Bangladesh Economy in the 21 st Century A in m ins 1/ Selected Papers from the 2008 and 2009 Conferences on Bangladesh at Harvard University edited by MunirQuddusand Farida C. Khan Bangladesh Development Initiative The University Press Limited
Contents List of Tables, Figures and Box Abbreviations Contributors Editorial Remarks from BDI Preface Part I Production and Employment xiv xix xxv xxxv xxxvii Chapter 1 Determinants of Non-farm Employments in Rural Bangladesh: A Case of Comilla Sadar Upazila 3 Mohammad Abdul Malek and Koichi Usami 1.1 Introduction 4 1.2 Literature Review 5 1.3 Methodology 5 1.4 Findings 9 1.5 Conclusions and Recommendations 21 Chapter 2 Analysis of a Virtual Market for Mass Production of Appropriate Industrial Goods 29 ShafiAKhaled 2.1 Introduction 29 2.2 Literature Survey and Related Issues 35 2.3 The Virtual Model 38 2.4 Interpretation and Inference 43 2.5 Conclusion 47
Bangladesh Economy in the 21st Century Chapter 3 To What Extent Can Primary Sector Producers in LDCs Move Up the Global Commodity Chain? A Case Study of the Bangladesh Shrimp Industry Nazia Habib-Mintz 3.1 Introduction 3.2 Theoretical Frameworks 3.3 At the Crossroads: The Shrimp Industry 3.4 Trade Regulation and Bangladesh 3.5 Moving Up Process 3.6 Policy Matters: Market, State and Society 3.7 Conclusion 51 51 55 58 69 72 76 78 Chapter 4 Papermaking from Jute: A Win-Win Solution for Bangladesh 85 Bernhard G. Gunter, M. Sarwar Jahan, ARM. Ataur Rahman 4.1 4.2 4:3 4.4 4.5 4.6 4.7 Introduction Overview of Bangladesh Paper Industry Availability and Suitability of Non-wood Fibers in Bangladesh Economic Viability Some Developmental Implications Environmental Implications Conclusion Part II Financing Development 85 87 90 94 97 100 101 Chapter 5 Bangladesh Capital Market: Prospects and Challenges Mamun Rashid 5.1 Introduction 5.2 Causes of Underdevelopment 5.3 The Current Situation Compared to 1996 5.4 The Recent Surge in Stocks 5.5 Opportunities 5.6 Recommendations 107 107 108 109 110 111 112
Contents ix Chapter 6 An Investigation into the Efficiency of Commercial Banks of Bangladesh 115 Mainul Islam Chowdhury, ARM. Ataur Rahman 6.1 Introduction 116 6.2 Literature Review 118 6.3 Conclusion 130 Chapter 7 Foreign Direct Investment and Investment Climate: Comparing Bangladesh with Selected Countries in South Asia 143 Rahim Quazi and Munir Quddus 7.1 Introduction 144 7.2 Literature Review 146 7.3 An Econometric Model 148 7.4 Data, Methodology and Estimation 151 7.5 Investment Climate Foreign Firm's Perspective 155 7.6 Policy Implications and Recommendations 160 7.7 Conclusion 162 Chapter 8 A Study of Performance and Challenges of Remittance Inflows in Bangladesh 165 Md. Golzare Nabi and Md. Mahmudul Mam 8.1 Introduction 165 8.2 Review of Literature 167 8.3 Performance of Remittance Inflows in Bangladesh 171 8.4 Country-wise Trends 171 8.5 Scale and Nature of Labor 173 8.6 Remittance and Transferring Channels 174 8.7 Contributions of Remittances to the Economy 175 8.8 Remittances and Migrant Related Measures and Policies 177 8.9 Constraints and Challenges in Remittance Flows 178 8.10 Policy Options and Recommendations 180 8.11 Conclusion l 183
x Bangladesh Economy in the 21st Century Chapter 9 Workers' Remittances and National Economic Development: Contemporary Trends and Macroeconomic Policy Options 195 CafDowlah 9.1 Introduction 195 9.2 Trends and Patterns of Migration and Remittances 197 9.3 Economic Rationale Behind Labor Migration Theoretical Perspectives 203 9.4 Remittances and Domestic Economic Growth Evidence 208 9.5 Governmental Macroeconomic Policy Options 215 9.6 Concluding Remarks 220 Chapter 10 Aid, Debt, and Development in Bangladesh: Synergies or Contradictions 227 Bernhard G. Gunter, ARM. Ataur Rahman and Jesmin Rahman 10.1 Introduction 227 10.2 Impact, Effectiveness, and Future of Aid to Bangladesh 230 10.3 Debt Issues 242 10.4 Conclusions and Recommendations 254 Part III NGQ, Migration and Remittances Chapter 11 NPO Funding and Aid Dependency: A Case Study in Bangladesh 263 Aeshna Badruzzaman, Darren Zook 11.1 Introduction 264 11.2 A Brief History of Civil Society in Bangladesh 264 11.3 Bangladesh Independence and the Emergence of NPOs 267 11.4 A Description of Two Organizations 269 11.5 Methodology 271 11.6 Analysis 272 11.7 Conclusion - 280
