Bangladesh Development Letters July August 2022 en
Bangladesh Development Letters July August 2022 en
JUL-AUG ‘22
Transitioning from ‘Fast Fashion’ to ‘Green Fashion’:   Making the Most of Market Access in China:
Can the Green be Greener?                               What Needs to be Done?
  S M Zahid Iqbal | Page 1                               Abdur Razzaque | Page 12
Water Security in Secondary Cities of Bangladesh:       IPEF: Prospects for the Region and Implications
A Case of Mongla                                        for Bangladesh
  Khandker Tarin Tahsin, Lutfor Rahman &                  Rasheeq Ahmed | Page 15
  Md Bodrud-Doza | Page 4                               Is Data Localisation Economically Pragmatic
Revving up the ICT Growth Engine                        for Bangladesh?
  M Abu Eusuf, Nazneen Ahmed &                             M Abu Eusuf & Jillur Rahman | Page 18
  M M Zimran Khan | Page 7                              Productivity and Working Poor in Bangladesh
Is Sustainable Urban Development Affected by              Mohammad Nazmul Avi Hossain | Page 20
Climate-induced Migration and Informal Settlements?     Does the Social Safety Net Budget Prioritise
   Nobinkhor Kundu | Page 10                            Marginalised People?
                                                          Humayra Anjumi Nabila | Page 22
© All rights reserved by Research and Policy Integration for Development (RAPID)
Editorial Team
Editor-In-Chief                                                  Advisory Board
Abdur Razzaque, PhD                                              Atiur Rahman, PhD
Chairman, RAPID and Research Director,           Policy
                                                                 Former Governor, Bangladesh Bank, Dhaka, Bangladesh
Research Institute (PRI), Dhaka, Bangladesh
Development Letters, a quarterly peer-reviewed periodical, is published by Research and Policy Integration for Development
(RAPID). The views expressed in this publication are the views of the authors and not necessarily those of The Asia Foundation
and Research and Policy Integration for Development (RAPID).
Development Letters is different from other established academic journals in several respects. First and foremost,
it emphasises on communicating the propositions in a manner that can help integrate senior policymakers and
other relevant stakeholders into the policy discourse. Disseminating potentially important and timely ideas without
being stifled by technical details and unnecessarily long and ambiguous review of other studies is one core
objective of this publication.
Furthermore, Development Letters will also select and publish ideas that should require full-blown research for
gathering evidence. These days, policy-relevant analytical studies are often in short supply given the lack of
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supported to bridge the gap between analytical research and informed policymaking.
Development Letters will also offer an opportunity to learn from those who–based on their experience–can share
insights into the factors that cause development results to be less than optimal. This can help generate invaluable
lessons for future interventions.
Finally, Development Letters is about dealing with issues that are topical and demand immediate policy attention.
It is a usual phenomenon in social sciences that empirical research can be quite time-consuming, and any
evidence gathered may require further verification. This publication will duly acknowledge this challenge while
highlighting the promising ideas that need due consideration. To summarise, this periodical focuses on bringing
together relevant issues, ideas, and approaches that can be researched, refined, experimented, and investigated
further.
     Transitioning from
     ‘Fast Fashion’ to
     ‘Green Fashion’:
     Can the Green be Greener?
     S.M
     S M.Zahid
          ZahidIqbal
                Iqbal
Development Letters                                                                                                            1
    meeting the minimum requirements to earn the "green"           fashion. A one size fits all approach would not be
    tag and going full-fledged "green" might lead many             sustainable for the entire garments and fashion industry.
    ready-made garments (RMG) factories to strategically           Policymakers and researchers should initiate more
    prefer the cheaper option of being merely a "green             in-depth, quantitative, and qualitative research to help
    factory." Is it green, sustainable fashion? Yes, to some       the fashion industry transition to greener fashion.
    degree. But is it what the world is rooting for? Not           Bangladesh, being the second-largest apparel exporter,
    remotely. Green fashion is a new approach to "fashion          would aim to cement its position irrespective of the
    with a conscience." To assist in controlling "greenness,"      changes in rules, regulations, and production
    certifications and standards are needed to ensure that         procedures.
    specified conditions have been met. Fulfilling the bare
    minimums and fulfilling all requirements are not the           Considering the environmental impact, the European
    same shade of green. But, going greener is costly, and         Union (EU) has declared war against "fast fashion."
    it takes time. Some of the significant challenges that the     European regulators are planning to propose rules and
    RMG sector faces while working towards making the              regulations to force factories involved in garments to
    industry go green, include, but are not limited to, higher     overhaul their clothing designs to meet a laundry list of
    cost of organic or sustainable raw materials, lack of          criteria governing everything from the durability of the
    eco-friendly waste management system, lack of                  apparel to the final production (Chakraborty et al.,
    infrastructure to minimize carbon emission, lack of            2022). The rules and regulations would also cover
    advanced technology, lack of public awareness about            labour and the working condition of the factories. The
    sustainable     production    system, and consumer             USA also seeks to address the environmental and social
    sentiments or absence of their preparedness to bear            impact of the fashion industry. It plans to propose a law
    the increased price of greener fashion.                        requiring large fashion companies “to disclose
                                                                   environmental and social due diligence policies" (Alzate,
    Way Forward for Bangladesh RMG:                                2022).
    Role of Supply Chain, End-users,                               The regulations will most likely cover other facets of the
    Fashion Houses, and Importers                                  fashion and garment manufacturing industry as the
                                                                   sustainability concern attracts more attention. All this
    For the RMG industry, going green is feasible only if          newness will present new opportunities for many
    fashion brands induce the end-users to pay for greener         countries to enter the garments production and export
    goods. Existing research states that if consumers              business as the factors of production, the production
    believe there is an environmental problem, they are            procedure, and many other related production
    more likely to adopt consumer behaviour geared                 dynamics. These changes will also require a
    towards alleviating the problem (Mainieri et al., 1997). It    considerable investment. The higher production costs
    states that consumers' pro-environmental concern is            would also require the final product's prices to be
    one of the determinants of their "green buying"                higher. Bangladesh policymakers must be very thorough
    behaviour, i.e., buying and consuming environmentally          and far-sighted to develop the appropriate strategies to
    beneficial products. A more sustainable, eco-friendly          ensure its competitive advantage. It is not possible to
    garments production procedure would be feasible in             wait for the regulations to be in effect to start making
    the long run when the fashion brands and sectors               changes as that will give other countries a competitive
    involved in the supply chain can enjoy profitability.          edge. Also, social initiatives to promote green products
    Determining the premium consumers are willing to pay           should be undertaken to reach the end-users. The
    for sustainable garments is an important question. The         importers of RMG products should be brought into the
    shade of "green" depends on this finding significantly.        whole supply chain and production loop to avoid
                                                                   forgery and to encourage paying fair prices for green
    Existing research has identified several critical factors to   products. Going greener in RMG production will also
    motivate individual consciousness about environmental          take Bangladesh on the path of sustainable
    sustainability. When individuals are concerned about the       development.      Now, only the          strategies that
    environment they not only work towards the welfare of          policymakers would come up with will determine
    others, but they also act responsibly and reasonably           whether Bangladesh can take on the challenges and
    towards the environment.                                       turn them into opportunities or would lose its
                                                                   competitive edge.
