S. R. Osmani I. Introduction



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Achievements and Challenges of the Bangladesh Economy:

An Overview
S. R. Osmani
I. Introduction
The economy of Bangladesh has come a long way since the country achieved its independence at the end of 1971. The ravages of a prolonged war of Liberation, combined with the wrath of natural calamities both before and after, brought the economy to a state of utter despair soon after independence – so much so that the very viability of the economy came to be questioned at home and abroad. Over the next three decades and a half, the economy has not only survived, it has even begun to show signs of sustained vibrancy. The successes it has achieved so far and the challenges it faces from the vantage point of the first decade of the twenty first century form the subject matter of this essay.1
It took almost the whole of the 1970s to reconstruct and rehabilitate the war-ravaged economy, with per capita income crawling back to the pre-independence level by the early 1980s. Since then, a good deal of progress has been made in both economic and social spheres. The achievements in social spheres, in particular, have attracted special attention from the international community – for example, successes in bringing down infant mortality rate and fertility rate much faster than most countries at comparable levels of income, closing the gender gap in school education, and rapid increase in female labour force participation compared to most other countries with similar cultural-religious traditions, to name but a few. But some of the achievements in the narrowly economic sphere have been quite remarkable too. This is especially so when seen from the vantage point of the tottering state of the economy in the 1970s, and also when compared with the performance of other low-income countries in Asia and Africa. We shall begin by highlighting some of these achievements before moving on to the challenges that lie ahead.

II. Economic Successes: The Story So Far
The most basic achievement relates to economic growth, which is a necessary pre-condition for broader economic well-being. It’s not that Bangladesh’s rate of growth is spectacularly high; indeed, its growth rate falls short of what one finds in the high-performing countries of East and South-East Asia. The really encouraging part of the story lies in the sustained acceleration that Bangladesh has achieved in its rate of growth. After the recovery of 1970s, the rate of growth of GDP fluctuated in the 1980s around a lowly 3.7 per cent. But since the onset of the 1990s the economy has started to grow at an accelerating rate. The average annual growth rate first jumped to 4.4 per cent in the first half of the 1990s, but it soon crossed the 5 per cent mark hovering around 5.3 per cent during 1995-2005, and since 2005 it has accelerated further to over 6 per cent. With population growth slowing at the same time, the acceleration in terms of per capita income has been even more impressive. The growth of per capita income jumped from an average of 1.7 per cent in the 1980s to 3.0 per cent in the 1990s and again to 4.4 per cent in the 2000s. Since 2005, per capita income has been growing at more than 5 per cent per annum, representing a three-fold increase compared to the 1980s. The end result of all this is that the current generation of Bangladeshis is almost exactly twice as rich as was the preceding one.
All this may seem to pale in comparison with some of the Asian miracle economies that have managed to double their per capita income in one decade or less, but it is easy to forget that in the dismal decade of the 1970s, and even in the slightly better decade of the 1980s, the current rates of growth would have seemed like a distant dream in Bangladesh. It is also worth noting that Bangladesh’s performance compares highly favourably with the rest of the world other than Asia. For instance, the 4.5 per cent growth rate that Bangladesh achieved during the twenty-five year period from 1980 to 2005 is distinctly higher than the 3.6 per cent rate achieved by the Middle-East and North Africa region, 2.6 per cent by sub-Saharan Africa and 2.3 per cent by Latin America and the Caribbean during the same period.2
The growth acceleration that has occurred in Bangladesh since about 1990 has been underpinned by faster rate of capital accumulation.3 From less than 10 per cent of GDP in the 1970s the rate of investment rose to about 17 per cent in the 1980s, rising further to 20 per cent during the 1990s and 24 per cent in the 2000s4. Even though the current rate of investment in Bangladesh is far below the likes of 40 per cent rates achieved by the hyper-growth economies of East Asia, such comparisons must be tempered by the knowledge of the initial conditions – in particular, of the dire conditions in which the country found itself in the early 1970s. The country was barely able to meet its consumption needs from its own resources, leaving specious little for savings and investment; indeed in some years domestic savings turned out to be negative implying that a part of foreign aid had to be used to meet consumption needs. For that country to come to a stage where within a space of three decades nearly a fifth of GDP is being saved and invested on the average is not a mean achievement at all. The amount of investible resources has been further augmented by the spectacular rise in remittances, which has allowed the national savings rate to exceed the domestic savings by a fair margin.5 All this has enabled Bangladesh to achieve a rate of investment that was unthinkable only a couple of decades ago.6
What makes this improvement in investment rates especially remarkable is the dwindling role of foreign assistance in providing investible resources for Bangladesh. In the 1970s, when the country started from the scratch, foreign aid loomed large in all spheres of the economy, accounting for almost 75 per cent of gross investment on the average. Even in the 1980s, the contribution of foreign aid to gross investment was still as high as 40 per cent; by the 2000s, however, it has came down to just over 10 per cent.7 It is thus evident that the country has managed to accelerate its rate of capital accumulation while at the same time substantially reducing its dependence on the rest of the world for financing its investment. As a result, Bangladesh can claim today to have not only a faster rate of growth than before but also a more self-reliant growth as far as mobilization of investment resources is concerned.
