Justifiability of Socio-economic rights: The new strategic approach by courts.
Introduction
A favorable environment is very essential to the speed and effectiveness of the Socio-economic process. The goals of economic liberalization depend upon the sequential implementation of a range of interrelated policy measures. The Government acted directly to restructure taxation and social provision; to change pricing behavior, and to create a favorable climate for investment and growth. The pace of reform[1] has been reflected particularly in key sectors including agriculture, industry and external trade. In the industrial sector, important policy changes have been introduced with a view to developing a broader and more diversified industrial base led by the private sector. These included measures:
- To encourage private sector investment by liberalizing sanctions and controls of investment, improving the import regime, and introducing investment and export incentives.
- To improve the efficiency of public sector industrial enterprises through financial restructuring and improvements in pricing policies.
The objective of this paper is to present a comprehensive review of the evolution of strategic policies, particular analysis of agricultural[2] and industrial reforms, policy implementation stages and efficient uses of human resources for the Socio-economic development of Bangladesh.
Agricultural Economic Rights
Agriculture is one of the largest sectors of Bangladesh economy. Combined contribution of all the sub-sectors such as crop, livestock, forestry and fisheries was around 34% of GDP in 2008-09[3]. Since agriculture is the mainstay of the economy, besides reducing poverty, it contributes significantly to ensure food security for a vast population together with improving their standard of living and enhancing employment opportunities. Being the prime contributor to the economy, the agriculture sector has experienced pronounced and visible reforms in its policies as a part of structural adjustment policy. Restrictions on the imports of minor irrigation equipment have been withdrawn and imports duties on small diesel engines have been abolished. Subsidies have been withdrawn and Bangladesh Agricultural Development Corporation (BADC)[4] has no longer been procuring and distributing minor irrigation equipment. The importation of seed has been liberalized the private sector is being encouraged. Bangladesh achieved outstanding success in food production due to efficient uses of high yielding varieties of seeds, irrigation and fertilizer technologies and financial support to needy farmers on a credit or cash basis and at subsidized prices through the BADC, BWDB, and Bangladesh krishi Bank. Bangladesh within a short time of agricultural reforms became a self-reliant country in food grains and vegetables.
The World Bank advised the Government of Bangladesh for the privatization of the program. The policy shift aimed to:
i. Increase irrigation coverage per machine,
ii. Reduce the cost of irrigation,
iii. Improved maintenance by owners of machines, and
iv. Reduce the cost of management on the part of the BADC. The government provided credit to the private importers and distributors of STW sets and withdrew subsidies on the sales of STWs by the BADC.
The Food and Agricultural Organization (FAO) and United Nations Development Program (UNDP) advocated a policy[5] for complete privatization of the irrigation sector by:
i. Removing all import duties and sale taxes on all irrigation equipment,
ii. Abolishing the standardization requirements of diesel engines,
iii. Withdrawing tube well sitting restrictions,
iv. Reducing the subsidy on DTWs,
v. Giving increased credit to poor farmers for hand and treadle pumps.
The fertilizer market was deregulated and the private sector was allowed to purchase fertilizer from the factory directly. With the objective of early attainment of self-sufficiency in agricultural sector, the government of Bangladesh had stressed the adoption of seed-fertilizer water irrigation technology and adopted policies to encourage this. For the development of agriculture and for achieving the target of crop production with success, innovative programs have been undertaken for intensive seasonal crop production, strengthening activities of agricultural extension at field level and other R & D activates through different Departments/Directorates/Institutions and International Agencies. Several leading research Institutes such as, Bangladesh agricultural Research Institute (BARI), Bangladesh Rice Research Institute (BRRI), Bangladesh Institute of Nuclear Agriculture (BINA) and Bangladesh Agricultural University have been pursuing research for better quality seeds, pesticides and fertilizers for increased agricultural productions. Import of high nutrient content of fertilizers is being encouraged and farmers are also being motivated to use such high yielding seeds and fertilizers. Foreign investment in fertilizers is also invited and significant incentives are being offered.
