The
Bangladesh Development Studies
Vol. XXIX, March-June 2003,
Nos. 1 & 2
Is Bangladesh Experiencing Feminization of the Labor Force?
by
Simeen Mahmud
___________________________________________________________________________________
Increase in female labor supply accompanied by generation
of demand for female labor in new forms of production resulted
in a feminization of the labor force in Bangladesh. This
has affected both gender segregation and market segmentation.
Women’s primary responsibility for reproductive work,
however, appears to constrain both quality of employment
and returns to labor by restricting women’s full participation
in market work. Moreover, unchanging gender division of
labor in the household and reproductive economies carries
negative implications for the well-being of women and of
family members dependent upon women’s care-giving
labor.
-----------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Vol. XXIX, March-June 2003, Nos. 1 & 2
Bangladesh’s Trade Barriers in a Global Perspective:
A Comparative Analysis
by
Selim Raihan
---------------------------------------------------------------------------------------------------------------------------
This paper develops an index of trade barrier for 108 countries
and makes a comparative analysis of Bangladesh’s trade
barrier indices in a global context. Bi-variate as well
as multivariate cross-country econometric models have been
estimated to explain cross-country variations in trade barrier
indices. The results show that cross-country variations
in trade barrier indices are much influenced by variations
in per capita income, population, the ratio of foreign direct
investment to GDP and literacy rate. The findings for a
much disaggregated level of commodity categories show that
Bangladesh possesses high trade barrier indices.
-------------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Vol. XXIX, March-June 2003, Nos. 1 & 2
Unchanging Fertility Level in Bangladesh in the 1990s: A
Myth or Reality?
by
Sharifa Begum
-----------------------------------------------------------------------------------------------------------------------------------
Estimates from three rounds of BDHS suggest of unchanging
fertility level in Bangladesh during the 1990s. This is
quite puzzling given the widely acknowledged success of
Bangladesh in reducing fertility in early years and it contradicts
the steady increase in contraceptive practice during the
same period. This paper revisits the numerical estimates
upon examining several indirect methods and concludes that
fertility decline did not stop during 1990s even though
the pace of decline slowed down.
________________________________________________________________________________________
The Bangladesh Development
Studies
Vol. XXIX, March-June 2003, Nos. 1 & 2
Job Displacement Effects of Immigration on Canadian-born:
A Microeconomic Perspective
by
Asadul Islam
--------------------------------------------------------------------------------------------------------------------------------------
This paper examines the job displacement effects of Canadian-born
workers due to immigration in Canada. It considers both
substitutability and complementarity relationships between
Canadian-born workers and immigrants. These relationships
have been examined by estimating a system of wage earnings
equations involving Canadian-born, recent immigrant and
older immigrant using a Generalized Leontief Production
Function (GLPF). The coefficients estimated from GLPF have
been used to estimate the Hicksian elasticity of complementarity.
The estimated Hicksian elasticities suggest, on the aggregate,
that there is no job displacement of native-born workers
by immigration. However, there are some job displacement
effects by industry.
--------------------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Vol. XXIX, March-June 2003, Nos. 1 & 2
Exchange Rate and Investment in the Manufacturing Sector
of Bangladesh
by
M. Habibur Rahman & M. Ismail Hossain
------------------------------------------------------------------------------------------------------------------------------------
The study is an attempt to empirically examine the existence
of long run equilibrium relationship between the real exchange
rate and private manufacturing investment in Bangladesh.
Appreciation (depreciation) of the real exchange rate has
been found to have a negative (positive) impact on the level
of private manufacturing investment both in the long and
in the short run. In addition, gross domestic product is
also found to have significant effect on investment. The
short run dynamic model suggests stability in the equilibrium
relationship.
----------------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Vol.XXVIII, December 2002, No.4
Corruption and Government Regulations: An empirical Analysis
by
Naved Ahmad
--------------------------------------------------------------------------------------------------------------------------
The current cross-country empirical literature on the determinants
of corruption has demonstrated a direct relationship between
government regulations and corruption by assuming a linear
relationship between them. This study reexamines the relationship
for a sample of 43 countries by testing the presence of
threshold effects of government regulations on the level
of corruption after controlling the effects of bureaucratic
competition, level of education, GDP growth, and urbanization.
Using two measures of corruption from the World Bank survey,
the study finds the evidence of threshold; the direct relationship
between corruption and government regulations is profound
in countries where the index of government regulations is
less than the threshold level. Consequently, it suggests
that government regulations spawn corruption before the
threshold level is reached. Moreover, this study also provides
evidence of the existence of an inverted U-shape relationship
between government regulations and corruption. The study
finds that regulations reduce corruption if the index of
regulation is above the threshold level negating the neo-classical
liberalism. The study concludes that government regulations
can also be used to reduce corruption. Thus, prudent policies
with or without government interventions are likely to be
less corrupt and, therefore, are more conducive to economic
growth.
-----------------------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVIII, September 2002, No. 3
Income, Consumption and Poverty Impact of Infrastructure
Development
by
Muhammad Abdul Latif
----------------------------------------------------------------------------------------------------------------------------------
The paper analyzes the impact of the development of transport
and trading infrastructures such as rural roads and markets,
on income, consumption and poverty in Bangladesh. Household
level panel data collected in two phases have been used
in the analysis. The benchmark survey was carried out during
December 1995 to April 1996, just before the physical implementation
of the development works. The follow up survey was conducted
during January to May 2000, three years after completion
of the physical works. In order to capture the impact, both
bivariate and multiple regression analyses have been done
taking into consideration both “with-without”
and “before-after” situations. The results suggest
that there has been significant positive impact of the development
of transport and trading networks on income, consumption
and poverty alleviation. The government should expand infrastructure
development projects in other areas of Bangladesh where
such development works have not yet been implemented.
------------------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVIII, September 2002, No. 3
Factor Demands in the Second-Generation
Green Revolution: A Bangladesh Case Study
by
S.M. Fakhrul Islam
A.S.M. Nazrul Islam
-----------------------------------------------------------------------------------------------------------------------------------
The present study analyzed factors demand for modern rice
technology adoption in second-generation Green revolution.
A considerable progress in development and adoption of modern
rice technology was observed in the country due to advent
of 1st, 2nd and 3rd generation rice cultivation. Only seed
and fertilizers were found to have elastic demand. The price
elasticities of land, labor and insecticides had positive
coefficient. This could be due to scarcity of land and rational
use of these inputs as marginal productivity of these inputs
would be higher than their marginal costs. The complementary
relationships of land-fertilizer, animal-seed, seed-labor
and fertilizer-insecticide pairs characterize intensive
use of inputs in the third-generation modern rice technology.
Considerable higher degree of substitutions was observed
for animal-labor and land-labour pairs which indicate the
modern rice technology in Second-Generation Green Revolution
could be labor intensive for the small farm holders.