A related feature of Bangladesh’s growth performance is the ease with which it has achieved its growth acceleration without getting into the kind of debt trap that many of the developing countries have found themselves in since the 1980s. The stock of external debt has increased only slightly from 28 per cent of GDP in the first half of the 1980s to just over 32 per cent in the 2000s. This ratio is not particularly low compared to other developing countries, but the important point is that thanks to the low cost of loans the debt servicing burden has remained especially low by international standards. In the first half of the 2000s, debt servicing accounted for a just over 1 per cent of GDP and less than 8 per cent of export earnings. By contrast, during the same period, low and middle income countries as a whole faced a burden that amounted to nearly 6 per cent of GDP and 17 per cent of export earnings.
The relatively low burden of external debt faced by Bangladesh owes itself mainly to the fact that historically the country has depended much more heavily on the less expensive foreign official assistance than on the more expensive commercial borrowing for financing its investment needs. The official foreign aid has itself become somewhat more expensive over time as the proportion of loans has increased at the expense of grants8, but the loans have been offered at a sufficiently low rate to make the repayment burden far lower than anything that might have obtained with an equivalent flow of private capital. The relative absence of private capital has, of course, its flip side, as it implies a constraint on raising the rate of investment. But at least it has helped avoid on the one hand the short-term problem of volatility in capital movement that has plagued many emerging economies in the past decade and prevent on the other the kind of long-term debt problem that has blighted the development prospects of many countries of Africa and Latin America.
In addition to avoiding an excessive debt burden in the external sphere, Bangladesh has also managed to avoid excessive inflationary pressure in the domestic sphere – yet another scourge that often goes hand in hand with the pursuit of rapid growth. Bangladesh did experience a phase of relatively high inflation of around 13 per cent in the early 1980s owing to excessive expansion of domestic credit that was deliberately engineered by the government in order to finance an ambitious privatization programme. But in a significant departure from the experience of many developing countries, the rate of inflation came down just when growth began to accelerate. It fell to 5.7 per cent when the first spurt of growth acceleration occurred in the 1990s, and fell further to 4.3 per cent during 2001-05. Subsequently, the rate of inflation went up again – to about 8 per cent during 2005-08 – but it did so as part of a global commodity boom rather than as a home spun inflation.
The success in keeping inflation down owed itself to prudent fiscal and monetary policy followed by successive governments ever since the excessive credit growth of the early 1980s precipitated a serious macroeconomic crisis later in the decade. Budget deficit, in particular, has consistently been kept within prudent limits. It was brought down from 6.1 per cent of GDP in the 1980s to 4.7 per cent in the 1990s and 3.8 per cent during the 2000s. Modest as these figures are, they actually overstate the inflationary implications of fiscal policy because these deficits include foreign financing while only the domestic component of deficit financing has direct implications for inflation. As it happens, the domestic component has risen somewhat over the years to meet the shortfall created by declining availability of foreign aid, but still remains quite low. From slightly less than 1 per cent of GDP in the 1980s, domestic financing of budget deficit rose mildly to 1.3 per cent in the 1990s and somewhat more sharply to 2.3 during 2001-05, but even these figures are very low by the standards of developing countries.9
Prudent conduct of fiscal policy has not only helped to keep inflation down, it has also helped to keep the burden of interest payment down. This in turn has allowed Bangladesh more fiscal space to maintain the rate of public investment. The implications of all this can be seen clearly by contrasting the experience of Bangladesh with its South Asian neighbours.
