Bangladesh in a Changing World Order
S Nazrul Islam |
Dec. 17, 2021, 7:51 p.m.
Dec. 17, 2021, 7:54 p.m.
The world order is undoubtedly evolving, but not always in an orderly fashion. Rather, changes occur as a result of spontaneous processes. Often times the world changes more because of the failure to bring order – climate change being a prime example. Often times this is a catch-up game, and as progress is made in proposing an order, the situation on the ground changes to undermine the proposed order. It may be recalled that there was a conscious and collective effort to change the world order in 1974, culminating in the adoption by the United Nations General Assembly of the resolution and program of action on the new order. International Economic (NIEO). At the United Nations (UN) secretariat, we are still preparing a biennial report on the progress of the implementation of this resolution. However, it is clear that on the ground, the situation has changed considerably from that which led to this initiative. In any case, whether through conscious and concerted efforts or not, there is no doubt that the world order is changing. When we envision the future of Bangladesh, we must pay attention to these changes.
TWO TYPES OF CHANGES: It is possible to distinguish two types of changes in the world order; one is what may be called “global and long term” changes and the other may be called “short or medium term changes which are of a particular nature”. The United Nations Network of Economists (UNEN, 2020) recently prepared a report marking the 75th anniversary of the United Nations. This report, titled Shaping the Trends of Our Time, identified the following five elements, what it called megatrends. These are:
– Climate change, natural capital and pollution
– Demographic trends: aging
– Emerging technologies and frontiers
Meanwhile, short to medium term changes that are unique to Bangladesh include:
– Obtaining the status of least developed country (LDC) (2016)
– Obtaining the status of low income country (LIC)
4TH INDUSTRIAL REVOLUTION (4IR): The most important global change that is happening today is probably in the area of technology. Some observers have argued that the world is going through what is known as the 4th Industrial Revolution (4IR). The term was coined and most heavily promoted by Klaus Schwab, the founder and president of the World Economic Forum (WEF), who has already written two books on the subject (Schwab 2004, 2006). The term 4IR has also been adopted by the Secretary-General of the United Nations. On several occasions Mr. Gutteres has used this term. There is some controversy regarding this characterization. In the eyes of some observers, the new technologies we are witnessing represent a continuation of the 3rd Industrial Revolution, also known as the Digital Revolution, which began with the invention of computers. Supporters of 4IR, however, believe new technologies, especially the emergence and application of artificial intelligence (AI), mark the start of a whole new stage that deserves to be called another new industrial revolution. . According to this point of view, the emergence of AI can be seen as a turning point in human history.
The 1st industrial revolution announced the substitution of muscular power by the power of machines. AI replaces many forms of mental work with intelligent machines capable of “thinking”. They also point out that an emerging revolution often goes unnoticed by contemporaries, and it is only with time that the meaning of small initial changes becomes clearer. For example, when the first factories of the 1st Industrial Revolution appeared, they were not seen as harbingers of a revolution. In fact, they were often not even noticed, because until steam engines began to be used in factories in the 19th century, most of the early factories were located near streams, to be operated by force. of the water current, far from the cities. It was only with time that the significance of the momentous change brought about by these rudimentary initial factories became clear.
Whether you call it a new 4th industrial revolution or an extension of the previous digital revolution, the fact remains that technologies are advancing at breakneck speed and the world is changing before our eyes. As the World Social Report 2021 produced by DESA and titled Reconsidering Rural Development (United Nations 2021) has shown, the possibility of remote work has undermined the very technological logic behind the rural-urban divide. The need for the physical congregation that led to the emergence of cities is thus disappearing. The dream of ending the rural-urban divide that progressive thinkers advanced in the 19th century may finally come true. Likewise, the emergence of 3D printing technology is emerging with the potential to convert manufacturing into boutique operations that can be scattered across the country, so that the world, following a “negation-negation” process can revert to a dispersed manufacturing situation, as was the case in pre-industrial societies, except of course it will be based on a whole new level of technology. It may all sound a bit futuristic. However, as I have already mentioned, the beginnings of great changes are sometimes poorly perceived by contemporaries.