-----------------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVIII, March-June 2002, Nos. 1 &2
Disaggregated Demand for Fish in Bangladesh:
An Analysis Using the Almost Ideal Demand System
by
Zulfiqar Ali
-----------------------------------------------------------------------------------------------------------------------------------
The main objective of this study is to analyse the expenditure
and price responses of aggregate and disaggregate fish categories
through development of a disaggregated demand model and
to explain the policy implications of the results obtained.
An extension of the Linear Approximate Almost Ideal Demand
System (LA/AIDS) is applied here to model the disaggregated
fish demand. The AIDS model has been popular in recent times
and it has a number of advantages all of which make it attractive
for the type of problem addressed in this study. Data used
in the analysis were collected from a household panel survey
conducted by the author for a year round period. The one-way
error component random effects model and the two-step censored
regression technique are employed here to estimate the model,
which give the better fit of the estimates. Results show
that the expenditure elasticities for low and dry fish are
less than unity whereas the expenditure elasticities for
medium and high fish are highly elastic. The own-price elasticity
of low price fish is less than unity whereas the own price
elasticity of high price fish is highly elastic. Results
also show that the demographic variable has little impact
on the demand for fish. The results indicate that the category
of low price fish should be given due importance in devising
policies for the development of fisheries sector. This is
indeed needed from the point of view of fish consumption,
particularly, of the vast majority of the poor people in
Bangladesh.
------------------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVIII, March-June 2002, Nos. 1 &2
Price Responsiveness
of Foodgrain Supply in Bangladesh and Projections 2020
by
Paul A. Dorosh, Quazi Shahabuddin & Muhammad Saifur
Rahman
----------------------------------------------------------------------------------------------------------------------------------
In recent years of normal rice harvests, supply from domestic
rice production in Bangladesh has essentially met domestic
demand so that imports have been very small. Future supply-demand
balances will be determined in part by the price-responsiveness
of supply and demand, along with technical change, income
growth and other factors. This paper provides estimates
of the price-responsiveness of rice production (in particular,
area planted to rice), and then simulates supply and demand
balance for rice under alternative scenarios.
---------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVII, December 2001, No 4
The Rice Seed
Delivery System in Bangladesh:
Institutional and Policy Issues
by
Mahabub Hossain, Aldas Janaiah,
Muazzam Hussain and Firdousi Naher
---------------------------------------------------------------------------------------------------------------------------
The paper provides insight into the adequacy of institutional
linkages and policy conditions of the current seed delivery
system based on information collected through interviews
with executives from 19 key agencies and stakeholders in
the seed market. The public sector is performing a wide
range of roles from the development of a modern variety
to the final distribution of seeds to the farmers. The private
sector and NGOs are expanding their roles with increasing
demand for quality rice seeds for the newly released varieties.
Lack of incentives for plant breeders to produce enough
breeder seeds, and simultaneous participation of the public
and private sector in the production and distribution of
certified seeds may constrain the expansion of the market.
The paper discusses the emerging public-private sector interface
and adequacy of policy environment for further development
of the rice seed market.
-----------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVII, December 2001, No 4
Social Impact
of the Growth of Garment Industry in Bangladesh
by
Salma Chaudhui Zohir
--------------------------------------------------------------------------------------------------------------------------------
This paper analyzes the data from two BIDS surveys o readymade
garment (RMG) industry workers conducted in 1990 and 1997.
The paper compared not only men and women workers in the
garment industry over time but also makes comparison between
workers engaged in the RMG units located in EPZ and non-EPZ
areas. The findings in this paper suggest that employment
in the garment industry has definitely empowered women,
increased their mobility and expanded their individual choice.
But this they have achieved at the cost of their health
and increased risk of harassment. Hence, the process is
complex, and here is both decomposition and recomposition
of women's subordination through employment in the garment
industry. The analysis in this paper suggests that on the
whole there has been improvement in worker's well-being
over the period 1997. The improvement in the worker's well-being
will be sustained in future if proper policy supports are
extended to the garment industry and is workers. The main
challenge lies in meeting the phasing out o MFA in 2005.
The paper suggests some measure, which needs to be undertaken
on an urgent basis.
--------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVII, September 2001, No 3
Gas Extraction
and Its Implication for
Economic Sustainability of Bangladesh
by
AHM Mustain Billah
Md. Abdul Aziz Khan
--------------------------------------------------------------------------------
Natural gas in Bangladesh currently is a very hot issue
that deserves considerable discussion. Its reserve is very
debatable agenda. It is officially reported that the gas
reserve in Bangladesh is around 12 trillion cubic feet (Tcf)
that plays a very vital role in economic development of
the country. In order to sustain the economic growth in
respect of rapidly depletable gas resource, two issues need
urgent attention - to invest some of the resource rent in
alternative sectors and to ascertain the amount to be invested.
The study attempted to examine the effects of gas resource
extraction on sustainable consumption for maintaining better
standard of living. A model for estimating gas resource
depletion of Bangladesh is developed then used to make necessary
adjustment with sectoral GDP that reflected the efforts
of resource extraction.
The study revealed that the trend of resource depletion
has some implications that can affect the trade off between
current and future resource rents. Future rents will decline,
if the current stock of resources is extracted quite excessively.
The trend of the Adjusted Gross Domestic Product (AGDP)
appreciated when the resource was valued at an official
price (low price). This signifies that the real value of
resource was undermined inducing more resource to be extracted.
A reversed scenario was observed when the resource was valued
at a border price. But after 1996 onward under both the
prices the trend of AGDP was declining indicating the unsustainability
of the economy. The urgent attention is needed for investing
some of the resource rent in alternative sectors to protect
the gas based downstream industries for economic sustainability.
--------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVII, September 2001, No 3
An Analysis
of the Evolution of the Human Development Index
with Special Reference to Its Income Component
by
Ravi Kant Bhatnagar
-----------------------------------------------------------------------------------------------------------
The author has reviewed methodology followed by the UNDP's
Human Development Reports from beginning till the latest
Report particularly with reference to its treatment given
to income component in the computation of Human Development
Index for various countries. A closer look has been taken
on Atkinson based formulation of utility function adopted
by UNDP in the Human Development Reports during 1991 to
1998 for discounting or adjusting the income levels (real
GDP per capita in countries), exceeding a threshold level
of income.
An alternative multi-step formulation of the utility function
is proposed, as a substitute for the Atkinson based approach,
without sacrificing the premise of threshold income level
which happened to be a concept strongly advocated by UNDP
from 1991 to 1998 but suddenly dropped thereafter due to
trivial reasons. The proposed alternative formulation is
shown to be better than the Atkinson based formulation.
The impact of our proposed multi-step utility function on
the previous rankings of HDRs is assessed for different
countries of the world.
