Driving digital Bangladesh forward

Driving digital Bangladesh forward

Md. Joynal Abdin

The Independent on July 16, 2018

One achievement of the government is more visible i.e. expansion of digital technology and its uses in day to day activities of mass people. Making digital Bangladesh was the election manifesto of Bangladesh Awami League in 2009 general election. With different limitations digitization took place in many sectors and different government services became peoples reach due to introduction of online processes. But till now people are not getting full benefit of digital Bangladesh due to lack of commitments from the corrupt bureaucracy and lack of monitoring and evaluation by the responsible higher authority. Corrupt official are not allowing full digitization of the processes to remain unofficial earning line alive. Therefore respective Secretaries and Ministers should be careful to make the processes fully digital to ensure hassle free delivery of government services to the mass people and make digital Bangladesh truly functional. At the same time government has to move further with its Digital Bangladesh concept into Digital Economy concept.

Digital economy refers to an economy that is based on digital computing technologies. The digital economy is also sometimes called the Internet Economy, the New Economy, or Web Economy. Digital economy is related to various areas in the development of ICT infrastructures, equipment, services and applications across industries like mobile network, fixed broadband access network, transmission network, ICT application and services, ICT infrastructure, equipment and in semiconductor industry etc. According to the Oxford Dictionary “digital economy is an economy which functions primarily by means of digital technology, especially electronic transactions made using the internet”. Bangladesh entered into the Fourth Generation (4 G) age of telecommunication. High speed internet connectivity is available in the country but till now its cost is comparatively higher for the general people. Cost of internet uses has to bring into general peoples reach and other processes have to be cleared to make digitization functional, effective and fruitful. For example receiving foreign currency earnings through outsourcing is still out of mass peoples reach. Only members of a certain association can open such accounts in selective banks and receive PayPal account’s earnings here in Bangladesh. Making instant online inter-bank transactions, purchasing goods from online portals, receiving online payment is still impossible. Bangladesh has enormous potentials in outsourcing business but producing trade based qualified manpower is yet to be added in formal learning. Whereas digital economy risen about USD 3 trillion during last twenty years globally.

According to Forbes magazine about 1,25, 000 large organizations are launching digital business initiatives with estimated digital revenue increase by more than 80per cent by 2020. There is evidence that the companies that are adapting digital technologies are 26per cent more profitable than their industry peers. Bangladeshi SMEs are yet sleeping to adopt digital means of business i.e. e-commerce and e-business due to absence of digital infrastructure. Paying or receiving online is not possible till now. Even instant online interbank transaction is out of peoples reach. Online trading of shares by mass people is not started as a result share market did not expand as it should be. Company registration, trade license, tax payment, passport renewal and many other government services is supposed to get online but to remain corrupt practices alive relevant officials are not providing those digital processes to be fully functional.

According to McKinsey Global Institute (MGI) report “Digital globalization: The new era of global flows”, “soaring flows of data and information now generate more economic value than the global goods trade” making “possible for companies to reach international markets with less capital-intensive business models”. Digital economy is contributing in increasing economic growth, expanding business opportunities, creating new jobs, improving public services delivery etc. with all these benefits digitization has few challenges like cyber security, cyber crimes, cyber war etc. to be careful about.

Now come to the point what initiatives could be taken to move from digital Bangladesh into digital economy. First initiative in this regard is to adopting relevant ICT skills in the curriculum of different levels to ensure demands of the proficiencies from the applied business sectors. Increasing use of digital technologies at work and adopting new skills in national curriculum. Adopting occupation specific generic ICT skills at worker level curriculum to make them able to use such technologies in their daily work like access information online or use software for a specific purpose.  Adopting curriculum relevant to the production of ICT products and services like software, web pages, e-commerce, cloud and big data etc. specialist skills to programs, applications and manage networks. Adopting ICT-complementary skills like capability to process complex information, communicate with co-workers and clients, solve problems, plan in advance and adjust quickly. At the same time attainment of sound levels of foundation skills constitutes a prerequisite for the proficient development of ICT generic, specific and complementary skills could make the curriculum digital economy friendly.

Secondly; government or donor funded development projects could be driven into establishment of digital infrastructures to make relevant business processes functional, secured, transparent and accountable. Without making the processes functional, or establishment of required infrastructures digital Bangladesh will not move into digital economy. Digitalization of enterprises and their functions is the prerequisite of digital economy. Globally its expansion speed is much higher than that of the product based economy. Services sectors especially government services delivery system digitization may be a good initiation of the digital economy movement.

Finally; spreading out of digital benefits throughout the country is still a major challenge of digital Bangladesh. Internet speed in the village level is remaining a major obstacle to start any productive venture. Therefore people’s congestion is rising in the major cities. Spread out of digital infrastructure into village level could reduce peoples flow to the cities too. Digitization of economy and entering into digital movement could offer quicker development of Bangladesh economy and achieving vision 2021, SDG 2030 and finally vision 2041 in time. Thus digital Bangladesh could be transformed into Digital Developed Economy of Bangladesh.


Post-LDC Challenges for Bangladesh Economy

Post-LDC Challenges for Bangladesh Economy

Md. Joynal Abdin

The Daily Sun on 6 February 2018

Bangladesh became a member of the least developed country (LDC) club in 1975. As a newly emerged independent country Bangladesh had to face many socioeconomic as well as geopolitical challenges at that period (soon after the independence).

