
well in the current PRSP so that each individual agent of the economy
responds to the macro policy objectives of attaining the national vision
under the new Development Management Framework.
6.5 Aligned effective governance

Governance also should be tuned to the requirement of achieving the new
vision. It should be pro-growth, pro-poor and pro-people. The whole
governance process must uphold the norm of developing an enabling
environment for take-off and helping the people to work for that.
7. Conclusion and Recommendations

Bangladesh has the potentials to take-off. Many of the preconditions are
already met. Among these are the very high investment-GDP ratio,
extensive network of road and telecommunication, reawakening of
manufacturing sectors along with readymade garments as the lead sector
having key backward linkage with textile industries. Recent improvement
in the law and order situation with the tendency of sustenance may be
19
added in the list of preconditions for take-off. However, the major

wanting factor remaining is the lack of quest for take-off by the political
authority, i.e., the vision and mission for take-off. It needs badly ‘good
governance’. Further, the country needs a paradigm shift in managing its
economy, i.e., from macroeconomic management to development
management. The recently launched PRSP requires a thorough revision to
make it fit to the requirements of new paradigm, the Development
Management. It requires exercising another strategic planning on take-off
involving the political authority in power and in opposition along with the
technocrats based on take-off as the new vision of development for the
economy.
REFERENCES
1. Akkas, S. M. Ali (2005). “Macro Management of Bangladesh Economy: Recent

Shocks and Immediate Policy Interventions”. Thoughts on Economics, Vol. 15
No. 1 & 2, January-June 2005. Islamic Economics Research Bureau, Dhaka.
2. Akkas, S. M. Ali (1992). “National Economic Management and Budget 1992-

93”. Thoughts on Economics, Vol. 1 No. 1, 1992. Islamic Economics
Research Bureau, Dhaka.
3. Ministry of Finance, Finance Division, Economic Advisor Wing. Bangladesh

Economic Survey, March 2008.
4. Ministry of Finance and Planning, Planning Commission, General Economics

Division: Bangladesh, Unlocking the Potentials, National Strategy for
Accelerated Poverty Reduction, October 2005.
5. Rostow, W. W. (1960). The Stages of Economic Growth. London: Cambridge

University Press.
6. Thirlwall, A. P.(1994). Growth and Development with Special Reference to

Developing Economies, Fifth Edition, ELBS with Macmillan, UK, 1994.
20

Development Management Setting The Economy's Take-Off

Transféré par

Informations du document

Description originale:

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Development Management Setting The Economy's Take-Off

Transféré par

Droits d'auteur :

Formats disponibles

www.cdss.ingeniousbd.

Bangladesh: For A Development Management

Section-2 of the paper attempts to identify Bangladesh’s position as

2. Where does Bangladesh stand in terms of Take-off and the

In practice, the development of major export industries has sometimes led to

countries, railway building seems to have been prominent. Certainly, an

willingness to take risks and to respond to material incentives. Moreover,

Unfortunately, that did 20.0

not happen. From that 15.0

2.2. Relatively Higher Control on the Economy in financing National

the same trend as of the 2

some control on the management of national budget. Of course, the

Even in a situation of still weak governance in tax administration, there

2.3. Uncontained Improvement in the External Sector of the Economy

experienced a constant 25.0

improvement from early nineties

of GDP (Fig-4a). Export as a

earning (Fig-4b) in spite of sharp

gained some real control on

sole export item, the garment, which is horribly risky by all

Further, the balance of payments situation of the country has continuously

situation except in FY00- -6.0

2.4. On the Plane of Deficit Financing

deterioration in budget deficit again in FY07-08, which is likely to

2.5 An Encouraging Performance of the Industrial Sector

the industrial sector 12

to GDP has grown

Fig-7b shows that the

2.5.2 Growth of Foreign Direct Investment (FDI) and Private Sector

There has been a phenomenal Fig-8: Foreign Direct Investment (FDI)

to US$ 845 million in

FY2004-05. There was a

40000 PSI, on the other hand, grew

13%. Starting with an amount

increased consistenly every year, reaching Tk. 87,570 crores in FY05-06

The quality of private Fig-10 : Import of Capital Good

2.6 Garments & textiles emerged as lead export sectors

Readymade Garments is Fig-11: Production Index of Textile and Readymade

sector has already proved 1000

facing successfully the

potential and the backward linkage impact on textile industries in the

for marketing facility

and abroad. The 6

2.8 Steady Remittance earning from work force export

leading sectors for 5000

tremendous potential to grow further and may contribute further in easing

3. Need for a Paradigm Shift: From Macroeconomic

Development is a multi-dimensional problem, of which economic

Economic development presupposes prior and/or simultaneous

Economic development has been deviated from/de-linked to

Development in all spheres is steered and managed by political

Politics itself needs to be developed for being conducive to economic

Development is ultimately an overall management problem involving

whole dynamics of development which can be eventually be used as

3.2 Development Management as a Framework

Development management, on the other hand, may be expressed

It should be noted that while notations used in the expression 1 show

teasing contributes negatively to the Y. On the other hand, patriotism,

3.2.2 The ‘P’ in the Development Management Framework

3.2.3 The ‘K’ in the Development Management Framework

3.2.4 The ‘E’ in the Development Management Framework

4. Need for setting a strategic development vision for