--------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVII, June 2001, No 2
Recent Developments
in Growth Theory and
Their Implications for Bangladesh
by
Nazrul Islam
----------------------------------------------------------------------------------------------------------------------
This paper reviews the recent developments in growth theory
and discusses their implications for Bangladesh. It starts
with an exposition of the Neoclassical Growth Theory (NCGT)
and then presents several variants of the New Growth Theory
(NGT). The paper identifies the unresolved issues of economic
growth and highlights the implications of the growth theories
for cross-country growth regularities. The paper next examines
Bangladesh's growth record in the light of recent growth
discussion and identifies the areas of match and incongruities
between the experience and the theories. The paper ends
by drawing some lessons from the recent growth discussion
for future growth efforts of Bangladesh.
------------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVII, June 2001, No 2
Real Exchange
Rate Behaviour and
Exchange Rate Misalignments in Bangladesh
by
A.K.M. Atiqur Rahman
Syed Abul Basher
--------------------------------------------------------------------------------------------------------------------------
The paper adopts a single equation approach to examine
the real exchange rate behaviour and exchange rate misalignment
in Bangladesh. The paper finds that real exchange rate and
the macroeconomic fundamentals affecting real exchange rate
form a cointegrating vector. It observes that trade liberization
and increase in debt service burden result in a real depreciation
of currency; while increase in capital inflow, improvement
in terms of trade, and increase in government consumption
of non-tradable result in a real appreciation of currency.
Nominal devaluation has been able to partly retain its effect
to have a real devaluation in the short run. Estimation
of long run equilibrium real exchange rate reveals that
our currency was considerably overvalued until late 1980s.
However, real exchange rate broadly was in equilibrium during
the 1990s.
---------------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVII, March 2001, No 1
Inequality
and Its Sources in Bangladesh,1991/92 to 1995/96:
An Analysis Based on Household Expenditure Surveys
by
Azizur Rahman Khan
Binayak Sen
-----------------------------------------------------------------------------------------------------------------------------
Official estimates of personal income and its inequality,
based on the Household Expenditure Surveys, suffer from
inaccurate definition of income and inappropriate procedure
for the estimation of inequality. This paper re-estimates
personal income and expenditure and their components from
the Household Expenditure Surveys of 1991/92 and 1995/96,
estimates Gini ratios of income and expenditure distributions
and corresponding concentration ratios of the distributions
of their components. These results show that the level of
inequality in Bangladesh is lower than the official estimates
suggest while the rate of increase in inequality during
the period under review has been greater than is shown by
official estimates. The rising inequality has largely been
due to the rising share in income of certain components
that are disequalizing (i.e., disproportionately concentrated
among the higher income groups) as well as a rise in the
extent of their disequalizing effect. For Bangladesh as
a whole a good part of increased inequality has been due
to the sharp increase in inequality between urban and rural
areas. The paper concludes by considering the implications
of the findings for policies for poverty-reducing growth
in Bangladesh.
--------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVII, March 2001, No 1
Microcredit
and Savings of Rural Households in Bangladesh
by
Muhammad Abdul Latif
---------------------------------------------------------------------------------------------------------------------------
Households in Bangladesh This paper attempts to analyse
the effect of microcredit on household savings. There are
over 850 Government and Non-Government Micro Finance Institutions
(MFIs) operating at national or various local levels which
provide the rural poor who are landless or functionally
landless with group-based small credit with the objective
of increasing self-employment and income and thereby alleviating
poverty. The paper hypothesizes that this microcredit has
positive effects on savings of the participated households.
The analysis is done with the data derived from a sample
survey of 2599 households relating to the financial year
1998/99. The households include both programme participants
and non-participants. The hypothesis is tested statistically
by controlling for such variables as income and land-ownership
which also influence saving, and found that microcredit
has statistically significant independent effect on household
savings. The policy implications that follow from the analysis
are to continue with the programmes and formalize them beyond
the land-poor.
------------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVII, March 2001, No 1
Monetary Interpretation
of Exchange Rates in the
South Asian Countries
by
Mohammad Yunus
-----------------------------------------------------------------------------------------------------------------------------
This paper attempts to analyse the extent of influence
of the monetary factors in determining exchange rate in
the developing countries. In doing so, it presents empirical
evidence on the monetary model of exchange rate determination
for five South Asian countries over the post-Bretton Woods
period using the Johansen multivariate cointegration technique.
It finds supportive evidence of long-run relationships between
the official and the market exchange rates and the so-called
fundamentals. This implies that market fundamentals accounted
for the substantial loss of the external values of the currencies
over the period under consideration. Therefore, a prudent
pursuit of monetary policy is a prerequisite for maintaining
stable exchange rate in the long-run in these countries.
However, statistical testing of popular restrictions resoundingly
rejects the monetary model. Two conclusions are reached:
the monetary model can still be a valid representation of
the long-run behaviour of the exchange rates; and that the
restrictions imposed on the model are in general not valid
in view of complex dynamics in the exchange rate determination
process.
---------------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVI, December 2000, No 4
A Re-examination
of Domestic Saving-Foreign Aid Relationship in the
Context of Bangladesh
by
Abdur Razzaque
Nazneen Ahmed
-------------------------------------------------------------------------------------------------------------------------------
The empirical studies in the context of Bangladesh provide
contradictory evidence regarding the relationship between
domestic saving and foreign aid. The present article examines
the domestic saving-foreign aid relationship using the co-integration
and error-correction modelling strategies to tackle the
problem of non-stationary data, which the earlier studies
overlooked. Three different co-integration techniques have
been used and in every case a valid long-run inverse relationship
between saving and aid is observed. The short-rum error-correction
models have also confirmed the negative relationship between
these two variables. The Granger Causality test identifies
a long-run causal relationship running from foreign aid
to saving while in the short-run a bi-directional causality
is found. This paper finds that the negative relationship
between saving and aid is quite ‘robust’ and
not sensitive to the choice of variables in the saving function.
----------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVI, December 2000, No 4
Development
of Primary Education in Bangladesh : The Ways Ahead
by
Mahmudul Alam
-----------------------------------------------------------------------------------------------------------------------------
The paper is an attempt to analyse development of primary
education in Bangladesh in the 1990s. It studies different
state, school and programme-based interventions undertaken
in the country to make an ‘effective school’.
On the basis of school, household and pupil-based cross-section
data, empirical research shows that a set of basic inputs
such as supply of instruction materials, adequate contact
hours, a good mix of teaching practices, well-trained and
motivated teachers is necessary to make the school effective.
It is observed that the teachers in the non-State schools
and NGO sector with lower salary levels are performing better.
