In praise of good policies

On weekday mornings, Lucky Khatun makes a five-kilometre journey on an electric three-wheeler from her village to college in Jashore town where she studies social welfare. A poor sharecropper's daughter, she will complete her master's this year and then will look for a job.

Her two younger brothers, however, have never entered any classroom, not even a school's. Their father, Anwarul Islam, was just too poor to afford it.

But Lucky was really lucky because the government made education free for girls in phases. She got free books and meals, and even a monthly stipend that was sent to her account through mobile banking system. 

Abdur Razzak of Mymensingh was in college when he came to know that the government was going to train young men and women in computer programming. A curious Razzak signed up for the programme.

One year down the line, Razzak was making simple apps. But more than that, the training has changed his life as he has set up his own computer shop in the local bazar.

With 170 million people and over 97 percent mobile phone penetration, Bangladesh is the ninth largest market for cell phones. Almost everyone carries a mobile phone here, from fishmongers to day labourers.

Until recently, all these phones were coming from outside. Then the government made a policy change – it hiked the duty on mobile phone import. Today global heavyweights like Samsung, Vivo and Oppo have set up factories in Bangladesh.

These stories point to only one crucial aspect of development – how policies can play an important part to make or break a country. And how numerous such policies have shaped Bangladesh to what it is today – a basket-case-turned-fastest-growing-economy.

Countries that have turned heads in recent decades – China and India – are all products of good and progressive policies.

China under Mao Zedong turned inward looking with its Cultural Revolution. During those times, China's common image was of farmers in straw hats and dark blue shapeless shirts and pyjamas working in the field. Then came Deng Xiaoping who ushered in radical economic reforms, opening up markets and allowing private entrepreneurship. Today, China evokes images of high-rises and smart cities.

Or say India. An inherently inward looking economy egged on by the Gandhian philosophy of self-reliance in everything. India meant the long-horned Haryana cows herded by skinny white-turbaned villagers and vintage pre-1960 model Ambassador cars.

Then came the reforms of Manmohan Singh who opened up the economy, invited foreign investment and did away much of the licence raj. Today's India is a different picture, with swanky malls, Rolls Royce and BMW snapping-up companies, and the finest brains behind IT.

Bangladesh has also made a long haul with innovative policies and shaped its own development model.

Today, as the country begins its journey of a new decade with global challenges looking even bigger, many of its policies will need serious updating, matching with smart institutions that Bangladesh lacks right now.

And reminding what the country has achieved with good policies is equally important to chart the future course.

Talking of policy successes, agriculture must come first.

The experience of a famine in the formative years of Bangladesh had convinced the governments that this was one area that needed dynamic and thoughtful handling. This led to a second Green Revolution that saw rice production tripling since the 1970s.

The conscious decision to subsidise fertiliser, seeds and irrigation in spite of strong opposition from the World Bank has paid off handsomely. There were some experiments in reducing subsidies and privatising the input market and at one point subsidy was completely withdrawn in 1992. But the fertiliser crisis in 1995 and the food crisis in 2007-08 had reversed that line of thinking. Today fertiliser is heavily subsidised.

Similarly, irrigation has gone through a lot of robust policy regimes. The Bangladesh Water Development Board was given the task of setting up deep tube-wells across the country to provide water free of cost to farmers. Later, the private players were allowed in the irrigation business. The subsidy on diesel made irrigation cheap for farmers and bank cards were introduced to reach subsidy to farmers directly.

Agriculture credit policy of the Bangladesh Bank has made it possible to ensure easy access to rural credit from scheduled banks.

In a similar fashion, the government distributed heavily subsidised seeds as part of its policy choice until the 1980s when it opened the market to the private sector. Today while the government research organisations are innovating newer varieties, the private sector is also playing a crucial role in supplying high-yielding seeds.

Low or even zero duty on agriculture tools and the government's embrace of innovations in varieties have left a positive impact on production, and not just in rice. Today Bangladesh occupies the third position globally in growth in vegetable production, third again in inland fishery and tenth in production of fruits.

Our becoming the world's second largest apparel supplier also speaks of policy success. All the benefits such as cash incentive, bonded facility, and many more have turned our entrepreneurs into the finest clothes makers in the world.

The "going green" approach of the government has seen an amazing result of late. The world's highest rated green garment factories are all in Bangladesh. Of the global top 10 platinum certified LEED (Leadership in Energy and Environment Design, which certifies that a factory uses 25-30 percent less water and energy and ensures fewer workplace accidents), six are in Bangladesh.

Disaster management surely deserves a mention as well. Bangladesh is today recognised globally for its amazing coping capacity with cyclones and floods. After hurricane Katrina devastated Louisiana, the Americans themselves wondered why the US had not taken disaster management lessons from Bangladesh.

