– Bangladesh to clock highest growth in Asia this year.
– Pakistan’s growth to be lowest in South Asia in current fiscal.
8% vs. 3%. From a geopolitical perspective at current rates of relative stagnation India’s Pakistani problem will “solve” itself as the Islamic Republic is turning into a macroeconomic midget. All of the geopolitical posturing will be irrelevant if the Pakistani polity doesn’t get its structural house in order (e.g., shift away from the oligarchy).
This is the next article in the series “Is it time for Asian Americans and Latino Americans to ask to be considered “white”, “Is it time for Asian Americans and Latino Americans to ask to be considered “white” (a)”, Razib’s “Hasan Minhaj’s Patriot Act on Affirmative Action“, and “Is it time for Asian Americans and Latino Americans to ask to be considered “white” (b)”.
A growing part of the global caucasian intelligentsia are attacking Hong Kong protesters as far right fascists. This is part of a growing trend among xenophobic caucasians attacking Asians for “white supremacy”, “nazism”, “racism”, “oppression”, “patriarchy”, “imperialism”, “colonialism”, “hegemony”, “exploitation.”
Why is this happening? Is it just jealousy? Is it that many caucasians fear that “darkies” own a growing percentage of global wealth, earn a growing percentage of global income? Is it fear that “darkies” have growing competence, capacity, merit, mental health, intelligence? Is it fear about improving “darkie” academic outcomes?
I am not sure. Can everyone share their thoughts?
How should us “darkies” react?
I believe in loving and respecting our enemy with all our hearts, all our souls, all our minds and all our might. This includes everyone who is disrespectful, not loving, racist, bigoted, prejudiced, white supremacist, Nazi, facist, oppressive, hegemonic, exploitative, patriarchal towards us. And everyone who accuses us of being disrespectful, not loving, racist, bigoted, prejudiced, white supremicist, Nazi, facist, oppressive, hegemonic, exploitative, patriarchal. And everyone who labels and mislabels us. And everyone who falsely accuses us.
Everyone has the right to freedom of art and thought. If we truly love and respect others, then how can we not respect their right to disrespect and not love us?
The sweetness of love will gradually melt their hearts.
Some might say that this works for most people who are mean to others, but is insufficient for dangerous people. For particularly dangerous people, we can combine the deepest of love and respect with dialogue. And for the most dangerous people, we can combine love, respect, and dialogue with other things.
Can there be any other way?
This topic is one of the reasons The Brown Pundits Podcast would like to interview Irshad Manji:
Irshad Manji has touched the sweetness of the heart, the silence that is always with us. And while I agree with her that we should respect and love others, and not label others. I don’t think we have the right to limit the freedom of art and thought of others by asking them not to label and mislabel us.
One example that inspires me is how Krishna dealt with harsh bigotry, criticism, false allegations, others mislabeling him, disrespect, bigotry, prejudice, white supremacy, Nazism, fascism, oppression, hegemony, exploitation, patriarchy. Krishna insisted that others be allowed to criticize Krishna.
I would be curious to listen to Irshad Manji’s thoughts about this.
Angus Maddison’s Contours of the World Economy 1-2030 AD: Essays in Macro-Economic History is one of my favorite books (though if you are looking for economic history, Power and Plenty: Trade, War, and the World Economy in the Second Millennium is underrated/underread).
Maddison’s work is cited in this piece,
No, Mughals didn’t loot India. They made us rich: They remained as Indians, not colonists. Overall, I found it to be specious and sophistic in the details.
The specious part is the attempt to assert that India was rich during the Mughal period. The sophistic part was the interleaving of anecdata and observation to buttress the quantitative point, made with an appeal Maddison’s data set.
The reality is that it is likely that Maddison was wrong, and more importantly, the Mughal state was highly extractive:
(Subtweeting many people in my feed) Accrding to Lindert, Milanovic & Williamson, ca 1750 Mughal India’s ‘inequality extraction ratio’ (btw actual inequality & the max possible inequality just short of killing off the producers) may have been amongst the highest ever historically pic.twitter.com/kJQsk8HlQQ
— Pseudoerasmus (@pseudoerasmus) July 15, 2019
There is more here. It is not my place to judge economic history, it’s not my specialty (though on the whole, I don’t dissent from the judgment of “Pseudoerasmus” on most things in his wheelhouse). And I still value Maddison’s magisterial work. And so should you.