Contents xi Chapter 12 Microfinance and Poverty Reduction: Evidence from a Longitudinal Panel Database 285 Mohammad A Razzaque 12.1 Introduction 286 12.2 Data 288 12.3 Measuring Poverty Incidence 290 12.4 Panel Data, Estimation, and Results 294 12.5 Concluding Observations 308 Chapter 13 Temporary Migration in the Lean Period: Evidence from Northern Bangladesh 311 Abu Shonchoy, Abu Shahriar and Sakiba Zeba 13.1 Introduction 311 13.2 Data Analysis and Description 314 13.3 Hypotheses 318 13.4 The Determinants of the Seasonal Migration Decision 321 13.5 Concluding Remarks 323 Chapter 14 Remittances and Economic Growth in Bangladesh: A Bounds Testing Approach 327 Md. Gazi Salah Uddin, Abdullah M. Noman 14.1 Introduction 327 14.2 Review of Empirical Literature 329 14.3 Performance of the Remittance Sector in Bangladesh 331 14.4 Data and Methodology 333 14.5 Results and Findings 335 14.6 Concluding Remarks 340 Part IV Growth and Development Chapter 15 Economic Growth in Bangladesh: Experience and Policy Priorities 347 Jyoti Rahman, Asif Yusuf 15.1 Introduction 347 15.2 Growth Experience 350
xii Bangladesh Economy in the 21st Century 15.3 Factors Affecting Growth Prospects 362 15.4 Growth Diagnostics 368 15.5 Conclusion 380 Chapter 16 Macroeconomic Developments, Policies and Issues in Bangladesh, 1972-2007 385 Akhand Akhtar Hossain 16.1 Introduction 386 16.2 Economic Growth, Structural Change in Output and Employment 389 16.3 Macroeconomic Developments, Policies^and Issues in Bangladesh Under Different Political Regimes 395 16.4 Growth Determinants and Conditions in Bangladesh 415 16.5 Summary and Concluding Remarks 427 Chapter 17 Challenges of the New Decade and Reforms for Growth in Bangladesh 433 Biru Paksha Paul 17.1 Introduction 17!2 Challenges of the Next Decade 17.3 Reforming the Priority Sectors for Growth 17.4 Market Economy and Growth in Bangladesh 17.5 Conclusion 433 436 439 453 461 Chapter 18 Determinants of Economic Development Shaikh A Hamid 18.1 Introduction 18.2 An Assessment 18.3 Foreign Aid 18.4 Major Hurdles 18.5 Leadership 18.6 Corruption 18.7 Failure of Politicians 18.8 Enabling Investment Environment 18.9 Manufacturing Base 18.10 Stability 18.11 Democracy 18.12 Natural Resources 18.13 Fallout of Economic Growth 467 468 469 476 477 479 480 480 481 481 482 482 482 484
Contents xiii 18.14 Role of Political Parties 485 18.15 Private Sector and Economic Growth 485 18.16 Asian Tigers and Economic Growth 485 18.17 Justice 486 18.18 Conclusion 486 Chapter 19 The Readymade Garment Export Industry in Bangladesh: A Review and Update 489 Anisul M. Islam, Munir Quddus 19.1 Introduction 489 19.2 Background - 491 19.3 Literature Review 493 19.4 Performance of Bangladeshi RMG Industry 494 19.5 RMG Sector's Contributions to Exports and the Economy 503 19.6 Bangladesh RMG Sector Performance Global Comparisons 504 19.7 Future Challenges 506 19.8 Recommendations and Concluding Remarks 510 Chapter 20 Domestic Coalitions and the Push for Policy Change in Bangladesh's Garments and Textiles Industry 513 Sanchita Saxena 20.1 Introduction 513 20.2 Background 514 20.3 Present Study and Competitiveness 517 20.4 Theoretical Arguments 519 20.5 Methodology 521 20.6 Coalition Building and Policy Change in Bangladesh 523 20.7 New Partnership for Development 531 20.8 Recommendations 533 20.9 Conclusion 535 Index ( 539