Photo by Mahfuzul Hasan Bhuiyan
Life for people living in the Jalekhali village of the Sathkira District in Bangladesh has not been the same since Cyclone Aila made landfull in 2009. In this coastal village, not only did people suffer in the aftermath of the cyclone, but health effects still linger from salinity intrusion into their ponds and other bodies of water. In addition to an increase incidence of water borne diseases among women and children, the increased intake of salt has resulted in increased prevalence of high blood pressure among pregnant women. The issue not only affects Jalekhali but is prevalent across coastal towns and villages in Bangladesh. In many of these villages the ground well water is also contaminated with arsenic leaving the people with acute shortage of safe drinking water.
Guest workers have played an integral role in the Gulf since the 1970s where the demographic changes accompanying these labor flows occurred at an extraordinarily rapid pace. The region’s aggregate population has increased more than tenfold in a little over half a century, but in no other region of the world do citizens comprise such a small proportion of the population. While this ‘demographic imbalance’ makes the Gulf unique, what differentiates it is not its economic and demographic expansion through migration but the degree to which the region’s governments have excluded foreign workers from being integrated into the national polity. This exclusion of foreign workers is a result of a conscious policy.
Labor migration to Gulf Cooperation Council (GCC) countries are mostly governed under a sponsorship system known as Kafala. Migrant workers require a national sponsor (called Kafeel) and are only allowed to work for the visa sponsoring firm. The workers must obtain a no-objection certificate from the sponsor to resign and have to leave the country upon termination of the usual 2 to 3 years’ contract before being allowed to commence a new contract under a new sponsor. Tied to the sponsor, the migrants become immobile within the internal labor market for the duration of the contract. Consequently the sponsors benefit from non-competitive environments where they extract substantial economic rents from migrant workers at the expense of inducing significant inefficiencies in production.
The Kafeels pay workers an income above the wage in their country of origin and obtain economic rents equal to the difference between such earnings and the net marginal return from employing the migrant worker. Migrant workers are paid the initial nominal wage throughout the entire contractual period. They are even made to accept lower wages than contracted initially. Immobilized by labor restrictions, workers cannot command a higher wage even when there is demand for their services by rival firms willing to hire them in order to avoid the cost of hiring from abroad. Kafeels have also found other ways of extracting rents in recent decades by indulging in visa trading. They allow their names to be used to sponsor foreign workers in exchange for monetary gains.
Arguably, rents per-se should not directly create adverse effects because they are essentially redistributive transfers. Earnings paid to migrants are sufficient to motivate them to migrate. The migrants do not leave. But this view is over-simplistic. The combination of short contracts, flat wages, and lack of internal mobility kills the incentives for migrant workers to exercise higher effort levels in production and engage in activities that enhance their human capital. Any productivity gain would go to the sponsor in the form of rents. The system provides incentives to entrepreneurs to concentrate on low-skills, labor-intensive activities where the extraction of economic rents is easier. Such sponsor-worker behavior explains for instance why despite the massive investments in Dubai, the economy-wide efficiency levels (average labor productivity) have not improved in the last two decades while in Hong Kong, they doubled and in Singapore quadrupled.
More than 1.5 billion people today reside in countries affected by violence and conflict, most - if not all - of which also suffer from inadequate and poor access to basic services. By 2030, it is estimated that about 40 percent of the world’s poor will be living in such environments, where each consecutive year of organized violence will continue to slow down poverty reduction by nearly one percentage point.
A large portion of this group presently resides in conflict-affected parts of South Asia, a region that is home to 24 percent of the world’s population and about half the world’s poor.
Despite such challenging circumstances, research shows that in many settings, development aid is indeed working - albeit with frustrating inconsistency.
The 2011 World Development Report recognizes the strong link between security and development outcomes in fragile and conflict-affected contexts. However, what the evidence is yet to show us is how exactly do you get the job done right?
“Thanks to our research program, we have been able to save the lives of at least 10 women by detecting their breast cancer at early stages,” enthusiastically says Dr. Md. Kamrul Hasan, a professor at Department of Electrical and Electronic Engineering (DEEE), Bangladesh University of Engineering and Technology (BUET), Dhaka.
