The Department of Economics and Social Sciences (ESS) of BRAC University (BRACU) invited Dr Rizwanul Islam to present its third public lecture titled “ Economic Growth, Structural Transformation and Employment: Which Pathway?” at its Mohakhali campus auditorium on Tuesday, 06 March 2018.
Dr Rizwanul Islam is a former special adviser to the International Labour Organization’s Employment Sector and has also taught economics at the University of Dhaka.
He attained a PhD in economics at the London School of Economics and Political Science, and has published numerous books and articles in various peer-reviewed journals and edited volumes.
Dr Rizwanul focused on the connection between economic growth, productive employment, better living and structural transformation.
Drawing on the historical experience of the developed countries and those that recently succeeded in their development efforts, he also discussed the common pattern in their structural transformation and explained the absorption of surplus labor.
By making a comparative analysis of East, Southeast and South Asian countries, he explained the failure in absorption of surplus labor by the latter and addressed questions on alternative pathways to these issues.
Furthermore, Dr Rizwanul raised questions such as whether the modern sector in dual economy models have to mean manufacturing, or it can be interpreted more flexibly to include other sectors like trade, services, etc. and is transfer of surplus labour from traditional to modern sector synonymous with migration from rural to urban areas or workers may be able to find higher productivity employment in rural (or semi-urban) non-farm activities.
Also, whether answers to the above questions indicate the existence of alternative ways of attaining structural transformation and of reaching the Lewis turning point in dual economies.
Dr Rizwanul started off with the fundamental question of whether there were any alternative pathways to structural transformation other than the common pattern of modernisation observed in developed countries through the shift from agricultural to manufacturing to tertiary sector.
Such questions arise due to the recent experience of South Asia proving to not have the similar pattern of success through industrialization as well as failure in absorption of the surplus labor.
In South Asian countries, the agricultural sector has not been playing the engine of growth due to limitations, such as diminishing marginal returns, unlike in the developed countries.
Manufacturing sector, on the other hand, has been unable to play its part as the drive for growth in Bangladesh. Dr Rizwanul also pointed out that, growth of manufacturing output in relation to GDP growth has been higher in ESEA countries compared to South Asian ones.
Dr Rizwanul also addressed the concept of premature deindustrialization by Rodrik (2015), where in some developing countries, the share of industry in GDP started declining when their income were at a much lower levels compared to the rest.
He presented some of the alternative pathways to structural transformation such as the possibilities of the IT sector (fastest growing Indian ICT) which is highly export oriented and the sector of tourism (major contributions to Nepal’s foreign exchange earnings).
These alternatives also focus on generating higher employment. In the context of Bangladesh, few alternatives such as rural non-farm activities (a major diversification noted over the years in rural economy) where the share of business and commerce has increased as well as contributed to growth of employment.
The lecture was graced by the presence of prominent guests including BRAC Chairperson and Founder Sir Fazle Hasan Abed, KCMG; former finance minister M Saiduzzaman, former Bangladesh Bank governor Saleh Uddin Ahmed, Distinguished Fellow at the Centre for Policy Dialogue Dr Mustafizur Rahman, and Policy Research Institute Chairman Dr Zaidi Sattar.
The audience included faculty members, academic administrators and students of BRAC University.
Vice Chancellor Professor Syed Saad Andaleeb PhD presented the opening remarks, ESS Chairperson Professor ATM Nurul Amin moderated the session and Pro-Vice Chancellor Ansar Ahmed PhD gave the closing remarks.