But gradually we achieved remarkable progress in many fields and emerged as one of the fastest growing economic power in Asia. Continuous progress of Bangladesh economy is an example to the entire world. But we are supposed to achieve even more if political chaos, greed and immaturity is not there. Frequent change of political ideology made us bound to radical shift towards multidimensional economic paradigm. Besides shortcomings of infrastructure, industrial utility, absence of united political will towards a particular system of economy, Bangladesh achieved the millennium development goals (MDGs) with significant performance in many arenas. Bangladeshi expatriate workers and women workers in readymade garment (RMG) sector are the significant contributors of this wonderful achievement.

Bangladesh reduced poverty rate into 23.2% (up to 2016) whereas it was 31.5% in 2010. At the same period extreme poverty rate declined into 12.9 % from 17.6% in 2010. Per capita income of Bangladesh increased to USD 1610 in 2016-17 fiscal years. Hopefully, Bangladesh could be considered to graduate from the list of LDC in upcoming triennial review meeting of the Committee for Development Policy (CDP) in this year. Second review of the same committee could be in 2021 then we will be observed for another 3 years i.e. up to 2024 to be finally graduated from the LDC club. This graduation is so much expected and welcoming for the whole nation. It will increase value of Bangladesh brands, Bangladeshi passport, and Bangladesh’s position in different global platforms. Therefore every Bangladeshi is expecting this graduation as soon as possible. But before going for final celebration of this achievement we should conduct an impact assessment study by an impartial body to identify possible impact of LDC graduation on Bangladesh economy during next decade. Few impact of LDC graduation on Bangladesh economy could be as follows:

  1. Loosing preferential market access / preference erosion: Bangladesh exported USD 34.83 billion in last fiscal year. About 90% of Bangladesh’s total exports go to the export markets under different preferential market access facilities in EU (under EBA), Canada, Japan and the US, under their respective GSP schemes. Bangladesh also enjoys preferential market access in such other industrialized countries as Australia and in some developing countries, such as China, India and the Republic of Korea, under RTAs and bilateral initiatives. All these schemes are non-reciprocal in the sense that Bangladesh is not expected to offer preferential access to products originating in the preference-giving countries in response to the offer made to her as an LDC. Since developed country markets account for about 90 per cent of Bangladesh’s total exports, preferential market access in these countries is of special significance to Bangladesh. Besides GSP or EBA Bangladeshi export items are enjoying duty free and quota free market access under the following trade regime:
  • Special and Differential Treatments (S&DT) for LDCs under different agreements of WTO
  • Preferential market access for LDCs under different regional trade agreements like SAFTA, BIMSTEC, APTA etc.
  • Preferential market access for LDCs under different bilateral trade agreements.

The above mentioned discussion made it clear that, Bangladesh’s export items enjoys preferential market access in different parts of the world under different trade regime. If 90% of our export items loose preference then Bangladesh’s export performance is likely to be adversely affected. Therefore fact finding studies should be conducted to identify the financial value of preference erosion in USD, what could be its spillover effects on Bangladesh’s investment environment especially to attract FDI, what could be ways forward to minimise adverse affects of preference erosion on Bangladesh economy.

  1. Impact of Reciprocal Trade Regime Offerings: Currently Bangladesh is a member of nine (9) RTA or FTAs namely, Asia-Pacific Trade Agreement (APTA), Bangladesh-Sri Lanka Free Trade Agreement (Proposed), Bangladesh-Turkey FTA (Proposed), Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) Free Trade Area, Pakistan-Bangladesh Free Trade Agreement (Negotiations launched: 2003), People’s Republic of China-Bangladesh FTA (Proposed), Preferential Tariff Arrangement-Group of Eight Developing Countries (D-8), South Asian Free Trade Area (SAFTA), Trade Preferential System of the Organization of the Islamic Conference (OIC PTA). An LDC country is allowed not to offer reciprocal trade preference to its counter parts. But Bangladesh has to offer it while graduating from LDC. In such case signing free trade agreement could be more costly for Bangladesh after graduating from LDC list.

  1. Paradigm shift in Official Development Assistance: Bangladesh received official development assistance from development partners 90.5 % as grant and only 9.5% as loan in 1971-1972 fiscal years. Foreign grants and soft loans played a vital role in infrastructure and other development activities in Bangladesh. Still official development assistance (ODA) is a significant source of funding in various mega project of Bangladesh. Development partners are shifting their mode of financing with the wheel of local economic development. Grant amount is decreasing and loan amount is increasing day by day. For example Bangladesh received only 12.5% grants and 87.5% loan in last fiscal year. Soon after the graduation Bangladesh will be completely out of grant assistance facility, everything has to be bearded by local resources or go for foreign loans and repayment with interest. So it may have another adverse affect on development motion of Bangladesh.

  1. Other challenges: Besides the above mentioned challenges Bangladesh may face challenges in getting aid for trade, implementing IP laws, paying more subscription fee to international platforms like UN, unavailability of technical cooperation in terms of development assistance etc.