The reason is simple: contrary to what Rana Safvi would have you believe, the vast majority of pre-modern people and societies were poor, with very marginal differences in per capita wealth in a modern sense. I am convinced by various arguments that large polities, such as the Roman Empire, can obtain some gains in efficiency through economies of scale, as well as reducing costs of production through imposing peace. But these differences were marginal compared to anything we moderns might believe to be worth notice.
To see what I mean, I’ve plotted some of Maddison’s data below:
According to Maddison, there was a decline in per capita wealth from the Mughal period to the early British period: from 550 to 533 dollars. First, this is hardly much at all. Second, it is clear that Maddison’s estimate here is very coarse, and we shouldn’t put that much stock in it.
But the bigger picture that I’m alluding too is clear when you look at all of Maddison’s data. 2,000 years ago Italy was the richest region of the world on a per capita basis (though since Madison is comparing a province of the Roman Empire to all of China, I think this is somewhat misleading). But Italy seems to have been only about twice as rich on a per capita basis as the poorest areas of the world. By 1500 the British Isles was already wealthier than India on a per capita basis, but it was only 1.3 times as wealthy.
When pre-modern observers, as quoted in the piece above, mention the wealth and riches of a polity, what they truly mean are the goods of the people of power. In 1500 France and the British Isles were at the same per capita wealth level. But the monarchy of France was much wealthier and more powerful than the monarchy of England. There were two reasons:
According to economic historians, one way that the British closed the gap in later centuries was much better management of and recourse to public debt. The British “punched above their weight” in terms of mobilization of resources for this reason (eventually Britain surpassed France in population and per capita wealth).
But that’s neither here nor there. Observations of the wealth of the Mughals by European observers is mostly a function of the reality that the domains under Mughal control were extensive, and the Mughal Empire had a much larger population than any European state. Its wealth was not due to intensive production of economic vitality, as much as extensive exploitation of productivity. Similarly, the domains of the Chinese Emperors of the contemporary period allowed for lavish wealth, but that was due to the massive population increase in their territories in the centuries of peace.(part of this was due to the introduction of maize into lands where it was more suitable than rice or wheat).
Of course, there are differences between various political arrangements. Even before seeing the data on extraction levels above, I suspected that the Mughals were not necessarily encouraging economic flourishing in an atypical manner. The reason here is historical and ideological. Though the average per capita wealth of China across history did not vary a great deal, there were ideological variations which resulted in different levels of poverty and uncertainty. The orthodox Confucian Chinese view was rather libertarian and physiocratic. It emphasized low taxes on the farmers so as to encourage freeholding and rural prosperity. Though this was not always executed, it was the ideal. The pre-modern Chinese state as actually relatively “light.”
One can think of a major exception here: the Yuan dynasty. That of the Mongols. Unlike the Manchus, the Mongols did not assimilate to Chinese norms. They engaged in massive extraction, pure rent-seeking, and brought in “middle-men minorities” (Central Asian Muslims often) to do much of the dirty work.
On the whole, I believe that the Mongol influence on economic growth was predominantly negative in Eurasia during their period of dominance, because the steppe nomad ethos was extractive and predatory toward the ancient agrarian civilizations of Eurasia. The Pax Mongolica likely introduced some efficiencies through trade and the spread of ideas, but the local impact of Mongol rule in China, Persia, and Russia seems to have been one of predation and consumption, rather than fostering production.
The Mughals were in part descended from Mongols. And as Timurids they were patrons of culture but also adhered to the steppe ethos of extraction and predation. Rana Safvi emphasizes that the Mughals became more Indian genealogically over time. This is true. And the Mughals also relied on Rajputs to administer their domain. But anyone who has read about the Mughal state apparatus knows that like the Mongols in Yuan China they relied extensively on West and Central Asian first-generation immigrants (the preference for non-natives even within these ethnicities is a clear tell that it was important they not be too attached to India, and mirrors “Mameluke” regimes further west). While Turks and Afghans were the military elite, the civilian class was saturated with Persians.
