Democracy vital for development

Democracy promotes economic growth and development as it provides room for questioning actions, identifying the wrongs and correcting them, said a development economist yesterday.

“Development is not about material wellbeing; it also includes expansion of freedom of all kinds, including expansion of democratic freedom, civil and political freedom,” said Siddiqur Rahman Osmani, a professor of developmental economics at the UK'S Ulster University.

In that sense, democratic freedom is a constituent of development itself, he said at the inauguration of the second South Asian Network on Economic Modelling (Sanem) annual economists' conference. Sanem, a Dhaka-based non-profit research organisation focused on economic modelling, organised the two-day event at the capital's Brac Centre Inn.

Citing various arguments and theories, Osmani said there is no reason to believe that autocracy is superior to democracy in promoting economic development.

The majority of the evidence almost conclusively demonstrates that democracy is superior to autocracy in promoting growth, human development and stable economic environment.

“Yes, autocrats can do well for the economy and can promote growth because it helps him plunder resources. But in most cases, autocratic growth would be short lived, uncertain.” 

Since an autocratic regime changes abruptly, and in a violent manner in most cases, it puts off those who are interested in investing. “They are unsure of what is going to happen when this particular autocrat goes.”

In democracy, leaders and parties may come and go, but the institutional permanence gives a sense of certainty to the investors.

Over the long term, investors feel more confident in investing in a democratic regime than an autocratic one, according to Osmani.

“So there is no room for arguing that a lack of democracy should be tolerated because it better promotes growth.”

The history of democracy shows that the longer the period of democracy, the better the growth performance and human development, he said.

“If we do not have democracy, we will be unable to detect the wrongs and eliminate them,” he said, adding that the level of development depends on the strength of democracy being practised.

Citing Bangladesh, he said there are arguments that the country should wait as it is not ready for democracy due to factors such as a lack of tolerance.

“But these are not acceptable. What good will it do if we just simply wait? We have to go through the democratic process. Whenever there is restriction on freedom, we must fight against it,” Osmani added.

The theme of this year's conference is 'managing growth for social inclusion'.

The participants at the event discussed various issues including trade and investment, poverty and inequality, employment and labour, monetary and fiscal issues, financial inclusion and ICT, climate change, and adaptation and mitigation challenges for Bangladesh.               

Bangladesh came in last in an inclusive growth index of seven countries as it did not perform well in fighting poverty and inequality, and ensuring health, education and gender equality between 2005 and 2010, said Towfiqul Islam Khan, research fellow at the Centre for Policy Dialogue.

“In contrast to Bangladesh, both Cambodia and Nepal exhibited impressive progress in poverty and inequality pillar. The same can be said about health and education, and gender equality.”

The inclusive growth index is an attempt to measure development by Khan and two of his colleagues.

It has been prepared based on seven pillars -- poverty and inequality, growth, employment, access to infrastructure and public services, health and education, gender equality, and governance and institution.

The index has been prepared on seven countries based on data for 2000, 2005 and 2010.

Bangladesh's performance deteriorated in poverty and inequality, health and education, and gender equality between 2005 and 2010, Khan said.

In Bangladesh, the poverty rates are higher among families with children, said Sanem Chairman Bazlul Haque Khondker.

For instance, some 40 percent of the rural families are unable to afford the minimum cost for a nutritious diet.

The level of poverty is also higher among the disabled people, said Khondker, also a professor of economics at the University of Dhaka.

“Bangladesh is ageing rapidly,” he said, adding that the poverty rates increase with ageing.

Subsequently, he suggested increasing the coverage of social protection programmes.

Barkat-e-Khuda, supernumerary professor of economics at the University of Dhaka, called for increasing the budgetary allocations for education and health.

He said it would not be possible to reap the benefits of demographic dividend without ensuring improved quality of education and skilled human resources.

Abdul Bayes, director of Brac's research and evaluation division, stressed the need for vocational and technical training instead of focusing too much on general education. 

Bangladesh can cope with the negative effects of climate change by 2055 but the cost of adapting to the changes would be very high, said David Hulme, professor of development studies at the UK's University of Manchester.