Therefore, further encouragement of non-State primary schools
with more community participation may be an innovation in
the right direction
-----------------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVI, December 2000, No 4
Corruption
and Entry Deterrence
by
M. Shahe Emran
Forhad J. Shilpi
------------------------------------------------------------------------------------------------------------------------------
This paper constructs two simple asymmetric information
models to analyze the effects of bureaucratic corruption
on entry conditions and output in an industry. In the first
model, the bureaucrat controls a direct mechanism of entry
deterrence like industrial license, and can unilaterally
set the bribe rate. The bribe maximization by the bureaucrat
implies output restriction in the industry compared to a
monopoly if there is heterogeneity of costs among the firms.
In the second model, there is no explicit entry deterring
mechanism available to the bureaucrat. Here we analyze the
conjecture that bribe may be the outcome of collusion between
the bureaucrat and the incumbents which deters entry by
raising the costs of doing business. If there is cost heterogeneity,
collusive entry deterring equilibrium exists under certain
parameter restrictions. There does not exist a subgame perfect
collusive equilibrium where bribe alone can deter entry
in the case of homogenous costs.
--------------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVI, December 2000, No 4
Money Demand
Function for Bangladesh
by
Anisul M. Islam
------------------------------------------------------------------------------------------------------------------------------
This paper provides new evidence on the money demand function
for Bangladesh using cointegration techniques and a longer
quarterly time series data than previously used. Cointegration
results indicate that a single co-integrating vector describes
the long-run equilibrium money demand relationship in Bangladesh
for both the narrow and broad money categories. It is also
found that the money demand function is stable and is highly
dominated by the transaction motive for holding money. The
effects of alternative opportunity cost variables on money
demand were not found to be significant. The short-run money
demand function was found to be stable and the speed of
adjustment to the long-run equilibrium was found to be reasonable
for both money categories. The empirical results may have
significant implications for monetary policy of the country.
--------------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVI, June-Sept. 2000, Nos. 2 & 3
How Donor
Funds Could Better Reach and Support Grassroots
Microcredit
Programmes:
Working Towards the Microcredit Summit’s Goal and
Core Themes
A Special
Address
by
Muhammad Yunus
------------------------------------------------------------------------------------------------------------------------------
In order to fulfill the Microcredit Summit’s goal
of reaching 100 million families with microcredit by the
year 2005, we must ensure not only that more resources are
dedicated to promoting microcredit, but also that resources
are provided to institutions in cost-effective ways.
Donor agencies generally provide funds as grants or low-interest
loans to microcredit programmes, often with government involved
as a guarantor. The administrative cost of providing these
funds is often unacceptably high, and the amount that actually
reaches the poor as loans is likely to be quite low. Donors
should increase the percentage of microcredit funds that
reach the poorest to 70%.
Several limitations exist in current methods of fund distribution
by donor agencies. One significant limitation is an over-reliance
on consultants, many of whom do not have the skills necessary
to successfully advise and assist microcredit donors and
practitioners. In order to strengthen their capacity to
reach the poorest, donor agencies should declare a target
percentage of funds going to the microfinance sector which
will be committed as loans to the poorest, and then require
each local office to produce annual reports on its contribution
to achieving the country goal. A clear policy should be
established to CGAP members and to local Microcredit Capital
Programmes (MCPs), Microcredit Funds (MCFs) and NGOs. Moreover,
agencies should create a country-level CGAP mechanism and
hold at least one meeting each year to review progress and
discuss upcoming plans.
The Microcredit Summit estimated that US$11.6 billion would
be needed as grants and soft loans to reach 100 million
families. This additional US$11.6 billion could be mobilized
if the percentage of Official Development Assistance (ODA)
going to microcredit for the poorest is raised to 5%. Initiatives
must be taken to build non-governmental, sustainable, wholesaler
MCFs at the local level and channel donor funds to these
institutions in order to initiate and support MCPs.
-----------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVI, June-Sept. 2000, Nos. 2 & 3
The Effect
of Non-agricultural Self-employment Credit on
Contractual Relations and Employment in Agriculture:
The Case of Microcredit Programmes in Bangladesh
by
Mark M. Pitt
----------------------------------------------------------------------------------------------------------------------------------
This paper examines the effect of group-based credit for
the poor in Bangladesh, by gender of participant, on participating
household’s mix of agricultural contracts (quantities
of land sharecropped and rented), and the supply of agricultural
labour which takes the form of own-cultivation as opposed
to agricultural wage labour. The group-based microcredit
programmes examined provide production credit for non-agricultural
activities to essentially landless and assetless rural households.
Landless cultivators are more likely to have their contractual
choices shaped by credit market constraints than others.
On a priori grounds it is important to distinguish credit
effects by gender of participant. Male programme credit,
if properly monitored, should induce men to substitute away
from supplying agricultural labour and contracting for agricultural
land to supplying the non-agricultural labour required by
the non-agricultural self-employment activity financed by
the microcredit programme. Programme participation by women,
who are otherwise much less involved in income-generating
activities, diversifies the sources of household income
not merely by the type of activity undertaken but also across
individuals within the household. These outcomes that permit
households to choose higher return but riskier agricultural
contracts.
Econometric analysis of a 1991/92 household survey provides
strong evidence that participation in these group-based
microcredit programmes substantially alters the mix of agricultural
contracts chosen by participating households. In particular,
both female and male participation induces a significant
increase in own-cultivation through sharecropping, coupled
with a complementary increase in male hours in field crop
self-employment and a reduction in male hours in the wage
agricultural labour market, consistent with its presumed
effects in diversifying income and smoothing consumption.
Female credit effects are larger than male credit effects
in increasing sharecropping and in reducing male wage labour
and increasing agricultural self-employment, as predicted.
-------------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVI, June-Sept. 2000, Nos. 2 & 3
Savings,
Informal Borrowing and Microfinance
by
Shahidur R. Khandker
----------------------------------------------------------------------------------------------------------------------------
Microfinance provides an alternative source of finance
to the poor and women, who, if without access to formal
banks, have access to a variety of informal lenders. As
microfinance is relatively cheaper than informal finance,
access to microfinance is expected to reduce household borrowing
from informal sources. Microfinance is also expected to
increase household savings by providing an alternative facility
for savings mobilization from the poor. An econometric analysis
of household survey data from Bangladesh shows that micro-borrowing
has indeed reduced borrowing from informal sources, thereby
demonstrating microfinance as an effective alternative source
of finance to the poor. Micro-borrowing is also found to
increase voluntary savings, thus assuring that an appropriate
facility can raise household savings even in a poor country
such as Bangladesh. Of course, impacts of microfinance vary
by the gender of borrowers. The savings impact of micro-borrowing
is more pronounced for women than for men. In contrast,
the informal finance impact is more pronounced for men than
for women.