The ethno-religious distance between the ruled and rulers to me would set a prior expectation that there would be an emphasis on extraction and extensive rent-seeking. Muslims, like Ibn Battuta, had long seen India as a land of riches and a place where young adventurers could make a fortune. In the pre-modern world, unfortunately, this often involved some sort of rent-seeking activity, rather than productive entrepreneurship.
And yet were the Mughals qualitatively different from what came before an what has come after? To be honest, I don’t think so. One of the major problems with South Asia is that it is a world of “communities,” and communities look after their own. Han Chinese bureaucrats culturally identified with the peasants that they ruled. Even the connotation of “peasant” in Chinese is far less pejorative than in Europe, which had a blood nobility. In South Asia, the ruling elite has often by logical necessity been different from those the ruled because no one group identity has been a majority. This is often true even locally, while Hindu zamindars ruling in eastern Bengal over Muslim peasants, or Muslim potentates in the Deccan over Hindu peasants.
Note: Chill on the bullshit comments. I’ll be deleting them if you manifest stupidity or ignorance.
One of the economists I follow is Rathin Roy [member of the Prime Minister’s Economic Advisory Council.] India has several major long term growth challenges. One is geographic inequality in growth. South and West India are growing much faster and have much lower population growth rates than the rest of India, causing them to pay far higher taxes than they recieve in government spending benefits. Some believe this could cause long term Indian instability. My view is that the poor parts of India are likely to grow rapidly in the future. When measured in terms of human population I think STs, SCs, OBCs and poor conservative Sunni (non Sufi) Indians are likely to experience rapid economic growth, causing this issue to take care of itself over time.
Rathin Roy is optimistic about short term Indian economic growth but worries about India’s long term economic growth. He worries that India could enter the upper middle income country trap, similar to Brazil. Let us assume that income or Y depends on three inputs, K (Capital = tools or the sum total of all previous investments minus depreciation), L (Labor = total hours worked), A (technology, product development and process innovation, total factor productivity):
Y = F(AL, K)
dY/dL = marginal product of Labor = long term real wages on average
dY/dK = marginal product of Capital = long term real rate of return on investment
India has a reasonable savings rate which finances investment.
India has a long term challenge with A or technology. What are these challenges?:
Eric Weinstein is close to the intersection of science, math and spirituality (or religion). He is skeptical that someone can do multi-dimensional math and science in deep meditation (satori, samadhi, mystical rapture). I think this is possible (not yet figured out how to do it).
Many ancients in narrative stories are described as combining science, math and spirituality. Including the great 7 sages (of the east, Sumeria and Egypt). Including Vishwamitra. Including Hinanyaksha and Hiranyakashipu.
I hope that our current crop of science and math thought leaders fully self actualize.
Eric describes the many theisms that different groups of people have, including in physics, math, AI, liberal arts, silicon valley, local governance, national governance, international institutions, globalization, politics.
One of the goals of religion is to transcend all theisms seeking the truth alone. The goal of religion is atheism. Theisms being:
Eric is exceptionally good at breaking all theisms. Sadly those who break all icons and assumptions tend to get demonized. The Intellectual Dark Web–including Eric Weinstein–are being attacked as predicted by beautitudes Matthew 5:10-12:
+++++++++++++++++++
In this part I write about some of the interesting changes I saw in the villages of Bangladesh during my stay there. I wrote this as an op-ed in a local daily.
[I am very interested to know from Brown Pundit readers of other South Asian countries about changes in rural society and economy from direct experiences. Particularly interesting would be to know if there are variations among countries]
Earlier this year, I came back to Bangladesh after an absence of more than five years, and stayed for more than a month.
During the stay, I had the opportunity to visit rural and small-town parts of the country in two forays out of Dhaka. A visit to my ancestral home in the northern parts and another to the southwestern parts. These visits were my first into rural Bangladesh after more than a decade. Therefore, they provided very stark experiences of the rapid but gradual change that has been occurring for several decades.
The first thing that caught my eye was how drastically the utilization of resources has increased over the last decade. A decade or so ago, in Northern parts, you would mostly see cultivated fields expanding miles to the distant horizon. Now, people have planted so many trees everywhere that it almost gave me a claustrophobic feel.
Every pond is utilized for fish production and every square metre of the land is cultivated for year-round value addition. Bangladesh is, reputedly, among the leading developing countries with the fastest agricultural productivity growth in the last two decades. The dramatic physical transformation of the village landscape is clearly strong evidence of that growth.
