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Bangladesh

The Inexorable March of Branchless Banking

Ignacio Mas's picture

There are two ‘coming of age’ tests for bold new ideas. The first, still in the realm of the market for ideas, occurs when the concepts become entrenched as conventional wisdoms, when you no longer need to justify them as ideas. The second is when they gain traction in the marketplace, when you no longer need to justify them as a business proposition.

The ground has shifted massively on both counts since I wrote about the opportunities from branchless banking in this blog more than two years ago. Few now would dispute that a key step to achieve much broader financial inclusion is to take banking transactions outside of banking halls and into everyday retail establishments that exist in every village and every neighborhood, and that financial service providers need to put technology in the hands of customers (in the form of cards or, better still, mobile phones) to increase the convenience and security of those transactions.

Dying to Measure

Mark Ellery's picture

Starting with water and sanitation interventions and then trying to gauge the health impact can actually take us away from our desired goal of securing health improvements. Reversing this approach to start with health impact (first) and then determine causality (second) may create a more effective framework to optimize the trade-offs between water, sanitation and a range of other interventions!

The water and sanitation sector has been subject to numerous health impact studies. These are complex undertakings that require careful intervention and control conditions, extensive and carefully managed data sets, considerable time and money. Even in the best cases, quantifying the health impact of water and sanitation interventions is plagued by the high levels of uncertainty that surround the confounding variables. Furthermore, such studies do not quantify the relative health impact of choosing to invest in water and sanitation rather than breast feeding, or female literacy, or any other intervention. Even worse, such studies can draw a positive correlation between an intervention and the health impact … while the overall health for the particular target population has decreased. In such a scenario, it could be legitimately argued that investing in water and sanitation (and not female literacy) was the wrong choice - if the goal was a positive impact on health.

Costly Electricity May Still Be Cheap

Zahid Hussain's picture

The deep power crisis that Bangladesh is currently living through is affecting more people than the 40 percent population who currently have access to electricity. The reasons are simple.

For industries power outages increase production costs and the operating uncertainty that enterprises face. Losses arise from spoilage of goods-in-process and damage to machinery. Often the cuts in power supply cause production losses lasting beyond the duration of the outage. E-commerce and ICT cannot operate without reliable supplies of electricity. Mechanization of businesses is rendered ineffective, affecting productivity. SMEs rely on electricity for a variety of needs—lighting, refrigeration, grain mills, water pumping, food preservation and you name it. More generally, economic growth that creates jobs and enhances incomes requires electricity. Less and unreliable electricity translates into less and unreliable jobs. This is now a well established fact.

The million dollar question is what do we do to energize the economy?

Financing Living Wage in Bangladesh’s Garment Industry

Zahid Hussain's picture

The Wage Board on garments in Bangladesh nearly doubled minimum wages on July 29, 2010. The minimum wage at the entry level will be raised to Tk 3,000 a month (or about $43) from Tk 1,662.50 ($24). The new pay structure, proposed to be effective from November 1, maintains the existing seven grades with the highest pay fixed at Tk 9,300 ($140) per month. About 3.5 million Bangladeshis work in the garment industry, which accounts for 80 percent of the country’s exports. International companies like Wal-Mart, JC Penney, H&M, Zara, Tesco, Carrefour, Gap, Metro, Marks & Spencer, Kohl's, Levi Strauss and Tommy Hilfiger all import in bulk from Bangladesh.

Garment workers apparently are unhappy over their wages, even after the proposed increase. They protested by smashing vehicles and blocking traffic in various garment sites in Dhaka following the announcement of the wage increase. Why has the frequency of violence increased?

Bangladesh sets a world record – 5 million CFLs in a day, one bulb at a time!

Ashok Sarkar's picture

CFL bulbIf you were in Bangladesh in June, you would have found teachers in schools, preachers in mosques, and ads in newspapers, television, loudspeakers and pamphlets, encouraging people to bring in their incandescent bulbs to exchange with new Compact Fluorescent Lamps (CFLs) – and encouraged they were! On Saturday, June 19th 2010, at over 1,400 rural and urban distribution centers spread across 27 districts, manned by teachers, utility workers and other volunteers, Bangladeshis collectively took home about five million high quality CFL bulbs, in the first round of distribution.

 

They broke a record set by the British in January of 2008, for the most number of CFL bulbs distributed in a single day―some 4.5 million. In June, the Government and people of Bangladesh were inspired to do even better … and they did!