4IR AND BANGLADESH: 4IR, for valid reasons, is also causing some concern, especially in developing countries that have been and continue to rely on offshoring opportunities to carry out industrialization based on high-intensity manufacturing. export-oriented workforce. The use of robots has always been a threat to employment. With the drastic reduction in the cost of robots and the invention of robots equipped with AI, the threat to employment extends not only to blue-collar workers performing repetitive manual operations, but also to white-collar workers performing repetitive mental tasks. This can affect developing countries in two ways. First, it may lead to some reversal of the offshoring or relocation of manufacturing industry to developed countries, thereby reducing the possibilities of an export-oriented labor-intensive manufacturing industry. Second, it can lead to the use of more robots even in offshore factories located in developing countries, thus reducing the expansion of employment for the same amount of capital investment. Bangladesh can be affected by both of these processes. These processes will obviously have a significant impact on the inequality situation. Let me now turn to the second type of changes in the world.
DOUBLE TRANSITION OF BANGLADESH: Among the changes of a special nature and of a short to medium character, the two most important that concern Bangladesh are the transitions it is going through from the LDC category of the United Nations and the LDC category of the Bank. global. from Middle Income Countries (LICs) to the Lower Middle Income Country (LMIC) category. These two events are encouraging for Bangladesh. However, both are fraught with challenges. These challenges are manifold, concerning trade, finance, intellectual property rights, etc. Thus, Bangladesh will no longer benefit from the preferential trade and financial status it had as an LDC or LIC. Likewise, TRIPS will become binding on Bangladesh, including those concerning the pharmaceutical industry. However, the challenges posed by 4IT go beyond the challenges emerging from the dual transition mentioned above, and Bangladesh needs to prepare for these broader challenges. The question is, what is the best way for Bangladesh to do this.
HUMAN CAPITAL DEVELOPMENT: While it may sound a bit cliché, the broader challenges of 4IR and the challenges of the dual transition have further increased the importance of human capital development. A high level of human capital is a prerequisite for participating in and benefiting from 4IR. A high level of human capital is also a prerequisite for moving up the quality ladder of products that can be efficiently produced in Bangladesh for the export market. Analysis of the middle income trap shows that the inability to move from low labor costs to innovation as a source of comparative advantage is the main reason that has led countries into this trap (Islam 2014). Again, developing human capital is the key to effecting the above change. Thus, there is a need to put more emphasis on human capital development for Bangladesh to successfully complete the dual transition and advance towards the goal of becoming a developed country and not being trapped in lower middle income status.
STATE OF HUMAN CAPITAL DEVELOPMENT IN BANGLADESH: Unfortunately, the state of human capital development in Bangladesh falls short of what is needed to face the global and dual transition challenges facing the country today. The concerns span both ends of the spectrum of the education scene. At the bottom of the ladder, the spread of madrassahs focused solely on religious education leaves the younger generation ill-prepared for the challenges of 4IR. At the high end, Bangladesh has seen a proliferation of private and public universities. However, there has not been commensurate progress in the quality of education, as evidenced by the fact that the private sector is hiring large numbers of foreign nationals for managerial positions, eschewing the BBA and MBA graduates produced by domestic universities – a process which also results in the transfer of a large amount of income abroad in the form of remittances. If this is the case with BBAs and MBAs, which most private universities focus on, this leaves less room to be optimistic about the situation in other disciplines. So, to move forward, Bangladesh needs to re-energize the population growth planning efforts and make a huge effort to overhaul the country’s education system towards the creation of a unified education system, where no one is left behind. account, where even children of low-level income families can have adequate opportunities for quality education, including fluency in Bengali and English. Pursuing such a journey will help Bangladesh not only to cope with the challenges of 4IR and the dual transition, but also to move forward towards a more equitable society, which is another prerequisite for avoiding the income trap. intermediaries.
S Nazrul Islam is head of development research in the United Nations Department of Economic and Social Affairs. The opinions expressed here are personal of the author and should not be attributed to the United Nations. The article is based on the writer’s speech at the virtual international conference on Fifty Years of Bangladesh: Retrospective and Perspective, co-hosted by the Center for Policy Dialogue (CPD) and the South Asia Program, Cornell University last week. .