Published in futurestartup on Monday 3 December 2018
The Future Of CPD, Demographic Dividend, Technology, Inequality And Economic Growth, And Life With Fahmida Khatun, Executive Director, CPD
(Part 02)
Ruhul Kader
Dr. Fahmida Khatun is a prominent Economist in Bangladesh and the Executive Director of the Centre for Policy Dialogue (CPD), a leading think tank in South Asia. In this 2nd and final part of our interview with Dr. Khatun, she talks about CPD’s priorities and future plans going forward, discusses imperatives for building sustainable institutions and lessons other organizations can learn from CPD’s journey, how inequality works and how we can deal with it as a society, shares her thoughts on youth, demographic dividend, economic growth and unemployment, technology, automation, and future of work and business, how Bangladesh can sustain its rather fast economic growth, explains her observation our society today, and reflects on why leadership is about setting example, shortness of life, preciousness of time and why we should resist our temptation to pursue perfection which often breeds inaction.
This was a much longer interview, so we had to break it up into two parts. This is the second and final part of the interview. You can read the part one here. We hope you enjoy the interview as much we did.
Future Startup: What are the priorities for CPD going forward?
Fahmida Khatun
We are in the era of Sustainable Development Goals (SDGs) which are to be implemented by 2030. We will continue to work on monitoring of the implementation of the SDGs at the country level. To that end, CPD has initiated a network called the “Citizens Platform for SDGs in Bangladesh.” More than 100 organizations are partners of this Platform.
I also feel that regional connectivity will continue to be very important going forward through which we could expand trade and investment. Because of Bangladesh’s convenient location – we have India and China on either side – it has great potential through connection with both the countries. There have always been tensions in this region. However, this region has so much potential that is yet to be explored,
The financial sector is an equally important issue of the day. The sector is struggling with institutional, governance and management challenges. For a thriving economy, such a messy financial sector is not conducive for further progress. CPD has been working on this sector for long and urged for taking immediate reform measures to discipline the financial sector. This is, however, an unfinished agenda in Bangladesh.
In this regard, the whole issue of reforms in various sectors and institutional strengthening comes to the fore. Fiscal reforms to energize domestic resource mobilization through taxation for supporting future development activities will be crucial. Similarly, improving private investment for employment creation and ensuring social security for the marginalized are also equally important. Besides, how various vulnerable groups such as workers, women, youth and migrant workers will be affected in the age of fourth industrial revolution (4IR) will also be our areas of research in the coming days.
We work in a very democratic manner within the organization. It is not like that the decisions come from the top, and then they get implemented. We try to make decisions collectively so that we all have ownership on them. Everyone’s contribution is recognised duly. Our people spend long hours writing reports or organising events at CPD.
Future Startup: What are some lessons other organizations can learn from CPD’s journey in-terms of building a sustainable organization?
Fahmida Khatun
A strong governance structure, a pool of motivated and intelligent people and a sense of purpose are behind the sustainability of CPD. We have a sound institutional structure which is functional through various committees and divisions. The management committee, the review and implementation committee, and the audit committee are among them. We have a board of trustees comprised of renowned and respectable people of the country. They provide useful policy guidelines.
On the operational side, we work in a very democratic manner within the organization. It is not like that the decisions come from the top, and then they get implemented. We try to make decisions collectively so that we all have ownership of them. Everyone’s contribution is recognized duly. Our people spend long hours writing reports or organizing events at CPD.
For the last 20 years or so, the whole office works throughout the night reviewing the national budget once it is announced. We organize media briefing on the budget the next day of its announcement. You cannot expect this kind of dedication in a conventional setting where decisions are made top-down and staff are not passionate about their work.
Future Startup: One of the topics you have written extensively about is inequality – the growing income disparity between the top 10% and the rest of the population. What are the reasons behind this growing inequality? How could we address this challenge?
Fahmida Khatun
Growing inequality is a global phenomenon, and Bangladesh is also suffering from it. Over the years, Bangladesh economy has been growing fast. However, this growth has not been able to create enough jobs for its population. On the other hand, resources are being concentrated in the hands of a few. According to the Household Income and Expenditure Survey (HIES) of Bangladesh Bureau of Statistics in 2016, the top 5 percent population of Bangladesh owned 27.89 percent of total income of the country while the bottom 5 percent owned only 0.88 percent. This model of growth cannot be sustainable.
In order to improve their income, we need to create employment through more investment. Of course, the quality of education and capacity development will be critical to employ the job seekers. We also have to recognize that the size of the economy is not big enough to absorb all those who are in the labor market. We have to give them an opportunity to be self- employed through skills development and access to finance, among others. By improving skills we can also send our labor force abroad for employment. For the vulnerable people, the government has to expand its social safety net programmes.
