Bangladesh economy, even with 160 million people remaining mostly poor, is going through its good times having GDP growth by 7% a year, as fast as China and by some social indicators it has overtaken its giant neighbour – India. But the economic and development activities should be more participative and sustainable. As Bangladesh has transited from the Millennium Development Goals (MDGs) phase to the more complex Sustainable Development Goals (SDGs) phase and as the ‘middle income’ dream holds ever-greater sway over the policy vision, participatory economy ensures more effective balanced and sustainable economic growth. Participatory economic growth can reduce the imparity of sector-wise development and can involve more people into the goal of achieving SDGs within 2030.

Participatory Economics is a model for an economy based on democracy, justice and ecological sustainability proposed as an alternative to our current economic system. If we look at the decision making norms in most workplaces today, typically a minority at the top, made up of the management of the organisation, make the important decisions, while workers lower down in the hierarchy carry out all the orders imposed by the management. But most workers have very little say over the decision to run the workplace or meaningful control over their work lives. The decision making process based on hierarchy in the political system, labelled authoritarianism or dictatorships are no longer tolerated in most parts of the world. So if we reject the idea of political elite dictating our lives and we value democracy, then it should be applied to all domains of social life, including the economy. But, in reality, what exactly do we mean by economic democracy?

Nobel Laureate Prof. Dr. Muhammad Yunus urged participatory economy which is also needed for participatory democracy. He said, “Ensuring participatory democracy is a fundamental goal. But we all should remember that participatory democracy is not feasible without participatory economy. Economy that we have in the world today is certainly not a participatory economy. Bottom half of the population hardly has any share in it. One per cent of the population of the world owns 99 per cent of the global wealth. That does not sound very participatory.” Prof Yunus was speaking as a keynote speaker at the three-day National Women’s Parliament (NWP), organised by Andhra Pradesh Legislative Assembly, India, with the theme “Empowering Women – Strengthening Democracy”, which began on February 10, 2017 in the state capital of Amaravati.

In Bangladesh, the economic and development activities are not involved I the way of ensuring participatory economy. Decision makers are mostly from the higher society and sometimes do not represent all classes of the society while making national policies. In such a way, a particular class of the society gets priority over the introduction and implementation of policies.

Bangladesh is remaining very weak in private investment rates. According a World Bank report, with its contribution to gross domestic product (GDP) growth declining from 1.5 percentage points to 1.3 percentage points stagnating private investment, in 2016, remains a concern. That also focuses on the other challenges to the economy which include – decline in agricultural growth, appreciation in Real Effective Exchange Rates, a struggling banking sector with weak governance in state banks coupled with slow pace and quality of development spending. Progress on export products and market diversification remains slow. The Government should take measures to ensure a favourable environment, from which the private investor can think themselves save to make investment for the mid and long term period. The effective supervision and government control over the mal-management of stock exchanges can be a way to bring the middle-class of the society into the arena of national capital investment.  

Political violence can hinder the achievement of Bangladesh. It becomes terrific, especially at the time of national and different local elections. Although political impasse is not a distinguishing phenomenon as compared to the rest of the world, but the nature and frequency of violating this democratic agenda is very different when it is in case of Bangladesh. The shocking matter is in the recent past Union Parishad (UP) election. According to the media the number of deaths and killings at the time of this election created a record in the history of election in Bangladesh, leaving 116 killed and around 8,000 injured in the six-phase election in 2016. Political experts and economists are concerned about the next general election to be held in 2019.

The target of revenue collection in the FY 2016-2017 may fall short with budget deficit to increase. Public expenditure will be lowered than the planned budget size as the budget deficit was 5% of GDP as previous two years. However, the deficit should be kept within a moderate limit to ensure the financing all proposed projects.

Stock exchanges represent the financial situations of a country. Bangladesh capital market shows a better indication in the last part of year 2016. According to a report published in January 2017, by Centre for Policy Dialogue (CPD) titled Independent Review of Bangladesh’s Development (IRBD), based on DSE data, shows that the capital market indeed ended with a high index as the Dhaka Stock Exchange (DSE) index recorded at 5,036 points in December. During the first half (July-December) of FY2017, the DSEX index recorded a spike. It registered a growth of 8.8 per cent as of December 2016 over the corresponding month of 2015. Such improvement in the market is due to the dynamic participation from both local and foreign investors and for politically good environment in this time. An effective and unbiased policy enforcement should be ensured to keep present situation needs to go on and to protect the capital from the sudden shocks like the dramatic capital market collapse of December 2010.

Bangladesh recorded a trade deficit of BDT 113.51 billion in November of 2016. Balance of Trade in Bangladesh averaged –Tk 22.69 billion from 1976 until 2016. Foreign Direct Investment in Bangladesh increased by USD 2003.53 million in 2016. It indicates an increasing trend over the last three years. Investor-friendly business and economic environment and government policy should be ensured to take this present increasing trend in the future.

Although Bangladesh is in its great time in terms of getting huge number of young and workable people, but unemployed people is a great problem for the nation. A British Council sponsored report on graduate unemployment in South Asia, published in early of 2015, prepared by the Economist Intelligence Unit (EIU), the report ranked Bangladesh above India, Pakistan, Sri Lanka and Nepal in terms of employability of local graduates. These graduate unemployed people should be included in the workforce at any cost to reduce the burden of society.

The future challenges for the economy of Bangladesh which can continue to hinder growth: infrastructural incommensurateness; shortage of power and primary energy; credit shocks in the banking and financial system; environment which create difficulties of doing business; political inconsistency amongst governments; and lack of reform continuity. Bangladesh needs strong structural reforms and effective public investment efforts to be on a higher and faster growth path. Further, weakness in the financial sector also disrupts investment and growth. Divert credit away from productive investment, and impose large fiscal recapitalisation costs. High levels of non-performing loans and the high rates on national savings certificates increase banks’ operating and funding costs, keeping interest rates high despite large excess liquidity.

More participation of private sector in the economy can help address part of the infrastructure gap, but the country needs substantial public sector funding for investments in transport, river management, agricultural development and other infrastructures. For energy sector, more sustainable and renewable way to produce energy should be used and price reform is needed to attract investments in primary energy.

Reforms in government regulations pertaining to mediating civil and commercial cases, companies act, customs act and property registration are needed to strengthen competitiveness, making the comfortable environment and ease of doing business. A careful selection of industrial zones will increase private sector efficiency.

The financial sector should be made more effective through reforming the regulatory and supervisory principles, strengthening and improving the legal and default loan recovery framework. Spreading the banking services over vast rural areas can motivate people to save more money which can influence national capitalisation in a great extent.

In the major cases of decision making, peoples’ opinion, from all strata, should be considered with due respect. All economic and social classes have to be included in the decision making process. To ensure long term positive trend in the economic and social indicators, the development activities should be more inclusive, participatory and sustainable.

The writer is a faculty member, Department of Business Administration, Varendra University, Rajshahi. Email: [email protected]