Finally; we can state that, Bangladesh’s graduation from the list of LDC is a good news for us, but could we please recheck statistical figures that we are producing now, is there any methodological errors, could we conduct an impact assessment study to identify post graduation adverse affects on Bangladesh economy, could we please evaluate economic value of those prospective adverse affects whether we could survive and prosper further or bounced back to the LDC club again. It is better to graduate later than bouncing back to the same pavilion again. We have to develop 100 SEZ, Deep Sea Port, Increase efficiency of existing sea ports, generate more power, develop internal road networking and offer load shedding free electricity connection to the mass people. Lots of mega projects are yet to be materialised. Internal resource mobilisation, confidence building of local investors and attracting foreign investors to invest here in Bangladesh is still pending. So graduation without preparation could be more painful for us if sustainability is not sure.

Skill development: a priority for sustainable development

Skill development: a priority for sustainable development

Md. Joynal Abdin

The Independent on December 18, 2017

The government of Bangladesh has fixed up vision 2021 and vision 2041 to be middle income and developed countries by the year 2021 & 2041. Similarly major opposition political platform has come up with their vision 2030 to have economic development of the country. On the other hand globally sustainable development goals (SDGs) 2030 were fixed up by the United Nations as a follow-up action plan of the millennium development goals (MDGs) 2015. Government of Bangladesh took SDG targets seriously to be achieved by 2030. 7th five year plan of Bangladesh focused mostly to the SDG goals and targets. Separate platform has been created to coordinate SDG related issues under the leadership of a Senior Secretary of the government under direct supervision of the honorable Prime Minister of Bangladesh.

Each of the newly enacted policies, development plans, projects and programs are making linked with the SDG and other national goals like vision 2021 and 2041. During resource allocation for these development activities we identified a serious gap between our development expectations and availability of required skills. Bangladesh is earning about USD 5 billion by exporting 8 million plus semi-skilled or unskilled workers mainly to the Middle East and Southeast Asian countries. But Bangladesh is paying about USD 5 billion plus by recruiting less than 0.2 million foreign professionals here in Bangladesh. That means we are lagging behind in terms of mid-level managerial and technical capacity required to operate our existing corporate houses.

Skills development became an emergency issue for Bangladesh to achieve its visions and to increase valuable foreign currency earning in any forms namely; export earnings and remittance. According to a recent study conducted by BIDS titled “Labour Market and Skill Gap in Bangladesh” labor demand has been projected to increase from 63.5 million in 2016 to 88.7 million in 2025. The rapid increase in projected labor demand is the result of high projections of GDP growth, which has been assumed to be sustainable with the same elasticity of employment as experienced during the last decade. From the year 2021, labor demand will be in excess of supply of labor in Bangladesh. In fact, Planning Commission has also estimated that during the Seventh Five Year Plan period, labor demand generation would be in excess of supply. The Asian Development Bank (ADB) also mentioned that Bangladesh is in skills shortage in a study conducted in 2015.

BIDS (2016) showed in another study i.e. Skill Gap Analysis for Selected Sectors that, existing skill gap is the highest in the agro-food sector followed by the RMG Sector. Skill gap for “skilled workers” is also high (40%) in the IT and leather sectors where this is a constraint. Generally skilled workers and semi-skilled workers are in short supply in every sectors of Bangladesh. The same study projected that demand for skilled workers would be in agro food sector will increased to 261%, in construction sector it would be 54%, in healthcare sector 54.95%, in hospitality and tourism sector 35%, in IT sector 100%, leather goods sector 107%, light engineering sector 76.95%, in RMG sector 122.6%, and in shipbuilding sector 677% in 2025-26 fiscal year. From the above study findings it’s quite clear that, to meet the visions (2021, 2030, and 2041) Bangladesh has to develop skilled manpower in every sector. Few other studies identified that demand for overall manpower in Bangladesh would be higher than its population growth. That mean overpopulated Bangladesh is becoming manpower shortage country within next one decade.

To meet up this skills gap government is trying to restructure overall education system of Bangladesh. Technical and vocational education system is given priority over general education. A cash incentive is given to the technical education students along with other instrumental support. But performance of the vocational institutes throughout the country is miserably poor. Quality of education in technical and vocational sector became questionable. Graduates from these institutes are becoming idle due to their poor performance in the industry. This education system is unable to meet up-to-date demand of the industrial sectors. As a result graduates are remaining unemployed. On the other hand industries are recruiting foreign professionals with valuable foreign currency to meet concurrent demand of the world competition in respective sector.

National skills development council (NSDC) was established and upgrading it into National Skills Development Authority (NSDA) is under process. National Skills Development Policy (NSDP) was adopted few years back. Updating curriculum of technical and vocational education board is under process. Now is the time to analyze weather our existing institutional setup is capable to create required number of skilled hand to meet up the demand or we have to establish new institutes?

One of the major challenges to improve quality of our education system to produce qualified manpower is absence of enough laboratory facilities in specific fields. Secondly, we have limitation in development of appropriate course curriculum and modules to teach. Scarcity of trained trainers / teachers is another bold barrier to capacity building of our local education institutes. Government alone cannot fight with all these barriers toward capacity building of our education system and facilitate demanded skills development of Bangladesh. Government shall involve private sector more actively with skills development initiatives. Local entrepreneurs shall be encouraged by the government to establish skills development institutes and training up their employees in respective field.

