The nature of development economics | The Daily Star
12:00 AM, October 02, 2010 / LAST MODIFIED: 12:00 AM, October 02, 2010

The nature of development economics

Farida Shaikh acknowledges the importance of a new work

Unnayaner Orthonity, Rizwanul Islam, The University Press Limited, July 2010

Prominent development economist Amartya Sen won the Nobel Prize in 1998. He is the author of Development as Freedom. Freedom, Sen argues, 'is both the end and most efficient means of sustaining economic life and the key to securing the general welfare of the world's entire population…In the new global economy… the contemporary world denies elementary freedom to vast numbers… it is still possible to practically and optimistically restrain a sense of social accountability.' The Nobel laureate thus brings an 'ethical dimension' to the technical study of economic.
Unnayaner Orthonity is about development economics. And development economics is a branch of economics that deals with economic aspects of the development process in low income countries. It focuses on economic growth and structural change with emphasis on improving the potential for the mass population through public as well as private channels in health, education, employment and other areas.
Of the eleven sections in the book, the most exciting read comes at the end: What kind of economic growth is Bangladesh attaining? It is based on Islam's paper presented at an international seminar on the subject of 'Development prospects of Bangladesh: Emerging Challenges', organized by the Bangladesh Institute of Development Studies in Dhaka in December 2007. The impact of the global economic crisis cancelled the country's GDP growth rate at 7 % as projected by the Asian Development Bank. Table 11.1 makes clear the GDP per capita 2005 in Bangladesh was $470, in India $720, in Pakistan $690, and in Sri Lanka $1160. Based on 1995-96 price indexes, Table 11.2 show GDP by percentage of various sectors. GDP and rate of inflation and industrial production are given in figures 11.2 and 11.3. Employment figures for various industrial sectors between 1983-2002 shows a dramatic increase in garment sector employment, with a much lesser increase in paper and cement industries.
Section two of the work covers economic history. The inductive methods of analysis identify stages of growth, leading to international economic disparity p.35. All societies are found within one of the five stages: the traditional society, the pre-conditions for take-off, the actual take-off, the drive to maturity, and the age of high mass consumption. Refer to W.W.Rostow: The stages of Economic Growth: A Non-Communist Manifesto 1966.
The Harrod-Domer model 1930 suggests that savings provide the funds which are borrowed for investment purposes. The economy's rate of growth depends upon savings, savings ratio and capital output ratio.
Karl Marx propounded the theory that human civilization has manifested itself in a series of organizational structures, each determined by its primary mode of production, particularly the division of labor that dominates each stage of development: the tribal form, primitive communism, feudal or estate property and capitalism.
Economic development in developing countries covered in section three is about dual economy, which is the existence of two separate economies within one country. Lewis elaborates this as labor supply theory of rural urban migration. Further, a differentiation is drawn between low income rural subsistence sector with surplus population, and an urban expanding capitalist sector. The role of capital accumulation in the industrialization of labour surplus economy known as Fei-Ranis model is also discussed. The examination of this model is done by formulating a disequilibrium adjustment model of a dual economy.
Section four has been given over to a discussion of inequality and poverty. The inter-connectedness between the concept of inequality, income distribution and the stage of economic growth are examined. Next, the steps to reduce inequality in income distribution and its follow-up in reduction of poverty are discussed.
Based on twenty-eight references, economic growth, employment and poverty reduction in sections five and six raise the crucial question: Can agriculture alone be the engine of economic growth in a country? This refers to the seminal work of Schultz: Transforming Traditional Agriculture (1964) and Johnston and Mellor:'The Role of Agriculture in Economic Development' (1961). The discussion is based on data analysis and the experiences of some Asian countries.
Next, section seven deals with the importance of non-agricultural activities in a rural economy. The role of these activities in poverty reduction and reducing inequality through income distribution are also covered. Industrialization and economic development, particularly strategies for industrialization, and scope of employment come under section nine.
Section ten focuses on economic development and international organizations with a brief evaluation of the activities of the IMF and the World Bank. Section one is an overview of economic as well as human development.
The writer, Rizwanul Islam, was for a long period resident in Geneva. Upon his return to the country, UPL requested the writer to write in Bangla on the economics of Bangladesh. Based on agreed contents that would be covered in his work, the writer submitted a draft outline of the text. To this was added section ten. This was in May 2007 when the writer was commissioned by the University Press Limited to do the work.
The purpose of this Bangla publication is fundamentally to enhance overall awareness on basic subjects such as economics. It will certainly be of benefit to teachers and students alike as also to general readers. Particularly for those who are less fluent in English, this work will deepen their understanding of economics and development issues. Many of UPL's past publications have covered academic issues in Bangla. It is encouraging to know that the publishing house has plans to offer more writings in Bangla on basic subjects in future.
The book has been generously acclaimed by some development writers in Bangladesh. Note can be made here of Professor Wahiduddin Mahmud, Moshiur Rahman and Akbar Ali Khan, who acknowledge its relevance to an understanding of contemporary economic realities in Bangladesh.
The book is a landmark work on Bangladesh's development economics. In this concise and compact edition is presented a detail analysis and understanding of economic 'nitty gritty' in Bangla. This slim volume, two hundred and twenty pages in all, is especially recommended for all students, teachers, scholars, researchers and readers for whom reading in Bangla is natural, a matter of habit. However, this does rule out the possibility of showcasing this fine work of international standard abroad. Sad, I say, unless, of course, the writer has plans of reproducing it in English.

Farida Shaikh is a critic, reviewer and member of The Reading Circle.

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