Sheikh Hasina: The forward-looking leader
Thanks to the Honourable Prime Minister’s farsighted vision, 73% of the growth in the economy took place during the last thirteen years of her rule
Bangladesh has been doing far better than many of its peers in responding to the ongoing global economic crisis, mainly due to its sharp focus on the real economy. This indigenous development strategy has been useful in responding to the Global Financial Crisis following the collapse of Lehman Brothers as well.
Since then, Bangladesh has put much of its energy into inclusive development with focused investment in agriculture and small enterprises and the export-earning manufacturing sector providing huge employment to rural job seekers, mostly women.
Simultaneously, Bangladesh had maintained stunning macroeconomic stability except during the last couple of months when the external sector began to go through a roller-coaster. Most social indicators have also been growing exceedingly well.
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However, the global pandemic and the Russia-Ukraine war have led to significant supply-side disruptions leading to a massive rise in fuel and food prices, affecting almost all developing countries, including Bangladesh, with rising 'imported inflation'.
Yet, Bangladesh faced the pandemic more strategically and kept the wheels of production both in agriculture and manufacturing moving. The stimulus packages of nearly six percent of GDP directed to the entrepreneurs and farmers with low-cost credit and the very disadvantaged with necessary social protection proved crucial in sustaining the economy.
The pace of recovery drive for the pandemic-inflicted economy increased once the global economy started opening again. However, the Ukraine war has been a big distractor to this robust recovery process of our economy, creating new sources of risk for it.
Bangladesh stopped on its track in 1975
Even then, Bangladesh is marching forward, aiming at achieving seven-plus growth in the current fiscal year. All this has been possible due to the committed and forward-looking leadership of HPM Sheikh Hasina, who has been very keen on achieving sustainable development, defying all challenges.
Like her father, she too has been relying on the strength of the masses who are inherently entrepreneurial. This social capital of inculcating fighting spirit in crisis has been a boon to Bangladesh.
Bangladesh's initial journey from ashes to prosperity, from 'desolation to hope' was made possible due to the immense trust in Bangabandhu's reassuring leadership.
He started his journey with an economy of only $8 billion, per capita income of $93, savings to GDP, and investment to GDP proportions of 3% and 9%, respectively, with not even a dollar in the exchequer. With about 80% of the poverty rate and a fertility rate of around six per eligible couple, the country was overwhelmed with myriads of challenges.
Thanks to his prudent policies covering greater investment in modernising agriculture for increased food production along with the revitalization of the industrial sector under state management, raising social consciousness for population control and nationalising primary education to reach every nook and corner of the country despite a resource-starved economy deeply engaged in rehabilitation and recovery, Bangladesh witnessed a phenomenal pace of economic growth in those difficult times.
The per capita income went up to $273 by 1975. Inflation began to be contained. The comprehensive rationing system provided some food to the hungry. And the country was well on its way to recovery, followed by prosperity.
Bangabandhu's steadfast leadership manifesting how to convert challenges into opportunities suddenly came to a halt following his tragic killing by the traitors on 15 August 1975.
The per capita income dropped to $138 in 1976 and then to $128 in the following year. It took thirteen years for Bangladesh under errant leadership to return to the level of per capita income of 1975.
Return to inclusive development under Sheikh Hasina
The country regained its hope and aspiration for restarting the developmental journey in a manner that was initiated by Bangabandhu when his eldest daughter Sheikh Hasina returned home in May 1981 after half a decade of political asylum. She restarted the inclusive development journey in 1996 after winning a general election.
Besides giving humanitarian leadership in responding to one of the devastating floods in 1998, she began to put more focus on poverty reduction, modernising agriculture, blending public-private policies for fast export-led industrialization, investing more in people's education, primary health, social protection (by pioneering policies like stipends for the elderly, widows, freedom fighters, girls' education) and, of course, a greater focus on country-wide physical connectivity through revamping the Local Government Engineering Department (LGED).
The country started moving towards faster growth in per capita income, leading to greater prosperity and poverty reduction. Unfortunately, the journey was halted in 2001, and the country went to the dogs, abandoning the pro-people development strategy initiated by Sheikh Hasina.
She continued her struggle for democratic inclusive governance and had to go through all kinds of life threats and undesired jail for many months. Finally, she made a comeback to power in 2009 with a landslide victory in the general election with a promise to achieve 'Digital Bangladesh.'