Dr. Hasan is the manager of the cancer detection research project, which is one of the sub-projects awarded with research grants from the Academic Innovation Fund (AIF) program under the Higher Education Quality Enhancement Project (HEQEP). Faculty members and research students of the department joined together for the research project.
Lack of access to research grants and proper research environment has long been a major headache for researchers in developing countries like Bangladesh, especially in fields of science and technology. Bangladeshi scholars, who go abroad for their studies, often prefer to stay back in the host countries out of concern for availability of research facilities and financial resources indispensable for pursuing their academic work.
The biggest daily struggle for 28 year old mother of two Sima Begum, is feeding her young children and keeping them healthy. Nutrition is a key challenge not only for Sima, living in a slum in Narayanganj, but for women across Bangladesh and South Asia. In fact, wasting and stunting are among the most stubborn health challenges facing the children of this region.
For the last 15 months, Sima has started receiving nutritional advice as well as a small cash transfer to help raise healthy children. Through a pilot cash-transfer program supported by the Rapid Social Response Multi-Donor Trust Fund (MDTF), her 10 year old son Faisal, is eligible for a Tk 800 ($10) school stipend and her daughter Shakal, 5, for a Tk 800 income transfer. Sima uses the stipends to feed Shakal a healthier diet and to pay for Faisal’s tuition, school books and uniform.
In order to receive these stipends Sima has to ensure that Faisal goes to school and that Shakal is brought every month to the community center near her house at New Zimkhana, where her growth can be monitored. The growth monitoring is simple:
Bangladesh, the most vulnerable country in the world to the impact of natural disasters is also a leader in emergency preparedness and disaster response, particularly for cyclones, tidal surges and floods. This was achieved through 25 years of effort, which was catalyzed through two devastating cyclones, one in 1970 and 1991 that caused the deaths of approximately 500,000 and 300,000 people respectively. Part of what makes Bangladesh so strong at cyclone preparedness and response is the fact that major cyclones seem to hit Bangladesh every 3-4 years. Recurrence of this frequency is quite unique.
On the other hand, major seismic events that lead to major losses occur infrequently. Cities like Dhaka and Kathmandu, which are susceptible to major earthquakes, haven’t experienced a major shake in more than a generation. Unfortunately, a lack of frequency often leads to complacency amongst governments and citizens. Even more problematic is the very rapid accumulation of assets and population in urban environments in South Asia, including Dhaka.
Walking through the streets of Dhaka paints a picture of a city with significant structural vulnerabilities – where poor construction standards, lack of enforcement, and poor maintenance turn many buildings into potential hazards. When a building in Savar collapsed in April 2013 – killing over 1,100 people and injuring thousands more – it was a wakeup call for Bangladesh. The collapse was not triggered by an earthquake, it was the result of catastrophic structural failures, but it was a glimpse into what could happen in the event of a major earthquake.
Let’s say we are both girls born on farms in remote villages at the foothills of mountains, but you were born at the foothills of the Himalayas and I, somewhere at the foothills of the Swiss Alps. You are the first of five children and I have only one younger sister. What do you suppose our lives growing up would be like?
I have access to a road that leads me to school every day and to hospitals when I need it. I have electricity so that I can do my homework in the evenings and my mother can cook using a clean stove. We have heat. I even have telecommunication services for when I want to talk to my uncle who lives in Nova Friburgo, Brazil. And my bathroom is indoors because it separates us from our waste.
Tax revenue growth in Bangladesh this year has been one of the lowest in recent years. There is now demand for a cut in corporate income tax rate with the forthcoming FY15 budget. Is this a good idea from a fiscal point of view?
Whether or not a tax-cut will increase or lower tax revenues depend on the tax rates and the tax system in place. If tax rates are in the prohibitive range, a tax cut will result in increased tax revenues. Arthur Laffer distinguished between the arithmetic effect and the economic effect of tax cuts. The arithmetic effect means that a lowering of the tax rate will result in lower tax revenues by the amount of the decrease in the rate. The economic effect identifies a positive impact of lower tax rates on work, output and employment which expand the tax base. If tax rates that are currently in the prohibitive range are lowered, the economic effect of a tax cut will outweigh the arithmetic effect and revenue collection will increase with tax cut.