OP-ED: For the future, look to the past

From village tea stalls to city talk shows, Bangladesh is debating how to navigate the coronavirus crisis and restore economic growth. As predicting the future remains guesswork at best, I shall not today attempt to do it. Instead, I found the following table of numbers arresting.

The table shows the growth rates of components of real GDP in the first decade after Bangladesh’s independence in 1971. One thing is clear: The annual growth rates were volatile. Part of the reason behind the wild volatility is a famine in 1974 followed by a military coup in 1975. Many observers doubted Bangladesh’s survival in those early years of independence.

Yet, as we all know by now, Bangladesh has made some of the biggest gains in the basic standard of living in South Asia. More remarkably, Bangladesh’s life expectancy is on par with several rich countries.

Bangladesh’s dynamic NGO sector armed with a non-interfering and decentralized industrial policy (particularly in the development of the RMG sector) contributed to its economic development. We will need these assets more than ever, as we face the myriad challenges of the coronavirus pandemic.

One big loss for Bangladesh in the Liberation War was the destruction of its human capital, particularly on March 25, 1971, and December 14, 1971 when the Pakistani forces and their collaborators selectively killed its intellectuals. 

Though Bangladesh now has a decent stock of human capital at home and abroad, it is not properly utilized in a nonpartisan way. To put this into perspective, imagine your personal productivity if you avoid using one of your hands.

The pandemic has exposed the internal weaknesses of the country. The current growth strategy based on exports of goods and workers is not without drawbacks. 

If Kerala serves its people well through community-based health care, the least Bangladesh can do is to study them. Universal health coverage (UHC) can be financed with 6-8% of GDP. Bangladesh’s current health expenditure (% of GDP) is around 2.5%. Whereas, the size of the non-performing loans is around 4.5% of GDP. 

We need “political will” for UHC, money isn’t the real problem.

Syed Basher is Professor of Economics at East West University.