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Budget for regions lagging behind – Dr Fahmida Khatun

Published in The Daily Star on Monday, 3 April 2017

MACRO MIRROR

fahmida-khatun-macro-mirror-tdsDiscussions on the upcoming national budget in Rangpur during the past weekend revealed a number of issues. Some are new, some old. But all are important. Sitting in Dhaka many of us may not have empathy for them at all. Some of us may even be blissfully unaware of them.

National statistics provide information on macro indicators of growth, income, employment, education, health, etc. Information on several micro indicators such as access to water and sanitation, structures of houses, level of solvency and many more are also available. These give us a pretty good idea about the socioeconomic situation of the larger sections of people across the country. But what we miss in statistics are the ground realities experienced by the people. We also miss the insights of local people themselves who have a clear understanding of their developmental problems and the way out. Some of the issues raised in that pre-budget dialogue in Rangpur organised by the Centre for Policy Dialogue, RDRS and Citizen’s Platform on SDGs on April 1, 2017 made me reflect on a few aspects of our national budget once again on my way back to Dhaka.

Bangladesh has achieved steady growth and also performed impressively in the area of human development. There is also no denying that an apparent improvement has been observed in, for example, the lifestyle of the people both in urban and rural areas. Clothes, food habits, access to amenities and general lifestyle indicate a change among a large section of people. One does not see as many unclothed children in the villages with bloated tummies infected with diseases or rickshaw pullers with only a piece of cloth around the neck as in the past. Death due to silent famines like Monga is also unheard of these days. Access to housing, sanitation, electricity and communications has improved the living condition of the poor in a major way.

budget_9While all these may be attributed to the impressive improvements in some of the macroeconomic indicators, inequality still persists in the country. A feature of this inequality is reflected through regional disparity. That is, the progress has not necessarily been equal across the country. Prior to the construction of the Jamuna multipurpose bridge the disparity between the eastern and western districts of Bangladesh was distinctive. The eastern parts such as Dhaka, Chittagong and Sylhet divisions used to be ahead of the western part that includes Rajshahi, Rangpur, Khulna and Barisal divisions. Striking disparity amongst regions has narrowed to a large extent due to economic progress and efforts towards equitable growth by the government but disparity among regions still exists. This disparity is revealed through income, social indictors, employment opportunities, consumption, infrastructural facilities, and access to clean water. For example, in Rangpur, incidence of extreme poverty is highest, availability of electricity is lowest, use of mobile phone and computer is lowest and economic solvency is also lowest compared to six other divisions. Surprisingly, even though poverty is high, labour force participation rate in Rangpur division is high and unemployment is low. This paradoxical situation may be due to the fact that those who are employed are either employed in low income jobs or are underemployed. Lower income opportunities are also reflected through lowest bank savings and bank loans in the region.

Public policy can play the most important role to reduce the gap between the advanced and less advanced districts. The issue of regional disparity deserves to be a central issue of the development planning and policymaking process. The national budget is an instrument to implement those policies. However, the effectiveness of our budget is limited to a large extent due to the way it is formulated and implemented. The process of consultation with various sections of people to get their suggestions before budget formulation is well appreciated. But participation of broader sections of people at the grassroots level and political representatives of people are lacking. As much as the budget formulation has to be a consultative process, its implementation should also be participatory. The demand has to be assessed from the field. The allocation has to be based on the need.

A few years back, the government coined the idea of district budget in an attempt to make fiscal measures decentralised through involving the local government. In FY2014 budget, the Finance Ministry prepared the first district budget for Tangail on a pilot basis. Six more district budgets for Khulna, Chittagong, Barisal, Rajshahi, Rangpur and Sylhet were proposed in FY2015. However, this initiative was dropped the following year. Lack of strong local government administration is blamed for this unsuccessful proposal. Of course, those district budgets in no way could be termed as complete budgets. They mainly set aside some government expenditures to be implemented at the district levels. And the other part of the budget – resource mobilisation – was not within the capability of local governments.

In order to have any meaningful decentralised policy implementation, the budget-making process should involve the local administration, law makers, and all stakeholders. This can increase efficiency of resource allocation and improve accountability of implementation of budget proposals. This can also expedite efforts towards diminishing regional inequality. The success of budget implementation at local levels will underpin the achievement of the government’s commitment towards the agenda of “leave no one behind” as enshrined in the Sustainable Development Goals.

 

The writer is the Executive Director at the Centre for Policy Dialogue.  

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