The Problem of Poverty in Bangladesh

The Problem of Poverty in Bangladesh

By Professor Muhammad Yunus

Ever since its founding, Bangladesh has been known as one of the world's poorest countries. There has been an ongoing battle against challenging living conditions overcrowding, floods, deforestation, erosion, soil depletion and natural calamities. As Grameen Bank founder and Noble Prize winner Muhammad Yunus argues, solutions are available provided we are willing to entertain fresh thinking about poverty and its remedies.

I don't think we can blame fate, nature or God for our troubles. The real problem in Bangladesh is not the natural disasters. It is the widespread poverty, which is a man-made phenomenon.

Taking steps toward safety

Cyclones, floods and tidal surges occur in other countries. In most, they do not cause human misery of the magnitude we see in Bangladesh.

The reason is that, in these countries, the people are rich enough to build protective systems and strong embankments. Rivers in Canada, England and France have tidal surges similar to those in Bangladesh, but dredging and causeway construction have minimized their effects and the threat to human life.

Furthermore, poverty and over-crowding have pushed the countless poor in Bangladesh to seek their livelihoods in more and more unsafe areas of the country, though they lack the capacity to organize even minimal safety measures for themselves.

A threat to world peace

Thus, poverty doesn't only condemn humans to lives of difficulty and unhappiness­ it can expose them to life-threatening dangers. Because poverty denies people any semblance of control over their destiny, it is the ultimate denial of human rights. When freedom of speech or religion is violated in this country or that, global protests are often mobilized in response.

Yet when poverty violates the human rights of half the world's population, most of us turn our heads away and get on with our lives.

For the same reason, poverty is perhaps the most serious threat to world peace, even more dangerous than terrorism, religious fundamentalism, ethnic hatred, political rivalries or any of the other forces that are often cited as promoting violence and war.

Loss of hope

Poverty leads to hopelessness, which provokes people to desperate acts. Those with practically nothing have no good reason to refrain from violence, since even acts with only a small chance of improving their conditions seem better than doing nothing and accepting their fate with passivity.

Poverty also creates economic refugees, leading to clashes between populations. It leads to bitter conflicts between peoples, clans and nations over scarce resources water, arable land, energy supplies and any saleable commodity.

Prosperous nations that trade with one another and devote their energies to economic growth rarely go to war with one another ­ nations whose people are brutalized by poverty find it easy to resort to war.

By lifting people out of poverty, micro-credit is a long-term force for peace. And Bangladesh is a vivid example of what it can do.
Bangladesh today is a living laboratory­ one of the world's poorest countries that is gradually being transformed by innovative social and business thinking. Over the past two decades, conditions among the poor people of Bangladesh have steadily improved. Statistics tell part of the story.

Signs of improvement

The poverty rate (as measured by international aid organizations such as the World Bank) has fallen from an estimated 74% in 1973-74 to 57% in 1991-92, to 49% in 2000 and then to 40% in 2005.

Though still too high, it continues to fall by around 1% a year, with each percentage point representing a meaningful improvement in the lives of hundreds of thousands of Bangladeshis. The country is on track to achieve the Millennium Development Goal of reducing poverty by half by 2015.

Even more remarkably, Bangladesh's rapid economic growth has been accompanied by little increase in inequality. The commonly used Gini index of inequality has changed only from 0.30 in 1995 to 0.31 in 2005.

It's also noteworthy that, since 2000, the real per-capita income of the bottom 10% of the population has grown at the same annual rate as that of the top 10% (2.8%).

Tangible growth

The sharp drop in poverty is reflected in changes in economic growth, employment patterns and the structure of the economy. Growth of the Bangladeshi economy at $71 billion, the third largest in South Asia, after India and Pakistan­ has averaged 5.5% since 2000 and reached 6.7% in 2006, compared with just 4% in the 1980s. In addition, per-capita growth has increased from 1% in the 1980s to 3.5% currently.

Reliance on subsistence agriculture is gradually declining. In 2005, non-farm labor surpassed agriculture as the main source of income in rural areas, and fully 50% of the nation's GDP is now derived from the services sector.

Population growth a major problem in Bangladesh, one of the most densely populated countries on earth­ has fallen sharply, from an annual average of 3% in the 1970s to 1.5% in 2000. This is close to India's 1.4% but much lower than Pakistan's 2.5%.