-----------------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVI, June-Sept. 2000, Nos. 2 & 3
The Gender
Dimensions of Programme Participation:
Who Joins a Microcredit Programme and Why?
by
Simeen Mahmud
------------------------------------------------------------------------------------------------------------------------------
The overriding policy and research attention on the measurement
of the impact of microcredit programme participation has
meant that the process of participation has remained relatively
unexplored. In fact, the ways in which households arrive
at the decision to participate may bear importantly on programme
effects since participation is essentially part of a household’s
livelihood strategy. Programme impact will depend not only
on programme inputs, but also more importantly on how closely
desired programme outputs are integrated into specific household
and individual strategies. This paper examines the household
participation decision on the premise that programme impact
hinges crucially on who joins a microcredit programme and
why. The paper finds that the household decision to join
a programme is determined by the interplay of the households
demand for microcredit, the opportunity costs of membership
activities for individual family members and the nature
of the intra-household gender relationship. Such a household
strategy carries new and important implications for the
interpretation of programme effects on both women’s
empowerment and poverty reduction.
--------------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVI, June-Sept. 2000, Nos. 2 & 3
Effeciency
and Sustainability of Formal and Quasi formal
Microfinance Programmes:
An Analysis of Grameen Bank and ASA
by
M.A Baqui Khalily
Mahmood Osman Imam
Salahuddin Ahmed Khan
-----------------------------------------------------------------------------------------------------------------------------------
The Bangladesh microcredit market comprises of formal and
quasi-formal microfinance institutions. The present paper
examines and evaluates efficiency and sustainability of
two microfinance programmes-formal and quasi-formal. Grameen
Bank is formal and ASA is quasi-formal in nature, status
and programme. The Efficiency and Subsidy Intensity Index
(ESII), as developed by the authors, was used to examine
the sustainability and efficiency of the two programmes.
The analysis shows that both Grameen Bank and ASA have been
operating with high degree of cost and financial efficiency.
ASA being a quasi-formal organization is more cost-effective
and sustainable than Grameen Bank, a formal organization.
This is attributed to low salary base and high lending interest
rate. GB is relatively costly because of higher salary,
based on national pay scale, and relatively low lending
interest rate. If ASA had to operate with the average salary
of Grameen, given the present level of operation, it would
be very worse-off. This was evident from a simulation of
increase in wage rate. In contrary, Grameen Bank would be
much better-off at a low salary base of ASA. During the
period 1993-97, the degree of ESII has declined for both
GB and ASA. The positive subsidy intensity of ASA is contrary
to the traditional belief that it is a self-sufficient organization
with no subsidy dependency. Consequently, social costs are
associated with these two programmes. Grameen Bank will
be able to reduce social cost and improve sustainability
by improving cost efficiency, increasing loan size and lending
interest rate, and changing portfolio mix without incurring
any operating cost. Grameen Bank is close to achieving sustainability
after its fifteen years of experience. Similarly, ASA has
attained higher degree of sustainability within seven years
of its microcredit operation. This implies that it takes
longer time for a formal organization like Grameen Bank
to be sustainable than quasi-formal organizations like ASA.
However, some proxy measures suggest positive net social
gains of both the programmes. The findings have implications
for developing microcredit market and designing regulatory
framework for MFIs in Bangladesh.
---------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVI, March 2000, No. 1
A Note from
the Executive Editor
-------------------------------------------------------------------------------------------------------------------------------
Despite our best efforts, we have failed to keep up with
the publication schedule of our quarterly journal over the
last few years. This has created a gap of two years in our
schedule of publication. The latest issue of the BDS which
came out a few months ago, covered the July-December, 1997
period.. We have, therefore, decided to skip two years,
1998 and 1999, in order to make it up to date. We hope to
maintain our schedule strictly from now on. We deeply regret
any inconvenience that this may cause to our valued subscribers.
--------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVI, March 2000, No. 1
On Reaching
the Hardcore Poor: Some Evidence on
Social Exclusion in NGO Programmes
by
Atiur Rahman and Abdur Razzaque
---------------------------------------------------------------------------------------------------------------------------
Recently there has been a growing concern that the poorest
of the poor are not reached by the NGO interventions. This
recognition has led to a number of studies that have discussed
the issue of participation in NGO programmes. However, although
some NGOs have several social programmes side-by-side their
micro-credit interventions, all the studies, so far, have
only considered the issue of non-participation of the poorest
households in credit programmes. As a result, from the existing
literature it is not possible to know the nature of participation
in the social programmes, let alone the question of less
representation by a particular group within the target population.
The present paper, probably for the first time, studies
the extent of participation of the extreme poor in the social
programmes of the NGOs based on some primary data gathered
from field survey. It is found that the social programmes
of the NGOs are also less participated by the extreme poor
households like its counterpart credit components. An attempt
has been made here to present some empirical evidence of
the extent of this exclusion and to understand the internal
dynamics of participation in such programmes.
----------------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVI, March 2000, No. 1
Assessment
of Comparative Advantage in
Bangladesh Agriculture
by
Quazi Shahabuddin
-----------------------------------------------------------------------------------------------------------------------------
The paper examines comparative advantage of different crops
using two indicators net economic profitability and domestic
resource cost ratio. The profitability estimates and estimated
domestic cost ratio suggest that except for a few import-competing
crops, Bangladesh has comparative advantage in production
of most crops. There are a number of crops, e. g. vegetables,
potato, cotton and onion whose financial and economic returns
compare favourably with that of HYV rice. The analysis has
important implications for scope and incentive for crop
diversification in the country. The longer term comparative
advantage, assessed in terms of expected technological innovations
and changes in future world market conditions suggests that
although the profitability of HYV boro is likely to worsen
in future, substantial improvements in both financial and
economic profitability can be expected for most other crops.
The analysis seems to suggest that the menu of crops that
Bangladesh can produce efficiently either for import substitution
or for export is quite large. A pertinent question is how
far the comparative advantage that Bangladesh agriculture
enjoys can be realized as a consequence of Uruguay Round
Agreements. The paper argues that the existence of comparative
advantage and the liberalization under UR Agreements are
not likely to generate any significant benefit to Bangladesh
agriculture on their own. What is essential is to enhance
agricultural productivity, develop technology and skills,
and create an effective policy regime to realize the potential
benefits of the emerging trading opportunities.
----------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVI, March 2000, No. 1
Distribution
of Rent in the Inland Fisheries of Bangladesh
by
Kazi Ali Toufique
------------------------------------------------------------------------------------------------------------------------------
This paper estimates rent in the inland fisheries of Bangladesh
by identifying three important determinants of its distribution:
the access rights of the fishers to fishing grounds of differential
quality, the differentiation among the fishers in terms
of ownership of fishing assets and the nature of contractual
structure. Fishing grounds have been classified as those
that are rich in quality and those that are poor and the
fishers have been classified as those who own fishing assets
and as those who do not. We present three major findings.
