Book Review: The Aid Lab: Understanding Bangladesh’s Unexpected Success, by Naomi Hossain

September 19, 2017

     By Duncan Green     

Over the summer I read a few absolutely brilliant books – hence the spate of book reviews. This week I will cover two new studies on development’s biggest recent success stories – China, but first Bangladesh.

How did Bangladesh go from being a ‘basket case’ (though ‘not necessarily our basket case’ – Henry Kissinger, 1971) to a development success story, claimed by numerous would-be fathers (aid donors, NGOs, feminists, microfinanciers, low cost solution finders)? That’s the subject of an excellent new book by Naomi Hossain.

The success is undeniable. Per capita income is up to $2780 from $890 in 1991 (PPP terms). Today, that economic progess is built on 3 pillars: garments (80% of exports, 3m largely female jobs), migration (remittances = 7-10% GDP, about 9m workers overseas, mainly men) and microfinance (which has been used by about half of all households).

But perhaps even more interesting, social progress has outstripped economic growth. Infant mortality down from 258/1,000 in 1961 to 47 in 2011; women were having 7 kids in 1961 and are now having 2. In Hossain’s words (she writes well) ‘Bangladesh is the smiling, more often than not sweetly female, face of global capitalist development. Better yet – she often wears a headscarf as she goes about enjoying her new economic and political freedoms, signalling that moderate Islam can couple with global capitalism.’ (And yes, she does acknowledge that there is still a lot of hunger and deprivation).

The ‘how’ of Bangladesh’s transformation is reasonably well known. What interests Hossain is the ‘why’. It certainly isn’t down to good governance – ‘it has never been obvious why an elite known best for corruption and violent winner-takes-all politics should have committed its country to a progressive, inclusive development pathway.’

Hossain’s argument is powerful: it all comes down to five traumatic years in the early 1970s, when a massive cyclone was swiftly followed by a brutal war of independence from Pakistan, and that in turn was eclipsed by a horrific famine, in which something like 1.5 million people died. ‘A famine so soon after independence caused a massive crisis of legitimacy for the government, whose overthrow a year later was seen as an expression of the loss of this legitimacy.’

The traumas of the 1970s left a legacy of a political system that, for all its thievery, accepted the moral economy of protecting the people from climate, shocks and hunger (an ‘anti famine contract’). How it achieved this is partly down to other aspects of the Bangladesh story:

Geopolitical/strategic irrelevance: this meant that aid technocrats were not being constantly over-ruled by their political masters, allowing Bangladesh to become the ‘Aid Lab’ of the title.

The lack of entrenched elites: Independence created a country whose nascent elite was still connected with the countryside, farming and normal people and (for all its venality) showed a ‘strong meritocratic streak’ and a faith in the importance of education. Very different from the caste-based paralysis of neighbouring India.

No natural resources: since money wasn’t coming out of the ground, Bangladesh was forced to base its economic progress on its people – a bit like South Korea or Japan (seen as a ‘touchstone’ for its development model)

A breakdown in patriarchy: the war of independence exposed the failure of traditional patriarchy to protect women – there were 200-400,000 rapes and 25,000 forced pregnancies – while women signed up en masse for workfare schemes during the famine . The ‘woman issue’ was dragged irrevocably into the sphere of public policy and has stayed there ever since.

One quibble: I would have liked to see more of a discussion of the relationships between politicians and civil servants. One of the tricks achieved by Japan, South Korea and other ‘developmental states’ has been to insulate technocratic officials from the grasping hands of politicians, allowing chaotic politics to coexist with an effective state – what happened in Bangladesh?

Given this analysis, calling the book ‘The Aid Lab’ seems a bit misleading – the Bangladesh story is much bigger than that (for example the garments boom, the migration bonanza and arguably the transformation in gender rights had very little to do with aid). Hossain herself says she doesn’t much like the title. But the chapter on aid is interesting, highlighting the combination of donor pressure and government resistance that produced economic policies that in many ways were ahead of their time (eg cautious macroeconomic policy, labour-intensive industrialization, but resisting World Bank pressure to privatize grain procurement, overriding patent protection on essential drugs,  along with the focus on women’s empowerment, experimentation and innovative solutions like using 200,000 community health workers to strengthen the healthcare system).

The book ends on the big question: can ‘Golden Bengal’ continue to develop? Hossain argues that Bangladesh is coming to the end of this phase of its development and needs to address some of the weaknesses of its model: in economic terms, its excessive dependence on low end garments and migration leave it vulnerable to shocks; in social terms, its fragmented patchwork of state and NGOs is going to struggle to move on from basic primary provision; politically, ‘individual empowerment has rarely, to date, aggregated to institutionalized forms of collective power.’ Hanging over everything else is the menace of climate change – acute in the case of low lying, flood prone Bangladesh as we are seeing right now.

And then there’s the question of memory – as the traumas of the 1970s fade, will new generations of leaders buy into the programme? Already, Bangladesh seems to be drifting towards a one party state under the Awami League, reducing the government’s accountability to the people.

This matters for Bangladesh and more broadly because, as Hossain concludes ‘As an early exemplar of life in an era of high globalization and accelerating climate change, Bangladesh demonstrates that the political foundations of human development, and the priority of a functioning state, must be protection against the crises of subsistence and survival.’