Quality of life

This slowdown means that more families have the resources to care for their children and provide them with decent opportunities for education.

It also means the liberation of millions of women from an endless cycle of child-bearing and child rearing, giving them the chance to help their families improve their standard of living through productive work.

Controlling population

The decline in population growth has been driven, in large part, by improvements in health care. When more children survive, parents feel more confident about using birth control they no longer believe they need to bear five or six children in hopes of raising two. During the 1990s, the percentage of Bangladeshi mothers receiving prenatal health care doubled.

Partly as a result, infant mortality rates in Bangladesh fell by more than half (from 100 to 41 per 1,000 children) between 1990 and 2006. In addition, the mortality rate for children under five is 52 per 1,000 in Bangladesh compared with 87 in India and 98 in Pakistan.

Healthcare and life expectancy

In 2005, the percentage of one-year-old children among the poorest 20% of households who had been fully immunized stood at 50% in Bangladesh, compared with 21% in India and 23% in Pakistan.

Around 81% of children had been vaccinated against measles, compared with 58% in India. And while child malnutrition remains a serious problem, the percentage of children whose growth is stunted has declined from almost 70% in 1985-86 to 43% in 2004.

Statistics for life expectancy at birth, which were static at around 56 years through the early 1990s, have begun to climb. By 2006, life expectancy was estimated at 65 years, and the unusual situation in which women's life expectancy was lower than men's has finally been reversed, with women now at 65 years and men at 64 years.

Educational opportunities

Educational opportunities for children have also improved. The percentage of children completing the fifth grade has increased from 49% in 1990 to 74% in 2004. National literacy rates have increased from only 26% in 1981 to 34% in 1990 and 41% in 2002. The 1990s witnessed a tripling in the number of children attending secondary school.

More girls now attend secondary schools than boys, a feat unmatched in South Asia and a remarkable achievement given the fact that, in the Bangladesh of the early 1990s, there were three times as many boys as girls in secondary schools.

Health and sanitation

The quality of shelter and access to basic sanitation and telecommunication services have all improved significantly in recent years. In 2000, 18% of households lived under straw roofs. By 2005, the percentage had fallen to 7%.

A sanitation campaign has resulted in increased access to safe latrines from 54% in 2000 to 71% in 2005. The mobile-phone revolution has boosted the fraction of the population with access to telephone services from 2% in 2000 to 14% currently.

Guarding against disaster

Bangladesh's capacity to withstand natural disaster shocks has improved significantly. Following the massive floods of 1998, per-capita GDP fell sharply, but a flood of similar scale in 2004 had a negligible impact on growth.

This resilience is attributable to a more diversified economy and improved emergency response capabilities, including early warning systems and cyclone shelters, throughout the country.

Between 1980 and 2004, the Human Development Index (a widely used measurement of key standard-of-living indicators for developing nations) increased by 45% in Bangladesh compared to 39% in India and 16% in Sri Lanka. This is despite the fact that, as of 2004, per-capita GDP in India was 68% higher than in Bangladesh, and in Sri Lanka over 200% higher.

Global applications

As these numbers suggest, the problems of poverty in Bangladesh, though improved, are far from being solved. Bangladesh is still one of the poorest countries in the world, with tens of millions of people living at a level barely above subsistence. But the social and economic trends are moving in the right direction.

The challenges and opportunities facing Bangladesh illustrate some important themes that many of the world's developing countries share:

  1. The need to think strategically about development, analyzing a country's potential role in its region and the world in search of opportunities for growth;
  2. The need to get past myths, stereotypes, and assumptions about poor countries and their relations to their neighbors;
  3. The need to find fresh, positive approaches to development that emphasize the potential strengths of a country and its people, not just their problems;
  4. The need to think about how social business can address social and economic problems that are usually left to be resolved by governments.

These ideas offer hope for alleviating the worst effects of poverty both in Bangladesh and in many other poor countries around the world.