First, the fishers as a whole received a large amount of
rent. Second, access rights of the fishers to the type of
water body and the degree of ownership of fishing assets
are important determinants of the amount of rent they receive.
Third, the distribution of rent was found more egalitarian
in the richer water bodies.
----------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Volume XXVI, March 2000, No. 1
The Validity
of Long-run Purchasing Power Parity in the
South Asian Countries
by
Mohammad Yunus
---------------------------------------------------------------------------------------------------------------------------
This paper examines the validity of long-rung Purchasing
Power Parity (PPP) and the so-called Generalized Purchasing
Power Parity (G-PPP) in five South Asian countries, using
the relatively new Johansen cointegration approach. It has
been demonstrated that weak-from PPP finds considerable
support from data, while the strong-form version of the
hypothesis does not, irrespective of whether the official
or the parallel market exchange rates are used in the analysis.
Moreover, G-PPP seems to hold among these countries. The
major policy implication of the findings of the paper is
that if the monetary authorities in the South Asian countries
wish to stabilize domestic prices or reduce persistent balance
of payments deficits they must try to lower the external
value of their currencies. These countries can also reap
the benefits of co-operation in the core areas of trade,
manufactures and services through elimination of various
restrictions on regional trade.
----------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Vol. XXV, Sept.-Dec. 1997, Nos. 3 &
4
Elasticity
Estimates by OccupationalGroups in Bangladesh:
An Application of Food Characteristics Demand System
by
Abdur Razzaque
Bazlul H. Khondker
Mustafa K. Mujeri
--------------------------------------------------------------------------------------------------------------------------
The study estimates demand elasticities using the food
characteristics demand system for eight different occupational
groups in Bangladesh. The methodology, based on the assumption
that every food item contributes to overall energy and variety
in the diet which together maximises the utility from energy,
variety and tastes of individual foods suggests that with
increase in incomes, most occupational groups are likely
to increase their consumption for non-cereal food items.
An agricultural production strategy which emphasises on
cereals, particularly on rice, at the expense of other non-cereal
crops may thus lead to the emergence of a serious mismatch
between the choice of individual food item and its supply
in the long run. The high income elasticities of several
items e.g. fish, beef, milk and vegetables call for medium
to longer term policy interventions to bring about a structural
change in the pattern of existing food production in the
country.
-------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Vol. XXV, Sept.-Dec. 1997, Nos. 3 & 4
Long-run Dynamics
and Causality in the
South Asian Foreign Exchange Markets
by
Mohammad Yunus
-----------------------------------------------------------------------------------------------------------------------------
The paper sheds light on the long-run dynamics between
the official and parallel market exchange rates in five
South Asian countries, using the relatively new Johansen
cointegration approach and a few variants of causality tests.
While the evidence shows strong long-run relationship between
the two rates, neither the transformed official and the
parallel market rates enter the long-run equilibrium affect
both the rates equally. The evidence of direct causal relationship
between the two rates is very weak. However, strong feedback
mechanism between the two rates is evident if the effect
of error-correction term is considered in the analysis.
---------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Vol. XXV, Sept.-Dec. 1997, Nos. 3 & 4
Money and
Economic Activityin Bangladesh:
A Rational Expectations Approach
by
Nazma Begum
----------------------------------------------------------------------------------------------------------------------------
The study aims to test the hypothesis that only unanticipated
movements in money affect real economic variables which
is explicit in the rational expectations monetary models.
The hypothesis is tested by using Bangladesh data. A money
growth model for Bangladesh is specified. Unanticipated
Money Growth (DMR) is defined as the residuals of the money
supply equations. A macroeconometric model for Bangladesh
is developed consisting of five equations. The equations
are estimated by including both Unanticipated Money Growth
(DMR) and Actual Money Growth (DM). The empirical result
of the study is not encouraging for supporting the hypothesis
that only unanticipated movement in money growth affects
real output.
-------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Vol. XXV, Sept.-Dec. 1997, Nos. 3 & 4
Macroeconomic
Performance During Adjustment:
The Case of Bangladesh
by
Salma Chaudhuri Zohir
-----------------------------------------------------------------------------------------------------------------------
The present study attempts to look into the impact of structural
adjustment on macroeconomic performance covering the period
up to 1992/93. The "before-after" approach is
the most widely used approach and hence has been used for
the analysis of this paper. The analysis suggests that the
structural adjustment policies in Bangladesh has been implemented
gradually, with policy changes introduced in phases. The
review of macroeconomic performance suggests that the nature
of structural adjustment pursued may be termed as "corrective":
it improved the fiscal and external balances but at the
cost of reduced public investment and stagnant GDP growth
at around 4 per cent during the adjustment period. The decline
in public investment appears to have affected private investment.
Bangladesh had only meagre foreign investment. Desirable
structural adjustment policies should lead to expansion
of tradable output. But contrary to the expectation, the
output growth in the tradable sector was significantly lower
than that of non-tradable. The share of expenditure in GDP
remained at around 15 per cent. Although the share of social
sectors as a whole increased slightly, that of the health
sector has fallen during the adjustment period. The structure
of export changed from traditional to non-traditional. Export
growth was larger than the target due to expansion in readymade
garment and knitwear. Under the MFA, Bangladesh has guaranteed
access to the US market and under the GSP, Bangladesh has
unrestricted duty-free entry into the countries of the European
Union, which gave it a competitive edge over other exporting
countries. The phasing out of preferential access by the
year 2005 is a matter of great concern. In order to survive
beyond 2005, there is an urgent need to set up backward
linkages domestic textile industries.
--------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Vol. XXV, March-June 1997, Nos. 1 & 2
A Simple Model
of Power and Property Rights in the
Inland Fisheries of Bangladesh
by
Kazi Ali Toufique
-------------------------------------------------------------------------------------------------------------------------
The problem of appropriators to maintain property rights
over resource systems is generally considered secondary
to the problem of developing institutions that can internalise
externalities associated with resource systems. It is assumed
that the appropriators maintain property rights over resource
systems at zero or negligible costs. In some practical setups
this sequence is often reverse – i.e., the appropriators
find it increasingly difficult or costly to maintain their
rights over resources. We provide such an example from inland
fisheries of Bangladesh where the fishers have in general
failed to establish property rights over water bodies despite
being explicitly sponsored by the state. Property rights
over water bodies are transferred to socially powerful agents
coming from outside the fishing community. We relate power
and enforcement costs to explain this transfer of rights.
-----------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Vol. XXV, March-June 1997, Nos. 1 & 2
Designing
a Health Insurance Programme for Rural Bangladesh:
Lessons from the Cooperative Medical System of Taicang Country,
China
by
M. Mahmud Khan
Naisu Zhu
Jack c. Ling
--------------------------------------------------------------------------------------------------------------------------------
Lack of funding in health sector renewed the interests
of development practitioners and policy makers in community
organized, managed and funded health care delivery schemes.