Without governments direct support private sector cannot effort cost of training up an employee during his working hours (while he is paying for this hours), paying the training cost in addition to the salary without work. As a result local professionals are remaining backdated in absence of up-to-date training facility; finally they are remaining under performer. Government could allow Private Sector to adjust the cost of capacity building of his employee from the applicable corporate taxes on him. Government may enact 100 hours mandatory training act to facilitate skills development of the professionals working in private sector. But that 100 hours cost should be adjusted from corporate tax applicable on respective organizations. Otherwise skills development in massive scale will remain a need never be achieved.

Private Sector shall be encouraged to establish technical institutes with up-to-date modules and laboratory facilities. Government should allow foreign investment in capacity building sector of Bangladesh to facilitate technology and managerial capacity transfer. A massive revolution is required to draft and adopt competitive course curriculum, modules, trained teachers, laboratory facilities, industrial attachments and other necessary tools of skills development. SEIP type’s project is required for capacity building of technical and vocational institutes as well as the institutes established by Private Sector Entrepreneurs, Chamber of commerce, Sectoral Associations, and Social Contributory Trusts etc. Without producing qualified manpower with up-to-date skills all of our visions i.e. Vision 2021, 2030, and 2041 will remain unattended forever.


Challenges Before Newly Elected FBCCI Leaders

Challenges Before Newly Elected FBCCI Leaders

Md. Joynal Abdin

The Daily Sun on May 15, 2017

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) is the apex trade organisation of the country. It represents all the Chamber of Commerce and Sectoral Associations in home and abroad. In one sentence we could term it as the focal point of Bangladeshi Private Sector. The General Body (GB) of FBCCI includes representatives from all the district chambers, joint chambers, metropolitan chambers, trade/sectoral associations including the women chambers and associations. No doubt that FBCCI general body is the comprehensive and inclusive forum with proper representations from each of the sectors and sub-sectors of Bangladeshi entrepreneurs. They are the key players of the economy. They are contributing directly in GDP growth, employment generation, export earnings and finally in the poverty alleviation of the country.

The general body of the Federation used to elect the Board of Directors through nomination or direct election. As part of their regular activities the GB of FBCCI elected its leadership for next two years (2017-2019) on 14 May (Sunday). We are waiting to welcome a group of dynamic, forward looking, knowledgeable and effective leaders to lead the federation for next two years. Current election of FBCCI has a significant difference than that of the previous elections. Current transformation trend of the economy (from agriculture dependent economy into industrialized economy), remarkable amount of foreign currency reserve, significant amount of idle money in the banking system, rising number of idle higher educated youth, achievement of our national economic visions, local and foreign investment trend, single product dependency in the export earnings, upcoming national election, concurrent change in the international economic ecology etc. made this election significantly different than that of the previous one. Therefore newly elected FBCCI leaders (Board of Directors) will face a series of built-in challenges in-front of them. The newly elected Board of the federation could consider the following issues in their action plan:

  1. Amicable Settlement with the New VAT and Other Business Related Laws: The government of Bangladesh is planning to implement new VAT law from July 2017. It is one of the widely discussed issues that the new VAT law (Draft) has few inconvenient points for the business community. There are scarcities of in-depth research findings with the issues. Therefore the upcoming leaders could take necessary initiative to measure the inconveniences through methodical research. Foreign best practices could be identified and select a best practice to be replicated here in Bangladesh in this regard. Both the parties the government and the private sector have to be cooperative to reach into an amicable settlement with this new VAT law. The newly elected Board of FBCCI have to consider the issue as first priority to safeguard stakes of the micro, small, medium and new entrepreneurs here in the new VAT law as well as other upcoming business related laws.
  1. Finding out a Way Forward to Utilise the Idle Money of Banking System: We have mentionable amount in the foreign currency reserve along with a significant amount of unutilised funds in the banking system. This unutilised fund has to be invested into productive sector for boosting up the investment wheel. We have unutilised funds but the rate of interest is comparatively higher than that of the competitor countries. So a way forward has to be identified to utilise this idle fund and moving the investment wheel.
  1. Initiative has to be taken to Diversify Product Basket: Bangladesh is the top denim exporter of the world. It is one of the key players in knitwear and readymade garment (RMG) export. What is next? We have potentials in leather goods sector, agro-processing sector, plastic sector, light engineering sector etc. But none of the sectors are coming up with a movement like RMG. Why newer sectors are not becoming export leader or near about RMG? This is because we have limitations in terms of new product designing and development. At the same time we have limitation to maintain international standard of existing products. Therefore new FBCCI leaders could take the issue seriously and establish few product research, design and development centers for potential sectors. They could claim funding from the development partners in this regard.

The government of Bangladesh announced 2017 as Leather Goods Year. But in absence of significant development initiatives (projects and policies) this announcement may not be worthwhile. The newly elected business leaders could take this issue to make the Prime Minister’s announcement meaningful.

