The World Bank Office, Dhaka, in a recent report (published end July, 2007) entitled 'Bangladesh: Strategy for Sustained Growth' has underlined an interesting observation. Mr Xian Zhu, the Country Director of the Bank has remarked that poverty rate in Bangladesh has "declined steeply from 58 percent in 1992 to 40 percent in 2005, a period over which income growth has picked up markedly, and impressive progress has been made on many key human development indicators despite serious weaknesses in governance, notably corruption". Most interesting!

The report highlights a few other factors. It points out that over the last three decades many 'doubts and doubters have been disproven' with regard to the economic viability of Bangladesh. In this context it has been stated that 'life expectancy in Bangladesh has risen from 50 to 64 years. Population growth rates of 3 percent a year have been halved ... Child mortality rates of 240 per 1,000 births have been cut by 70 percent. Literacy has more than doubled, and Bangladesh is on track in meeting its Millennium Development Goal on gender parity, having already achieved the goal in primary and secondary schooling'.

These gains have been seen as 'the result of targeted government efforts and exemplary social entrepreneurship'. It has also been suggested that such a movement forward owes a 'primary debt to income growth, the strongest engine for raising living standard and reducing poverty'.

These comments are indeed significant when analysed against the backdrop of sluggish, mediocre average yearly GDP growth rate of 1.2 percent achieved between 1972 and 1989.

It has also been revealed that since 1990, due to market deregulation and privatisation measures, reforms in the areas of macro stabilisation, trade liberalisation and financial deregulation, per capita GDP growth has attained an average of 3.3 percent. This rate, almost triple of the previous average has been more than double that of the median country worldwide and three times that of the median low-income country.

It would appear that the economic advances since the 1990s have largely been due to productive reforms having coincided with political democratisation. This apparently also underpinned and benefitted human development.

Nevertheless, despite such positive reports, we are forced with many continuing negatives. In this regard I agree with the observations of the World Bank in certain areas. Bangladesh will need to 'deepen its industrial base, further its economic integration with global markets and unleash the growth potentials of its major urban centres', especially Dhaka.

Various reform measures will also need to be addressed for achieving the desired macroeconomic stability. Emphasis will have to be given towards the strengthening of tax mobilisation and reducing the corrupt practice of 'systems loss' in the energy sector. There will also have to be review and reforms pertaining to principles associated with external trade.

Similarly, our economic strategists and planners need to rebalance their policies and focus more on hitherto neglected structural areas. This should include due consideration being given to economic and corporate governance, urban management, infrastructure (particularly power sector, ports and transportation) and labour skills. Few can deny that these are especially important for strengthening factor productivity. If we can get our act together and juxtapose these with reduction in corruption, we can then definitely move forward in our poverty reduction strategy. I have over here deliberately used the term reduction and not alleviation.

It is at this point that I will also stress on another serious failing that exists within our economic system. I am referring here to our less than perfect method for gathering data and eventually transforming them into statistics. More often than not, our Bureau of Statistics ends up being a problem rather than the answer. Qualitatively, it suffers from several constraints -- both in terms of qualified, trained personnel as well as resources. In both, short as well as intermediate terms, this is affecting our research and subsequent development measures. We are being hamstrung because of this and the shortcomings need to be removed.

There are other areas which also need our attention: (a) the linkage between remittance received from our expatriate workers, rural development and micro-entrepreneurship, (b) the question of disguised unemployment and partial unemployment both in the rural as well as the suburban areas and (c) the dynamics and effect of our informal economy. These have to be reviewed in the context of our existing economic matrix and a meaningful and functional equation arrived at.

The economists in the World Bank feel that Bangladesh can make the rapid transition to Middle Income Country (MIC) status where our per capita gross national income (GNI) can reach US$875 by 2023. They consider that this will be possible if the average per capita GDP growth holds at the 3.5 percent level of the last 10 years (assuming GNI growth equals GDP growth). They have also suggested that this process could be accelerated if Bangladesh is able to raise its per-capita growth to 6 percent, implying GDP growth at a challenging, but not impossible, 7.5 per cent.

One can only comment that this desirable trend has been achieved in China, Korea and Thailand. It is now being attempted in India. It has however been possible in these countries because of certain important factors -- large dosages of FDI, a shift from agriculture to industry and services, deepening of integration with global markets and emergence of dynamic urban centres. These elements have facilitated quick transformation.

These countries have also had to, on a fast track basis, generally improve their labour productivity rates through the enhancement of labour skills. There is a lesson in this for us as well.

I believe that Bangladesh has a chance to move forward quickly if we can, in addition to the requisite reforms in the regulatory area also try to increase connectivity between our rural and urban economies. Such a step will be assisted through the imparting of greater vocational training at the grassroots level. This will encourage micro-enterprises, build capital and provide employment. It will, almost certainly, also increase prospects of agro-processing. Given capacity building, better phyto-sanitary, storage and packaging facilities, it will also add to our export diversification potential.

If we can broaden our manufacturing base, develop our financial and managerial skills and our credit extension arrangements; we will have crossed the most important hurdles. This will lead to enhanced competitiveness.

Our per capita GDP in 2005 in purchasing power parity (PPP) terms was just under US$2,000 compared to India's US$3,486, China's US$6,572 and Malaysia's US$10,843. This scenario can however change and will change if we can garner the necessary political will, have a committed political leadership and good governance.

We will need a long-term strategy, which will have to be implemented without political interference and bias. We have our bottlenecks and weaknesses but these can be overcome. We have skills constraints, but we can improve upon them through effective re-structuring, fiscal sustainability and continued monetary prudence.

Muhammad Zamir is a former Secretary and Ambassador who can be reached at mzamir@dhaka.net