Industrial Economic Rights
The role of the industrial sectors, specially manufacturing is indispensable for enhancing economic growth. The industrial sector accounts for 22.91% of GDP in 2008-09[6].The government is committed to make the industry sector competitive in both the deregulated domestic and international market. The vision of industrialization is to ensure the manufacturing sector contribute 25% of GDP by 2010. Export-orientation is the principal feature of industrial reform. Currently permission of the government is not required to establish industries except those in the reserved sectors such as, defense related equipment and products, production of nuclear power, security printing and minting and reserved forest areas. Besides the local textile sector, government incentive has been introduced for the leather and jute sectors and recently extended to other export sectors such as, frozen food, agro-based products, vegetables and fruits, bi-cycle and light engineering etc. QIP[7] Table shows a consistent annual growth rate for medium to large-scale industries from 2008-2009 (Bangladesh Economic Review 2009)
Table 1: Quantum Index of Production for Medium to Large-scale Industries:-
| Type | 2001-02 | 2002-03 | 2003-04 | 2004-05 | 2005-06 | 2006-07 | 2007-08 | 2008-09 |
| Medium to Large scale industries | 228.4 | 236.1 | 249.7 | 263.3 | 279.6 | 296.3 | 313.7 | 329.3 |
Source: Bangladesh Bureau of Statistics(BBS) (2008-09=100).
State owned enterprises (SOEs) still play a major role in industry, power, gas, transport, communications and service sectors of Bangladesh economy. Though privatization of public enterprises in line with the government’s economic reforms are well in progress, the total contribution of these enterprises is still substantial in GDP, value addition, employment generation and revenue earnings. Six major industrial SOEs are: Bangladesh Textile Mills
Corporation (BTMC), Bangladesh Steel and Engineering Corporation (BSEC), Bangladesh Sugar and Food Industries Corporation (BSFIC), Bangladesh Chemical Industries Corporation (BCIC), Bangladesh Forest Industries Development Corporation (BFIDC) and Bangladesh Jute Mills Corporation (BJMC).
The recently adopted industrial policy[8] included seventeen new industries in the list of thrust sectors which enjoy certain privileges, such as cash incentives for exports, tax rebates and concessions in utility tariffs and interests on loans. Readymade garments, light engineering, pharmaceuticals, optical fame, cold roll (CR) coil, herbal medicine, furniture and handicrafts are among the new entrants that raised the number of thrust sectors from the present 28 to 43. The policy envisages that the contribution of the industrial sector to GDP is expected to increase from the current 28% to 50% in the next decade. The policy has announced increases in fiscal and financial incentives for agro-based industries and women entrepreneurs, and made special offers for establishing exclusive economic zones. The poverty reduction and faster industrialization programs of the government have been graining momentum due to liberalized industrial and investment policies pursued by the government economical reforms[9] through privatization of industrial sector. Part of economical reforms through privatization of industrial sector. The poverty reduction and faster industrialization programs of the government have been gaining momentum due to liberalized industrial and investment policies pursued by the government.
Policy Developments
The government of Bangladesh formulated its interim poverty reduction strategy paper, called the National Strategy for Economy Growth, Poverty Reduction and Social Development (NSEGPRSD)[10]. A great deal of compelling evidence suggests that the decline in poverty is primarily attributable to growth. However, the data on ‘income-poverty’ does not capture trends in ‘human poverty’[11]. Based on this more inclusive metric, Bangladesh is ranked above India and Pakistan for human development which is discussed in the later part of the paper. Though Bangladesh lags behind in reducing income poverty, it is one of the few countries on track for reducing human poverty and is likely to achieve the target for enrolment in primary education, and access to improved water sources, female secondary enrolment and infant mortality rates. The Government has increasingly recognized that providing basic social services such as access to education, health care, potable water, and sanitation is a key to poverty reduction.
The NSEGPRSD and the government have prepared a full poverty reduction strategy by the end of 2009 that provided the basis for obtaining assistance from IMF and the World Bank’s Development Support Credit. Underpinning the NSEGPRSD as a medium-term (FY2008-FY2010) macroeconomic framework that seeks to raise economic growth to 6.5% and bring down inflation to 5.0% (FY2008), as well as would contain the fiscal deficit to fewer than 6% of GDP during the period. To help achieve these goals, the government has embarked on a program of reform measures aimed at maintaining macroeconomic stability while addressing structural constraints on faster economic growth.
