Policy for balanced development

Settlement of the vast population of Bangladesh shows great disparity in their concentration and locations. Urbanisation and migration of people in search of economic opportunities notwithstanding, the greatest number of the country’s population–some 90 per cent–are still found to be living in the rural areas. But even this rural population is not uniformly provided with economic and developmental opportunities.
Some regions are relatively advanced than the others ; others are very backward. Employment conditions are reasonable in some regions but pitiable in the others. In sum, the entire country presents a spectacle of non uniform state from the perspectives of economic growth and development. This is reflected in various economic inequities such as urban people monopolizing the benefits of jobs and higher income to the exclusion of rural people in general. There is also noted regional disparities in matters of existing industries and industrialization. For example, the areas in and around the three major cities of Dhaka, Chitttagong and Khulna have the major industrial concentrations whereas there is hardly any such concentrations in the other areas. Thus, the other areas do not offer any meaningful scope for industrial employment when further entry of the labour force in the agricultural sector is difficult or not needed because of the saturated conditions of this sector in terms of creating significant additional employment.
Government’s policy policy makers need to early address the issues of growing imbalance in economic growth and development. This purpose can be best served from firstforming a regional policy and implementing it phase by phase after setting the priorities.
For example, a big part of the plan can be devoted to first identifying the highest priority areas where economic opportunities are the least. After having done this, it should be planned how these most backward areas can be aided in the way of economic activities or to set up new enterprises in them. From agriculture based projects to produce new crops for export to light industries, all sorts of new enterprising can be encouraged in these areas. Government will have to build basic infrastructures in them to make them usable by private entrepreneurs. Government on its own can also build various enterprises in them and make them available to private firms for rent or sale on favourable terms.
Government can also think of a broader framework of regional development by creating development promoting zones under a framework of specially ‘ assisted areas’. Assistance from the government can be extended to private entrepreneurs in these areas for buying lands, building and machineries. Special fiscal incentives can be given to enterprises here in the form of reduction of value added tax (VAT), similar reduction in import duties of raw materials, reduction in the rate of tariff for power and gas, lower corporate tax, etc. Even industries to be set up in these areas can be offered government preferences in the buying of their products when government contracts are awarded. All of these concessions and more, will likely create adequate incentives for potential investors to opt out of making their investments in the already congested few enterprise zones in the country to gain from setting up their enterprises in the assisted areas. In the process, balanced creation of economic opportunities in the country will be created.
Side by side, the government also will be expected to put the maximum emphasis on decentralization. Stronger and better local government with adequate resource flows to them, will contribute significantly towards the objective of creating local growth centres.