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Development of rural economy to change the country

M A  Khaleque

M A Khaleque

Fri, 10 May 24

Historians often argue that no dynasty can endure for more than a century with supreme majesty. The dynasty must face challenges within this time. This belief applies not only to the ruling families but also to individuals and normal households. The trajectory of wealth and influence follows a similar pattern, where what is prestigious today may falter tomorrow. This principle is evident in rural economies and family dynamics, where inheritance is seldom equal, and prosperity can swiftly shift. Once affluent families may find themselves impoverished over time, reflecting the ongoing flux characteristic of rural life.

The significance of the rural economy in Bangladesh's national landscape is undeniable. In the past, over 80% of the country's economy stemmed from rural activities, aligning with a time when more than 80% of the population resided in villages. However, the dynamics have shifted over time. Presently, 67% of the population lives in rural areas, while 33% resides in urban centers. Surprisingly, despite this demographic shift, cities now contribute over 60% to the national economy. This shift is akin to the movement of fish during the rainy season, with people migrating towards economic hubs much like fish swimming upstream. This trend has led to a steady increase in urban migration. However, recent data from the Bangladesh Bureau of Statistics indicates a slight reversal, showing a growing trend of people moving from cities back to villages. This shift signals a notable change in the traditional urban-rural migration pattern. What does it mean?

What's the upsurge in job opportunities within villages? Have rural residents diversified their skills beyond agriculture? In a recent conversation with Momtaz Uddin Ahmed, a former Economics professor at Dhaka University, he highlighted ongoing research on rural economy transformation. He noted a positive shift away from traditional farming, with villagers venturing into non-agricultural sectors and small businesses, boosting their incomes. Ahmed recalled a 1980s president's vision that electrifying villages would kickstart development, enabling villagers to engage in evening activities. Today, economic progress hinges on two key factors: improved connectivity and expanded electricity access, both of which have significantly advanced under the current government. Most villages now have power and paved roads, allowing rural dwellers to enjoy amenities like TVs, fridges, electric lamps, and air coolers, akin to urban lifestyles.

The village is the heartbeat of Bangladesh, essential for its vitality. Without rural development, Bangladesh's overall progress remains incomplete. The government's commitment, outlined in the last election manifesto, to bring urban benefits to rural areas has shown remarkable results. Villagers now have access to the internet, creating opportunities for computer-based livelihoods and freelance work, transforming rural economies. With more available land in villages compared to cities, entrepreneurs are setting up industries in rural areas, sparking economic growth and energizing rural life.

A notable shift is seen in rural society, with wealthy families migrating to cities, selling their properties to previously disadvantaged families. This positive transformation reflects the evolving dynamics of rural life and economy. Many of those who were once known as wealthy families in the village are moving to the city. They are selling their immovable property in the village. These properties are being bought by once-destitute families. A few years ago, when I went to the village house to see my land, an old man came and greeted me.

After exchanging greetings, he said to me, did you recognize me? When I hesitated a bit, he introduced himself and said, I was once a shepherd in your house. Your nephews and nieces have sold their share of land. My son bought that land. We can buy your share of land if you sell it. I asked him, how is your son? He said, my son was in Saudi Arabia for a long time. Now permanently returned to the country. Now trying to set up small industries. I liked it very much. The man who was a shepherd in our house now can buy our land. This is the present reality of the rural economy. One can never improve the financial condition of oneself and the family by doing traditional farming. To improve economic conditions, alternative income-generating activities should be done along with agricultural work.

The export of labour or manpower has played a pivotal role in the recent positive transformation of the rural economy. Every year, a significant number of workers from Bangladesh seek employment abroad, many hailing from illiterate and impoverished rural backgrounds. Often, they sell land and homes to finance their migration. Upon returning, they typically prioritize reclaiming lost land or purchasing new plots, rather than investing in industrial ventures. This trend has led to a considerable portion of remittances being diverted away from income-generating investments.

According to World Bank data, Bangladesh received a record $23 billion in remittances in 2023, ranking seventh globally. Despite this influx, a fixed exchange rate for the US dollar has led expatriates to utilize informal channels like hundi to remit money, aiming for better returns in local currency. While economists and stakeholders in labor exports believe that actual remittances may be higher, this practice underscores the significant impact of the labor export sector on bolstering and invigorating the rural economy.

The government has initiated plans to establish 100 Special Economic Zones across the country, with implementation already underway. These zones, predominantly located in rural areas, hold the potential to significantly bolster the rural economy through production activities. It's imperative to strategize for the future, focusing on transitioning the rural economy from agrarian dependence to industrialization. By promoting processing and marketing of agricultural products, especially food items, instead of raw sales, producers' incomes can substantially rise. Agriculture should be integrated as a backward linkage of the industrial sector, ensuring that raw materials are supplied from the agricultural domain. Many farmers in rural economies, often from impoverished backgrounds, work on leased or shared land, with a significant portion of their produce going to landowners. This practice warrants revision, drawing parallels to the historical Tevaga movement's core principle. The Tevaga system advocates for equitable cost-sharing between landowners and farmers, with produce divided accordingly. Implementing such a system would greatly benefit landless rural farmers, motivating them to increase crop production.

The availability of cultivable land in our country is limited, underscoring the importance of efficient land utilization. A significant portion of arable land in villages is used for single or double cropping, leaving much of it fallow for extended periods. By implementing strategic measures, single-crop land can be converted to double-crop, and double-crop land to triple-crop, optimizing land use. A national-level plan is essential to drive these initiatives forward. Current regulations prohibit soil cutting on arable land, a rule often subject to misuse. There's merit in reconsidering this restriction, especially concerning activities like creating ponds for fish farming on arable land. Just as crops can be cultivated, fish farming can also thrive, utilizing otherwise unused land. Many expanses of uncultivated land in villages remain untapped, signaling a need for structured efforts to bring them into productive cultivation practices.

Many housing developments in rural areas have arisen haphazardly, often resulting from family separations where each member builds their dwelling based on individual means. Consequently, large swaths of land surrounding these homes lie unused, a situation that cannot be allowed to persist. When family members separate, they often build separate houses, leading to the inefficient use of cultivable land. To address this issue, legal reforms could be enacted. In cases where family members separate due to parental death or other reasons, they could be compelled to reside together in a multi-story building, thereby conserving land. Financial aid from the state could facilitate the construction of such structures if needed. Adopting and effectively implementing a national rural development plan is crucial. Failing to do so may hinder efforts to meet future development challenges.

M A Khaleque: Retired General Manager, Bangladesh Development Bank Plc and Writer on Economics.

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