              2
    Ha-Brookshire et al. (2011) found that consumer attitudes
    toward social responsibility and environmental
    sustainability significantly depend on age and gender,         S M Zahid Iqbal, PhD, is an Assistant Professor,
    which are also significant factors for consumers'              Department of Economics, North
    willingness to pay a premium. Consumers who are                South University.
    concerned about the               environment and are
    knowledgeable about environmental issues try to                Email: Zahid.iqbal@northsouth.edu
    purchase only eco-friendly products (Laroche et al.,
    2001). So, holistic, all-inclusive policy strategies must be
    considered at every stage of apparel production if we
    want to reap the maximum outcome from green
2                                                                                                                Development Letters
     References
Development Letters                                                                                     3
    Water Security in
    Secondary Cities
    of Bangladesh:
    A case of Mongla
    Khandker Tarin Tahsin, Lutfor Rahman & Md Bodrud-Doza
4                                                                                                             Development Letters
     contaminated pond water. And such dependence on               System of Provision as a Possible
     saline water has strongly been correlated with multiple
     health issues like urinary tract infection, diarrhea,         Solution
     hypertension, and strokes; miscarriages and other
     complications in pregnancy in women.                          The persistent lack of safe drinking water in Mongla
                                                                   despite multiple interventions by government and
     Existing Interventions                                        NGOs, indicates that it is time for a radical shift in the
                                                                   understanding of the problem and solution. A working
     Given the water crisis situation, optimisation of water       concept known as System of Provision (SoP) offers such
     management systems seems the most reliable option             an alternative and is expected to be more effective.
     (Hossain et al., 2022). Rainwater harvesting has evolved      SoP calls for problem analysis to be strongly based on
     as one of the most widely used and preferred options          specific historical contexts, such as politics and power
     by most of the community people considering its social,       dynamics of water access. It is built upon five
     economic, and environmental benefits. High annual             fundamental components of a system: agents, relations,
     rainfall in Mongla also makes rainwater harvesting a          processes, structures, and material cultures (Bayliss &
     great alternative. One might question the idea of             Fine, 2020). By unpacking these five components, the
     introducing deep tube wells; however, the high salinity       drivers of observed outcomes in communities,
     in groundwater sources has made tube well an                  especially in relation to under-provisioning and
     unfeasible alternative (Hossain et al., 2022). Hence,         inequalities, can be unpacked. If policies are to be
     monsoon brings respite to the communities of Monlga,          mediated through this approach via the agents
     as high rainfall means a rise in river water level, reduced   identified in a community, there’s a higher chance of
     overall salinity in water and people can preserve             water reaching the end users. Additionally, this
     rainwater for later use. Rainwater harvesting usually         approach puts forward the proposal of empowering
     refers to a technology of collecting and storing              slum-dwellers in their relations with the city’s water
     rainwater from rooftops, land surfaces, or rock               utility to access safe drinking water in informal
     catchments using jars, pots, or well-engineered               settlements. Hence, it is imperative that the water crisis
     structures. Nevertheless, most of these storing               issue in informal settlements should be looked through
     containers used by locals are earthenware pots which          a lens of SoP, which aims to ensure inclusive urban
     are prone to breaking, catching molds, and can only           settlements and strengthen central water system for
     hold up to 16 liters of water max.                            secondary cities like Mongla and promote social
                                                                   awareness.
     During the 1990s, World Vision excavated a rainwater
     harvesting pond for the informal settlements in Mongla        The researchers have investigated in-depth on this topic as a part
     which would reduce their water crisis to a certain level.     of a research project Trajectory for Inclusion at International
     Nevertheless, the pond was far away from the locality         Centre for Climate Change and Development (ICCCAD). System of
                                                                   Provision (SoP) has been their primitive approach to identifying
     and people had to walk at least an hour to fetch water.       solutions for the existing problem in Mongla, Bangladesh regarding
     Other NGOs and INGOs working in Mongla have                   water security in informal settlements.
     sponsored a few rainwater harvesting tanks, but
     unfortunately, those are not enough for the total
     number of people residing in an informal settlement.
     Additionally, the installation cost of rainwater harvesting   Khandker Tarin Tahsin is a Junior Research
     tanks is around USD 350 (BDT 30,000), which is quite          Officer at International Centre for Climate
     high for people living in informal settlements, as most       Change and Development (ICCCAD).
     of their monthly income ranges between USD 80 to 100.
     In recent times, BRAC has also taken initiatives to           Lutfor Rahman is a Research Officer at
     construct several rainwater harvesting tanks which can
                                                                   ICCCAD.
     hold up to 2000 liters of rainwater in Mongla under its
     climate change program (Web, Relief, 2022). This might
     reduce the water scarcity issue in the region; however,       Md. Bodrud-doza is Operations and Business
     it’s yet to be implemented. The locals are also reluctant     Development Manager at ICCCAD.
     to get a legal water connection because of the cost
     associated with it; as they lack land ownership there’s a     For correspondence, email:
     high chance of them being evicted; therefore, investing       khandker.tahsin@icccad.org
     around USD 100 may not seem worthwhile for
     communities. Further Department of Public Health
     Engineering (DPHE) is providing rainwater harvesting
     tanks and freshwater lines in the informal settlements of
     Mongla in consortium with local NGOs free of cost.
     Such initiatives by government organisations and NGOs
     may seem enough but are far less compared to the
     population residing in informal settlements of Mongla.
Development Letters                                                                                                                     5
    References
6                                                                                       Development Letters
     Revving Up
     the ICT Growth
     Engine
     M Abu Eusuf, Nazneen Ahmed & M M Zimran Khan
     Rapidly growing information and communication                  significantly accelerated the digitalisation of their
     technologies (ICTs) have brought new dynamism in               customer and supply-chain interactions, as well as their
     access to health and education services, creating new          internal operations, with Microsoft's CEO stating that
     sources of income and employment. Being able to                they have seen two years' worth of digital
     access and use ICTs has become a major factor in               transformation in just two months of 2020
     driving competitiveness, economic growth, and social           (January-March period).
     development. This sector also has great potential in
     terms of export diversification.                               Companies had already been implementing 4IR (4th
                                                                    Industrial Revolution) technologies        before the
     There is a great deal of optimism that the ICT sector,         pandemic. While a lot of businesses worldwide were
     especially the outsourcing-related segment, can                shut down due to COVID-19, many have taken
     emerge as the next export growth engine for                    advantage of the rather unusual times by digitally
     Bangladesh. The growth of this sector can also help            modernising their organisations to prosper. Digitalisation
     generate employment opportunities, particularly for the        is expected to boost productivity, reduce labour costs,
     youth. In recent years the outsourcing-related segment         and improve returns. Businesses have increased their
     of the ICT sector has achieved rapid growth with               expenditureion technological improvements significantly.
     promising efficiency improvements in the supply chain.