Editor's Note: This feature is adapted from CREATING A WORLD WITHOUT POVERTY by Muhammad Yunus. Copyright 2007 Public Affairs. Reprinted with permission of the publishe

The World in 2050

The World in 2050
 


By Professor Muhammad Yunus

The Grameen Bank, a microfinance lender and community development bank started in Bangladesh, works to eradicate poverty worldwide. But what other goals would Nobel Prize-winning founder Muhammad Yunus like to see achieved by 2050? In "Creating a World Without Poverty," Professor Yunus describes what he sees as the ultimate goals of globalization.

Let me give a wish list of my dream world that I would like to see emerge by 2050. These are my dreams, but I hope that many of my dreams will coincide with yours. I am sure I would love many of the dreams on your list so much that I would make them my dreams too.
 
Here is my list:
 
There will be no poor people, no beggars, no homeless people and no street children anywhere in the world. Every country will have its own poverty museum. The global poverty museum will be located in the country that is the last to come out of poverty. There will be no passports and no visas for anybody anywhere in the world. All people will be truly global citizens of equal status.There will be no war, no war preparations and no military establishment to fight wars. There will be no nuclear weapons or any other weapons of mass destruction.

A brighter future

There will be no more incurable diseases, from cancer to AIDS, anywhere in the world. Disease will become a very rare phenomenon subject to immediate and effective treatment. High-quality healthcare will be available to everyone. Infant mortality and maternal mortality will be things of the past.There will be a global education system accessible to all from anywhere in the world. All children will experience fun and excitement in learning and growing up. All children will grow up as caring and sharing persons, believing that their own development should be consistent with the development of others in the world.

Encouraging entrepreneurship

The global economic system will encourage individuals, businesses and institutions to share their prosperity and participate actively in bringing prosperity to others, making income inequality an irrelevant issue. "Unemployment" and "welfare" will be unheard of. Social business will be a substantial part of the business world.

There will be only one global currency. Coins and paper currency will be gone.

The future of banking

Technology will be available with which all secret bank accounts and transactions of politicians, government officials, business people, intelligence agencies, underworld organizations and terrorist groups can be easily detected and monitored.

State-of-the art financial services of every kind will be available to every person in the world.

Sustainable lifestyles

All people will be committed to maintaining a sustainable lifestyle based on appropriate technologies. Sun, water and wind will be the main sources of power.

Humans will be able to forecast earthquakes, cyclones, tsunamis and other natural disasters precisely and in plenty of time to minimize damage and loss of life.

All cultures, ethnic groups and religions will flourish to their full beauty, contributing to the magnificent unified orchestra of human society.

There will be no discrimination of any kind, whether based on race, color, religion, gender, sexual orientation, political belief, language, culture or any other factor.

Universal communication

There will be no need of paper and therefore no need to cut down trees. There will be biodegradable reusable synthetic papers, in cases where "paper" is absolutely needed.

Basic connectivity will be wireless and nearly costless.

Preserving cultural identities

Everybody will read and hear everything in his own language. Technology will make it possible for a person to speak, read and write in his own language while the listener will hear and the reader will read the message in his own language. Software and gadgets will translate simultaneously as one speaks or downloads any text. One will be able to watch any TV channel from anywhere and hear the words in his own language.

All cultures, ethnic groups and religions will flourish to their full beauty and creativity, contributing to the magnificent unified orchestra of human society.

All people will enjoy an environment of continuous innovation, restructuring of institutions and revisiting of concepts and ideas.

Unlimited human potential

All peoples will share a world of peace, harmony and friendship devoted to expanding the frontiers of human potential.

These are all achievable goals if we work at them. I believe that, as we proceed through the future, it will be easier and easier to get closer to our dreams. The difficult part is making up our minds now. As more of us can agree on what we want to achieve, the quicker we can reach our goals.

Making dreams into realities

We tend to be so busy with our everyday work and enjoying our lives that we forget to look through the windows of our lives to find out where we are right now in our journey, and take time off to reflect where we wish to go ultimately. Once we know where we want to go, getting there will be so much easier.

Each of us should draw up a wish list of our own to reflect on what kind of world we would like to see when we retire. Once it is done, we should hang it on our walls to remind us daily whether we are getting closer to the destination.

Editor's Note: This feature is adapted from CREATING A WORLD WITHOUT POVERTY by Muhammad Yunus. Copyright 2007 Public Affairs. Reprinted with permission of the publisher.