To design a community health programme for rural areas,
developing countries should evaluate the appropriateness
of the Cooperative Medical System (CMS) of China as an alternative
model. In this research, successful CMS units of China are
examined to identify factors affecting long-term viability
of community-based Health insurance plans. These factors
can be grouped into a number of programmatic aspects of
health system organization: choosing appropriate human resource
mix consistent with the economic status of community members,
designing a benefit package to encourage participation of
both poor and non-poor households, developing administratively
simple premium setting and collection mechanism, ensuring
inter-CMS collaboration and developing well-functioning
referral system. Adjusting for the income difference between
Bangladesh and China, Chinese health care costs can be used
as a rough guide for estimating the health care resource
requirements for implementing a CMS-type programme. Adjusting
the Chinese data for Bangladesh income and prices, the premium
level becomes Taka 10 to 15 per person per month. this premium
will not allow appointment of a fully qualified physician
at the village, ward or union levels. In fact, the premium
level can pay only about Taka 1,500 to 2,500 per month for
a village doctor, keeping aside 55% of total premium collected
for drugs, supplies and diagnostic tests. The Chinese experience
also implies that a well-functioning health system should
allocate about 30 to 35% of total health care costs at the
local level, below the upazila level for Bangladesh. This
will ensure access to basic health care services for community
members and will provide partial financial protection against
costs incurred at secondary and tertiary levels of health
care delivery infrastructure.
--------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Vol. XXV, March-June 1997, Nos. 1 & 2
A General
Equilibrium Application of Learning by Doing:
Should Bangladesh Protect its Capital Goods Sector?
by
Farida C. Khan
---------------------------------------------------------------------------------------------------------------------------------
This paper is motivated by the predicament of capital goods
production in Bangladesh which has been penalized during
past import policy regimes. Duty concessions applied to
capital goods imports combined with high tariffs on imported
inputs have contributed to negative effective protection.
Current import policy has corrected this by moving towards
a more uniform tariff structure which includes rates applied
to capital goods. Under the new tariffs, however, the capital
goods sector has continued to be depressed and has provided
little employment opportunity for the relatively skilled
labour used more intensively in this sector. Using the presumption
that this sector is also an important source of skills dissemination,
this paper examines the optimum tariff structure and its
determinants.
Because of its relevance for many developing countries,
the analysis is kept at a general level. Having made the
presumption that there is learning by doing in the capital
goods sector, the optimal tariff structure is examined.
A two period model with intersectoral linkages demonstrates
the dynamics. The optimal tariff rate on capital goods imports
is also solved for. While machinery imports can lead to
the acquisition of technology, the dissemination of such
technology requires domestic capabilities and endowment
of skilled labour. Domestic production of capital generates
learning by doing and thereby enhances resource productivity
in the future by increasing the endowment of skilled labour.
The tariff structure is found to depend on the extent of
learning and intersectoral linkages. An agreegated numerical
model using data from Bangladesh also confirms this result.
The conclusion is that encouraging capital goods production
will increase the availability of skilled labour as well
as the level of welfare.
-------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Vol. XXIV, Sept.-Dec. 1996, Nos. 3 &
4
(Special Issue
on RURAL NON-FARM DEVELOPMENT IN BANGLADESH)
Employment Patterns and Income Formation in Rural Bangladesh:
The Role of Rural Non-farm Sector
by
Wahiduddin Mahmud
--------------------------------------------------------------------------------------------------------------------------
The rural non-farm (RNF) sector in Bangladesh provides
employment to a large and growing proportion of the country’s
labour force. The evidence presented in this paper suggests
that the process of labour shift from agriculture to the
RNF sector represents a precarious balance of the "push-versus-pull"
factors that might have kept rural poverty situation from
deteriorating, without making much improvement in the situation
either. The expansion of low-productivity self-employment
has been the major contributing factor in the sectoral transformation
of the rural labour force. While the provision of such non-farm
employment has been crucial for absorbing the growing numbers
of landless rural workers, the labour shift may have created
some degree of overcrowding in the low-productivity non-farm
activities, thus undermining the growth of overall productivity
and income levels in the RNF sector. In future, if the RNF
sector is to play a more dynamic role, there will have to
be probably some shift of emphasis towards relatively larger-scale
and higher-productivity RNF activities which are better
able to respond to income-elastic market demand.
----------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Vol. XXIV, Sept.-Dec. 1996, Nos. 3 & 4
(Special Issue
on RURAL NON-FARM DEVELOPMENT IN BANGLADESH)
The Rural Non-farm Sector in Bangladesh:
Evolving Pattern and Growth Potential
by
Zaid Bakht
----------------------------------------------------------------------------------------------------------------------
Recent macro evidence reconfirm the earlier finding that
Rural Non-farm Activity (RNA) is a dominant and growing
component of the rural economy in Bangladesh. Rural manufacturing
is the most important RNA both in terms of current size
and growth performance. While the overall cottage industry
sector experienced negative growth in value added during
the ‘80s, there has been differential performance
within the sector. Most of the dominant cottage industries
stagnated; but growth has been quite pronounced in non-traditional
industries involving larger employment size and higher capital
intensity. These industries cater towards urban markets
and higher income groups in rural areas, and are located
mostly in semi-urban and urban areas. The structure of small
industries has also changed in favour of non-traditional
industries that are located more in the semi-urban and urban
areas, and have larger employment size and higher capital
intensity. Average labour productivity in a large part of
RNA is still lower than the going agricultural wage rate.
However, the productivity level has shown a rising trend
over the past decade for a significant proportion of the
activities. One also observes a strong positive link between
productivity and growth of individual industries. This implies
that the subsistence nature of the sector is on decline
– a process that can be accelerated through right
kind of policy support.
-------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Vol. XXIV, Sept.-Dec. 1996, Nos. 3 & 4
(Special Issue
on RURAL NON-FARM DEVELOPMENT IN BANGLADESH)
Rural Non-farm Employment in Bangladesh
by
Sona Varma
Praveen Kumar
----------------------------------------------------------------------------------------------------------------------
This paper examines the structure of employment in Bangladesh’s
rural non-farm (RNF) sector and its potential to generate
sustainable employment, especially when compared with employment
opportunities in agriculture. It also considers the role
of labour policies, if any, in facilitating sustainable
growth of productive employment in the rural areas. The
paper concludes that the RNF sector in Bangladesh has grown
in importance during the late 1980s. It has been contributing
a rising share of employment and value added. While the
rural non-farm sector is less productive than its urban
counterpart, it generates full-time, sustainable employment
in small-scale industry. Productivity of a number of activities
is higher than the going agricultural wage rate. The household
component of the RNF sector still largely consists of low-productive
activities, and continues to employ a third of the rural
labour force engaged in the sector. The RNF sector has barely
begun the process of generating wage employment; future
potential for wage employment will depend largely on the
expansion of rural industries. Labour market policies have
had very little impact on the RNF sector so far, since a
large part of the sector consists of household activities,
which remain a part of the informal economy. The introduction
of a national minimum wage may, however, adversely affect
the sector by increasing the size of its informal component.