Back on track with a farsighted vision
Since then, she has kept the country on track with an amazing journey of socio-economic transformation. Thanks to her well-designed planned approach to sustainable development thriving on favourable macroeconomic policies with in-built desired incentives, young demographic structure, strong and rising labour force including higher growth of female human resources, major digitalization both in government and finance with an active developmental central bank, courageous investment in mega projects including the Matarbari hub of power and deep seaport, metro rails, multilane highways, bridges including the famous Padma bridge with own resources, the special economic zones including Bangabandhu industrial park at Mirsarai, Karnaphuli Tunnel, elevated expressway, Rooppur nuclear energy project, etc, Bangladesh has been moving on confidently as one of the first few fast-moving countries of the world. The Padma Bridge has been open to traffic since 25 June this year with robust connectivity impacts.
The continuity of the government with farsighted policy consistency of the HPM made all this possible. Despite the huge inflow of resources for the recovery, the overall debt to GDP ratio remains around 38%, including 14% of GDP as external debt on the back of foreign exchange reserves, good enough for about six months of imports.
All international credit rating agencies have, therefore, upheld the stable outlook of Bangladesh's macro economy. Almost all the international multilateral development and finance agencies appreciated Bangladesh's robust sustainable growth strategy.
What is more surprising is that 73% of the growth in the economy took place during the last thirteen years of her rule. No surprise, the UN earlier recognized her with the 'SDGs Progress Award' in collaboration with the Earth Institute led by Professor Jeffrey Sachs. He called her 'Jewel in the Crown' which reflects the global appreciation of her inclusive and compassionate leadership.
This award was overdue as the benefits have already reached the bottom of the social pyramid in Bangladesh. Over the period of 2009-2020, both average poverty and extreme poverty were reduced by more than half to around 20% and 10%. The pandemic may have stalled the process of poverty reduction temporarily.
Still, the quick recovery from the pandemic has been quite startling. However, as indicated earlier, inflation has increased significantly due to mostly supply-chain disruptions. The food production index has surpassed China, India, and Vietnam.
Massive digitalization of the government and finance (eg, mobile financial services, agent banking, internet banking, etc) has been helping fast transmission of money to the rural areas with high growth in domestic demand and consumption.
The robust growth in remittance with more than $2 billion per month has been facilitated by digital payment systems and incentives provided by both government and the central bank in terms of cash subsidies and easing of foreign exchange-related payment rules.
The rural economy has greatly benefited from all of these and now looks much more vibrant, with its 60% income originating from non-farm activities. In addition, the Bangladesh premier must be credited for improved investment in healthcare and education, including nearly 20% enrollment in technical education, despite some challenges in both sectors.
The gains in socio-economic indicators during 2010-2021 have been simply eye-catching. The per capita income increased 3.5 times, food grain production 1.4 times, export 2.6 times, FDI inflow 2.6 times, literacy rate 1.4 times, and five years were added to the life expectancy during these eleven years.
In a nutshell, one may portray the characteristics of her transformative development philosophy as oriented towards 'high growth and yet focused on inclusiveness,' 'self-reliant and collaborative' and 'respect for indigenous culture and openness to innovation.'
Transformational leadership
The 'Champion of the Earth' and 'Mother of Humanity', Prime Minister Sheikh Hasina pursues open regionalism balancing both India and China despite huge financial and social pressure originating from supporting food and other basic needs of a million plus displaced Rohingyas from Myanmar.
She has been waging war on climate challenges not only for Bangladesh but also for the entire climate-affected population of the world and showing the world how to invest in climate action, emphasising both adaptation and mitigation.
Her 'Mujib Climate Prosperity Plan' showed the world how to make a transition from risk to resilience and then to prosperity with prudent policy actions when she shared its framework in COP26 in Glasgow.
To her, there is no alternative to green recovery and inclusive growth. No doubt, she could write, "Climate change, pandemics, and destruction of nature are common threats. They should unite us in working towards a common solution: a cleaner, greener, and safer world." That she is a champion of climate-adaptive sustainable development has also been well articulated in the 'Bangladesh Delta Plan' with a horizon up to 2100.
Indeed, she can see far and organise the limited resources for efficient use,which has also been reflected in the second perspective plan for 2021-2041. By this time horizon, Bangladesh is expected to become a prosperous developed country with more than $12 thousand per capita income.
However, this will not be an easy task. Bangladesh will have to work hard to close the skills gap and smoother transition to a climate-friendly, more equal sustainable development trajectory. And such a transition will demand transformational leadership, which can be found in abundance in HPM Sheikh Hasina. I wish the HPM a long life on her auspicious birthday.
Dr Atiur Rahman is the Bangabandhu Chair Professor of Dhaka University and former Governor of Bangladesh Bank. He can be reached at dratiur@gmail.com