By relying heavily on domestic borrowing to finance large budget deficits, the governments of India, Pakistan and Sri Lanka have all incurred huge domestic debts over the years. The problem became progressively worse as higher and higher interest rates had to be offered on treasury bills in order to attract more and more funds from the financial system. In consequence, the burden of interest payment also became progressively heavier over the years. During the period 1991-2005, interest payment in India, Pakistan and Sri Lanka amounted to as much as 5-6 per cent of GDP as compared with just 1.2 per cent in Bangladesh. During the same period, the three South Asian neighbours had to spend 30 to 37 per cent of government revenue on account of interest payment alone, as compared with only 13 per cent in Bangladesh. The problem eventually became so acute in these countries that a vicious circle came into being in which governments had to borrow heavily simply to service the interests of past borrowing, which made it harder to bring budget deficits down. This led to a severe constriction of the fiscal space in these countries, with the result that despite mounting fiscal deficits they could not find enough resources to maintain, let alone increase, the rate of public investment. Thus in India the rate of public investment fell from 10 per cent of GDP during the 1980s to an average of 7.5 per cent during 1991-2005, in Pakistan it fell from 9.2 per cent of GDP to 6.5 per cent over the same period, and in Sri Lanka it fell from 5 per cent to 3.2 per cent. By contrast, in Bangladesh the rate of public investment actually increased over the same period – from 5.5 per cent of GDP in the 1980s to 6.6.per cent during 1991-2005. Evidently, even the current rate of public investment is not particularly high in Bangladesh, but the important point to note here is the fact that prudent conduct of fiscal policy has enabled Bangladesh to at least raise the rate of public investment, however modestly, while less prudent fiscal policy has compelled its South Asian neighbours to scale down the rate of public investment.10,11
From the broader macroeconomic features, let us now turn our attention to some of the structural features of the Bangladesh economy. Relatively rapid economic growth since the early 1990s has brought about remarkable transformation in the structure of production. In particular, the economy has become increasingly industrialised, so much so that for the first time in history industry has come to contribute more to GDP compared to agriculture. The switchover from an agrarian to an industrial economy occurred at the turn of the last century. In the second half of the 1990s, agriculture and industry stood neck in neck, each contributing about 25 per cent of GDP. Industry, however, leapt ahead in the 2000s, when its share in GDP went up to 28 per cent as compared with agriculture’s 23 per cent.
As it happens, the sector that contributes most to the GDP of Bangladesh is neither industry nor agriculture but services. It should be noted, however, that services has long been the most important sector in terms of contribution to GDP. This is inevitable in an overpopulated but underdeveloped country where surplus labour from agriculture has been compelled to pour into various informal sector activities to eke out a living by converting raw labour into labour services. What is important, though, is the fact that the share of services in GDP has not changed at all over the last three decades, stagnating at just around the 50 per cent mark from the early 1980s up to the present. In other words, the transition that has occurred in the economy is from agriculture towards industry, not towards services.
Industry, of course, is a broad category, including as it does such ancillary activities as construction, mining, and utilities such as power, water supply, etc., in addition to manufacturing. But manufacturing too has surged ahead, thanks largely to the emergence of the garments industry. It is perhaps not generally recognised that manufacturing alone now yields more to GDP than production of crops, the mainstay of the people of Bangladesh for centuries, if not for millennia. This transition is very much a post-2000 phenomenon. Towards of the end of the 1990s, crop production was still contributing more than manufacturing, but their relative positions have reversed since 2000. Thus, during the period from 2001 to 2007, the average contribution of manufacturing stood at 16 per cent of GDP as against 13 per cent from crop production. Bangladesh would thus seem to have well and truly embarked on the path of ‘modern economic growth’ as defined by Kuznets.