Bangladesh's defining moment arguably came in 1998 when three-fourths of the country went under flood water for three weeks and crops were devastated. The Awami League government had taken a comprehensive agriculture recovery plan with loan waiver, pouring in fresh funds, and farmers' rehabilitation. The result – a bumper crop the next year.

Or consider the floods of 2004, or the two back-to-back floods of 2007 followed by the devastating cyclone Sidr. Each time, Bangladesh came out stronger because the governments over the years have figured out how such events affect the lives of the poor and developed relief and recovery capacity. Bangladesh can today boast of never-found-anywhere kind of grassroots and NGO-level disaster response. Otherwise, two subsequent cyclones like Sidr and Aila could not be weathered so well.

The fiscal adjustment policy for disasters also paid off handsomely. When disasters strike, authorities do not have to wait for central approval for, say road repair. They can start right away and the amounts can be adjusted later on.

Electricity production is probably the foremost story of how good policies can turn a hopeless situation 180 degrees. No one would probably forget the "Dour Salahuddin", literally, "Bolting Salahuddin", as the BNP lawmaker from Demra had earned this nickname because he had to run for his dear life when thousands of people enraged by days of power outages chased him out of the area when he appeared on the street. Nor would anyone forget the Kansat story when people's frustration from frequent power outages turned violent and the government shot dead 20 persons to quell the unrest. Scores of industries had to shut down as the BNP government's incompetent, indifferent and self-destructive inefficiency left the power sector hobbled.

So when the Awami League came to power, Prime Minister Sheikh Hasina's firm commitment was to produce electricity. Today Bangladesh is surplus in electricity though through a costly method. All Bangladesh needs now is a balanced development in transmission and distribution of power.

Because of its sound macroeconomic policies, Bangladesh withstood two global crises – the Asian financial crisis and the global meltdown. Despite the hard-knuckled IMF's pressure to radically open up the economy with capital convertibility, Bangladesh shied away from the idea. Bangladesh by policy choice remained decoupled from the global financial system. As a result, Bangladesh did not see the capital flight by jumpy investors as the crisis started, and was insulated from the crisis.

It was also then that Bangladesh adopted the major policy of providing financial stimulus for export diversification to countries other than the US and Canada. So Japan and China are now new destinations for our apparels.

And think of all the rural roads that have networked Bangladesh better than its South Asian neighbours. This conscious decision since the 1980s to build tertiary roads linking the peripheral rural markets to the centre has helped business, reduced poverty and raised education. The grandfather lore of walking five miles to school through mud and rain are over. Bangladesh's rural road system is a globally recognised success story.

For that matter, Bangladesh has always maintained a conservative macroeconomic stance, maintaining a healthy fiscal balance. Our motto was to remain within the budget and unanticipated expenditures were adjusted within. Printing money was never an option.

This has helped our growth remain on a steady progress and investors have found the confidence that Bangladesh will never turn into a Venezuela one fine morning.

However, that cautious policy has been relaxed greatly in recent times and budget deficit has blown out of the age-old limit that Bangladesh has adhered to so ardently.

Despite having weak local level institutions, Bangladesh's success at poverty alleviation, or immunisation, or women empowerment has been especially recognised, thanks to the government's continued policy of involving NGOs in service delivery. This kind of involvement is actually the first private-public partnership in the social sector that has its history rooted back in the cyclone of 1970 when Sir Fazle Hasan Abed and his friends worked relentlessly to help the cyclone victims in the absence of any government efforts.

The governments' continued supportive policy on NGOs has been unique for Bangladesh and no other country in the world has an institution equivalent to the NGO Affairs Bureau to carry this partnership forward.

Like Lucky Khatun's story told at the beginning, thousands of girls are now walking to schools and colleges, outnumbering boys. This gives them a better chance to delay their marriage, make a livelihood, have healthy children and thus have a far-reaching impact on the economy.

And all these people living in the outlying corners are ever more financially integrated through mobile financial services such as bKash and Nagad which have brought about seventy million people under the banking system.

We had found an old woman, Nurjahan Begum, in a remote char land in Gaibandha, who is also served by the mobile financial services. She is part of the government's laudable social safety net programme and gets old-age allowance.

Like her, the safety net programme, yet another policy decision, has touched almost all segments of the disadvantaged – the old, the disabled, the socially excluded groups like the gypsy Bedes and the people of the third-gender. Such efforts are rarely found in the world.

Finally, many of our readers reading this article are here because of the numerous committed policies such as immunisation, health and nutrition that have pushed our average life span to 72 years from 47 years in 1972.

It is true today that a miracle has happened, and people like Lucky and the good policies have made Bangladesh 'one of Asia's most remarkable and unexpected success stories in recent years' as Kaushik Basu, former chief economist of the World Bank, stated.

But whether that success story will continue at the same pace will critically depend on whether we can ensure world-class quality – in education, health, service delivery and governance. Again, it is good policy that can ensure all this.