                                                                    There are projections that the spending on cloud
     Outsourcing services comprise a plethora of activities         services and other digital services, including analytics,
     using a range of technologies, from the low-end ones           artificial intelligence (AI)/machine learning (ML), cyber
     to the high-end. Low-end services generally include            security, and user interface (UI/user experience (UX) is
     front-office activities (e.g., customer support, back-office   likely to expand dramatically over the next few years.
     activities (e.g., invoice scanning, data entry, and
     accounting services), and creative content development         ThoughSSBangladeshSShasSSachievedSSimpressive
     (image, video, and audio).                                     advancement in digitalising society, acquiring skills for
                                                                    technological catch-up and expansion is yet to go a
     Higher-end services include software development,              long way. In this context, Bangladesh needs to consider
     cloud services such as Amazon Web Services (AWS),              undertaking serious policy measures and firm-level
     Microsoft Azure, Google Drive, and Dropbox, artificial         preparations to promote competitiveness. The Kearney
     intelligence (AI) services such as digital virtual agents,     Global Services Location Index (GSLI) 2021, which
     chatbots, automated financial investing, and image             evaluates the competitiveness of outsourcing locations,
     processing, and data analytics which is the analysis of        ranks Bangladesh 33rd out of 60 nations. In contrast,
     data-sets to find trends and draw conclusions.                 comparator countries such as India, Malaysia, and
                                                                    Vietnam are among the top performers ranked at 1st,
     The COVID-19 pandemic has accelerated digital                  3rd, and 6th, respectively. Bangladesh had the lowest
     transformation at both the business and consumer               score in workers' skills and availability component
     levels throughout the world. According to the 2020             among the mentioned countries. Industry stakeholders
     McKinsey Global Survey of executives, companies have           in Bangladesh also noted the lack of skills (both
Development Letters                                                                                                              7
    technical and soft), as well as an out-of-date curriculum    technologies/languages benefits larger customer bases
    as notable reasons for this deficiency. Overall,             and is good for securing revenue consistency.
    Bangladesh offers a very low cost of operations but
    lags in other areas.                                         According to the survey, the most common
                                                                 programming languages in Bangladesh are JavaScript,
    To identify the useful technical and soft skills demanded    Java, Node.js, PHP (including Laravel), ASP, Python, C#,
    by Bangladesh-based IT outsourcing firms to supply           C/C++, Flutter, MySQL, and Angular (TypeScript). The
    high-value and high-growth (in terms of revenue)             most used application softwares were found to be
    services to the global outsourcing market, Research          Adobe Photoshop, Adobe Premiere, Autodesk, and
    and Policy Integration for Development (RAPID) with          Final Cut Pro.
    the support from United Nations Development
    Programme (UNDP), Bangladesh Accelerator Lab                 Taking a look at the most popular programming
    recently surveyed 54 firms which are either members of       languages in India, the IT outsourcing leader, provides
    Bangladesh Association of Software and Information           some clues to what Bangladesh might be missing. It is
    Services (BASIS) or Bangladesh Association of Call           found that Kotlin, R, and ABAP are among the most
    Center and Outsourcing (BACCO).                              used technologies/programming languages among
                                                                 Indian IT firms; however, it is not the case for their
    The exercise divided the IT outsourcing industry into        Bangladeshi counterparts, indicating that the former
    three segments: i) BPO (business process outsourcing         provides more high-end services. The use of Kotlin by
    services), ii) KPO (knowledge process outsourcing), and      Indian firms shows that they are strongly involved in
    iii) IT and ITes (information technology and information     various Android and cross-platform mobile app
    technology-enabled services). BPO usually comprises          development in the IT and ITeS segment, and the use
    low-end services, and IT and ITes medium-to-high-end         of R and ABAP suggest their substantial involvement in
    services, with KPO being at the top of the spectrum.         market intelligence and asset management related KPO
    The survey assessed the skills required by the firms         services.
    operating primarily in the IT and ITes and KPO
    segments. Some interesting results have been noted           The most frequent technology/programming language
    from the survey, and these have great importance for         on which freshers were trained was found to be Java,
    adopting policies for improving the competitiveness and      followed by PHP, JavaScript, and Python. In the
    efficiency of the sector.                                    previous two years, more than 40 per cent of the
                                                                 surveyed firms had retrained new employees using
    Around 65 per cent of the surveyed firms export at           web-based learning platforms.
    least one service within the 4IR areas (such as ML/AI,
    cloud computing, data science, and big data analytics).      When it comes to recruiting freshers, a considerable
    On the other hand, about 95 per cent of the surveyed         gap between the skill levels demanded by the
    firms that have not yet exported such services aim to        employers and the level of skills possessed by the
    do so within the next two to three years. This finding       freshers has been found. The gap becomes more
    indicates the intention of the surveyed firms to provide     profound when only firms operating in the higher-end
    high-end services.                                           segments are considered. A similar trend has also been
                                                                 observed for employees with a few years of experience
    Most clients of the surveyed firms operate in the IT,        but to a lesser degree. The experience and skill gap for
    telecom, e-commerce, and retail industries. A                mid-level managers have been also found to be
    considerable portion of the firms are taking                 significant.
    concentration risk, putting their investments/services in
    just a few industries; however, they positively view such    Soft skills such as English fluency, teamwork, effective
    concentration, considering it as a reflection of             and engaging presentation skills, and problem-solving
    specialisation leading to attracting new clients.            are critical in the outsourcing market. According to most
                                                                 firms in the survey, when freshers are employed, they
    Employee attrition, i.e., the departure of employees         typically lack two soft skills: English speaking and
    from the firm for any reason, has been identified as a       presentation skills.
    major concern for Bangladeshi outsourcing firms. As
    firms invest a substantial amount of resources in training   The surveyed firms believe that government training
    new employees, especially freshers, a high attrition rate    aids and incentives can be highly beneficial to
    is costly for them. Over the past year, the average          businesses since they save a lot of resources (money
    attrition rate for the surveyed firms is estimated at 22     and time). They also suggest that it is important to
    per cent. For the mid-level manager group, this figure is    strengthen the industry-academia collaboration to
    slightly higher, at around 26 per cent.                      design a labour-market-responsive curriculum.
    The surveyed firms have differing opinions on the range      Women's participation in the IT sector is quite low. The
    of technologies/languages that they should use. While        survey found that only around 15 per cent of the
    some believe that clients prefer a proven track record       employees were female. Segment-wise, the share was
    in a limited number of technologies/languages (a proof       found to be the highest for BPO and the lowest for
    of specialisation), others argue that expanding the          KPO. This participation issue could be due to their
8                                                                                                             Development Letters
     lesser representation in science, technology, engineer-
     ing, and mathematics (STEM) subjects, particularly IT.