The shift in the structure of production is not fully reflected in the composition of labour force, however, as agriculture continues to be the largest employer. But it is significant that for the first time in the history of the country the proportion of labour force engaged in agriculture has dipped below half. According to the Labour Force Surveys, some 57 per cent of the labour force was engaged in agriculture in the mid-1980s; this proportion fell to 52 per cent by 2002/03 and has fallen further to 48 per cent according to the latest survey of 2005/06. Unlike in the case of production, however, the transfer of labour force has occurred not primarily towards industry, but towards services. But that doesn’t mean that industry, and in particular manufacturing, has not been absorbing additional labour. There was some concern in the recent past that the manufacturing growth of Bangladesh was taking place without creating any new employment, thus evoking the description of ‘jobless growth’. This perception grew despite the visibly spectacular growth of employment in the garments sector. It turns out, however, that the perception was basically misplaced, based as it was on a simplistic comparison of data that were essentially non-comparable.12
The latest Labour Force Survey of 2005/06 should dispel such misperception completely. It shows that manufacturing employment went up from 3.7 million in the late 1990s to 4.3 million in 2002/03, and went up further to 5.2 million by 2005/06, accounting for 11 per cent of the labour force.13 To put this growth in perspective, it may be noted that between 1999/00 and 2005/06 the elasticity of employment growth with respect to output growth in the manufacturing sector turns out to be 0.9, which is very high by international standards.14 Whether the manufacturing sector of Bangladesh can be made even more labour-absorbing by making it more labour-intensive in its techniques and composition without compromising its growth potential is an issue that certainly deserves serious scrutiny. But there is no basis for characterizing Bangladesh’s manufacturing growth as ‘jobless growth’.
It is also worth emphasizing that rapid growth in manufacturing employment has not come at the expense of wage growth. In the two and a half decades between 1980 and 2005, the real wages of manufacturing workers have grown a little faster than per capita income in the country as a whole – by 128 per cent as against 100 per cent. Manufacturing workers have in fact enjoyed the fastest growth of wages among all categories of wage workers over the same period.15
The growth of manufacturing is also reflected in the external sector. Manufactures have always loomed large in the export basket of Bangladesh ever since a big push was given during the Pakistan period to set up jute processing industries. But in recent years, the preponderance of manufactured exports has become even more pronounced and at the same time the composition of exports has also changed radically. The share of manufactures in the export basket has gone up from 74 per cent in the late 1980s to 93 per cent in the 2000s, while the share of jute goods has fallen from 26 per cent to just over 3 per cent. Export of garments has replaced jute goods as the prime mover of export growth, contributing some 75 per cent of all export earnings during the 2000s.
The initial spurt in garment exports was nurtured by the Multi-Fibre Agreement (MFA), agreed by the international community under the Uruguay Round of trade negotiations, which gave guaranteed access of Bangladeshi garments to the western markets. With the expiry of MFA in January 2005, it was feared that the industry might collapse, or at least contract severely. But despite some initial troubles these apprehensions have not by and large come true. Thanks partly to favourable external conditions (viz. economic boom in the west, continued restrictions on Chinese exports and duty-free access of Bangladeshi exports to the European market) and partly to the creative adjustments made by the domestic industry, garment exports have continued to flourish.
Moreover, the garment industry has itself become more diversified, with knitwear emerging as a major export earner side by side with readymade (woven) garments. During the 1990s, when the garment industry had fully taken off, knitwear contributed only about 14 per cent of export earnings as compared with a contribution of 52 per cent by readymade garments. By contrast, in the post-MFA period (2006-07), knitwear’s share has jumped to 37 per cent while the share of readymade garments’ has fallen to 39 per cent. Diversification is also evident outside the garments sector. Thus, during the period 1991-2005, the contribution of ‘other exports’ has more than doubled - rising from just about 5 per cent of total exports to close to 12 per cent.
It is significant to note that the growth of manufacturing export, together with the move towards its diversification, has occurred during a period when the economy as a whole has become more open. This is evident from all measures of openness – whether seen in terms of trade ratio (i.e., the value of export plus import as a proportion of national income) or the degree of trade liberalization (as measured by the removal of trade barriers). The trade ratio nearly doubled from 19 per cent in the first half of the 1980s to 36 per cent during 2000-0516, and rose even further to 45 per cent during 2006-07. This increase in trade orientation was helped partly by the favourable external circumstances that allowed the garments sector to flourish and partly by the phenomenal growth of remittances, which together with rising export earnings made possible a rapidly rising volume of imports.17 But partly it was also helped by sustained efforts at reducing both tariff and non-tariff barriers to trade that started in the 1980s but gathered momentum in the early 1990s. During this process of trade liberalization, a plethora of quantitative restrictions has been removed, a convoluted tariff structure has been radically simplified resulting in just 4 slabs of statutory tariff (0, 5, 15 and 25 per cent as of 2007/08), and the rates of tariff have also been drastically reduced. As a result of tariff reduction, the nominal protection rate (as measured by import-weighted average tariff rate) has come down from 24 per cent in the early 1990s to just 7 per cent during 2006/07.