These include:-
(i) Further fiscal reforms involving a sustained revenue effort and a shift in spending toward infrastructure and human capital formation,
(ii) Reform the banking sector using the suitable IT technology for faster customer services and to bring down the high cost of funding investment,
(iii) Reform of SOEs to reduce their burden on the budget and enhance the role of private sector-led growth, and
(iv) Trade reforms to improve competitiveness. Table 2 shows major economic indicators for a period of five years from 2008-2009[12] . It is confirmed from the data (Table[13]-2) that gross domestic investment and GDP growth have been growing steadily, which proves that the latest economic reforms are yielding positive results for reducing unemployment and poverty.
Table 2: Major Economic Indicators, Bangladesh, 2008-2009,% :-
| Item | 2005 | 2006 | 2007 | 2008 | 2009 |
| GDP Growth | 5.3 | 5.7 | 6.0 | 6.3 | 6.5 |
| Inflation rate | 4.4 | 4.7 | 4.2 | 4.8 | 5.2 |
| Money Supply | 16.6 | 13.1 | 15.6 | 15.9 | 15.2 |
| Export Growth | 12.6 | 7.6 | 9.5 | 13.5 | 11.2 |
| Import Growth | 11.4 | 8.7 | 13.0 | 17.5 | 15.0 |
Human Development and Gender Disparity
The world economic forum 2009 engaged in a comprehensive study to assess the current size of the gender gap by measuring the extent to which women in 58 countries have achieved equality with men in five critical areas: economic participation, economic opportunity, political empowerment, educational attainment, and health & well-being. Countries that do not capitalize on the full potential of one half of their societies are misallocating their human recourses and undermining their competitive potential. Consolidating publicly available data from international organizations, national statistics and unique survey data from the World Economic Forum’s Executive Opinion Survey, the study assesses the status accorded to women in a broad range of countries.
Basically all the first three five year plans had focused on poverty alleviation. The country’s fourth five year plan (2005-10) was the first plan that paid special attention to the gender issue in development and aimed to lessen gender discrimination in all Socio-economic activities. Since the launch of the Millennium Development Goals (MDGs)[14] at the Millennium Summit in New York in September 2000, the MDGs have become the most widely accepted yardstick of development efforts by governments, donors, and NGOs (United Nations 2000). Almost all the countries in the world including Bangladesh, have committed themselves to attaining the targets embodied in the Millennium Declaration by 2015. School-based administrative data show Bangladesh as having made impressive gains in reducing gender disparities in primary school has steadily increased from about 83% in 2001 to 96% in 2009 itself. At the secondary level, thanks largely to the Bangladesh female secondary stipend program (FSSS), there are already more girls enrolled than boys. Bangladesh ministry of education statistics indicated that that of the 17.7 million children enrolled in secondary schools in 2009, 14 million were female, implying a ratio of females to males of 112%. It is an outstanding achievement that Bangladesh, being one of the poorest countries in the world, with a per capita gross national income of only US$3,770 (in PPP terms) in 2008 is the only country in South Asia other than Sri Lanka to have achieved parity in male and female enrolments not just at the primary level but also at the secondary level.
These achievements represent extraordinary progress for a country that, until recently, was frequently decided as an “international basket case.” Indeed, a recent article by Dreze (2008)[15] suggests that Bangladesh is now ahead of India and Pakistan on most social indicators. Bangladesh has lower infant and maternal mortality rates, higher child immunization rates, better access to improved water sources and sanitation, and higher primary enrolment rates than India, which is an emerging global economy. As noted earlier, Bangladesh has eliminated the gender gap not only in primary education but also in secondary education, while India still has a significant gender gap at both levels. On the other hand, Dreze contends, “in India, social progress is slower and less broad-based, despite much faster economic growth. This is one indication, among many others, that India’s development strategy is fundamentally distorted and lop-sided.”
