In Dhaka, the capital city of Bangladesh, you cannot miss the slum neighborhoods. More than 5,000 slum communities, accounting for 40 percent of the population, are spread across the city, often located right next to luxury penthouses, hotels, and high-rise office buildings. Most slum dwellers are limited to low-quality housing in precarious areas, often prone to flooding. The limited access to adequate shelter is an important factor that – according to the Economist Intelligence Unit’s 2015 livability rankings – makes Dhaka one of the least livable cities in the world. These communities are among the most neglected in the city in terms of urban policy, planning, and development, although the people who live in the slums make up the lion’s share of the work force, which drives the city’s economy, contributing significantly to the garment and leather industries, construction, waste management, and many other informal sectors.
Living in slums puts enormous social, economic, and financial burdens on households, and it can lead to intergenerational poverty. Many argue that slum dwellers are caught in a poverty trap—that living in slums makes it harder for households to escape poverty. Several slum-related factors contribute to the perpetuation of poverty, including poor health outcomes; an inability to access finance or leverage property assets; and lack of access to basic services. The existence of slums is a symptom of a shortage of affordable housing, the provision of which can be viewed as a valuable goal in its own right and as a critical ingredient in addressing the broader challenges of poverty.
We've just launched a new, pilot global subnational population database featuring time series population estimates for 75 countries at the first-level administrative divisions (provinces, states, or regions). The database has time series data that spans 15 years (2000-2014), with total population numbers for each area and the shares relative to total national population estimates.
What's new about this?
The common data source of population estimates for most countries is a census, often conducted every 10 years or so. Many countries publish annual estimates between census years, but few publish similar population estimates for subnational regions. This database aims to provide intercensal estimates using a standard methodology.
Deep in the winding alleys of a Dhaka slum, business was booming. Rafiq, an entrepreneurial 12-year-old, was selling snacks out of a makeshift food cart – and his customers couldn’t get enough.
On a foggy winter morning in Dhaka, 41-year-old Jahid was sipping tea by a roadside stall.
“Life was very peaceful back in my village,” he reminisced, “but there was no work, so I moved to Dhaka. Even if I live in a slum, my children are better off here.”
Jahid is one of the 500,000 people that move to Dhaka city each year. Driven by the promise of economic opportunity as well as poverty in rural and coastal areas, it is estimated that half the population of Bangladesh will migrate to urban areas by 2030.
Urbanization can be catalyst for growth. Density – the clustering of firms and workers – can drive productivity, innovation and job creation. It is the benefits of agglomeration that once drew the country’s most important industry – the ready-made garments sector to Dhaka city.
However, it is the costs from congestion that are now pushing factories away, mainly to peri-urban areas. Why are factory owners leaving?
For starters, the tide of new migrants has overwhelmed urban infrastructure, basic services, as well as the stock of affordable housing – eroding the both the livability and competitiveness of Dhaka city. A recent World Bank report described South Asia’s urbanization trajectory as “messy and hidden” – reflected in the large-scale proliferation of slums and urban sprawl.
While extreme poverty has diminished, however, the gap between the richest and poorest countries has increased dramatically. In 1776, when Adam Smith wrote The Wealth of Nations, the richest country in the world was approximately four times wealthier than the poorest. Today, the world’s richest country is more than 400 times richer than the poorest.
What separates them?
One answer is knowledge, diversification and the composition of exports, all areas in which foreign direct investment (FDI) has an important role to play.
FDI matters, but not all FDI is created equal
While FDI is important for economic growth, not all FDI is the same. One way to differentiate is by an investor’s motivations using a framework established by British economist John Dunning:
- Natural resource-seeking investment: Motivated by investor interest in accessing and exploiting natural resources.
- Market-seeking investment: Motivated by investor interest in serving domestic or regional markets.
- Strategic asset-seeking investment: Motivated by investor interest in acquiring strategic assets (brands, human capital, distribution networks, etc.) that will enable a firm to compete in a given market. Takes place through mergers and acquisitions.
- Efficiency-seeking investment: FDI that comes into a country seeking to benefit from factors that enable it to compete in international markets.
This last category – efficiency-seeking FDI – is particularly important for countries looking to integrate into the global economy and move up the value chain.
Recently, an undergraduate engineering student from Khulna University of Engineering and Technology (KUET) in Bangladesh showed me his mobile app that helps a blind person navigate while enabling family and friends to track their whereabouts. I was impressed with his capacity to apply electronics, geographic information system, and programming knowledge to develop a real-life solution.
Like this student, the ability to innovate harnessing existing talent and infrastructure already exist in Bangladesh. Leading universities, like Bangladesh University of Engineering and Technology (BUET), KUET, Bangladesh Agricultural University, and University of Dhaka already have analog fabrication labs for molding, casting, wood and metal workshops and robotics. The BUET even has a 3D printer, although it is an early version. What is missing is a transformation from analog to digital to improve precision, design, and speed of fabrication and prototyping, a market-oriented product development, and multi-disciplinary teaching, learning, research, and entrepreneurship to advance innovation.
A local innovation ecosystem has also been emerging. Last year, the first hardware startup competition called “Make-a-thon” (website and video) connected young entrepreneurs, industries, and professors to jointly make solutions. BRAC has also organized a 36-hour hackathon event called “Bracathon” to provide a platform for the youth to make mobile applications for social innovation.
To foster innovation and university-industry partnership, the Higher Education Quality Enhancement Program (HEQEP), have been supporting Universities with an Academic Innovation Fund (AIF). To accelerate this effort, the project team organized a workshop on the digital fabrication laboratory (Fab Lab) potential to introduce Fab Lab concept.