  1. Internationalization of Bangladeshi Brands: Bangladesh is still lagging behind to establish an international brand. Walton has started this journey in a limited scale. I think all the major exporters of the country have this ability to establish own outlets abroad and establish Bangladeshi brand image with the world class products. The upcoming business leaders could negotiate with the government to allow outwards investment with few precautionary measures.
  1. Creating and Maintaining a Congenial Trade Regime with the Major & Potential Export Markets: Brexit, US presidential views with NAFTA and sloth movement of implementing WTO agreements etc. issues are giving us a signal of tomorrow’s global trade regimes. Bilateral trade arrangements are becoming faster and fruitful means of international trade regime. Till now we do not have a single effective bilateral trade, service or investment agreement with any global players or our major trade partners. Therefor the new FBCCI leaders could think of the issue seriously and insist the government to sign bilateral trade agreements with our major and potential export destinations to create and maintain a congenial trade regime with them. Otherwise we could be isolated in the international market after a certain period.
  1. Private Sector’s Capacity Building to Achieve SDGs: We are committed to attain the sustainable development goals (SDGs) by 2030. Government is enacting necessary policies and laws to facilitate the SDG achievement. But main game has to be played by the private sector. Almost all the sub-sectors of Bangladeshi private sector have limitation in terms of skills, knowledge and know-how. Fiscal and technical limitations are toughing the goals near about impossible. Therefore the private sector leaders like FBCCI Board has to be proactive to play due role in capacity building of the private sector as per requirement of concerned sectors.
  1. Special Attention has to be given to Employment Generation: Idle brain is a devil’s heaven. Idle young force is the engine of social unrest. Bangladesh has 3 million plus unemployed young forces at this time, another 2.2 million jobseekers are entering into the job market every year. Low or primary educated youth are going abroad as worker but a significant number of (not less than 1 million) higher educated middle class youth are remaining idle. This huge number of non-productive young people could be harmful for the family, society as well as the country. This problem could be more visible as an uncontrollable challenge in near future. Therefore it is the right time to think with the employment generation, facilitating self-employment opportunities like freelancing, entrepreneurship etc. Government alone could not be successful if adequate support is not available from the private sector.

From the above discussion it is clear that the new leadership of the Bangladesh private sector i.e. the Board of Directors of the FBCCI has significant role in employment generation, capacity building of the private sector, fostering the investment movement, creating and maintaining congenial trade regime in home and abroad. Therefore the GB members of FBCCI could think a while to elect learned, capable, farsighted, proactive and dynamic leaders to contribute in nation building movement toward a sustainable economic development of Bangladesh.

Fighting Unemployment and Poverty

Fighting Unemployment and Poverty

Md. Joynal Abdin*

The Daily Sun on March 1, 2017

Bangladesh is a least developed country (LDC). With so many development requirements it is fighting to reduce unemployment and provide employment opportunity to all of its workable population. There are about 160.41 million people in Bangladesh. The median age of Bangladeshi population is 26. That means it is dominating by the young force. It is high time to take the population dividend for Bangladesh. But the matter of fact is that, there are about 3 million working age people unemployed; they are neither in education nor in job. Additional 2.2 million educated young forces are entering into job market every year. Another 10.6 million people are day labourer / doing odd job without any job security. Therefore till now 24.8% of the total populationis living below the poverty line and extreme poor people are about 6.5% of its total population.

Huge working age population, growing number of higher educated population and population dividend etc. issues are not matching with its 25% poverty affected people. It is because we have working hands but the government is failing to offer job to them. It is impossible for any government to offer job to its all population. But the government has a great responsibility to create such a congenial environment in which a person will go for self-employment through entrepreneurship development and employ another five persons in it. The government could inspire private sector for more investment and expansion which will lead to more employment generation, faster GDP growth, increased value addition and export earnings.

A decently employed person means a family is out of extreme poverty. On the other hand, an unemployed young man could create unaffordable situation for the society. Many skilled but low paid workers wanted to be entrepreneurs but cannot have access to high rated and complex bank loan. Bankers not coming forward due to the security of depositor’s money. In such a condition it is only the government that could play the game to move forward with the issue. Refinancing, pre-financing, credit guarantee, seed financing etc. could be the weapon for the government to fight with this tough condition. The government has limitations in terms of its treasury balance. But recent reports are not supporting its treasury balance argument. Because we have gone through the report that, Bangladesh has about USD 35 billion foreign aid in hand but failed to utilise it. We had to deposit back the foreign aids due to our inability to utilise funds. On the other hand, according to a Bangladesh Bank report idle funds with banks and non-banking financial institutions stood at Tk 1263.24 billion on January 31, 2017.

From the above two statements it is clear thatthe government could source the fund if a positive thinking is there. So it is the peak time for the government to take necessary initiatives for creating an entrepreneurship friendly environment for promoting self-entrepreneurship and expansion of existing ventures to increase employment generation. Along with the entrepreneurship development trained manpower export / formal migration of skilled workers could be another very fruitful tool for the government to fight unemployment and poverty. The following recommendations could be considered by the government and the central bank of Bangladesh i.e. the Bangladesh Bank for installing the following tools in this regard:

Easy Formal Channel to Receive Remittance:

Bangladesh received USD15.27 billion as remittance in 2015. In the years 2016 it reduced to USD13.60 billion. Does it mean the remittance earning is really reducing? No. It is only because sending remittance through formal banking channel is complicated, time consuming and complex to the illiterate or less literate expatriate workers. Whereas using informal channels like Hundi is much easier, quicker and safer. In such way government is losing revenue. Therefor the government and the central bank has to think with the issue of introducing an easy, quick and hassle-free way of sending remittance through formal channel by our workers from abroad.