I saw yet another striking change in the transportation scene. A decade ago, manually driven rickshaws and rickshaw-vans were ubiquitous. Now I could mostly see electric and mechanized transports. It seemed to me that people in the village were now looking down upon manual transports as archaic. Also, I rarely saw buffaloes and oxen traditionally used for plowing the fields — tractors and power-tillers had taken over that role.
What are the reasons for such remarkable growth in rural productivity and economy? Undoubtedly government policies and infrastructure development played important roles, but I believe that one of the biggest drivers of this change is unappreciated but right before our eyes. In the villages, I saw everybody with mobile phones and phone-related service shops everywhere.
Economists in the last decade have begun to appreciate the transformative role mobile phones and the internet have been playing in the developing world. Unlike previous models, where heavy government investment in communications infrastructure was critical in economic development, mobile infrastructures grew almost entirely because of the private sector, and brought far greater connectivity with far fewer costs.
Developing countries went from less than 1-2 landlines per hundred people to 70-80 mobile connections per hundred in just 20 years. The poorest people in villages are now able to talk with anybody in the country, but also send and receive payments and access the internet and government services through mobile phones.
People in villages are using phones to be constantly updated about prices of agricultural inputs and outputs and get the best deals possible in the market. The increased competition and undercutting of middlemen have increased efficiency greatly. Coordinating all kinds of complex tasks, like contracting day labourers for planting or harvesting, have become much easier.
But there is a flip side to agricultural productivity growth that has taken place all over the world. Prices of easily tradable products like grains, consumer oil, milk products have been low for more than a decade and that low price has hit small farmers the hardest.
Like everywhere in the world, small farmers of bulk products like rice in Bangladesh can only be economically sustainable by massive government support. However, unlike India and other developing democracies, farmers in Bangladesh have little political power, as there are no competitive elections. I do not think the government in Bangladesh is as sensitive about rural unrest as it is about urban discontent.
Paradoxically, in spite of the economic and productive growth, I found the villages to be much less populated than they were 10 years ago. Like everywhere in the world, I think Bangladesh also is experiencing rural depopulation, and this will only accelerate in the future. I think the main reason is that people are reluctant to live in actual villages. Like everywhere, people aspire to live in more complex societies with more modern services.
Those who are able, move to upazilla towns where there are schools, banks, hospitals, police stations. More better-offs move to zilla cities, and the most propertied go to Dhaka and Chittagong. Village girls probably also think that working in a mind-numbing factory job for subsistence wage in a big city is preferable to the daily monotony of a village household.
Finally, one of the most inspiring sights I saw in villages was young girls riding huge motorbikes as part of their daily commute to work or study, a sight you rarely see even in America. I think that the prospect of Islamization of Bangladesh society is exaggerated. People of Bangladesh are very religious, and religious identity is very important for them. However, they are also very aware that religious and secular activities belong to different spheres, and they are not letting religion dictate their economic life.
The pragmatic and opportunistic nature of Bangladeshi people has been the saving grace of a country facing immense structural hurdles right from its birth. Nowhere is this more evident than its rapidly changing villages.
https://www.dhakatribune.com/opinion/op-ed/2019/06/07/how-the-landscape-has-changed
I went to visit Bangladesh from early April to mid-May after more than five years. For five years I have written about Bangladesh from secondary sources and secondary experiences. At long last I can write about my fist-hand experience.
I stayed most of the time in the capital city Dhaka. In recent years South Asian megalopolises like Dhaka, Delhi, Karachi, Mumbai have earned reputations as the cities with worst air pollutions in the world. Living in Dhaka’s unbearable pre-Monsoon heat, humidity, dust and particles thick air, I can well understand what do those pollution measures mean for the people. For the bulk of masses who are not fortunate to live in air-conditioned houses, work in air-conditioned offices and commute in air-conditioned cars, buses, Dhaka is truly an urban hell-scape. There is a popular saying among Dhaka’s suffering commuters stuck for hours in oven hot roads; citizens of Dhaka will be forgiven the dreaded ‘Adhab-al qabr’ or punishment of the grave that is supposed to be fate of all persons from death till Qyiamat, the day of judgement. Dhakaites suffer so much that the Adhab pales in comparison.