The extraordinary progress in improving social indicators in Bangladesh relative to the progress made by India most possibly have to do with the fact that public expenditure on health as a proportion of GDP is almost twice as high in Bangladesh (1.5%) as in India (0.9%). This was not always so. In 2008, Bangladesh spent only 4.7% of its GDP on health – less than what India spent (5.9%)[16]. It is also remarkable to note that public spending on health in Bangladesh increased sharply during the 2008s, while India experienced stagnation in public spending on health in relation to GDP growth. Additionally, there is an important difference between Bangladesh and India in the composition of public spending on education. While Bangladesh spends 45.1% of its total public expenditure on education at the pre-primary and primary level, the relevant figure for India is 38.4%. At the other extreme, India spends 20.3% of its total public spending on education at the tertiary level, in contrast to Bangladesh’s 11.1% (UNDP, 2009). Thus, the rapid growth of public spending on education and health in Bangladesh combined with its better balance of educational spending across the primary and tertiary sectors in comparison with other sub-continent countries are likely to be the important factors in explaining the significant progress the country has made in its social indicators during the 2008s.
Another factor that is likely to be important in explaining Bangladesh’s relative success in attaining positive social outcomes is the work of its NGOs. Bangladesh may well be the world’s leader in using NGOs as vehicles of development. NGOs are involved in virtually every activity[17] in the country. A villager in Bangladesh can send his or her child to an NGO school, have family planning and basic health services delivered by an NGO health worker, obtain micro-credit financing from a choice of several NGO banks, sell milk and other dairy products to an NGO dairy cooperative, and make a telephone call on an NGO telephone. Likewise, many of the family planning programs of the 1990s and 2000s, which set the stage for the subsequent decline in child mortality, were primarily delivered through NGOs. And several studies suggest that micro-credit programs, which were pioneered by one of the best-known NGOs in the world – the Grameen Bank, have had a significant effect on reducing poverty, especially among females. NGOs in Bangladesh differ from NGOs in other developing countries. Several of these organizations have become very large, very professional, and they have become a model for others. Bangladesh, one of the poorest countries in the and the last place you would have expected this to happen, has really become a leader in showing what the voluntary sector can do[18].
Governance and Corruption
Traditionally, national governance and corruption challenges have been seen as a) particularly daunting in the poorer countries, with the richer world viewed as example or benchmark, b) anchored within a legalistic framework and focused on the quality of formal institutions, c) a problem of the public sector, and d) divorced from global governance or security issues, which are regarded as separate fields.
It was assumed that corruption could be more broadly construed as attempts to exert undue influence in order to privatize public policy and appropriate the provision of public services for private purposes. In order to assess the relative importance of legal and illegal forms of corruption, in which many in the corporate and public sectors in both rich and emerging countries appear to be involved, an empirical analysis of the data emerging from 2009 Executive Opinion Survey (EOS)[19] of the World Economic Forum was carried out. To construct ethics indices, each relevant individual governance question in the EOS was mapped to one index. The theoretical range of each index is from 0 to 100, reflecting the average percentage of firms in each country reporting a satisfactory situation on the particular ethics-related EOS question.
BD News (Rahman, 2009) reported that although the government of Bangladesh already hiked the fuel price and took some steps to reform tax structure after the national budget according to the prescription of WB and IMF, Bangladesh’s performance in combating corruption remained very poor. Wolfowitz, President of the World Bank expressed serious concern for high scale corruption at all levels and failure to establish good governance, which are hindering economic development, reduction of poverty and unemployment in Bangladesh.