Easy Formal Credit for Expatriate Labours and Professionals:

There is a bank to provide bank loan against a labour visa to help expatriate manpower of Bangladesh. But, what is their capacity? How many branches do they have? How much money is offering by them? How many expatriate workers are migrating from Bangladesh per year? In the year 2016 about 757,731 labours and professionals migrated from Bangladesh. If 5% of them want to get bank loan for three to five lakh per person then 38,000 probable clients are there to receive more than thousand crore taka.  How much money do they received from that single bank? Therefore it is time to think with the issue of offering bank loan to the second largest contributory sector of the country with hassle-free banks loan by the commercial banks and Bangladesh Bank has to come up with a new loan product for them.

Easy Formal Channel to Receive Freelancer’s Earning:

According to a recent report published there was about USD3.2 billion freelancing market in 2014. USA, India, Ukraine, Australia, Canada even Pakistan is earning a significant part of that amount. Bangladesh has every possibility to be a significant partner in the global freelancing market. But due to complexities in banking channel to receive freelancing earnings many qualified professionals and unemployed youths are becoming frustrated. Digital Bangladesh will be meaningfully digital while mass people of the country could easily receive their free-lancing earnings through their ordinary bank account here in Bangladesh.

It is Bangladesh bank who has the responsibility to mobilise this process and offer a great service to the local free lancers.

Startup Financing / Seed Financing for Entrepreneurs:

There are about 2 million educated people unemployed in Bangladesh. Another 2.2 million graduates are entering the job market every year. It is impossible for the government to ensure employment to this huge number of population without promoting entrepreneurship and industrial development. Entrepreneurship and entrepreneurship is the only solution to this unemployment problem. But till now there are no startup financing / seed financing mechanism for promoting entrepreneurship. So the government could rethink with the issue and come up with a mechanism to provide startup financing for the new / would-be entrepreneurs.

Promotional Package for Venture Capital Sector:

Venture capital is a proven tool for supplying interest free loan facility to the entrepreneurs. It is widely received by the entrepreneurs and potential entrepreneurs of Bangladesh as well. But due to shortage of adequate fund this sector is not booming up as expected. Therefore it is the pick time for the government to inspire venture capital sector for the sustainable industrialisation in Bangladesh.

Export Guarantee Scheme:

There are about 7.8 million industrial entities in Bangladesh. Most of these are cottage and small in categories. Few of these enterprises are producing excellent quality products having export potentials. But due to lack of knowledge and shortage of finance to operate international trade they are not going to export. To inspire such enterprises Bangladesh bank / government could introduce export guarantee scheme and boost up export earnings of the country.

Credit for Export Diversification and Market Expansion:

Bangladesh earned USD34.24 billion in last fiscal year (2015-16). It is almost 10% more than that of the previous year. But we have the capacity to earn even more than that. We have to diversify our export basket and explore new export destinations to do so. The government could offer credit facilities for export oriented product diversification (procurement of machineries) to the existing exporters. Thus Bangladesh’s export basket and increase amount of export earningscould be enlarged.

Credit Guarantee Scheme:

Commercial banks are offering loan by investing depositor’s money. All types of bank loan have risk of return. As a result commercial banks have a shyness to provide bank loan. In such a situation Bangladesh Bank could offer credit guarantee scheme for providing guarantee of loans so that commercial banks’ shyness goes down. Thus the government could promote the industrialisation movement of the country.

Security Issues in Online & ATM Banking:

Recent ATM scamming and Bangladesh Bank’s reserve issues spread up a panic among the mass people. As a result people are feeling insecure even to draw money from ATM booths and deposit money to a bank. Therefore, it is time for Bangladesh Bank to take necessary measures to stop ATM scamming and ensure security of depositors’ money. Online banking system should be 100% secured and people’s awareness could be developed to relief the panic.

Entrepreneurship Loan for Technical Graduates:

There are about 2 million unemployed graduates in the country. Additional 2.2 million graduates are entering the job market each year. Both the government and private sector does not have ability to offer such a huge number of jobs per year. Therefor the government / Bangladesh Bank could offer entrepreneurship loan for the technical graduates and developing them as entrepreneurs in respective fields.

Professional Management of Idle Reserve / Bank Deposit:

A recent report showed that the idle reserve / bank deposit is mounting up in the banking sector (BDT 1,140 billion) especially there are BDT 1420 billion statutory deposits to the Bangladesh Bank. No return is coming out from this huge amount of idle money in comparison with its opportunity cost. Therefor it is time for thinking to invest at least a portion of this money through professional money managers. Thus a reasonable return could be ensured out of this idle money.

Finally we would like to hope that, the government and the central bank along with other responsible agencies will consider the above recommendations and create a pro-entrepreneurship regime in Bangladesh for fighting unemployment effectively and create a poverty free middle income country before the end of SDG deadline.

* Writer is a Development Researcher, Columnist and Author. He is serving at SME Foundation as Deputy Manager. Could be reached through mdjoynal@gmail.com

Reform Is Required in Education System

Reform Is Required in Education System

Md. Joynal Abdin

The Daily Sun on January 18, 2017

Bangladesh is home to about 163 million people. Steady economic growth of the country during last decade attracted attention of the regional and global investors. Bangladesh is second largest exporters of readymade garments. A number of other potential industrial and service sectors are waiting to take off.

With 2.19% of world population Bangladesh has a large domestic market itself and enjoying duty free and quota free market access to most of the European countries and Canadian market. Strategic geographic location of Bangladesh offers to reach to half of the world population within 24 hours by road from Bangladesh. It is one of the low cost locations for doing business (identified by JETRO) around the globe. Government is encouraging local and foreign investment for further economic growth and becoming a middle income country before celebrating the Golden Jubilee of its independence.