Yunus for more stress on IT for prosperity

 

Staff Correspondent
Noble laureate Prof Muhammad Yunus yesterday said Bangladesh needs more motivation in information technology for achieving swift prosperity.

He was speaking as the chief guest at the BUET Alumnae Association reunion programme at Bangladesh University of Engineering and Technology (BUET). Prof Jamilur Reza Choudhury, president of the association, chaired the inaugural session of the programme.

Prof Yunus urged the existing and former students to come up with new inventions to enhance the country and mankind.BUET has lifted the esteem of Bangladesh while the country's reputation has been slandered across the world, he added.

...why only take benefit of technologies from other countries when we need to come up with something ourselves, he said.

Grameen Bank has been providing education loans and offering scholarships to bright students to facilitate families maintained by women, Yunus said.

He also said around 35,000 students are now studying in different universities provided with loans by Grameen Bank.

"We are able to involve more former students in our activity," said Prof Jamilur Reza Choudhury adding that the existing number of alumnae members nears 1,000.

Acting Vice-chancellor of BUET Prof Abdur Rouf said such programmes would increase interactions between former and existing students, which will help the existing students to change their view on delaying exams.

The performance of alumnae has tinted the reputation of BUET in Bangladesh and abroad, he said.

Executive Director of Alumnae association Sadekul Islam and Deputy Chief Executive Officer of Grameen Phone also spoke among others in the inaugural session.

How Legal Steps Can Help to Pave the Way to Ending Poverty

 

Vol. 35, No. 1
by Muhammad Yunus

There is no better time for a serious discussion of how the law and lawyers can enable the poor to help themselves' throughout the world, and especially in the United States.

Right now, highly regulated banks in the developed world (many of them in the United States ) are having trouble pricing and trading complex mortgage-backed securities. At the same time, however, trust-based microfinance banks like Bangladesh's Grameen Bank continue to do well, unaffected by the financial uncertainty in the rest of the world.


How the Trust-Based Grameen Bank Works

The Grameen Bank issues loans using very simple trust-based financial arrangements; no legal documents are involved because, in part, Grameen's borrowers are poor and have no collateral. So, Grameen relies on trust and the positive incentives of continued access to credit and other support to ensure repayments' and Grameen's repayment rates have averaged better than 98 percent. Because Grameen's loans are based on trust and positive incentives and no legal documents, Grameen has never used lawyers or courts to collect any of its loans. Grameen has about 7.5 million borrowers in Bangladesh, and has loaned approximately $7 billion since its inception, with an average loan size of about $150.

When a potential borrower wants a loan, she has to form a group of five or join such a group of borrowers from her neighborhood and agree to meet with that group once a week. Each loan is made to an individual in the group and is the responsibility of that one individual, but others in the group cannot get their next loans if any member of the group is late in her payments.

Grameen's borrowers are also required to maintain a regular savings plan, and today its borrowers and their nonborrowing neighbors as a group have $150 in savings for every $100 in loans outstanding. Today, the Grameen Bank is funded by the savings deposits of the poor. It has been profitable for all but three of the last twenty-five years.

Grameen's interest rates for loans and savings are clearly available to all at www.grameen.com. All loans are intended for income-producing activities, housing, or education, not for consumption. The basic interest rate for most business loans is 20 percent. In addition, Grameen has issued more than 600,000 housing loans at 8 percent and about 20,000 educational loans at 5 percent.

Grameen also has arranged loans for about 100,000 beggars, whom it calls "struggling members." These loans are interest-free and offered without time limits. The goal is to encourage these members to cease begging and to become regular savers and borrowers. To date, 10 percent of these borrowers have left begging behind completely.

The Grameen bank is 96 percent owned by the borrowers, 97 percent of whom are women. Nine of its twelve directors are women.

Its bankers, using bicycles or motorcycles, go to a borrower's neighborhood for the weekly meetings. Typically, ten or so groups of five borrowers (sixty individual borrowers total) meet every week for about an hour to pay back existing loans, to receive new loans, and to exchange ideas in an open and transparent way in front of the whole group of fellow borrowers. The approach is practical also because Grameen's borrowers typically cannot read financial statements.