     How the ensuing gender gap in the digital workforce
     market can be addressed thus constitutes one crucial
     policy issue.
                                                                         “Industry stakeholders believe
     Industry stakeholders believe that accreditation of
     online courses is needed to enhance access to                       that accreditation of online
     high-quality education and training. To strengthen
     accreditation and ensure the smooth operation of                    courses is needed to enhance
     online courses, an online education institute could be
     established that integrates both the industry and                   access to high-quality
     academia and would be responsible for the design and
     delivery of online courses as well as the online course             education and training.
     marketplace. However, employers think that blended
     courses (which include online and offline learning                  However, employers think that
     activities) are better than fully online courses; they
     prefer some level of in-person interactions, especially in          blended courses (which
     the case of assessment of the participants. Hence,
     blended courses should be provided instead of fully                 include online and offline
     online courses.
                                                                         learning activities) are better
     Given the industry's immediate technical skill demands,
     training on Angular (TypeScript), ASP, C#, C/C++, Django            than fully online courses; they
     (Python), Flutter (Dart), Go, HTML/CSS, Java, JavaScript,
     Laravel, MySQL, Node.js, PHP, and Python should be                  prefer some level of in-person
     beneficial, with a focus on Java and Python. Moreover,
     it is necessary to raise awareness among both                       interactions, especially in the
     international and domestic clients about the skills
     available at local enterprises. The government could                case of assessment of the
     establish IT promotion cells at embassies/high
     commissions to not only publicise the skills of domestic            participants. Hence, blended
     IT enterprises but also to explore equivalent overseas
     market prospects and connect them to domestic firms.                courses should be provided
     This article is an outgrowth of a study conducted by Research and
                                                                         instead of fully online
     Policy Integration for Development (RAPID) with support from the
     UNDP Bangladesh Accelerator Lab. A version of this article was      courses.”
     published by The Financial Express on 10 February 2022.
Development Letters                                                                                        9
     Is Sustainable Urban
     Development Affected by
     Climate-induced Migration
     and Informal Settlements?
     Nobinkhor Kundu
10                                                                                                                 Development Letters
     (Uddin, 2018). In addition, many climate-impacted              References
     people are seeking refuge in informal settlements in
     Dhaka's Korail neighbourhood owing to poverty and              Birtchnell, T., Gill, N., & Sultana, R. (2019). Sleeper cells
     frequent natural disasters (Birtchnell et al., 2019).          for urban green infrastructure: Harnessing latent
                                                                    competence in greening Dhaka’s slums. Urban Forestry
     Inhabitants of informal settlements struggle with              and Urban Greening, 40, pp. 93–104. https://doi.org/10.1
     inadequate drinking water, lack of sanitation, power and       016/j.ufug.2018.05.014
     gas, and proper drainage system. (Satterthwaite et
                                                                    Degert, I., Parikh, P., & Kabir, R. (2016). Sustainability
     al., 2020). Furthermore, inefficient expansion of urban
                                                                    assessment of a slum upgrading intervention in
     areas and urban population growth have put pressure
                                                                    Bangladesh. Cities, 56, pp. 63–73. https://doi.org/10.1016
     on basic utility and environmental issues that which has
                                                                    /j.cities.2016.03.002
     impinged biodiversity across the cities. GHG emissions
     have been increasing due to rapid growth of                    Giri, M., Bista, G., Singh, P. K., & Pandey, R. (2021).
     population and their carbon emission activities.               Climate change vulnerability assessment of urban
                                                                    informal settlers in Nepal, a least developed country.
     Is Informal Settlement Challenges to                           Journal of Cleaner Production, 307, pp. 127-213.
     Sustainable Urban Development in                               https://doi.org/10.1016/j.jclepro.2021.127213
Development Letters                                                                                                                 11
     Making the
     Most of Market Access
     in China: What Needs
     to be Done?
     Abdur Razzaque
     In over 100 cities, China has more than one million             ● The Chinese domestic market size for clothing is
     residents with considerable purchasing power. The                 worth $330 billion, catered by highly competitive
     country is set to be the world's most crowded retail              domestic manufacturers. Due to the small import
     marketplace very soon. In addition, its 700                       market for apparels, it is difficult for Bangladesh to
     million-strong online community is the largest globally.          achieve export success based on clothing items
     A large majority of Chinese consumers demand                      only. It is worth noting that China is also the largest
     high-quality goods. Also, China is the centre of the              exporter of apparel, shipping more than 140 billion
     globe's supply chains in manufacturing. Partnering with           worth of garment items in 2021 and capturing
     Chinese companies can therefore provide access to                 almost 30 per cent of the world’s apparel market.
     funding, new markets, and cutting-edge technologies.
     Since 2021, China has provided Bangladesh duty-free             ● While Bangladesh's export is concentrated on
     market access in almost 98 per cent of tariff lines. Prior        RMGs, China mainly imports electrical machinery
     to that, Bangladesh used to get similar market access in          and equipment(25% of total imports), mineral
     61 per cent of Chinese tariff lines. Nevertheless,                fuels(15%), ores, slag, and ash, (10%), mechanical
     Bangladesh's exports to China have seen setbacks                  appliances(9%), and plastics(3%). Comparator
     coinciding with the Covid-19 outbreak. After reaching a           countries, including India, Malaysia, Myanmar, and
     peak of $950 million, exports to China fell to $680               Vietnam, have done well in China by diversifying
     million in FY21. China accounts for less than 2 per cent          these items.
     of Bangladesh's total exports. This is in sharp contrast to
     its accounting for about a quarter of Bangladesh's              ● Furthermore, other comparator countries, including
     imports. Mostly Bangladesh exports readymade                      Cambodia, Lao PDR, Myanmar, the Philippines, and
     garments, jute and jute products, fish and some basic             Vietnam, have duty-free access to the Chinese
     leather items to China. Bangladesh's share in total               market under ASEAN-China FTA, causing Bangla-
     Chinese goods import is a minuscule 0.04 per cent.                desh to be less competitive.