With all of the above potentials Bangladesh has few barriers toward development as well. The most significant barrier toward Bangladesh’s development at this moment is to develop its young force with professional skills. About 40% of total populations of Bangladesh are young. A recent study shows that there are about 11 million youths of Bangladesh doing nothing just seating idle. It is a big threat for the society as well as for the development of the country. With this 11 million unemployed youth another 2.2 million jobseekers are entering into job market every year. If one third of this 2.2 million get job than the unemployment list is enlarging with another 1.5 million youth every year.

A separate study shows that about 47% of Bangladeshi graduates are either unemployed or under employed. It is a very significant threat for the society that university degree holders are not getting job. Recent passing rate of higher secondary level is about 3 million per year. If two third of this higher secondary pass students got graduation than the rate of jobseekers will further go up. If a graduate does not get placement how drop out I mean non-educated or less educated population will manage a job? How long our society could afford this 11 million and growing idle youth?

Let’s try to analyze why graduates are not getting job? Is it like that there are no scopes for job placement in Bangladesh? Practical scenario is not like that.

A newspaper report stated recently that there are about half a million foreigners working in Bangladesh. They are sending about USD 5 billion to respective countries per year. On the other hand about 8 million Bangladeshi expatriate are earning about USD 15 billion per year. That means we are earning less but paying more. But why? The only reason is that our manpower is not skilled. Local entrepreneurs are recruiting foreigners with more payment due to their efficiency and skills. We could not develop those saleable skills among our graduates? We are not getting qualified manpower as per demand of the private sector due to the existing education curriculum in undergraduate and post graduate level.

Most of the cases, education institutes do not have any sort of linkage with the job providing organisations of Bangladesh. Let’s try to have a look what we are mostly teaching at universities of Bangladesh. We are teaching history, literature, philosophy, psychology, religion studies, drama, theater, sociology, political science, social work etc. so on and so forth. I am not here to undermine any of the above mentioned subjects. But I would like to know what the practical application of these subjects without teaching is? Where the graduates of these subjects will apply for a job? How many posts are vacant? What is the growth rate of demanding positions? How many graduates should be produced per year for proper placement?

On the other hand who are providing jobs? Job providers are mainly banks and other non-bank financial institutions, insurance companies, telecommunication companies, NGOs, electronic and print media, pharmaceuticals companies, garment factories and buying houses, logistics companies and manufacturing factories / companies of agro-processing, light engineering, plastic, leather, electrical and electronics, cosmetics, fashion designing etc. sectors. What is the application of those organisations? How much philosophical knowledge do they need to operate this daily business? How many historical events have direct reflection in theses factories? Therefor we are producing super result holder graduates but job placement is not happening.

Every field of knowledge have importance but up to a certain number per year. Therefore it is the time to estimate the required numbers and limiting those non-applied fields up to the requirement. On the other hand Bangladeshi garment and buying house sector is leading by Indian and Sri Lankan professionals due to lack of skilled professional available at home. We are consuming Indian or Chinese products starting from morning Indian tooth pest ending into mid-night Chinese magic pillow under the head to sleep.

Bangladesh has to create employment opportunity for existing unemployed and upcoming jobseekers youth. None will employ a single person if he/she could not contribute into the advancement of that organisation. To offer contribution one needs applied skill/technical and vocation knowledge. We do not need labour to carry foreign goods to the door step of our houses but we are in need of a manufacturer of those products beside our houses.

From the early morning we need tooth pest and tooth brush. In which university/institute/training center in Bangladesh one could get the skill of manufacturing these items? Then we are in need of soap and shampoo in the shower. Do we have enough skill to manufacture soap and shampoo? Which institute is teaching to manufacture soap and shampoo in Bangladesh? Then we are in need of bread and butter for breakfast. Similarly I need a bread maker and a butter producer. How many institute in Bangladesh training up a raw hand youth to prepare bread from flour or produce butter from milk or other vegetable fats. Then we used to dress up ourselves before going out of the house. How many trims and accessories used in our dress? How many of those trim and accessories could be produced beside our houses? To identify the trim and accessories used to produce our dresses starting from fabric, to threads, button, zipper, cutting knife, designing knowledge, sewing machine, finishing iron, and hander or packet etc. which one of the dress we do know to manufacture? Thus we could identify that, there are 163 million consumers in Bangladesh but skilled manpower to manufacture or serve those consumer items are very limited in amount.  As a result we are becoming a nation free from applied knowledge or practical skills. It is resulting into the long list of unemployment every year.

Therefore we are in need of a serious revision in our educational system mainly in the curriculum. We are quarreling with unipolar, bipolar or tri-polar education system. But we are missing the point that school student, madrasha student, or maktab students are my brothers or sisters. I have to absorb everyone into my economy. So let’s train them up with a useful skill and let them perform the respective job. If every hand perform in respective position than the economic upliftment of Bangladesh will be a miracle for the entire world. The Bangladeshi miracle of development and prosperity will be identical and adoptable for rest of the globe. We are in need of a feed mill manufacturer rather than a scholar speaker or a robust leader.