Grameen's borrowers have established some of their own rules. Known as the Sixteen Decisions, many of these rules have to do with the health of the family and the care and education of children (see www.grameen.com for details).

Complex Isn't Always Better

In view of the general financial uncertainty in the world, one wonders how helpful complex legal contracts have proven to be for the subprime borrowers or for the lenders who are currently experiencing difficulties. How useful are these contracts if the transactions are not ultimately based on trust between bankers and borrowers who know each other? In 50 percent of the current housing foreclosures in the United States, no direct communication exists between the borrower and the lender. Grameen's bankers and borrowers meet and look each other in the eye each and every week during the group meetings.

One must also ask how successful all of the disclosure statements are if they are buried in a large pile of documents that are so long and complex that no one, including the bankers, seems to fully understand the implications of the interest rate adjustments in the documentation. So many of the more complex mortgages and mortgage-based securities in the United States are faltering or failing. But Grameen's much simpler trust-based loans to poor women with no collateral seem to be doing well.

A similar situation occurred in 1997, when microfinance continued to grow steadily despite the financial instability that accompanied the Asian currency crisis. The macroeconomies in a number of Asian countries declined steeply when a bubble of speculative lending burst, but the microfinance organizations in those countries continued to thrive. During a financial crisis, microfinance organizations can be an island of stability.

In a recent meeting, U.S. Federal Reserve Chairman Ben Bernanke commented that the United States has less of an informal or unregulated sector than developing countries do. The discussion turned to the importance of a culture of thrift, hard work, savings, and mutual aid, and to whether those qualities remained important in the United States. Federal Reserve Board governor Randall Kroszner, who was also in attendance, cited the book "From Mutual Aid to the Welfare State" by David T. Beito. Beito's book documents the importance of thrift, hard work, and savings in the growth of the United States, where local community-based voluntary mutual aid societies provided bottom-up delivery of health care and financial services and promoted a culture of thrift and work for the poor.

What makes the trust-based Grameen bottom-up model so valuable is that it builds human, family, and social capital by helping the poor (poor women in particular) to help each other in a voluntary and businesslike fashion that builds respect and self-esteem. Grameen has learned that the poor can take care of themselves, and that they can support each other and make important contributions to society. The resulting knowledge, experience, confidence, pride, and self-respect have become the basis on which Grameen has successfully built its lending program.

Where the Legal Profession Can Help

Lawyers can provide vital help to encourage and enable lower-income people to take care of themselves in the United States and internationally. The needs are universal, but laws differ among countries, so perhaps lawyers can form groups in each country to develop or revise laws that ultimately help the poor to help themselves. Perhaps one group of lawyers can be formed for each of these or similar objectives in every country where such changes are needed. Here are some areas to focus on:

1. Simpler laws for microfinance programs. Everywhere in the world, simpler laws are needed to allow microfinance programs to receive savings deposits and re-lend that money. The right regulations should allow a microfinance organization to expand through savings deposits. Expansion of lending through savings deposits would be the single most important step in expanding microfinance globally. In the United States, credit union regulations might work for microfinance organizations, and Grameen America is studying that option. The best option would be to create a new law exclusively for establishing microfinance banks for low-income people and people on welfare.

2. Laws focused on individual borrowers. In the United States in particular, low-income borrowers find that starting and managing a small business can be difficult because laws and regulations either are intended for larger businesses or simply are not essential. For example, in the state of Louisiana, a person cannot arrange and sell more than one variety of flowers in a vase for resale without taking a test to get a state license. This regulation discourages new entrepreneurs, reduces competition, and keeps the cost of flower arrangements high. The license could be voluntary and optional, allowing the end purchaser of that flower arrangement to decide if he wants flowers arranged by a licensed or unlicensed businessperson.

3. Waiver medallions for the poor. Very poor people should be entitled to sort of waiver medallion that enables them to take care of themselves through self-employment opportunities with minimal or no interference from laws that weren't designed with them in mind. Such a medallion would entitle the very poor to do what they need to do in search of earning their own legal livelihood, and no law should be allowed to interfere with that initiative. Free trade and special enterprise zones are common. Let's work to give the poor the individual right to operate in a legal interference-free zone to make a living for themselves.