Impact of the Socio-economic reforms and future steps
The reform activities have led to several major successes as mentioned earlier. The overall budget deficit has been reduced, the inflation rate has fallen, foreign reserves have steadily increased, and female literacy and work participation rates have increased. To reduce poverty and increase employment, present economic reform policies should implement the following steps:
Ø Further liberalization of trade through attractive incentives, fair and transparent corporate governance for FDI to achieve competitive advantage over other Asian countries particularly over other Indian sub-continent countries
Ø Further privatization of public enterprises
Ø Development of social sectors such as, education and health
Ø Further deregulation of financial and labor markets
Ø Reducing budget deficit by controlling public spending and strict implementation of taxation program
Ø Introducing necessary changes in the institutional framework and administrative procedures
Ø Improvement of the productivity and quality of the products to offset the balance of payment problem
Ø Introducing appropriate pricing and resource allocation policies to safeguard poor village farmers for their development
Ø Establishing stable democratic process through central and local governments for sustainable development
Conclusion
This paper performed a comprehensive review of the evolution of structural and Socio-economic policy reforms particularly in the areas of agriculture, industry, female participation in social development, corruption and corporate governance, and their effectiveness with regard to poverty alleviation, reducing unemployment, improving literacy and numeric skills especially for the female population and GDP growth. It is found that the reform policies have already achieved good result in some areas. Bangladesh’s export to EU countries in the period between 2005 and 2009 surged forward by 166% while China, the fastest growing global economy, recorded an increase of only 85%. Agricultural reforms commenced in early 1990s made Bangladesh self-sufficient in food grains production. Privatization of public enterprises in line with the government’s economic policy reforms is well underway and showing some positive results in terms of GDP growth and poverty alleviation.
It is also found from the data (ADB, 2009) that ‘income poverty’ does not capture trends in ‘human poverty’, which reflects deprivation in other dimensions of the quality of life. Bangladesh has achieved significant progress in reducing human poverty though target rate for reducing income poverty has not been achieved. The possible reasons are high corruption at all levels, lack of accountability in the corporate governance, and poor infrastructure development.
World Economic Forum’s Executive Opinion Survey found that Bangladesh managed to reduce gender disparity reasonably well. Bangladesh has made outstanding progress on female economic participation when compared with better economics such as, Japan, Malaysia and India. Bangladesh also achieved gender parity in terms of primary and secondary female to male student’s enrolment ratios – one of the MDGs. The study also recorded high scale corruption and poor corporate governance which are major concerns for the economic development of Bangladesh. There should be systematic and concerted efforts by government agencies, business enterprises and civil society groups to overcome these concerns and establish a comprehensive and transparent governance mechanism as a tool to achieve improved performance in all spheres of socio-economic activities.
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[1] The government initiated major policy reforms in the early 1999s within the policy framework of the Extended Fund Facility and Structural Adjustment Lending of the IMF and the World Bank. Reforms under structural adjustment were activated through a set of comprehensive economic policies (Messkoub, 2009).
[2] Public policy with regard to agricultural sector has undergone significant changes especially in relation to pricing of agricultural inputs. Subsidies for key inputs such as
[3] Bangladesh Economic Review,2009.
2 The prime responsibilities of the BADC were to supply, install, operate, repair and the maintenance of law lift pumps (LLPs), deep tube wells (DTWs) and shallow tube wells (STWs) etc. Bangladesh Water Development Board (BWDB) pioneered the development of DTWs and large-scale gravity irrigation system.
[5] In 2008-09, the Agriculture Sector Review Mission of the Food and Agriculture Organization (FAO) and United Nations Development Program (UNDP) advocated a policy for complete privatization of the irrigation sector
[6]Bangladesh Economic Review, 2009.
2 Quantum Index of production (QIP) is an important tool for measuring production of goods of manufacturing industries.
[8] Industrial Policy, 2009.
[9] Apart from Adamjee Jute Mills, eight SOEs under the Bangladesh Chemical Industries Corporation have so far been shut down recently as a part of economical reforms through privatization of industrial sector.
[10] It seeks to reduce by half the incidence of income poverty by 2015.
[11] It reflects deprivation in other dimensions of the quality of life (ADB, 2009).
[12] (Economic assessment, 2009).
[13] Sources: Bangladesh Bureau of statistics; Bangladesh Bank; Export Promotion Bureau; Ministry of Finance; staff estimates.
[14] Bangladesh already fulfills the target of MDG within 2008-09.
[15] Dreze admits that “Bangladesh is no paradise of human development but social indicators are improving quite rapidly not just for privileged elite but also for the population at large.”
[16] (UNDP, 2009)
[17] Relief and rehabilitation, poverty alleviation, health, education, social protection, and environmental protection,
[18] Source-(Smillie, 2009)
[19] (Kaufmann, 2009).