The boys are back in town
It’s 10 years since the global financial crisis and therefore, to those of a gloomy disposition, high time we had another one. As and when we do, there’s sure to be renewed interest in the most dynamic emerging markets. And there seem few more dynamic than Bangladesh, the world’s 8th most populous country, with a whopping 9% GDP growth last year. What’s going on in this thriving economy?
Eight years ago, in his fantastic book Arrival City, Doug Saunders wrote compellingly of two Bangladeshi phenomena. Firstly, a healthy flow of remittances (and tastes) from Londoni migrants, into the villages of Sylhet (the biggest chunk coming straight out of Tower Hamlets.) And secondly, a growing internal flow of migration from the villages into the urban slums. Places like Kamrangirchar, on the outskirts of Dhaka.
As remittances from foreign and internal migrants flowed into the villages, tastes for consumer goods followed; for things like trainers and personal care products. As this early consumerism has taken hold, the sense that one’s life might be governed by something other than the agricultural cycle has followed in its wake. This has been hugely important for settings traditionally afflicted by the monga – the autumn period of hunger when the rice has been planted, but is not ready to be harvested; when agricultural labour is idle and cheap; baking endemic malnutrition into generations.
A desire to break the destructive cycle of the monga seems to have been behind an experiment conducted by Yale economists since 2014. Small grants of around $12 have been offered to households, enough for a bus ticket to the city. Since then, tens of thousands of men have been enabled to travel to the city to find jobs – as itinerant labourers, rickshaw drivers and others; it’s often dangerous work, but pays up to three times more than work in the fields; and many men are shuttling back and forth between town and country, taking their labour at the appropriate time of year to where there’s a market for it. Money comes back into the villages, the price of agricultural labour ticks up and efficiencies in food production are sought.
Similar urbanisation is happening in many countries, but what is it about the Bangladeshi case that is translating into such consistent and spectacular economic growth? It turns out that, in contrast to other notable examples around the world, the government there exerts a very light touch on internal movement and residence. Seems there might be something in this free movement of labour idea.