Watching export growth across South Asia surge in the recent past leads one to ask the obvious but crucial question: Will this trend continue in the longer term and is South Asia on its way to become an export powerhouse, or has it just been a short term, one-off spurt provoked by external forces?
Clearly, the rupee depreciation following tapering talk in May 2013 and the recovery in the US constituted favorable tailwinds; however, our analysis in the fall 2014 edition of the South Asia Economic Focus finds that there are more permanent factors at play as well. South Asia is no exception to the trend across developing countries of increasing importance of exports for economic growth. While starting from a low base, the region saw one of the starkest increases in exports to GDP, pushing from 8.5 percent in 1990 to 23 percent in 2013.
Since gaining independence in 1971, food security issues in Bangladesh have been amongst the highest priorities on the government’s agenda. This is because Bangladesh faces a number of demographic, social and ecological challenges, which make it particularly vulnerable to food insecurity. These challenges are further exacerbated by climate change, including the consequences of sea level rise. Silent threats such as soil and river salinity and arsenic contamination have direct and indirect effects on agricultural production and households’ access to food.
In order to target the continuing food security threats the Government of Bangladesh has developed a number of high level policy initiatives, including Vision 2021 and the related Perspective Plan. Achieving food security is also a key objective of the country’s poverty reduction strategy and has been recognised to be the highest risk in the Bangladesh Climate Change Action Plan. Strategic objectives include realizing universal food security, which implies that the country needs to be not only self-sufficient in terms of food production but also manage equitable distribution of nutritious food. Ensuring universal food security is particularly challenging given the multidimensional nature of the food security concept which comprises food availability, physical and financial access to food, food utilisation and food stability.
The Skills and Training Enhancement Project (STEP), since its inception in 2010, has supported vocational training institutions to improve the quality of training and expand access for disadvantaged youth in Bangladesh. 33 polytechnics are currently receiving financial assistances from STEP for their institutional development. Vocational training institutions in Bangladesh have plenty of investment needs that are long overdue – degraded facilities, obsolete instructional machineries, outdated ICT tools, absence of qualified instructors, to name but a few. Such neglects are no longer tolerable in the face of growing concerns over technical skills gaps in the Bangladesh’s labor market, and the government is committed to expanding and improving skills development training in Bangladesh. STEP’s support has proven very effective to help the institutions to improve their training services.
In introductory macroeconomic class, students learn the theory of the multiplier and many interesting counterintuitive notions such as the paradox of thrift and the balanced budget multiplier based on the multiplier process. Essentially, the multiplier multiplies because one person’s expenditure is another person’s income of which they spend a fraction, which in turn becomes another person’s income, of which a fraction is spent and the process eventually converges with subsequent increments to income getting smaller and smaller.
How does the multiplier process work in reality? The Refugee Migration Movement Research Unit (RMMRU) in Bangladesh has recently completed the first phase of a longitudinal research on the impact of external and internal migration on income and poverty in Bangladesh. The research is based on a survey of 5084 external, internal and non-migrant households from 102 villages. Among others, one of the most interesting is their findings on the impact of external migration on local level development through remittances and expenditure behavior of remittance recipients. Note that since the mid-1970s, Bangladesh has participated mostly in the short-term international labor markets of the Gulf and other Arab countries, as well as South East Asian countries. Over the last ten years, an average 500,000 workers have migrated abroad for work each year. Currently, an estimated 8 million Bangladeshi workers are on short-term migration abroad.
In 2013 the short-term international migrant (STIM) households on average received Tk 251,400 (over $3100) as remittance. The maximum amount received was Tk 4,400,000 and the minimum was Tk 6000. The study found international migration plays a significant role in reducing poverty. Only 13 percent of the STIM households were below the poverty line, compared with 40 percent of the non-migrant households. The survey particularly covered those groups that were either below poverty line, experienced occasional deficits, or ‘break-even’ situations at the time of their first international migration.
The Bangladesh government wants to enhance support for university research as a part of its strategy for higher education (Strategic Plan 2006-2026). Supported by the Academic Innovation Fund (AIF) under the Higher Education Quality Enhancement Project (HEQEP), researchers in Bangladeshi universities are conducting advanced research on some of the most pressing economic challenges in key sectors of the country such as agriculture, environment, and health. With upgraded research facilities and equipment, Bangladeshi faculties are publishing more on international scientific journals and training competent PhD graduates.