According to the Household Income and Expenditure Survey (HIES) of Bangladesh Bureau of Statistics in 2016, the top 5 percent population of Bangladesh owned 27.89 percent of total income of the country while the bottom 5 percent owned only 0.88 percent. This model of growth cannot be sustainable. In order to improve their income, we need to create employment through more investment.
Future Startup: We have a huge young population – our median age is 26. The conversation around demographic dividend is a commonplace thing. At the same time, the youth unemployment rate has been growing consistently even though the economy has been seeing impressive growth. There is growing frustration in young people. It is true that having a young population offers an advantage, but you have to provide them opportunities as well to have a positive outcome. The current scenario does not show that we are doing well regarding ensuring opportunities for our youth. How do you see it progressing down the line?
Fahmida Khatun
Youth unemployment is increasing over time. At present 10.6 percent of the youth who seek jobs are unemployed. Indeed it has increased from 7.1 percent in 2010. On the one hand, we are observing strong economic growth. On the other hand, this growth could not create enough jobs in the economy. It is a phenomenon of jobless growth. Moreover, the higher the education, the higher the possibility of remaining unemployed. This is worrisome. If we cannot create job opportunities for the youth, at some point in time, we might see an outburst from frustration. It can also create an opportunity for them to get involved in destructive activities.
As I have mentioned in response to your previous question, we need to enhance investment for job creation. In order to absorb the educated youth in the job market, their skills have to be upgraded to cater to the demand of the market. They should also be given vocational training. They should be encouraged and supported for self- employment. Access to finance is an obstacle which needs to be removed. I feel if we cannot utilize the talent and labor of our youth, we will miss the opportunity of benefitting from the demographic dividend.
Future Startup: Coming back to the discussion about the technology and automation in the RMG sector, what do you propose can be done to help the displaced employees?
Fahmida Khatun
The transition to 4IR will not be easy for an economy like ours. It will mean that we have to transform from a factory-based to a productivity-based economy. The need for labor will reduce. The low skilled labor force will be displaced. Technology will also create new jobs.
To face the situation, first of all, workers’ skills should be upgraded. Second, opportunities for self-employment have to be created. Small and medium enterprises will play a big role in creating self-employment. However, even becoming a small enterprise owner will require skills, apart from money. So they should be given appropriate training, orientation, and guidance. Most importantly, given the uncertainty as to how the 4IR will impact our employees, we need to undertake in-depth research. The government needs to take targeted measures to face the implications of the 4IR.
Youth unemployment is increasing over time. At present 10.6 percent of the youth who seek jobs are unemployed. Indeed it has increased from 7.1 percent in 2010. On the one hand, we are observing strong economic growth. On the other hand, this growth could not create enough jobs in the economy. It is a phenomenon of jobless growth. Moreover, the higher the education, the higher the possibility of remaining unemployed. This is worrisome.
Future Startup: Many things are happening in the technology space such as ride-hailing and e-commerce and many other things. If you look at the Western markets, technology has a winner-takes-it-all tendency in it. For instance, Google is the only big search company and Amazon and so on. One big company usually takes up the majority of the industry. I believe it will happen in Bangladesh as well. There needs to be discussion around designing technology policies and impacts of various technologies. Do you see CPD getting into that in the future?
Fahmida Khatun
If appropriate regulatory mechanisms are not in place technology can create digital divide. At the individual level, the fortunate ones with access to technology can make their lives comfortable and earn a lot while those without technology still stay behind. Similarly, at the company levels, the big giants tend to overtake the smaller ones due to their scale of operation. This is an interesting and emerging issue. The intervention of the technology and what impact technology will have along with automation in the labor market are areas where we will work in the coming days.
Future Startup: I was reading your article ‘Can Bangladesh’s strong economic growth hold up’ that was published in East Asia Forum and it is a fascinating read. Let me read back your conclusion from the article to you, “Thus to maintain growth momentum Bangladesh must complete it’s unfulfilled reform agenda to strengthen its institutions and ensure better delivery of services to its country’s people.” The question is how do we get there?
Fahmida Khatun
The critical factor to getting there is to have political commitment. We are talking about strong institutions which can deliver, which are accountable and transparent. We are yet to see something like that.
For example, economic institutions such as the Central Bank, the National Board of Revenue and the Security Exchange Commission play important roles for a healthy financial sector, for strong revenue collection and vibrant capital market, respectively. Similarly, institutions such as the Anti-Corruption Commission has a critical role for a corruption free country. The Election Commission has a key role in strengthening the democratic system in the country by ensuring free and fair elections.
