Locally made Products can make the Dream of Autarky come True
Abandoned by her parents, twelve-year-old Masuma sleeps under the awning of a foreign bank, the latest to enter the country’s burgeoning capital market. Masuma does not know how to read and write, neither has she learnt the hidden laws of probability, according to which the stock exchanges work. She sells flowers at the intersection in Motijheel, near the DSE, as it is called by those who invest in the share market. She has remained outside the steady growth of 5/6 percent that Bangladesh’s economy has enjoyed over the last few years. Her father left them, she and her mother, in 2005, the year in which Bangladesh was listed with South Korea and nine other countries as ‘Next Eleven’, eleven emerging economies, by Goldman Sachs investment bank. Her mother ‘disappeared’, as she calls it now, a year after that. Her mother has got married again, Masuma found out later. Left with no other option, Masuma, barely in her teens, started to beg; with the hundreds that she had saved, Masuma bought a few bouquets of flowers to sell it to the commuters who halted at the crossway. Since then it has been her only source of income; “It’s better than begging,” she, who goes hungry on every alternate days, says proudly.
Over the last couple of decades Bangladesh’s economy, considered the 48th largest in terms of its total Gross Domestic Product, has grown. It is difficult to tell to what extent locally made products are contributing to its overall growth, but the advent of Bangladeshi consumer products has become one of its prime contributors. People belonging to the middle-income group are flexing their financial muscle, generating an ever-increasing demand.
The irony, however, does not escape us: Bangladesh’s booming economy is based on a system that forces its own children to go hungry year in and year out. Millions live on subsistence income; hundreds and thousands of children grow up stunted and malnourished. The law of capitalist economy requires growth and development to be heterogeneous-- while new shopping malls are being built and are quickly crowded with the overfed rich, jostling over gaudy, glitzy expensive clothes; we still have to live with the sight of famished, bone-all Masumas sleeping in the footpath. In this cruel city of over one crore, they are the silent, invisible majority. The path to free them from the clutches of the double-headed monster of poverty and exploitation remains a long and treacherous one.
“The boom has taken place because of the small and medium enterprises (SME), the growth of the garment industry and the remittance sent from abroad by migrant workers,” says MM Akash, economist and teacher of Dhaka University. The consumers of these locally made products belong to the lower and middle classes, who, he says, if are given proper government help, can work wonders. One reason why the SMEs have flourished in the country is because certain import restrictions are in force. “All the SMEs produce goods and commodities are import substituting, or they supply the raw materials to small agro-based industries,” he says. If these small enterprises are given the driver’s seat, they will generate more growth and the benefit of it will trickle down to the bottom. “The government should make bank loans cheap and easy for local small industries. It must also create cooperatives of small farmers and weavers and the government has to take the responsibility of marketing their products so that middlemen like big retail stores cannot exploit them,” Akash says.
In fact in an economy like ours cooperatives and guilds owned by the farmers and small investors are necessary to relieve the burden of import expenditure. As their produces are primarily import substituting, encouraging their growth will mean more employment opportunities, which for its turn will generate demand.
Akash has made scathing remarks on the outlets that buy products from small producers only to sell it at a higher price. “They add value to the products that the poor weavers produce and market them at a higher price,” he says, “In the long run this process leaves the producers exploited.” He thinks it is high time that these outlets give up its ownership to the weavers and small producers who produce all its products. “Grameen Check is owned by the weavers, if Grameen can do it, why will other such organisations will remain an exception?”
To strengthen the growth and sustainability that our economy has been enjoying over the last couple of years, the government must take concentrated steps. One wrong decision can ruin everything. “If now,” Akash says, “the government lifts the restrictions following some dictums of the World Bank and open our market to cheap substandard Chinese goods, our SME-based growth, which has so far grown steadily, will not sustain.” Inflow of remittances, on the other hand, does not go to the productive sector. The government can take certain measures that will increase non-resident investments.
Taking the right steps in the right direction to sustain the demand for Bangladeshi products can be the first step towards autarky. It means that Masuma's freedom from hunger and poverty is entwined with Bangladesh’s economic independence.
This article was first published in the September 12 issue of the Star Magazine