Some Challenges to Future Bangladesh: Economic and Political Perspectives

Some Challenges to Future Bangladesh: Economic and Political Perspectives

Bangladesh has a population density of about 949 people per square kilometer whereas in Australia, the population density is 2.5 people per square kilometer. Bangladesh’s reputation as a largely moderate and democratic country is under threat from a combination of political violence, poverty and corruption. Demographic pressure and environmental problems, some believed to be brought on by climate change, are increasingly a problem for Bangladesh. It is estimated that only 30% of the population entering the labor force in the future could be absorbed into agriculture sector.

The World Bank has praised Bangladesh for the way it has ensured 5.9% of the GDP growth in 2009 despite a global economic downturn- GDP is expected to grow by 5.7% in 2010. The country’s limited exposure to global markets meant it was not as badly hit by the global economic recession as other countries, although the downturn affected textile exports and foreign aids. In April 2009, the Awami League (AL) government announced a $500 million stimulus package to spur export driven sectors and placed emphasis on public and private partnerships [1].

Despite achieving an economic growth in recent years, around 40% of the country’s 160 million populations are still under the poverty line. High rates of inflation in the price of food, resulting from global commodity prices and rice shortages, have worsened problems in Bangladesh where the majority spends more than 70% of their income on food. An estimated 20,000 workers rioted near Dhaka in 2008 over the cost of rice, which soared due to two floods and Cyclone Sidr in 2007. Government imported 4 million tons of rice from India during 2007-2008 to tackle food crisis in that time. In Bangladesh, the rice availability at affordable prices becomes the politically destabilizing issue.

A key challenge for AL government is to curtail inflation, which reached 9% in February 2010, but in June 2009 the inflation was only 2.3%. Experts predict that inflation in Bangladesh will be 8.6% for financial years 2010/2011.

One estimate has projected that the country’s population could reach nearly 231 million by 2050 [2]. Intergovernmental Panel for Climate Change (IPCC) has projected that rice and wheat production in Bangladesh could be decreased by 8% and 32%, respectively by the year 2050 and that the rice yield will likely to be decreased by 10% for every one degree Celsius rise minimum temperatures in growing-season. Adverse impacts of climate change already have been observed in Bangladesh- saltwater intrusion damages 830,000 hectares of cultivable land; river bank erosion leading to more damaging floods; too little water during the dry season; and too much water during the monsoon leading to declining agricultural outputs [3]. It has been projected that Bangladesh will face an enormous challenge by 2020 to achieve food self reliance and to ensure food security for all [4]. International Labor Organization (ILO)’s prediction is that Bangladesh’s workforce by 2020 will be more than 96 million, and the country will face challenges in creating sufficient new jobs to absorb these people. Roughly all cultivable land is already in use within Bangladesh.

A rising population when combined with poor economic resilience and environmental problems could be politically destabilizing for Bangladesh. Bangladesh’s Foreign Minister Dipu Moni has stated that one third of Bangladesh could be lost to sea level rise induced by climate change [5]. Bangladesh’s lack of resources could lead to cross-border migrations into bordering India, which could exacerbate existing border tension.

The biggest challenge to Bangladesh’s economic growth comes from energy shortages- an estimated daily shortfall of 300 million cubic feet of gas and 2,000 megawatts of electricity [6]. This energy shortage has taken its toll on the garments industry and export sector. It has been estimated that Bangladesh needs $12 billion in investment over the next five years to meet demand for energy that is growing at an annual rate of 8-10%.

There is considerable potential in the discoveries of onshore and offshore reserves of natural gas. There appear to be problems with Bangladesh’s attempt to divide offshore gas fields in the Bay of Bengal area into 28 blocks for auction to natural gas companies in May 2008. This led to a tense standoff with its neighbours- Myanmar and India.

The Rohinga from Myanmar’s western Arakan state have wanted refugees in Bangladesh for decades- an estimated number of Rohinga in Bangladesh in 2010 is almost 220,000 of which 28,000 are registered with UNHCR and are living in a United Nation’s camp. The Rohinga refugees who have fled persecution in Myanmar over the past years are potentially highly destabilizing. It has been reported that Rohinga Solidarity Organisation (RSO) of Myanmar and Harkatul Jihad (HuJi) have the objective of creating an Islamic state in the area of Myanmar’s Arakan state and areas around Cox’s Bazar, Bandarban, and South Chittagong in Bangladesh. It has also been reported that RSO and HuJi may have ties to Pakistan intelligence [7]. These disputes will continue, although both sides are highly reluctant to engage in significant cross border violence. A fixed link between Islamist movements and traditional power structures means that there is an obvious threat of religious militancy.