Although air pollution has become much worse, city roads and walkways have become cleaner and more well maintained. Parts of the massive revenue collection by both city corporation and government are really being used to maintain the infrastructure. Trash collection has become more organized . Piles of rotting garbage and constant stench are no longer ubiquitous.
Mercifully powercuts in electricity, so common in Bangladesh until 8-10 years ago, seem to be very rare now. Diesel generators reverberating throughout the city, a very common sight and sound of yesteryears, are rarely seen and heard now. In fact, a recent news report said that Bangladesh installed so much power generation capacity in the recent years that capacity has outstripped demand substantially. Experts are recommending that no new power plants be initiated in the next few years. Uninterrupted power supply has made the industries, particularly Garments industries, very happy.
However, the top 10% Dhakaites are living very differently than the rest. Fantastic high-rise apartments and office buildings have sprouted all over the cities. Glass and steel clad apartments and offices remind people more of the spotless splendor of Singapore than traditional dirt of South Asia. New BMWs, Lexus, Toyota cars and SUVs clog the city streets. However, apart from home, office, cars and eateries, there is very little things to do socially in Dhaka for the upper class. That’s why they escape to foreign spots like Bangkok, Bali, Malayasia, Singapore, Dubai, Sri Lanka, India etc several times a year. Bangladesh is the supplier of highest number of tourists in India. Bangladeshi shoppers are significant boosters of Kolkata economy. Several Bangladeshi tourists were among the dead and wounded in the recent Sri Lanka terrorist attack.
The top businesspeople, professionals and government employees are doing great in Bangladesh. Their income has soared in the last decade. Signs of their affluence is everywhere in the cities. People working in banks and finance, telecommunication sectors are doing OK. The middle class is not doing so great. Shockingly, I found that private sector salaries have barely changed in the last ten years but house rent, essential prices have increased at least 100% in the last ten years. Economists say that a living wage in Dhaka, minimum wage for a two person family to keep their body and soul together under a roof, is 17000 Taka or about 200 dollars per month. Starting salaries for college, university graduates not working in choice sectors like banks or telecom are still below the living wage. Garments workers earn 80 to 150 dollars, from starting to experienced. It’s hard to imagine the life of the lower-middle and working class in Dhaka.
In the second part, I will discuss my very startling experience of change and prosperity in the rural areas. In the third part, I will talk about my impression of the state of economy and politics.
Lately, we have been talking a lot of things about South Asia but not much on what is supposed to be the biggest event in the calendar for 2019, India General Elections 2019 scheduled to start 11th April and continue till May. Looking at the Opinion Polls it seems that BJP’s election fortune has become much brighter since the dustup with Pakistan. Although foreign issues do not dominate Indian elections that much. Domestically, general Indian people still seem to regard Modi as a better steward for the Indian economy than Rahul or any other alternatives. I have no opinion on the probable results as I have little knowledge and expertise. Let those who are more informed opine here freely on the elections. Not just probable outcomes but also about social, economic and political directions that this elections may bring about.
19th March : ” Times Now and VMR survey is back with yet another batch of poll-related data and analysis. In the current survey, the National Democratic Alliance (NDA) is predicted to grab 283 out of 543 Lok Sabha seats, UPA – 135 and Others – 125.
In the last survey, the Times Now-VMR poll had shown that the NDA would have been 21 seats short of the half-way mark had 2019 Lok Sabha Elections been held in January.”
This is the next article in the series “Is it time for Asian Americans and Latino Americans to ask to be considered “white”, “Is it time for Asian Americans and Latino Americans to ask to be considered “white” (a)”, and Razib’s Hasan Minhaj’s Patriot Act on Affirmative Action.
I think the world of Asian Capitalists and would advise everyone to watch their other posts. Is there an interest in inviting them on Brown Cast? They and many other Asians say that Asians will not bend the knee to the post modernist cultural marxist. Within a decade half the world’s billionaires are likely to be Asians or people of Asian ancestry who live elsewhere in the world and the full power of the post modernist cultural marxist will be brought to bear against Asians. What will happen then?
The Chinese have a term for post modernist cultural marxist caucasian intelligentsia. The word is baizuo. Should the Brown Pundits start using the term in solidarity with our Chine bhai bhai (Chinese brothers)? Can everyone vote below?
