Is the Bangladesh tank half-empty or half-filled? The half-empty version is loaded with apprehensions: the share of private investment to the gross domestic product (GDP) fell from 22.07 per cent in FY2014-5 to 21.76 per cent in FY2015-6, and especially since the 2014-5 proportion was the highest in the last five years; remittances, which grew 2.47 per cent during 2015 to hit a 15.31 billion USD record-high, plunged precipitously by 12.23 per cent as 2016 began, when Bangladesh Bank forecasted a 10 per cent growth this year; foreign investment to the entire South Asia region is falling, in spite of being next to India's increasing global attraction; and the World Bank's reduction of expected global growth-rate this year to 3.2 per cent from previously forecasted 3.4 per cent also reflects widespread stagnation.
On the flip-side, the half-filled mind-set feeds upon an alternate set of statistics: Bangladesh belongs to the fastest growing region of the world, and not necessarily by hanging on to India's coat-tails; yet the 2.0 billion USD credit-line and 8.0 billion USD investment Prime Minister Narendra Modi extended during his July 2015 Dhaka visit certainly adrenalised our economic situation, as too the urgency the government has given certain mega projects like the Padma Bridge, Payra energy project with China, the Dhaka-Chittagong-Cox's Bazaar highway/railway construction, and the Dhaka metro implementation since Modi's visit.
While the future is a very, very long innings, evidence trickling in suggests the latter vision may be capturing reality better than the former. Even a nuanced observer cannot miss the signals: driving up, down, and across Dhaka, for instance, one can see construction is on the upswing, meaning that banks that had hitherto been complaining for at least two years of being flooded by unused cash, are beginning to find small-time private borrowers (even registering a 32 per cent profit increase during 2015, though based largely on declining default loans); Baishakhi sales spiralled 20 per cent over last year's, bringing smiles to family-owned stores across Dhaka's many main streets; and, among others, the sequential termination of the Hatirjheel flyover project is already ramping up real-estate prices as property-holders envision home/office construction without any vertical ceilings (that is, how tall the buildings can rise).
Outside these metropolitan glimpses, the picture is not far different. Anyone travelling the Dhaka by-pass highway will notice a flurry of construction activities from Boshundhara and Rupayan gated community to Purbachal and up to Gazipur. Elsewhere, several mega-projects have begun hiring workers hoping to get ahead before the onset of monsoon rains.
The point to be made is far simpler and smaller to enter the different radars of the Planning Ministry, which predicts a growth-rate of 7.05 per cent this year, or the World Bank, which lowered its forecast from 6.7 to 6.3 per cent: though only in fits and starts at this point, construction is on the upswing; and construction opens far more sectors than many other types of investment.
For example, when a house is built, it will need doors and windows, thus energising the woodwork, metal, and curtains sectors; and likewise, from furnishing to energy supplies, many, many orders will be placed in commensurate numbers of producing, supplying, retailing, and wholesaling corporations, which will then boost transportation service demands and bank transactions, in turn elevating infrastructural improvements for roads, rails, and rivers.
Those infrastructures themselves unleash other businesses: a highway or bridge exemplifies the new work generated for builders and repairmen; and they attract retail stores, petrol-pumps, restaurants and hotels, and maintenance staff. All need access to banks, at the least, some to insurance company offices (for instance, port facilities), and so forth.
Construction investment, therefore, carries more mileage than the object of the construction: a trickle here and a trickle there can add up to an ocean somewhere. This is where Bangladesh is at in mid-2016, counting domestic trickles (small-time individual investors) more than foreign aid or capital inflows, or even multilateral loans or soft-term borrowings. We could do with the latter, and they are certainly are not absent; but they cannot be as critical to our growth right now as resorting to our own initiatives and investment: they not only insulate us from global-level stagnation or shocks, but also profit from two secular but valuable inputs.
The first has been the robust levels of public expenditures. One might recall how modern United States owed as much to the Morgans, Vanderbilts, Carnegies, Rockefellers, and Fords as to the massive New Deal projects President Franklin Delano Roosevelt salvaged a sinking titan with during the 1930s. Beyond protecting farmers but smashing trade barriers and buoying up private banks with public insurance, he sowed the seeds of what we see as a breathtaking network of highways rivalled only by the Tennessee Valley Authority energy infrastructure.
The second has been that our dominant export is so low-waged that it has admirably survived the battering global commodity and energy markets face. Not only that, their demand keeps inching upwards in spite of the market stresses. For as long as these RMG (ready-made garments) geese lay the golden eggs, we should not shy from undertaking mega but vital projects from public funds.
In times of crisis, as the last four years ostensibly were given the half-empty vision alluded to earlier, we are resourceful enough to have our own New Deal with massive infrastructure-building intervention by the government. Passengers typically ditch a ship when it is sinking, rarely when it is merely floating, and never when it is charging full-steam ahead. Investors do not differ: they will come with every trickle, but rush when a gush is envisioned.
Of course, even on a charging ship, one must keep one's seat-belt fastened. To wit, we must always have a Plan B to every project, but more urgently scrutinise Plan A details from right, left, centre, top, down, bottom, and so forth. We cannot build a flyover designed in 2003 and learn a posteriori of a mistake, as the Moghbazar-Malibagh project, designed in 2003, was in 2015 because the landscape had changed so drastically; or depend upon air-freight exports without complying with the security-laced global airport paradigm that elevates passenger safety more than merchandise imports; or devote all our time to counting ever-growing bank cash, neglecting safeguards from predators and hackers; or even waiting for the umpteenth Shela River mishap to halt environmentally hostile transportation. Without doing the homework, we might find all our massive investments becoming more costly than beneficial or yielding diminishing returns.
Similarly, without restoring confidence, the baton cannot be passed from public investment to the private. Certainly security has emerged as the most nightmarish of all, not just here, but globally. No one in the world has devised a foolproof response to this ghost; but preventive measures could be coupled with curative efforts more widely and seriously than evident. In addition to intelligence-sharing, increasing check-points, and deploying the latest technologically-driven gadgets to detecting threats, causal factors could be given more attention with a view to converting stubborn chasms and antagonisms into quid pro quo dialogue and discussions. Diffusing the optimistic half-filled vision of the country's glass more energetically than permitting the half-empty view to prevail would be a necessary step; and it can only begin when individuals seize the occasion for welfare enhancement rather than wait for the proverbial Godot.
Dr Imtiaz A Hussain is Professor, International Relations, formerly Universidad Iberoamericana, Mexico City.