 

Let Good Sense Prevail in Bangladesh’s Garment Industry

Zahid Hussain's picture

The garment industry in Bangladesh has been subject to several tests of resilience in recent years—global recession, energy shortage, input price increases, and labor unrest. Of late, the labor unrest has escalated apparently triggered by disagreement over re-fixation of minimum wage. The workers, for quite some time now, have been pressing for adjustment in minimum wage that was last increased in 2006, after 12 years, from Tk. 930* (about $60 in PPP) per month to Tk. 1,662 (about $108 in PPP) per month. The government in April 2010 committed that a new pay-scale for the RMG workers will be announced before Ramadan, and formed a Wage Board for making the wage recommendations. For reasons not yet fully understood, the labor unrest was reignited recently without waiting to hear what the Wage Board’s recommendations are. However, it is abundantly clear that dissatisfaction with the nominal level of the minimum wage is at the center of the discord between garment owners and workers.

Bangladeshi Communities Build "New Lives"

Meena Munshi's picture

In 2008, I sat with a focus group of about 15 women in a rural village of Bagerhat district in southern Bangladesh. I and some colleagues had visited their village the day before and saw their desperate living conditions and the family conflicts that erupted because of it. This village, and many others, had been hit by cyclone Sidr four months earlier.

We asked the women about their aspirations; they responded with blank stares. But after just two hours of discussion, these women had absorbed and understood the importance of savings, of credit, of good governance, and how they could rebuild (and improve) their lives and livelihoods. At the end of the meeting, one woman told us, “We came here because we thought you would give us food, but we’re not hungry anymore. We have hope.”

The women in Bagerhat and 7 other districts are part of the Social Investment Program Project (SIPP), which has been working in Bangladesh since 2004, when it started as a US$18 million pilot, to introduce community driven development to the country’s rural communities.

The New Normal? South Asia Looks East

Dipak Dasgupta's picture

The world South Asia will face after this crisis is not going to be the same as in the past. The trend that is accelerating after the financial crisis is that of the “new normal”: the shift in traditional engines of growth from industrial countries to emerging markets.

The crisis is accelerating this fundamental change in economic order in which developed countries have to save more and spend less, while emerging markets, such as China, India, Indonesia, Brazil, Russia, and South Africa begin to play much bigger roles in driving the global recovery. According to our estimates, by 2020, in just ten years---Asia may see its share of world GDP (in nominal dollars) climb to over one-third, replacing North America and the European Union as the biggest region. Underlying this is an expected sharp rise in shares of China and India, and indeed, that of all emerging markets may climb to nearly one-half of global output.

Is South Asia Moving Up?

Dipak Dasgupta's picture

The food, fuel, and financial crises during the last three years sent shockwaves throughout the world and its effects rippled across South Asia. It impacted growth, causing a reduction of growth by nearly 3% from the peak of 8.9% in 2007 to 6.3% in 2009, led to job losses, declines in stock market value, decreases in tourism, and increasing pressures on already weak fiscal, balance of payments, reserves and exchange rates.

I was based in New Delhi during the crisis, and the effects were palpable. For a moment, it looked as if confidence was ebbing---the construction cranes in Gurgaon (the fastest-growing township around Delhi) became silent, a young scholar at Delhi University ran a survey of what graduates might do as job markets became difficult, airlines ran half-empty and racked-up massive losses, jobs were lost heavily in diamond-cutting in Gujarat and IT firms stopped hiring in Bangalore, and people paused to consider the implications of such a dramatic change from the accelerating and heady growth of the previous years. But despite the circumstances, and thanks to strong and prompt government actions, confidence has swiftly returned, the region has proven to be quite resilient and a noticeable resurgence has taken hold.

New evidence reaffirms that migration is costly but still worthwhile for Bangladeshis

Zahid Hussain's picture

The International Organization for Migration (IOM) presented their Final Report on The Bangladesh Household Remittance Survey 2009 in a workshop held in Dhaka on May 12, 2010.  This survey collected data from a nationally representative sample of 10,926 migrant households.  The findings of the survey confirm most of what we know about migration and remittance based on smaller surveys and anecdotal evidence.  In particular, the findings are in line with the ones from the World Bank Survey (2007), which was smaller in scope. 

I summarize below what appears to me as some emerging stylized facts about the profile of Bangladeshi migrants and their remittance behavior.

Migrants tend to be young (32 years old on average) married males who have at least completed primary education (over 75 percent). They go to the Middle-East (nearly 73 percent) and Asia (22) with the help of relatives (55 percent) and intermediaries (45 percent) after obtaining a low skilled or semi skilled job contract (79 percent) for which they had to wait for about 6 months.

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