For a long time the rest of the world laughed at and made fun of the baizuo. But now the baizuo are becoming a major global threat that is significantly hurting poor, lower middle class, middle class and upper middle class people all over the world. Including by:
This is turning the entire non caucasian world against the baizuo. It is perhaps the largest single cause of anti European and anti American sentiment among people who are not European or American. Europe and America will pay a very heavy price for this. I for one don’t think it is worth paying this heavy price of global anti European and anti American sentiment. Europeans and American need to bring the baizuo under control. No European or American who travels internationally should have to endure large numbers of people looking at caucasians with suspicion.
One of the smartest, most perceptive and wisest global thought leaders John McWhorter described the baizuo phenomenon far better than I could. I would read his whole article on “The Virtue Signalers Won’t Change the World.” And many of his other articles too.
Sadly the baizuo control much of the global establishment and they demonize any darkie who has the courage to stand up to them. For example our very own co founder Razib Khan. And John McWhorter, Glenn Loury, Coleman Hughes, Desi-Rae, Narendra Modi, . Most darkies are too afraid of the baizuo to speak openly. But one day this dam of fear and baizuo politically correct mind control will break; and I fear the consequences for the world.
How to bring the baizuo under control and stop them from greatly harming the world? Through loving and respecting them with all our hearts (devotion), all our souls (wisdom), all our minds (the royal road of yoga) and all our strength (service). By melting their hearts with the power of love. By awakening their own intrinsic deep intelligence. I am reminded of this baizuo video:
When a Jewish person tells Queers for Palestine baizuo about West Bank and Gazan policies towards LBGTQ, it is like their hearts falls out and they want to cry. It causes baizuo so much personal anguish and pain to hear painful facts that it is incredibly tempting to patronize them by not talking honestly with them. I know I am contradicting myself. What should we do?
Please share your thoughts below.
[During the month of December I wrote several articles in Bangladeshi newspaper about the runup to the election in 30th December. I am going to post some of these here so that BP readers may get a native perspective on what’s going on.]
As Bangladesh heads to parliamentary elections to be held on 30th December, only a risk-loving gambler would bet against the governing party returning to power. In its latest country report, Economist Intelligence Unit (EIU) expressed the conventional assessment that the Sheikh Hasina’s government will retain power easily. The analysis powerhouse based this expectation mostly on the strong economic performance of Bangladesh in the last decade under the current regime. Over the last ten years, GDP growth in Bangladesh averaged well over six percent and is projected to be even higher in the next few years. Foreign exchange reserve has increased more than fourfold, and the currency has remained steadfast against hard currencies. During the last ten years the Bangladeshi currency has lost only twenty percent of its value against US Dollar while the Indian Rupee lost thirty-one percent and Pakistani Rupee forty-one percent.
Not just in economy, Bangladesh has made great strides in social development. By World Bank estimates, national poverty rate dropped from forty percent to twenty-four percent in the ten years preceding 2017. By Bangladesh government estimates, by 2015 the country has already achieved many of the Millennium Development Goals, for example in nutrition, primary education, child mortality, maternal health etc., far ahead of most of the LDCs. These growth and developments were not urban-centric either, rural household income increased by forty percent from 2010 to 2016.
However, the ongoing pre-election period may baffle an outside observer because, despite strong economic growth and widespread expectations of a win, the regime is carrying out an unprecedented campaign of repression of political opponents. Not only the ruling party is visibly controlling every facet of the administration, including the election commission, but the party is using these state organs to directly thwart, attack, arrest, harass opposing candidates countrywide. This would not surprise regular observers of Bangladesh affairs because, along with the remarkable economic growth, the last ten years were also marked by clear democratic backsliding and authoritarianism. German research group Bertelsmann have been keeping tabs on democratic development in the world since 2005. Its indexes show that status of democracy in Bangladesh has been rapidly deteriorating since the non-competitive election of 2014 and in 2018 Bangladesh was downgraded from a highly defective democracy to a moderate autocracy.