With increased casualisation of the labour force, Government
attempts to improve the rural roads network would improve
the efficiency of sub-contracting, which would benefit the
sector.
------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Vol. XXIV, Sept.-Dec. 1996, Nos. 3 & 4
(Special Issue
on RURAL NON-FARM DEVELOPMENT IN BANGLADESH)
Rural Non-farm Sector in Bangladesh:
Stagnating and Residual, or Dynamic and Potential?
by
Binayak Sen
--------------------------------------------------------------------------------------------------------------------------
The new piece of evidence culled from household expenditure
surveys of BBS as well as 62-village panel surveys of BIDS
indicates that the expansion of the rural non-farm sector
(RNF) during the period since early eighties through mid-nineties
can no longer be viewed as the persistence of a "residual"
sector phenomenon. Such characterization, if true would
have predicted declining output and higher incidence of
poverty in this sector. The evidence presented in the paper
suggests that the shift to non-farm occupations has been,
on balance, pro-poor in nature. This is seen both in terms
of greater potentials for poverty alleviation in these activities,
and in respect of their potentials for moderating overall
rural income inequality. The other view, favouring a "dynamic"
characterization, is also found to be wanting in that it
falls to recognize the lack of improvement in labour productivity
in many RNF activities – and the consequent overcrowding
at the lower end of the productivity scale – affecting
the long-term sustainability of the sector.
-------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Vol. XXIV, Sept.-Dec. 1996, Nos. 3 & 4
(Special Issue
on RURAL NON-FARM DEVELOPMENT IN BANGLADESH)
Role of Targeted Credit in Rural Non-farm Growth
by
Shahidur R. Khandker
------------------------------------------------------------------------------------------------------------------------
In a labour surplus country like Bangladesh, rural non-farm
(RNF) sector is important not only for poverty alleviation
but also for promoting overall economic growth. Lack of
credit has proved to be a binding constraint to the growth
of RNF activities. Microcredit from Grameen Bank, BRAC,
and RD-12 programme of the BRDB has played a significant
role in relaxing this constraint and promoting RNF activities
in Bangladesh. Data from household level survey show that
both household characteristics and community factors are
important determinants of RNF participation. Better infrastructure
promotes RNF participation while better income earning opportunities
in agriculture reduce it. Trade and manufacturing are the
dominant forms of RNF activities in Bangladesh. Household
attributes, village characteristics, and prices and wages
have been found to explain a significant part of various
of the choice structure of the RNF activities. Analysis
of borrower-level data clearly indicates that because of
skill training and other organizational help, BRAC borrowers
have managed to sustain increased productivity with improved
access to credit. Therefore, the supply of affordable credit
for the expansion of RNF production must be supported by
appropriate skill development, market promotion, and other
organizational supports.
------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Vol. XXIV, Sept.-Dec. 1996, Nos. 3 & 4
(Special Issue
on RURAL NON-FARM DEVELOPMENT IN BANGLADESH)
The Non-farm Road to Higher Growth: Comparative Experience
and Bangladesh’s Prospects
by
Shahid Yusuf
------------------------------------------------------------------------------------------------------------------
The prevent poverty and unemployment from becoming socially
insupportable and politically explosive, Bangladesh must
aim for a growth rate of 7-8 per cent using the most labour
intensive techniques while still being efficient. The paper
explores the role that non-farm sector can play in supporting
this push for higher growth, and the lessons regarding non-farm
development that can be derived from examining the experiences
of growing countries in Asia. The thesis of this paper is
that rapid growth in Bangladesh is likely to be a function
initially of agricultural productivity and prosperity. It
will be difficult to expand non-farm income if agriculture
is stagnant. Comparative experience from some of the successful
East and Southeast Asian countries and empirical evidence
from Bangladesh suggest that investment in transport infrastructure
and the mechanization of farming would give the strongest
push to agriculture and generate the most potent spread
effects. Agricultural growth stimulate growth of RNF activities
through demand and input-output linkages. But in order to
turn rural manufacturing into a leading sector with the
potential to employ a large number of people and good export
prospects, impetus must come from other directions as well.
--------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Vol. XXIV, Mar.-June 1996, Nos. 1 & 2
Bangladesh
Towards Twenty-First Century
by
Nurul Islam
--------------------------------------------------------------------------------------------------------------------
The two challenges Bangladesh faces as she enters the twenty
first century are: (a) rapid transition to a market oriented
private enterprise economy and (b) integration in the world
economy. This article deals with a few selected issues in
respect of each of these challenges. The principal issues
in the first category are: the reform of the financial institutions;
progress and prospects of privatization and public expenditure
review illustrated by case of defense expenditure. These
three measures are interrelated and significantly affect
the mobilization of resources for development and therefore,
the rate of growth in savings and investment.
The important challenges in the field of external economic
policy relate to: (a) The process of liberalization of trade
and foreign exchange regime, (b) Sustained growth of exports
and implications of membership of WTO and (c) Regional/
sub regional economic cooperation. The short-term adjustment
problems of the highly protected domestic industry are real
and should be dealt with. Preconditions of supply in the
cost effective import competing and export sectors are to
be created expeditiously.
----------------------------------------------------------------------------------------------------------------------------
The Bangladesh
Development Studies
Vol. XXIV, Mar.-June 1996, Nos. 1 & 2
Determinants
of the Gender Composition of Employment
in Manufacturing Enterprises
by
Rushidan Islam Rahman
------------------------------------------------------------------------------------------------------------------------
The paper analyses the factors influencing women’s
employment in the formal manufacturing sector and takes
into account both demand and supply side determinants of
gender composition of employment. On the basis of data from
100 manufacturing enterprises in Dhaka city, it has been
concluded that the characteristics of enterprises and the
attitude of employers towards women’s employment have
emerged as significant determinants of female employment
in manufacturing enterprises. Among the characteristics
of enterprises, the export orientation of industries has
been observed to have largest positive impact on female
employment.
The experience of the enterprises with female employees
do not provide an evidence of higher non-wage and/or non-financial
costs of employing women. Female employees did not show
either greater absenteeism or larger turnover rate compared
to their male counterpart. Moreover, such non-wage costs
are often converted into financial costs and are covered
through adjustment of financial benefits (or negative benefits)
provided to women. Even if there is no evidence that female
employees take leave more frequently or require the provision
of expens