Are these institutions being able to carry out their duties freely and independently? It is anybody’s imagination as to how strong these institutions are. The delivery of public services can happen when those responsible for service delivery are accountable. Without strong institutions, such accountability cannot be ensured.
We need to enhance investment for job creation. In order to absorb the educated youth in the job market their skills have to be upgraded to cater to the demand of the market. They should also be given vocational training. They should be encouraged and supported for self- employment. Access to finance is an obstacle which needs to be removed. I feel if we cannot utilize the talent and labor of our youth, we will miss the opportunity of benefitting from the demographic dividend.
Future Startup: What’s your management philosophy?
Fahmida Khatun
I believe in participatory management. Nobody can run an organization without the support of everyone. I believe participation gives a sense of ownership in everyone and they give hundred percent to the organization.
Future Startup: What does it take to be an effective leader?
Fahmida Khatun
A leader has to be humble, transparent, emphatic and inspiring. The leader should be accessible to everyone. An effective leader will appreciate the team and extend support to the team in case of need. The leader has to lead by setting examples. If the whole office is working round the clock and the leader is not there, then the leader does not get any respect. To bring most out of your people, you will have to participate as well. Leaders have to be hands-on with their team.
I cannot claim that I have all the qualities of a leader, but I am learning every day. Learning is a continuous process. No one is perfect. But we can improve ourselves. My role in the institution has evolved over time. I have learnt by observing other leaders. This has helped me to understand what makes a good leader.
The critical factor to getting there is to have political commitment. We are talking about strong institutions which can deliver, which are accountable and transparent. We are yet to see something like that.
Future Startup: Three pieces of advice you would give to your 20-year-old self.
Fahmida Khatun
My three pieces of advice would be:
Please do not waste time. Time is the most precious thing in the world as it never comes back.
Do not try to be perfect. It will frustrate you. Give your best to whatever you do.
Be humorous and fun loving. It is so important in this crazy world!
Future Startup: What are a few books you have been reading lately?
Fahmida Khatun
Recently, I have started to love reading female novelists’ books. I have just finished three books by Sudha Murty at a stretch. These are: Three thousand stitches, The Mother I Never Knew: Two Novellas and House of Cards. She is the Chairperson of Infosys Foundation and an engineer but leads a very simple life. Her writings are very lucid and often she writes from her own life experiences. I have great respect for her dedication to social work.
Future Startup: What do you think about life?
Fahmida Khatun
Life is short and unpredictable. So we should enjoy every bit of it. We should accept life as it comes but not forget to give our best effort to achieve what we aspire. Otherwise, we will end up repenting. Ideally, we should do what our minds desire. But we have responsibilities, so we cannot let life do whatever it wants to do. But we should choose to do what we are best at and what we enjoy to do. That can also bring us success and happiness. There is no single formula to be happy in life. Life is the culmination of choices we make by ourselves.
A leader has to be humble, transparent, emphatic and inspiring. Leader should be accessible to everyone. An effective leader will appreciate the team and extend support to the team in case of need. The leader has to lead by setting examples.
Future Startup: How do you look at our society today as a researcher and an observer?
Fahmida Khatun
I see a paradoxical trend in our society. There is this affluent class to whom money is everything. They use money to shape power relationship in the society. Many of them have benefitted from being associated with the political power or through corruption or through getting licenses. There is also a demonstration effect of this trend. When one sees some people are becoming rich by whatever means, that person might also feel encouraged. There is a rat race among the affluent people to show off their wealth. The value of education has eroded among this wealthy class.
On the other hand, I also see a lot of promise among the youth. They are ahead of the curve in case of learning, innovation, and technology. They have brought about a change in our traditional way of career development and success. They are investing in start-ups and creating employment. Many of them have returned to Bangladesh after higher education abroad and creating examples for others. They are our future. There are also a group of youths who are doing a lot of social services and social entrepreneurship. I feel these energetic, enlightened and compassionate youths can transform our society towards more positivity. They are our future and our hope.
I see a paradoxical trend in our society. There is this affluent class to whom money is everything. They use money to shape power relationship in the society. Many of them have benefitted from being associated with the political power or through corruption or through getting licenses. There is also a demonstration effect of this trend. When one sees some people are becoming rich by whatever means, that person might also feel encouraged. There is a rat race among the affluent people to show off their wealth. The value of education has eroded among this wealthy class. On the other hand, I also see a lot of promise among the youth. They are ahead of the curve in case of learning, innovation, and technology. They have brought about a change in our traditional way of career development and success.
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Interview by Ruhul Kader, Transcription by Shabiba Benta Habib.