     Raising this share to just 1 per cent could lead to $27
     billion worth of additional exports for Bangladesh.             ● The extended duty-free access was provided in
12                                                                                                                Development Letters
           July 2020 to assess the impact of such preferential   chain; and so Chinese investors can significantly
           coverage as export supply response can take time.     increase the profit margins by taking advantage of the
           Since receiving the extended preferential             low cost of labour and potentially the large-scale
           coverage, the covid-19 pandemic wreaked havoc         supply capacity. Bangladesh is a country that can offer
           on global exports. China continues to maintain a      economies of scale in production, given its large labour
           zero-covid policy, and as such, no export             force. As a part of the trade agreement, China can
           promotional measures can be undertaken.               therefore consider Bangladesh as a regional manufactur-
                                                                 ing hub to supply to other markets. By investing in
        ● Less integration with retailers and lack of            Bangladesh, China can even make use of the duty-free
          participation in marketing, sales and after-sale       market access in Canada, the EU, the UK and other
          services are also major barriers to export success     export destinations.
          in the Chinese market. Research and Development,
          design, branding; manufacturing; distribution;         Secondly, Bangladesh should consider joining the
          marketing; sales, and after-sale services are          Regional Comprehensive Economic Partnership (RCEP),
          different stages of the value chain. Bangladesh        which can be an alternative to an FTA with China. The
          operates at the manufacturing stage of the value       RCEP, being the largest trade block, can help
          chain. Lower integration with the local agents and     Bangladesh promote export and welfare by trade and
          retailers, insufficient network on the ground, etc.,   investment facilitation. Results from GTAP simulation
          hamper export promotion.                               suggests that Bangladesh's overall exports could
                                                                 increase by 20 per cent by joining RCEP.
        ● Cultural and language barriers have posed a
          severe challenge in boosting exports. When             Thirdly, Bangladesh can adopt aggressive export
          exporting to China, it is essential to communicate     promotion strategies targeting the Chinese market.
          with customers and handle logistics and clearance      Setting up export pavilions in China (Vietnam and other
          through Chinese customs in Mandarin.                   comparable countries have pavilions in China), forging
                                                                 business-to-business (B2B) collaborations, engaging
        ● China's     stringent  labeling and     packaging      Bangladesh Embassy in China in export promotions,
          regulations are of major concern. The Product          and establishing links with retailers are some of the
          Quality Law (2009 Amendment) mandates that             strategies Bangladesh can deploy. Additionally,
          labels on products and packaging in China must         Bangladesh can participate in and host trade fairs with
          display confirmation of product quality inspection     the government's support.
          certification and all labeling requirements in the
          Chinese language.
Development Letters                                                                                                         13
     Concluding Remarks
     Traditional LDC-style duty-free market access alone will
     not be enough to promote exports to China. A trade
     agreement can help boost investment-backed export
     promotion. To stimulate the supply response,
     Bangladesh       must    attract  Chinese    investment.
     Bangladesh must develop an export development and
                                                                “Bangladesh must develop an
     promotion strategy targeting the Chinese market. Due
     to the growing geopolitical competition, China must
                                                                export development and
     also diversify its supply networks. With the support of
     Chinese finance, Bangladesh must expand its product
                                                                promotion strategy targeting
     line beyond apparel paying special attention to
     developing export supply capacities in electric
                                                                the Chinese market.”
     machinery & equipment, plastic, leather items, footwear,
     iron and steel based manufacturing. Bangladesh could
     also take additional measures to increase exports to
     China. For export success in China, aggressive export
     promoting activities, building a solid B2B linkage,
     establishing a local presence, participating in online
     sales etc., can help tremendously.
Email: m.a.razzaque@gmail.com
14                                                                                     Development Letters
     IPEF:
     Prospects for the Region
     and Implications for
     Bangladesh
     Rasheeq Ahmed
     The Indo-Pacific Economic Framework for Prosperity            morphed into Comprehensive and Progressive
     (IPEF) is an economic initiative introduced by United         Agreement for Trans-Pacific Partnership (CPTPP) under
     States President Joe Biden in Tokyo on May 23, 2022.          Japan, one of the largest trade-bloc in the world (Tan,
     Originally launched with 13 nations, the Framework was        2022).
     later joined by Fiji with an open invitation to join at any
     time. The grouping represents about 40 per cent of            The current US administration has designed the
     global GDP which includes 7 out of 10 members of              framework for multilateral talks based on what could
     ASEAN, all four Quadrilateral Security Dialogue (QSD)         reasonably be achieved with a deeply divided congress.
     countries, and New Zealand.                                   By being a non-trade agreement, such a framework has
                                                                   reduced value. Without free market access, The IPEF
     The IPEF seeks to strengthen economic partnership             cannot be compared to RCEP or CPPTP. It is more
     amongst participating countries with the objective of         focused on flexibility and policy adoption. IPEF can be
     cooperation, stability, prosperity, development, and          seen as the US attempt to restore influence in the
     peace in the Indo-Pacific region (The White House,            region with a credible and reliable economic strategy
     2022). The US-led framework is seen as a counter to           instead of just a military and political one.
     China’s ‘Regional Comprehensive Economic Partnership
     (RCEP)’ in the Asia-pacific region. However, the RCEP is      Four negotiating pillars of IPEF
     a free trade agreement among 14 nations focused on            The Indo-Pacific Economic Framework is designed to
     reducing tariffs and red tape. IPEF is focused more on        introduce new regulatory baselines in the region. The
     labour, environment protectionism, and anti-corruption        Initiative is in its early stages, a precursor for later
     commitments with an incentive for investment.                 negotiations. The IPEF can produce a wide-range of
                                                                   outcomes depending on the support from different
     Context of Changing US Strategy:                              groups of countries on the negotiating table, depending
                                                                   on their interests in each initiative (Goodman et al.,
     From Trans-Pacific Partnership                                2022). The Framework focuses on four major pillars:
     (TPP) to Indo-Pacific Economic                                   ● Connected Economy: Trade that will have labour
                                                                          commitments, environment standards, trade
     Framework (IPEF)                                                     facilitation, transparency along with good
                                                                          regulatory practices and corporate accountability
     Home to 60 per cent of the world population, The
                                                                          will be prioritised. It will also focus on the digital
     Indo-Pacific Region is a hotspot for economic activity
                                                                          economy and emerging technology with higher
     and growth with an extreme need for infrastructure
                                                                          standards for cross-border data flows and data
     investment estimated at around $26 Trillion between
                                                                          localisations.
     2016 and 2030. With a vested interest in this region, the
     US tried to influence this future growth through an
                                                                     ● Resilient Economy: Supply chains that can better
     ambitious multilateral trade agreement, Trans-Pacific
                                                                       anticipate and prevent disruptions like the
     Partnership (TPP). However, With the US withdrawal
                                                                       pandemic by creating a more resilient economy
     from TPP by then president Donald Trump in 2017, TPP
                                                                       and guard against price spikes through establishing
Development Letters                                                                                                                15
          early warning systems, mapping critical mineral          The IPEF’s signature achievement would be to form
          supply chains,     improving traceability in key         digital economy regulations. If reached consensus, it
          sectors, and coordinating diversification efforts.       can promote trade and investment by lowering business
                                                                   costs. However, issues like cross-border data flows and
      ● Clean Economy: Infrastructure, clean energy, and           data localisation, online privacy, and ethics of AI are
        decarbonisation     efforts   that  will  include          political minefields. While some countries with US
        agreements on renewable energy targets, carbon             export interests might pursue talks on the matter, a
        removal      purchasing     commitments,   energy          majority of the IPEF countries do not share US interests
        efficiency standards, and new measures to combat           in this regard.
        methane emissions.