The level of repression before the election suggests that the rosy economic and development numbers may not be providing a faithful representation of the economic well-being of the general people. A recent report by International Labor Organization (ILO) said that youth unemployment in Bangladesh grew by seven percent from 2010 to 2017, one of the worst unemployment growths in developing countries. In a pre-election assessment of the economy of last ten years, CPD, the venerable Bangladeshi thinktank, put forward the calculation that one-third of the educated youth are unemployed. In the recent years, the country has been rocked by several urban youth movements demanding more access to government jobs, for many the only avenue for upward mobility.
At the same time, several estimates from Bangladeshi sources say that as many as half million foreign nationals, mostly Indians, work in Bangladesh in skilled/white collar jobs. This lack of Bangladeshi educated and skilled workers is greatly explained by the dismal state of higher education in the country. Times Higher Education produces annual world university rankings with one of the largest coverage of universities. In the latest 2017 rankings, there are more than thirty Indian universities and five Pakistani universities among the top one thousand universities of the world. Bangladesh has zero. World Bank data shows that during the last ten years, Bangladesh annually spent only about two percent of its GDP in education while Pakistan spent near about three percent and India three and half percent.
Economists studying development argue that a country’s long-term economic growth comes mainly from two sources, investing in human capital and investing in physical capital. From previous discussion, we have seen that human capital development in Bangladesh has been significantly below par to its neighbors. In investment, the picture is not much better either. The previously mentioned CPD report showed that in the last ten years both private investment and foreign direct investment growth in Bangladesh were anemic. Rather than investments, much of the ‘miraculous’ economic growth of Bangladesh have come from exports, consumption and government spending.
Export growth, in particular, has been spectacular; more than doubling from seventeen billion USD in 2009 to thirty-seven billion in 2017. For comparison purposes, Pakistan’s total export in 2017 was less than twenty-five billion USD. However, if we look at the composition of export, a stark imbalance appears like the elephant in the room. More than eighty-five percent of the total exports of Bangladesh is just from one product category, ready-made garments (RMG) and textiles. Any development economist would say that such high level export dependence on just one product is alarming for any country and any product. RMG may be an especially bad basket to put in all the eggs.
Garments is a low-technology, labor intensive industry that mostly depends on ready-to-export, turn-key factory units. Although the industry employs a great number of factory workers, lack of learning and upgrading in jobs mean that workers have short shelf-life and are unceremoniously terminated after the end of productive years. The mature technology of RMG means there is little effort for innovation, R&D in the export industry. Thus, there is a lack of need for skilled and technology workers, which means that the industry provides little demand for development of human capital and technological capabilities in the country.
A particular feature of garments industry is that, unlike chemicals, machinery, IT services etc., it has very little input-output relations with other major export industries. This means that development of garments industry does not spill over to development of other more value-adding industries. Despite frequent boastful proclamations from regimes and entrepreneurs, industries like pharmaceuticals, electronics, IT services, chemicals etc., are prominent in the Bangladeshi export basket by their insignificance and absence.
Some economists argue that “countries become what they make”. The RMG industry, by dominating Bangladeshi economy for long time, has not only dramatically shaped the society but also the politics. This is a strikingly unequal industry with a few dominating large firms and many small firms servicing those large firms; there is a conspicuous lack of mid-sized and diverse firms. The industry creates a narrow business elite that can easily collude with the government for preferential treatment. The regime, in return from this privileged treatment of the industry, obtains assurance of steady and increasing revenue which it invests in building up the bureaucracy and infrastructure. This growing public investment not only help boost the GDP but also provide the political regime with means to buy off loyalty of bureaucracy and civic society. Regimes then use the RMG-fueled state and civic power to suppress political opposition and stage ‘managed’ elections. We have witnessed these intimately related events again and again in recent years, most notably in Cambodia, another RMG-dominated country, where the ruling regime just staged an election in 2018 where it ‘won’ hundred percent of the seats.
Many technology, economics analysts have argued recently recently that Bangladeshi garments industry is a prime candidate for severe incoming disruption from automation. Development of new automation technology, changes that are now within realistic realm, can wipe away advantages of cheap labor at a stroke and render millions of garments workers jobless worldwide. The spectacular growth of garments industry in Bangladesh explains source of the dominating power the ruling regime has over political opponents. At the same time, the uneven economic and social development from this industry and the very precariousness of the industry’s future, help us understand why there is simmering discontent among aspiring citizens. The puzzle of repression during times of plenty, is not so baffling after all.