To what extent trade liberalization has contributed to the growth and diversification of manufactured exports is difficult to say as it is hard to disentangle its effects from those of such exogenous factors such as the trade policies and economic cycle of the rest of the world. It would, however, be reasonable to make at the least the minimalist claim that liberalization is very likely to have made a positive contribution in this regard by reducing the incentive for pervasive import substitution.18
A distinctive feature of the process of trade liberalization in Bangladesh relates to its impact on government revenue. One common concern with trade liberalization in the developing world has been that tariff reductions might seriously constrict the fiscal space since revenues from import tariffs tend to be the largest contributor to government revenue in these countries. On purely a priori grounds, of course, there is no reason to believe that such an outcome is inevitable, for a number of reasons. First, the process of trade liberalization involves not just reduction of tariff rates but also conversion of quantitative restrictions into tariff protection (the so-called tariffication of quota). Second, as the volume of imports expands in the wake of trade liberalization the size of tariff revenue may actually increase depending on the elasticities of demand for imported goods. Third, and foremost, there is always the scope of replacing tariffs with such trade-neutral taxes as the VAT, which is compatible with the logic of trade liberalization and should help recoup any loss of tariff revenue. Despite these theoretical possibilities, however, the actual experience of the developing world at large confirms the fear about the adverse revenue effect of trade liberalization. A recent study has found that while the developed countries have been able to avoid the adverse revenue effect the developing countries have by and large failed to do so. The middle-income countries in the developing world have been able to recoup only 40-60 cents per dollar lost by way of tariff reduction, while the low-income countries have been able to recoup only 30 cents per dollar lost (Baunsgaard and Keen, 2005).
Bangladesh, to its credit, has evidently been able to buck the trend. Thanks mainly to the introduction of VAT in the early 1990s, when trade liberalization began in earnest, and partly to tariffication of quota and rising volume of imports, Bangladesh did not suffer any adverse revenue effect of trade liberalization. The direct impact of tariff reduction was marginally negative, as evidenced by the fact that the relative amount of customs revenue came down from 2.3 per cent of GDP during 1991-95 to 2.0 per cent during 2001-05. But this effect was outweighed by the new revenues obtained from the (trade-neutral) VAT and the (not-so-neutral) supplementary duties. As a result, the overall revenue from indirect taxes went up from 5.5 per cent of GDP during 1991-95 to 6.6 per cent during 2001-05. Over the same period, tax revenue as a whole (including both direct and indirect taxes) went up from 6.8 per cent of GDP to 8.2 per cent. This still represents a very poor revenue effort even by developing country standards, but trade liberalization is not to blame for this. Indeed, as we have just noted, in contrast to most other developing countries Bangladesh managed to implement its trade liberalization programme without any adverse impact on government revenue. The fact that revenues nonetheless remain very low constitutes one of the challenges facing the economy.