4. Welfare and Medicaid laws designed to encourage independence. Welfare and Medicaid laws often too steeply limit how much a low-income person can save or earn. These laws should be designed to help people gain self-respect and independence by taking care of themselves through income-producing activities. Instead, the welfare laws seem designed to keep people on welfare longer than necessary. Creative policy changes should be put in place to help people help themselves and to lose these subsidies gradually rather than all at once.

5. Simpler laws for the poor. Laws should be kept as simple as possible for low-income people in particular, to motivate them to take the next steps to help themselves.

6. Non-governmental loan programs. Governments should create an enabling environment for microcredit programs without getting directly involved in lending money to the poor. It's extremely difficult for a political entity to recover money that it has loaned to poor people. Some people look at government as an agency that is required to take care of them. Thus, the important discipline of paying back a loan is lost in a government program. Politicians by necessity are more focused on awarding loans and securing votes than in making sure loans are repaid. For all these reasons, loan programs should be left to the non-governmental, private sector, and social businesses.

7. Tax laws that encourage social businesses. Social businesses are designed exclusively to maximize benefits to customers, rather than maximizing profits. Social businesses serve social needs in a businesslike manner. Such a business is sustainable and makes a profit, and the investor gets back the capital he invested, over time. Profits in a social business are entirely reinvested to expand the existing social business or start new ones. A charity dollar can be used only once, but a social business investment dollar is recycled indefinitely. Current tax laws offer tax benefits to charitable organizations. New tax laws are needed that put social businesses on at least an equal footing with charities.

8. Simpler visa, immigration, and passport systems. The current visa, immigration, and passport systems worldwide are a great source of frustration and wasted time and resources. So many countries want some of Grameen's 27,000 experienced microfinance employees to come and build programs, but those same countries have complicated and expensive visa procedures. The children of developed countries want to come to Bangladesh to study microfinance. The children of Bangladesh's poor borrowers want to travel and go to international schools. Simple programs that allow people to travel more easily to share what they know should be devised. The goal should be a world where people can travel freely without the need for passports and visas.

9. Tariffs and trade barriers that favor the less powerful. Tariffs and trade barriers seem to favor the powerful over the less powerful. The relatively poor country of Bangladesh has to pay one of the highest tariffs on its textile exports to the United States. The goal should be to help poor countries to do more business with rich countries, rather than letting them depend on their foreign aid.

We must all believe in people and their ability to change their own lives. All people, including the poor, have enormous capacity to help themselves. Despite appearances, deep inside every human being exists a precious treasure of initiative and creativity waiting to be discovered, to be unleashed, to change life for the better. If we look at each and every poor person from this perspective, we will find enormous possibilities for this world.

Dr. Muhammad Yunus is founder and managing director of Grameen Bank in Dhaka, Bangladesh. He is the 2006 Nobel Peace Laureate (shared with Grameen Bank)

Link: http://www.abanet.org/irr/hr/winter08/yunus_winter08.htm

Bangladesh and Its Giant Neighbors

Bangladesh and its Giant Neighbors
 

By Muhammad Yunus

Stable infrastructure, good governance and reduced corruption could help Bangladesh lift itself out of poverty. In this Globalist Bookshelf feature from Creating a World Without Poverty, Muhammad Yunus examines the importance of Bangladesh's geographic location and explores how the country could become a global mega-port.

Bangladesh is a lucky country. It can easily create a dynamic economy by exploiting its attractive geographical location, flanked by two giant, rapidly growing neighbors India and China.

India has already achieved an 8% GDP growth rate while China has surpassed 11% and both have reduced their poverty rate to less than 25%. They are becoming such political and economic powerhouses that the whole world is paying serious attention to them.

Profit by association

With our giant neighbors bringing the whole business world to their doorsteps, Bangladesh can benefit simply from being in the neighborhood. Growing neighbors are convenient sources of technology, experience, skills and contacts.

Bangladesh, in turn, can be an attractive venue for both countries for all kinds of outsourcing. If even a small portion of the business flowing into India or China comes to our shores, we will be a fast-moving economy.

Some Bangladeshis worry that our smaller country will be overwhelmed by its giant Indian neighbor if we open our borders for free trade. India, they say, will flood our markets with goods taking advantage of the free trade zone and stifle the potential for nascent industries in Bangladesh.