Adopting the concept of multi-role projects

Adopting the concept of multi-role projects


Md. Joynal Abdin

The Financial Express on March 9, 2016

A programme is a plan of actions made in order to achieve a specific result. In other words, a programme is a plan of things aimed at achieving a clear objective, with details on what is to be done, by whom, when, and what resources to be used. On the other hand, a project is a planned set of interrelated tasks to be executed over a given period of time and within a certain amount of budget and other limitations. Main objective of this article is not defining programmes and projects with a few sweet sounding words, but to analyse the development projects now being implemented by the government, NGOs, development partners. We all know that Bangladesh passed 44 years of its independence. Bangladesh has earned the experience of implementing of hundreds of projects with billions of Taka either with local fund or donor grants and loans. The main objective of all the development projects is to empower people to eradicate poverty, overcome infrastructure limitations, and effect employment generation, entrepreneurship development, industrialisation, rehabilitation, education, healthcare, communication development and so on.

 We are happy to watch the country grow. But have we ever thought about the opportunity cost of all the projects and programmes implemented here in Bangladesh since independence? Bangladesh received about US$ 50 billion as foreign aid through government or non-governmental (NGO) channels. The sum is equal to US$3000 per head of our present population (160 million). Besides foreign aid, grants, loans internal funds were also being used in numerous development projects. Have we got optimum result out of this huge investment? The answer is obviously in the negative, because our earlier projects were not scientifically planned and designed with a broad vision.

Many plans, policies, targets and visions are now under implementation by 43 ministries and about 350 departments, directorates and agencies. Hundreds of development projects are approved by concerned authorities and implemented every year. Few projects have inter-ministerial coordinated components (combined efforts to address different needs).  As a result, a good project of one ministry/agency may cause huge damage to other ministry’s/agency’s role. For example, over-bridges and flyovers were built to reduce traffic jam in the city. But the same over-bridges and flyovers are identified by experts as one of the major causes of traffic jam in the city.

The above phenomenon has arisen due to single-purpose programme planning by our decision makers. Time has come to give up this one-eyed (single-purpose) planning and think about multi-role project/mega projects. For example, Dhaka is one of the worst cities to live in (as per a few recent research reports) owing to its environment pollution and unplanned urbanisation. Traffic jam, shortage of public transport, water pollution, and environment pollution of Dhaka city could be reduced if a ‘Back Home’ mega project could be implemented.

The idea of this project is not to send everybody to their respective native villages by force, but to create a situation whereby people will automatically leave Dhaka. For example, an office executive at present has to waste an hour and a half to attend his office at Motijheel from Uttara or Mirpur. The same person can attend his/her office from Comilla easily if there is a fast train service between Comilla and Dhaka with only two stoppages at Daudkandi and Bhoberchar. It will not take more than an hour. Similarly someone from Gopalganj, Rajbari or even from Mymensingh may not require more than one hour to reach Dhaka by a bullet train. So we need a six-lane road with double railway lines from Comilla to Dhaka, Gopalganj to Dhaka, Rajbari to Dhaka and Mymensingh to Dhaka. We already have highways in these routes which should be developed. These four routes will allow half the Dhaka dwellers to move back to Comilla, Munshigonj, Narayangonj, Madaripur, Faridpur, Gopalganj, Rajbari, Manikganj, Narsingdi and Mymensingh districts.

These six-lane routes will not be a matter of connectivity only. These routes will facilitate economic development through industrialisation of respective districts. As a result, new employment will be generated. One such multi-role project can offer multi-dimensional solution to our existing problems.

Construction of multi-lane roads has multiple effects. Other projects like development of existing SME (small and medium-sized enterprises) clusters could also help provide multiple solutions to existing problems. For example, a cluster development includes several segments of activities like skill development of existing workers and entrepreneurs, creating new workers and entrepreneurs, upgrading existing machineries, establishing training centres, testing laboratories, storage facilities, specialied transportation system, market linkage, new market searching, and expanding value chain for maximum value addition, etc. As a result, new employment will be generated in each of the segments of the chain. It will raise productivity, improve product quality, augment sales, increase profit and so on. All of these effects will cause poverty reduction and ultimately usher in economic development of the country. Critics may argue, why SME cluster development instead of Special Economic Zone (SEZ), or Export Processing Zone (EPZ)? The answer is simple. SEZ or EPZ requires huge cash investment for infrastructure, utility and land development. On the other hand, in case of SME clusters, these are already available there. Plot allocation, utility supply etc. of a SEZ or EPZ may be controversial in terms of political identity or corruption. SME clusters are free from these controversies. Therefore it is better to think about development of existing 177 SME clusters without going for expensive industrial estates, SEZ, EPZ, etc.

The concept of multi-role projects could be applicable in every other sectors. For example, existing ‘Sadar’ hospitals located at district headquarters could be transformed into nursing institutes, medical colleges, medical technology centres and hospitals. It would require huge money and premises to establish a separate nursing institute, medical technology institute, medical college and a ‘Sadar’ hospital in separate premises as separate programmes. All these institutions can be set up in the same premises, or in other words, existing Sadar hospitals can be transformed into such a multi-role organisation and much lesser allocation will be required. A co-located multi-sectoral technical education centre concept can drastically change our existing education system and turn it into a practical demand-driven, profession-oriented education system.

It is time to think about multi-role inter-related/inter-connected institutions both in case of public and private entities through implementing multi-role projects. It could be far more productive with lesser investment.