This is very much logical and commonly believed that corruption distorts the allocation of resources by diverting much-needed capital for economic development to corrupt officials’ pockets. Thus, high-level corruption in a country is detrimental to its economic growth as well as sustainable human development.
However, empirical evidence for this relationship seems to be mixed. For example, a visual examination of data on corruption and economic performance across countries provides no clear relationship between these two variables. In other words, while many highly corrupt countries have low economic growth rates, some countries have achieved rapid economic growth under rampant governmental corruption. This at least suggests that some countries may achieve high economic performance despite high corruption.
Corruption is considered as a global problem in today’s world. Almost every country in this world has been infected more or less with this disease. So, Bangladesh is not an exception in this regard. Norwegian economist Just Faaland and US economist Jack R Parkinson published a book ‘Bangladesh: The Test Case for Development’ from London in 1976. They came up with more scathing remarks: “If development could be made successful in Bangladesh, there can be little doubt that it could be made to succeed anywhere else. It is in this sense that Bangladesh is the test case for development.”
In Transparency International (TI)’s corruption perception index of 2019, Bangladesh has only gone up one rank, 166 among 200 countries. Another international institution, Trace International ranks Bangladesh at 182 among 200 in its bribery risk index.
But, despite lack of good governance, bribery, corruption, environmental degradation, and the absence of satisfactory freedom of expression some miracles are taking place in Bangladesh in terms of economic development, GDP growth, human development indices, and so on. The influential and popular magazine Economist brings out a special issue at the beginning of every year. This issue deals with the various possibilities of the new year.
This year’s issue, ‘The World in 2020’ ranks Bangladesh in the 3rd position among the top 10 countries in terms of GDP. The magazine says Bangladesh’s growth will be 7.7 percent in the new year. China has dropped out of the top 10 and India has somehow retained a foothold in the 10th position. Due to the ongoing Coronavirus pandemic, this forecast could be changed. But ranking position hopefully shall remain unchanged.
The International Monetary Fund (IMF) also publishes a regular update on global economic growth. Analyzing the latest report, the US news agency Bloomberg said that in 2019, about 86 percent of the global economic growth took place in 20 countries, which includes Bangladesh. And that is where the dilemma lies.
Despite deeply rooted corruption, Bangladesh has also made remarkable progress in reducing poverty, supported by sustained economic growth. When Bangladesh emerged in the world map, 85 percent of people were poor. At present, the poverty rate in the country is 24.3 percent. According to the ‘Human Development Index and Indicator’ published on September 15, 2018, the life expectancy of Bangladesh’s people has increased. Bangladesh has fulfilled the criteria for being a developing country in the last 10 years. Purchasing power parity (PPP) is another tool that is used to measure the strength of any country’s economy. In terms of PPP, Bangladesh is the 31st largest economy in the world.
According to the US-based international organization Price Water Cooper House- by 2030, Bangladesh will be the 28th largest economy in the world. According to the Center for Economics and Business Research Report 2019- by 2032, Bangladesh will be one of the world’s 25 biggest economies. In 2033, Bangladesh will be behind countries like Malaysia, Sweden, Switzerland, Singapore, Vietnam, and South Africa as far as development is concerned.
In terms of agricultural production, Bangladesh is the 4th largest country to produce and consume rice, 11th in producing all types of food grains, 28thin fruits production, 7th in mango, and 10thin tea production. Besides, the country is 8thin producing fish and others shall fish and snails, 3rdin freshwater fish production, and 1stin Hilsa.
These two different faces of one country have caused Bangladesh to be seen as a ‘surprise’, a ‘mystery’, a ‘paradox’. There is a crisis of good governance in Bangladesh and a steady rise in corruption. So, what is the mystery of Bangladesh’s success?
Bangladesh is not the only example. Japan, South Korea, and Taiwan also have developed, despite high levels of corruption. But in those three countries, people connected to politics were the most corrupted. In China, corruption and development went hand in hand, especially in the ’90s. US political scientist Andrew Wedeman called this a ‘double paradox’. Despite the rampant corruption, the Chinese economy has been growing rapidly, with an average annual growth rate of approximately 10 percent. Moreover, China is not alone; other countries have relatively high corruption and economic growth rates. Presumably, one can argue that this is because many factors affect economic growth and corruption is only one of them.
According to Dr.Iftekharuzzaman, executive director of Transparency International Bangladesh (TIB)- countries can and do grow despite the worst forms of corruption. The key issue is the cost of corruption. Bangladesh has indeed been maintaining commendably high rates of growth of GDP in the range of 6-7 percent annually for over two decades now. The question is whether we could have achieved more. There are strong reasons to believe that subject to effective corruption control, double-digit growth is well within Bangladesh’s reach.
If we look into the secret of this miraculous success of Bangladesh, we would find mainly three sectors have been sustaining Bangladesh. Those are agriculture, foreign remittance, and readymade garments. The government also has made significant contributions through policies. For example, as the high-yielding varieties have increased the production in agriculture, the government also has subsidized agricultural equipment, and fertilizers and seeds. The subsidies have continued. As a result, production has increased despite the loss of agricultural land.
According to noted economist professor,Wahiduddin Mahmud- the startling development of Bangladesh is not because of any accountable government system or coordinated efforts. Rather, this is the result of several factors and people from various sectors. For example, aid-based family planning, the emergence of NGOs in post-independent Bangladesh, LGRD’s role in constructing village roads, RMG’s capturing of the export markets, and exporting unskilled and semi-skilled workers to the Middle East.
Wahiduddin Mahmud also thinks that adopting low-cost technology is another factor of this development. The work of the unskilled laborers who went to the Middle East was not technology-based. RMG workers also did not have to acquire technical expertise. The oral saline that magically reduced the death rate of diarrhea patients is also made of low-cost common ingredients. People could acquire such small-scale technical knowledge easily. Besides, the teachings of the 1974 famine also helped all the successive governments. Everyone has been emphasizing food production and security realizing that they must thwart another famine.
Two economists, Mirza Hassan, and Selim Raihan, published a research paper ‘Navigating the Deals World: The Politics of Economic Growth in Bangladesh’. They said Bangladesh does not follow rule of law. Instead, it is run by various types of deals. For example, the RMG and banking sectors run by open deals, and the power and transport sectors are run by closed deals. This is the characteristic of Bangladesh’s economy since the post-1975. And, the deals are largely ordered, which suggests the work gets done if bribed. And this is the real explanation of Bangladesh’s growth despite bad governance.
The question is whether this growth rate would continue for year after year amid this regression of good governance and deep-rooted corruption?
Experts say- it is possible for a country that is in the lower rung of development to progress without good governance. The reason is a low-income country has many possibilities for growth and it is possible to achieve it using all those corrupt devices. But the necessity of good governance increases when a country advances into a middle-income one from a low-income country.
Considering the real scenarios, opinions of various experts, researchers, economists and notable think tanks we could conclude that all of these miraculous successes and growth that have been achieved so far by Bangladesh have come into being through the hard labor of 100 million active population and the influx of remittance of more than 10 million human resources of Bangladesh living all over the world and more than 5 million garment workers discharging their inhumane hard labor for defending competitiveness, acceptability and above all existence of our garment sector- the largest source of foreign exchange earnings of the country. And that is the reality.
The writer is a banker and freelance column writer