Benefits of trade

But India already "floods" the Bangladeshi market with goods, only through unofficial channels that generate no government revenues (other than bribes to border personnel and customs officials). According to figures from Bangladesh Bank, officially recognized imports from India exceeded $1.8 billion in 2005-6, and estimates are that unofficial trade may be as much as 50% higher.

Free trade rules will legalize this unrecognized flow of goods and capture revenues for the government in the process. If reasonable provisions for adjustments by businesses and communities are made and if safeguards are put in place to prevent exploitation of the weak by the powerful small countries can benefit just as much from free trade as large ones.

Trade agreements

Bilateral free-trade agreements are already in effect between some of the SAARC countries for example, India and Sri Lanka. If tiny Sri Lanka, with a population under twenty million, can benefit from open borders with India, why not Bangladesh?

Bangladesh can be an attractive venue for both China and India for all kinds of outsourcing.

There are many reasons why Bangladesh should have an excellent relationship with India, but tensions between the two countries remain needlessly high. Although Bangladesh remains grateful to India for its military help during our liberation war, a pervasive feeling of fear about India persists in Bangladeshi minds.

Perhaps this is understandable India is seven times bigger than Bangladesh, surrounds Bangladesh almost completely, has the third largest army in the world, and is predominantly Hindu rather than Muslim (although India, in fact, has a larger Muslim population than Bangladesh).

Exploiting the poor

Some Bangladeshi politicians exploit Bangladeshi anxieties by blaming India for anything that goes wrong in Bangladesh and promising to "protect" Bangladesh from the unnamed threats supposedly posed by India.

For its part, India complains about illegal immigration by poor Bangladeshis looking for work in India. (In this respect, India and Bangladesh have a relationship comparable to that between the United States and Mexico, where border crossings by poor people in search of economic opportunities have also caused international tension.)

The global stage

India also complains that Bangladesh harbors and supports armed guerrilla leaders from Eastern India. Bangladeshi leaders continue to deny this allegation, but it does not seem to disappear.

In an atmosphere of general distrust, it is easy to stoke people's fears in this case, the fear of domination by a giant neighbor. But in today's world, countries generally don't dominate one another through military might but rather through economic power.

If Bangladesh remains a poor country, everybody will dominate her, not just India. Moving up the economic ladder as quickly as possible is the best protection against every form of foreign domination.

Advantageous location

Bangladesh's strategic location can be the key factor in shaping our country's future. Located at a regional crossroads, Bangladesh can be a converging point for international trade for all its neighbors. All that it has to do is provide shipping facilities for all these countries landlocked Nepal and Bhutan, virtually landlocked eastern India, western China, and northern Myanmar.

These areas have a total population of over 300 million and fast-growing economies with per-capita annual incomes rising steadily beyond the $1,000 mark.

Building new ports

Bangladesh has to to create world-class port facilities for the growing economy and build a network of superhighways to connect these countries with the port facilities.

Bangladesh has to prepare itself to take on a big development venture to create world-class port facilities for the growing economies of Bangladesh as well as her neighbors, and to build a network of superhighways to connect these countries with the port facilities.

This deep-sea mega-port may be built near Cox's Bazar, a city 90 miles south of Chittagong near the Myanmar border. This mega-port could serve this entire region and bring significantly greater prosperity to millions of people.

Under current conditions, Bangladeshi goods are at a great disadvantage compared to those of other nations. It takes several times longer to process products manufactured in Bangladesh for export than in Singapore, and the average cost for exporters in Bangladesh is almost double than that in Indonesia.

Accommodating for heavy traffic

A mega-port at Cox's Bazar, equipped to accommodate the vast new vessels now being used in global trade and the new ships with even deeper draft that will be built in the coming years, will solve these problems.

The port should be equipped with the latest cargo-handling technology and linked to neighboring regions and countries by a network of super highways that will support a continuous flow of vehicles carrying modern containers.

Singapore became one of the most prosperous countries in the world because of its location as a strategic port. There is no reason why Cox's Bazar can't play a similar role in the future development of Bangladesh.


Editor's Note: This feature is adapted from CREATING A WORLD WITHOUT POVERTY by Muhammad Yunus. Copyright 2007 Public Affairs. Reprinted with permission of the publisher.