                                                                   The IPEF goal of clean energy and decarbonisation
      ● Fair Economy: Promoting fair competition by                could create a difference among developed and
        enacting and enforcing effective and robust tax,           developing countries. Despite the less certain impacts
        anti-money laundering, and anti-bribery regimes in         of initiatives in the supply chain, digital economy, and
        line with existing multilateral obligations, standards,    clean energy, the objectives of IPEF reflect a broad
        and agreements by sharing expertise and                    array of interests from the participating countries. With
        supporting      capacity     building to advance           the commitment towards reaching agreements, it may
        accountable and transparent systems.                       change how businesses work in this region by bringing
                                                                   in new trade and investment.
     Some of the initiatives are not breaking new ground
                                                                   Promise and perils for Bangladesh
     such as corporate accountability and anti-money
                                                                   The IPEF could potentially form new regulatory
     laundering. However, supply chain commitments are a
                                                                   baselines in the region. Businesses will likely need to
     new feature of such multilateral economic dialogue in
                                                                   conform to the new compliance standards for
     this region stemming from the unanticipated events over
                                                                   continued operations in IPEF nations (Pitman, 2022).
     the last few years such as the US-China Trade War,
                                                                   New contracts, trade and investments would require
     Covid-19 pandemic, and Russia’s invasion of Ukraine.
                                                                   adoption of standards that could affect economic
                                                                   aspirations and the feasibility of new trade agreements
     The future of IPEF
                                                                   for Bangladesh.
     The IPEF led by the US can be said to be a soft-law
     framework that opens the gateway for future possible
                                                                   With LDC graduation in 2026, bilateral and multilateral
     agreements between US and other Indo-Pacific nations.
                                                                   agreements have become ever more important for
     Unlikely to return to CPTPP, this multilateral framework
                                                                   Bangladesh. With         current   emerging variables,
     keeps the door open for the US for future
                                                                   Bangladesh is likely to take a wait-and-see approach to
     collaborations as well as counterbalancing major
                                                                   IPEF. However, it could be an opportunity to advance
     Indo-Pacific power China.
                                                                   Infrastructure and renewable energy production using
                                                                   investments from IPEF in clean energy and
     Many uncertainties remain regarding the IPEF’s future
                                                                   decarbonisation. Bangladesh also needs to accelerate
     course. The participating nations of IPEF have their own
                                                                   the timeline for agreements with IPEF countries focused
     economic interests and political constraints. Many larger
                                                                   on the proposed reforms. The government could
     economies have already adopted similar standards
                                                                   launch a study on the possible impacts of IPEF on
     stated in IPEF. However, small economies like Indonesia
                                                                   bilateral and multilateral agreements in the Indo-Pacific
     and Vietnam have just begun adopting such laws.
                                                                   Region.
     Outliers like India have long resisted multilateralism and
     Fiji shares little in common with other participating
                                                                   Bangladesh is facing new challenges with rising inflation
     nations. Despite the diversity in legislation, ability, and
                                                                   and geopolitical uncertainty as China-US tension and
     willingness, IPEF has the capability to integrate these
                                                                   Ukraine-Russia     conflict  continues.     Considering
     standards.
                                                                   Indo-Pacific power play between US, China, and India,
                                                                   Bangladesh needs to be careful in possible negotiations
     The IPEF can potentially change the flow of trade and
                                                                   for IPEF considering repercussions from China.
     investment in the region with integrated regulatory
                                                                   Bangladesh needs to pursue such an agreement with
     standards and a resilient supply chain. These
                                                                   prudent strategy and maneuvering.
     commitments could take on the form of a newly
     centralised institution, or loosely structured working
     group amongst governments. Developed countries
     could pursue a more centralised institution provided          Rasheeq Ahmed is a Research Assistant at
     competitive edge and protection from disruptions              Research and Policy Integration for
     (Pitman, 2022). Despite benefits from such institutions,      Development (RAPID).
     developing countries may resist regulatory compliance
     and enforcement, especially on labour, environment,           Email: rasheeqahmedpro@gmail.com
     and corporate accountability standards. This may make
     or break the core foundation of IPEF’s agreements.
16                                                                                                              Development Letters
     References
Development Letters                                                                            17
     Is Data Localisation
     Economically Pragmatic
     for Bangladesh?
     M Abu Eusuf & Jillur Rahman
     Bangladesh's         Information   and     Communication        resulted in the creation of new risks related to data
     Technology (ICT) sector has shown phenomenal annual             misuse. Several governments, including Bangladesh, are
     growth after the launch of the Digital Bangladesh               considering data protection and restriction policies.
     initiative in 2010. The ICT, marked as a thrust sector, with    Such rules govern the usage of data, including data
     high growth opportunities, job creation, and positive           privacy and security. Measures under consideration
     spill-over effects on other sectors, has become                 include data localisation, restricting data transfers
     instrumental in continuing robust economic growth.              outside the country and conditional flow regime, and
     Therefore, the Digital Bangladesh initiative has now            imposing constraints on data flow, storage, and
     been extended further under Vision 2041, with the               processing.
     enhancement of the ICT sector and the use of effective
     technology for socioeconomic development.                       The Bangladesh government is gradually adopting data
                                                                     governance through laws such as the Digital Security
     In the era of the Fourth Industrial Revolution, digital         Act of 2018 and the Information and Communication
     trade has taken a central role around the world,                Technology Act of 2018. The Data Protection Act is
     facilitated by the free flow of cross-border data and           currently being prepared. The Act aims to protect
     digitalisation. With six out of 10 people worldwide             personal data in terms of life, property, freedom of
     utilising the internet, the world today is more connected       opinion, speech, and conscience, as well as the right to
     than ever, resulting in enormous data flows. This link is       privacy, secrecy, and personal identification. While this
     expected to expand further. Increased internet                  law will serve as a formal basis for the country's data
     penetration and the emergence of IT-enabled services            protection and privacy and incorporate the rights of
     (IT-es) are dramatically changing how people live, work,        users. It includes data localisation provisions that require
     trade, communicate, and practically do everything else,         data controllers to store sensitive, classified and
     eventually boosting cross-border data flows (CBDF).             user-generated data within Bangladesh. Such restric-
     Such flows generate the potential for capturing new             tions may negatively affect trade and productivity. It is
     markets without the need to physically enter them,              imperative to assess the potential and issues posed by
     enabling small companies to reach out to potential              CBDF regulations.
     clients all around the world by using internet platforms
     such as eBay or Alibaba.                                        Concerns about the localisation efforts increasing the
                                                                     hazards of cyber-attacks, privacy violations, data
     According to industry experts, Bangladesh is projected          breaches, and reducing the breadth of services
     to see a rise in CBDF because of the growing use of             provided, and swelling the operating expenses of
     IT-enabled services and the expansion of electronic             enterprises are also there. On the other hand,
     commerce (e-commerce) in the country. This signifies            localisation is perceived to enhance data privacy and
     that the influence of policies facilitating CBDF is not         security, which is vital. However, such perceptions are
     limited to the technology sector but also impacts               contestable.