Yet another, and perhaps the most important, aspect of Bangladesh’s economic success is that the growth and diversification of the economy over the last two decades has been associated with significant reductions in poverty. In the 1980s, when growth was slow, the rate of poverty reduction was also very slow.19 However, as the rate of growth accelerated in the 1990s, so did the pace of poverty reduction. In contrast with virtual stagnation of poverty in the preceding decade, the poverty rate declined by 10 percentage points in the 1990s. According to the latest estimates of the Bangladesh Bureau of Statistics, the pace of poverty reduction has accelerated even further in recent years, resulting in a 9 percentage points reduction in the space of just five years from 2000 to 2005. This represents a near doubling of the annual rate of poverty reduction (in percentage points terms) as compared with the 1990s.20
Both urban and rural areas have shared in the recent reduction in poverty. According to the BBS estimates, poverty declined by exactly 17 percentage points in both urban and rural areas in the decade and a half since 1990. Urban poverty fell from 45 percent in 1991/92 to 28 per cent in 2005, and rural poverty fell from 61 per cent to 44 per cent during the same period. Thus, in contrast to the past and present experience of many developing countries, the process of growth and poverty reduction has not been predominantly ‘urban biased’ in Bangladesh – the rural population have also gained almost equally.21
A number of factors have helped in this regard. First, although some of the major growth-propelling activities, such as the garments industry, are located mainly in the urban and peri-urban areas, their workers are drawn predominantly from rural areas. The remittances they send to rural relatives have played an important part in translating overall economic growth into rural poverty reduction. Second, rural areas have also gained almost as much as urban areas from the external remittances sent by Bangladeshi migrants working abroad. Third, even as the importance of agriculture in the national economy has declined, rural Bangladesh has witnessed a significant expansion in the range and scope of non-farm activities.22 Evidently, benefits from this expansion have not remained confined to the better off population alone – the poorer segments have gained too. It is eminently plausible that the phenomenal expansion of microfinance, an area in which Bangladesh’s pioneering role has been recognised worldwide, has played a crucial role in enabling the rural poor to both contribute to and benefit from the growth of non-farm activities.23
Along with the reduction in income poverty, the people of Bangladesh have also enjoyed unprecedented expansion of human capabilities in such spheres as health and education. Significantly, the pace of progress in these spheres gathered momentum in the 1990s at the same time that economic growth began to accelerate. Thus, infant mortality rate declined by almost 40 per cent during the 1990s (falling from 94 per thousand live births in 1990 to 58 in 2000) as against a decline of just 19 per cent during the 1980s (from 111 in 1981 to 94 in 1990). It fell by a further 22 per cent in the six years between 2000 and 2006. Similarly, crude death rate, which had remained practically stagnant in the 1980s at 11-12 deaths per thousand people, fell by more than half (to 4.9) by 2000.24 Life expectancy rates reveal a similar contrast. After creeping up very slowly from 54.2 years in 1981 to 56.1 years in 1990, it rose sharply in the next decade, standing at 64.2 years by 2000.25
Falling mortality, along with such other factors as greater literacy and female labour force participation, has helped bring about the onset of demographic transition in Bangladesh at a comparatively low level of development by historical standards. This too is primarily a phenomenon of the 1990s. Over the 1980s, total fertility rate had been declining slowly – from 5.0 in 1981 to 4.3 by 1990, but the decline gathered pace in the next decade as the fertility rate fell to 2.6 by 2000.26
Educational achievements have also been considerable, though not quite as spectacular as some of the health and demographic outcomes. School enrolment at the primary level increased very sharply in the 1990s, and its effect is gradually being felt at the secondary level as well. The gross primary enrollment rate, which was only 61 per cent in 1980, increased to 72 per cent by 1990 and to 96 per cent by 2000.27 Among other things, the provision for free universal primary education and the Food for Education programme of the government, along with concerted efforts of many non-governmental organizations, are believed to have played a large role in this.
The most remarkable aspect of the progress in the educational sector has been the manner in which the traditional gender gap in enrolment is being closed. By the turn of the last century, girl’s enrolment in secondary schools had already exceeded that of boys, thanks largely to the Female Secondary School Stipend Programme launched in 1994. Under this programme, a stipend is provided directly to the girl student to help her pay for miscellaneous school fees (other than tuition fees which are paid directly to the school). The programme also made provisions for increasing the number and quality of teachers, especially female teachers, at the secondary level and making the school environment more congenial to girls. All these measures together have together had a huge success in closing the gender gap all throughout the country; as a recent study observes, “Clearly, with this program, Bangladesh has become a pioneer in South Asia in increasing female secondary enrollments and in narrowing gender disparities at the secondary level.” (World Bank, 2005, p.ix) Furthermore, the gender gap appears to be closing rapidly in primary education as well, as the ratio of females to males in primary schools increased steadily from about 83 per cent in 1991 to 96 per cent in 2000, thereby substantially reducing overall gender disparities in schooling.28
Although the achievements in the health and education sectors were more impressive after 1990 when economic growth also picked up strongly compared to the preceding decades, it is important to emphasize that it was not through growth alone that the superior outcomes were achieved. Equally important was a conscious decision on the part of the government to allocate an increasing proportion of budgetary resources to these sectors. Thus, the share of health and education in the total budget increased from an average of 14.9 per cent in the 1980s to 21.8 per cent in the 1990s (but stayed around that level thereafter). Serious issues remain about the efficacy with which these resources are administered, but at least Bangladesh can claim to be one of the few developing countries that have met the international target of spending a minimum of 20 per cent of budgetary resources on social sectors.29

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