Relations between India and Bangladesh have been strained at times due to border disputes, the presence of Islamist militants in Bangladesh and Indian concern that insurgents from India’s northeast have sought refugee inside Bangladesh. Long running disputes exist over water sharing of their 54 common rivers. India has claimed there are approximately 20 million Bangladeshis living illegally in India who should be repatriated, and that Dhaka has failed to act against northeast Indian insurgent groups using Bangladesh as a sanctuary [8]. Some Bangladesh strategic thinkers believe that China should be pursued as a strategic counterweight to Bangladesh’s relationship with India. However, relationships between Bangladesh and India have improved dramatically since the accession of the AL government. The Prime Minister Hasina Waazed’s visit to India in January 2010 led to a number of agreements on cross border crime, energy and trade, terrorism, and the groundwork was laid for the resolution of long running water disputes.

The recent opening of road and rail routes through Chittagong and Mangla ports in Bangladesh to India’s northeast has led some in Bangladesh to call for Chinese investment in developing a deep seaport at Sonadia near Cox’s Bazar, which is relatively close to Bangladesh’s border with Myanmar.

Ongoing engagement by China with SAARC states, particularly in the area of developing ports access, has led to suspicion of China’s motives among some in strategic circles in India and USA. From this perspective, port development in Bangladesh could be seen as part of a ‘string of pearls’ strategy that could be used by the Chinese to secure sea lanes that cross the Indian Ocean and link its industrialized eastern seaboard with the energy resources of the Middle East. However, there are reports of increasing tensions between India and China over border disputes including India’s border with China in Arunachal Pradesh to the north of Bangladesh.

Taking the above issues into consideration, Bangladesh should concentrate on:

(i) Remittance increase: There is an estimated 6 million Bangladeshis working abroad. Most of them are unskilled labor. In 2008-2009, Bangladesh received $9.7 billion remittance, which is expected to decline in 2009-2010 due to global economic downturn. Bangladesh should invest in training and education to make more skilled workers who at the end would be able to earn more for Bangladesh.

(ii) Agricultural research: Research to identify crops to adapt to climate change.

(iii) Explore alternative sources of energy: Fuels, such as Bio-fuel and solar power, are seen as viable alternatives compared to imported fossil fuel.

(iv) Political affiliation: In Bangladesh, political parties tend to cluster around particular personalities and families, and party affiliations are based on familial and regional ties rather than distinct ideological orientations. This weakens the law and order situation and wide spreads corruption, which erodes the quality of the civil service and the government’s capacity to deliver essential services.

(v) Diplomacy: While Myanmar is reluctant to accept refugees return, Bangladesh could seek China’s assistance to influence Myanmar to take back the refugees. Bangladesh’s apparent policy to develop closer ties with both India and China may have difficulty if tensions mount between India and China. Therefore, Bangladesh could bring disputes over international matters, including maritime issues to the attention of the UN International tribunal to resolve.

1. ‘Bangladesh Announces $500 mn Recession Relief Package’ Thailand News, April 19, 2009
2. ‘Bangladesh Agriculture: 21st century’, Perspective, .
3. ‘Impacts of Climate Change in Bangladesh’, August 27, 2009, http://
4. Mohammad T. Chowdhury, ‘Sustainability of Accelerated Rice Production in Bangladesh’, Bangladesh Journal of Agricultural Research, September 2009.
5. H. Franchineau, ‘Bangladesh Fears Climate Change Will Swallow a Third of its Land’, The Washington Times, September 18, 2009.
6. ‘IMF urges Bangladesh to Raise Power Production’ Euclid Infotech, April 13, 2010.
7. ‘Religious Organisations to be Banned, Jugantor, March 3, 2010.
8. ‘Executive Summary- Bangladesh’ Jane’s, August 19, 2010.

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