     traditional industries. As a result of digital transformation
     facilitating simpler global trade, new business models          Any lop-sided regulatory position with CBDF could be
     have emerged that increasingly rely on data. This has           damaging to Bangladesh's ICT sector as the present
18                                                                                                                   Development Letters
     infrastructure and human capital are not aligned with        Similarly, to understand the effects of the impact of
     the requirements of data localisation.                       CBDF restrictions on the economy, another exercise
                                                                  was undertaken. It shows the existence of a positive
     A study undertaken by the Research and Policy                relation between digital services exports and the GDP,
     Integration for Development has evaluated the impact         meaning that digital service exports make a significant
     of CBDF restrictions on Bangladesh's digital services        contribution to the economy.
     exports and the economy. Primarily, two scenarios were
     considered: Bangladesh adopting more restrictive CBDF        It is found that Bangladesh's GDP could decline by 0.58
     policies akin to those of India and adopting substantially   per cent as a result of CBDF restrictions, akin to those
     restrictive CBDF policies comparable to those of             in India, on digital services exports. A more restrictive
     Vietnam. The two countries were selected because they        policy similar to that of Vietnam could cause the GDP
     are in the Asian region, and their data localisation and     to fall by 0.76 per cent. Similar retaliatory actions by
     data protection policies are regularly discussed in the      trading partners may cause the GDP to fall further.
     policy and public sphere. The objective of this analysis
     is to provide a directional view, therefore, assessing all   The reduction in GDP could adversely impact employ-
     policy alternatives against the likely outcomes.             ment, investment, and innovation growth in Bangladesh.
                                                                  Although the econometric model provides evidence of
     The study used a gravity modelling framework to              the significant adverse impact of data restriction on
     estimate the impact of the given scenarios. According        digital exports and the economy, some possess the
     to the analyses, CBDF restrictions are likely to have a      view that such restriction on data could improve
     negative impact on digital service exports. Estimates        productivity and exports in the long run.
     show that Bangladesh's digital services exports could
     fall by 29 per cent and 38 per cent if it imposes            Therefore, it is imperative for Bangladesh to judiciously
     limitations like India and Vietnam, respectively.            navigate the digital fields, carefully assessing the local
                                                                  and global impacts of potential rules and regulations
                                                                  related to data flows and streamlining such laws to the
                                                                  country's current scenario so that socioeconomic
                                                                  development is not hindered.
Development Letters                                                                                                                 19
     Productivity and
     Working Poor in
     Bangladesh
     Mohammad Nazmul Avi Hossain
     While evaluating Bangladesh’s labour market, often the               To further explain the labour productivity of
     focus is solely on the unemployment rate, which over                 Bangladesh, an analysis was done from which it
     the past two decades has been mostly in the range of                 became evident that the country is one of the lowest
     3-4 per cent. This is comparable to the so-called                    among countries with GDP per capita growth rate of
     Natural Rate of Unemployment in the context of more                  over 6 per cent. In the government’s Productivity
     matured and developed economies. Due to the                          Master Plan for 2021-2030, Bangladesh intends to keep
     definition and methods used, open unemployment rates                 pace with the countries of Asian Productivity
     in developing countries can appear quite low.                        Organisation (APO). (Figure 1) shows that Bangladesh is
     According to the Bangladesh Bureau of Statistics (BBS),              among the bottom three in the APO, with Cambodia
     the "unemployed" comprises the people in the labour                  and Nepal behind. The National Productivity
     force who during the reference period are: (a) without               Organisation's (NPO’s), Productivity Master Plan
     work – not in paid employment nor self-employed, (b)                 2021-2030 considers Sri Lanka and India as the
     currently available for work, and (c) seeking work either            reference framework for improving labour productivity,
     paid employment or self-employment. Therefore, the                   but both countries are currently far ahead of
     unemployment rate in Bangladesh over the past two                    Bangladesh. Looking at the labour productivity trends
     decades is not an alarming labour market problem. In                 of countries with similar socioeconomic profiles, it was
     an economy where about 86 per cent of the workforce                  found out that Bangladesh is at the lowest level for a
     is in the informal sector, it is not that difficult to get           decade.
     involved in low-productive economic activities. As a
     result, only a few get captured as unemployed.¹                      Figure 1: GDP per hour worked/Labour Productivity
     Challenges lie in getting decent work opportunities,                 as of 2021 (GDP constant 2017 international $ at
     earning reasonable wages induced by higher levels of                 PPP)
                                                                                            GDP per hour worked (Labour productivity)
     productivity. So, what needs to be investigated more
                                                                             Sri Lanka      17.7
     closely to better understand labour market
                                                                              Thailand      15.2
     performance of Bangladesh considering that the
                                                                                  China     13.8
     country is about to leave behind the LDC status and
                                                                                     Fiji   12.5
     soon become a middle-income country? Labour
     productivity and working poor can be two more                          Philippines     9.9
20                                                                                                                                Development Letters
     Where labour productivity is only a part of the story,      Technological know-how will potentially vary at the
     the productivity ecosystem at the firm and enterprise       national level, thus influencing cross-national income
     level is the handbook for higher economic growth and        differences. Besides the low level of productivity,
     inclusive development in Bangladesh. SMEs and MSMEs         Bangladesh has been facing a declining and negative
     are the fuel of the local economy as they account for       real wage growth rate since the last decade. In 2021,
     a large share of (mostly informal) employment where         the average annual real wage growth rate in
     productivity enhancement stands out as a major              Bangladesh was -5.9 per cent, the lowest among all
     constraint for the growth of enterprises. To comprehend     countries in the Asia-Pacific region and also one of the
     more on the productivity ecosystem, in the era of 4IR       lowest in the world. The opposing trends in real wage
     and technological transformation, it is crucial to study    growth and labour productivity have several
     how multifactor productivity affects growth at the firm     socioeconomic consequences: Brain drain, increase in
     level in combination with labour and capital. (Comin        the working poor, and eventually a decline in
     and Mestieri, 2018), for example, estimate that             productivity and competitiveness; which can lead to a
     differences in technology adoption at the firm level        downward spiral of low productivity, low wages, and
     account for up to 75 per cent of the income gap             low competitiveness. If this trend of real wage growth
     between advanced economies and developing                   continues to be negative and declining, there will be a
     countries. Developing capabilities to maximize growth       surge in the working poor with lower purchasing power,
     opportunities arising from technological changes            leading to lower levels of economic output, and greater
     requires the right mix of worker skills, management         inequality.
     practices,    innovation, training, and        supporting
     infrastructure. (Bloom et al., 2007), found a strong        Bangladesh should focus more on these "two big
     positive correlation between management practices           elephants in the room" of the labour market;
     and firms' performance in a cross-country study of          productivity and the working poor- to study labour
     6000 firms from 16 countries. Several other empirical       market outcomes on the way to becoming a
     studies have provided evidence that the following           middle-income country. The unemployment rate, labour
     factors affect the productivity of SMEs and                 force participation rate, and NEET are still the key
     microenterprises in developing countries:                   indicators, but they can contribute "de facto" to more
        ● Age of the firm;                                       effective policy analysis for better socioeconomic
                                                                 outcomes.
        ● Organisational form of the firm (i.e. incorporated
          companies, firms with only one establishment,
                                                                 References
          and firms with only one proprietary);
        ● Labour productivity;                                   Acemoglu, D. and Zilibotti, F. (2001). Productivity
        ● Level of unionization in the industry and size; The    differences. The Quarterly Journal of Economics, 116(2),
          business cycle of the sector;                          pp. 563-606.
        ● The level of formality of the firm
     Why should policymakers pay close attention to the          Bloom, N. and Van Reenen, J. (2007). Measuring and
     productivity ecosystem to improve macroeconomic             explaining management practices across firms and
     outcomes associated with labour market outcomes? For        countries. The quarterly journal of Economics, 122(4),
     two reasons. First, if productivity is not increased,       pp. 1351-1408.
     Bangladesh risks falling into the middle-income trap.
     Second, with lower productivity levels, there will be       Comin, D. and Mestieri, M. (2018). If technology has
     more and more working poor in the country. The key          arrived everywhere, why has income diverged?
     issues that policymakers should address are:                American Economic Journal: Macroeconomics, 10(3),
                                                                 pp. 137-78.
        ● How can a productivity ecosystem benefit the
          demographic dividend or landscape of a country?
        ● How will an improved productivity ecosystem
          influence the increase of active labour force          Mohammad Nazmul Avi Hossain is working at
          participation and help create more decent job          the ILO Bangladesh, and a PhD researcher,
          opportunities?                                         Universite Libre De Bruxelles.
     However, implementing the right policies and tools to
     improve the productivity ecosystem does not                 Email: hossainmoha@ilo.org
     necessarily lead to similar positive outcomes.
     (Acemoglu et al., 2011), analysed cross-country and
     intra-country differences in labour productivity and
     showed the following significant results with solid
     empirical evidence:
        ● Human capital of the workforce will differ across
          countries and within countries, in part, because of
          differences in institutions and policies that affect
          access to schooling and the costs and benefits of
          acquiring a marginal unit of education.
Development Letters                                                                                                         21
     Does the
     Social Safety Net
     Budget Prioritise
     Marginalised People?
     Humayra Anjumi Nabila
     Programme in the National Budget                               Mother and child benefit        1041.04      1243.07      19.4%
                                                                    program
     2022-23
                                                                    Honorarium for heroic           4603.35      4653.35      1.1%
     The national budget 2022-23 has taken place in the             freedom fighter
     wake of an unprecedented economic crisis all over the
                                                                    Medical treatment and           456.66       472.45       3.5%
     world. The post-pandemic economic recovery has                 honorarium of martyred
     come under tremendous pressure due to the disruption           families and war wounded
     in the global supply of goods and services, on the             heroic freedom fighters
     other hand, the Russia-Ukraine war has made the
     overall situation out of control. According to the             Pension for retired      23010               28037        21.8%
                                                                    government employees and
     International Monetary Fund (IMF), global growth is            their families
     anticipated to slow from 6.1 per cent in 2021 to 3.6 per
     cent in 2022. Rising price of edible oil, wheat, fodder,       Housing construction project 481.9           761.83       58.1%
     and fuel oil have left low and middle-income people in         for the insolvent freedom
     dire straits as a result of instability in the international   fighters
     supply chain. Consequently, the poor are the most                                                     Source: Budget Speech 2022-2023.
     vulnerable to the current economic crisis. Therefore, it                               Note: RB = revised budget, PB = proposed budget.
22                                                                                                                            Development Letters
     In the national budget 2022-23, the government has            Inadequate Allocation for Food
     increased allocation to provide support to marginalised
     people. Specifically, the quantity of allocation and          Security, Haor, and Coastal Areas
     number of beneficiaries for financially insolvent disabled
     people has increased. It is observed that the number of       In the post-COVID-19 context, the government has
     beneficiaries for disabled people has increased from          scaled up many food security and employment
     3.57 lakh to 23.65 lakh, up from 20.8 lakh. The monthly       generation programmes to provide support to
     allowance has been raised by Tk 100 from 750 to 850.          marginalised people. Sadly, the allocation for such
     Under the “Mother and Child Benefit program”, the             programmes has decreased. In the FY 2022-23, the
     number of beneficiaries increased by 2 lakh 9 thousand,       allocation for “Food friendly program”, “Open Market
     thus the total number of beneficiaries will be 12 lakh 54     Sales” have decreased by 10 per cent and 11.5 per cent
     thousand in FY2022-2023 from 10 lakh 45 thousand in           respectively. Due to lack of authentic data,
     FY2021-2022. The total allocation for this programme in       mismanagement of scarce resources, nepotism, lack of
     FY2022-2023 is Tk. 1,243 crore and such initiatives are       coordination among the ministries, and weak
     praiseworthy to bring the eligible people under the           implementation capacity, a large number of eligible
     social safety net programme.                                  people are still out of the coverage of the social safety
                                                                   net programme.
     However, prioritizing two to three programmes have
     raised questions, particularly among those who are            Table 2: Decreased allocation for the social safety
     implementing the programmes on the ground.                    net programmes
     Coverage of                            Allocation for         Open Market Sales (OMS)       1943.58      1720         -11.50
     Social Safety Net              Pension Scheme and
     for Other Programmes               Saving Certificate         Relief works (flood, drought, 181.00       81.00        -55.25
                                      Interest Assistance          cyclone, and others)
Development Letters                                                                                                                         23
     Conclusion
     Needless to say, there will be no qualitative change in
     the current situation unless a right-based universal
     social protection scheme is introduced by moving away
     from the conventional project-based social security
                                                               “Food security and relief work
     programme. Since the economy is growing, it is
     expected that there will be a dramatic change in the
                                                               programmes should
     need and demand for social security programmes.
     Hence, necessary policy actions should be taken to
                                                               be scaled up to provide
     strengthen the country's social protection system to
     adapt to evolving circumstances. The scope of social
                                                               support to the marginalised
     security strategy needs to be expanded to cover the
     issues related to social insurance and employment
                                                               people.”
     regulations. To get out of this, a right-based policy
     framework is required to be introduced then no eligible
     individual will be systematically excluded from the
     given support.
References
Email: humayra.nabila.duds@gmail.com
24                                                                                     Development Letters
Issue
JUL-AUG ‘22
              Development Letters, a quarterly periodical, focuses on bringing together issues, ideas,
              and approaches that can be researched, refined, experimented, and investigated further.
              This periodical intends to advance innovative research/intervention ideas so that
              analytical work and evidence can meaningfully lead to practical actions and maximise
              developmental impact.