Strengthening policies to support sustainable development

[The third and last part of the three-part article on Just and Green Transition in Bangladesh]

As discussed in the previous pieces, growth is the priority for policymakers, and this is likely to continue for at least the next decade. Bangladesh has also fared well in the social dimensions of sustainable development compared to other South Asian countries, for example, in child mortality, girls' education, and female empowerment through employment. But adding environmental sustainability as an equal priority remains the greatest challenge. Integrating all three dimensions of sustainable development into a single set of policies, plans, and strategies and then effectively implementing and enforcing the program is the core priority for Bangladesh.

Along this track, a set of recommendations follows.

First, there is a need to improve the governance process, with active stakeholder participation, not just of the private sector, but also of civil society, without any political or other biases. The need is to ensure a balance of both top-down as well as bottom-up approaches, which can ensure better transparency and accountability in the whole governance process.

Second, domestic resource mobilisation must be given added focus. For example, the tax-to GDP ratio, now standing at around 8 percent, is among the lowest in Asia and needs to be improved. Once this ratio improves, the domestic debt burden for financing development projects will go down. Here, further digitalisation of tax payments, citizen budgeting, and involvement of civil society to ensure due diligence and participation of representatives from the National Board of Revenue (NBR) should be initiated.

Third, public-private partnerships need to be taken to scale to mobilize additional finance, building on the experiences to date of infrastructure financing.

Fourth, civil society organisations (CSOs) have to work with and mobilise the private sector, particularly in the garment sector, which already has the world's highest number of green factories and is showing dynamism in moving further toward sustainable production. Mobilising green technology to control brown pollution is a priority that could turn the whole garment sector into a model for other countries.

Fifth, local capital markets must be developed to provide green or climate bond instruments, which would permit sustainable development financing to shift away from bank loans which are still the dominant form of finance. The GoB already has a draft policy for introducing green bonds but needs to provide incentives to encourage sustainable development, for example, through reduction of corporate tax or making such investments tax deductible.

Sixth, higher investments will be needed to scale market-driven skill development programs, especially in technical education and public health. A new generation of young workers with better skills and with green thinking might even move under bilateral agreements to industrial countries facing negative population growth. This can be a win-win option both for the host and sending countries, especially if climate-induced pressures to migrate rise.

Seventh, climate-resilient migrant-friendly towns should be established to divert those displaced by climate disasters away from Dhaka and other big cities, which are already overcrowded. The International Centre for Climate Change and Development (ICCCAD) at Independent University, Bangladesh, is working in partnership with BRAC and several municipal authorities to develop sustainable towns.

Eighth, a massive drive to green urban spaces needs to be undertaken. Many cities, including Dhaka, the capital city, do not have the minimum greenery for a healthy life. By contrast, rural areas in Bangladesh are fully green, particularly homestead forests, which provide livelihood opportunities to rural households. Singapore or selected Japanese cities may serve as models of what can be done with limited spaces under well-planned city landscaping.

Ninth, strengthening regional cooperation is a must in South Asia, particularly in introducing a regional electricity market and harnessing the huge hydro-power potential on a regional basis.

Discussion on these issues has been ongoing for many years, but without forward progress, mainly because of Indian insistence on restricting the dialogue to bilateral dealings. However, if economic benefits, rather than political-strategic considerations, take precedence, there is scope to move faster.

Finally, strengthening international cooperation in mobilizing finance must be a priority, particularly for scaling solar and wind power, as envisaged in the MCPP. As Bangladesh is formally graduating soon from its Least Developed Country (LDC) status, foreign aid will likely go down, and Bangladesh will have to compete with others to mobilise international loans at affordable terms. To do this, the country should devise a well-considered green investment plan in partnership with both bilateral and multilateral donors. The investments must be made in areas with revenue generating potential so that the debt burden does not become excessive. Where climate and nature-based projects do not generate revenue in immediate terms, Bangladesh can advocate for non-debt-creating financing instruments, like debt for adaptation and nature swaps, which are gaining ground internationally.

END NOTE: As mentioned, rapid economic growth and social protection are the priorities in Bangladesh, with the environment considered an issue to be tackled once the country is more prosperous.

There is some consideration of ideas contained in the second school of the economy-environment relationship, namely to build sustainability into all development projects and thereby maximise long-term growth. This could be seen as a win-win option. But it has not yet gained much traction because of a lack of confidence in implementation capacity.

Actually, there is not yet a strong culture of transparency and accountability in Bangladesh. Although there is talk of environmental governance and participatory process in decision making, this is far from the expected reality. An example of process weaknesses is the management of BCCTF projects, where the decision making Steering Committee is dominated by senior GoB officials, with only a few CSO representatives, who are not strong independent voices. So there are few checks and balances on the Executive to ensure stronger management and governance of development spending. Some weakness in implementation is seen in other aspects of the institutional set-up.

There are numerous government policies and plans that outline the mission and objectives of moving to a green transition, but without a clear direction for next steps. The policies prescribe Do's and Don'ts, rather than giving specific guidance to follow through. For example, although there is mention of environmental taxes in the latest policies and plans, based on the polluter-pays principle, there is no application yet in Bangladesh, even though many other countries have successfully introduced green/carbon taxes. As another example, the climate framework of the policy regime is regulatory in nature. The Environment Conservation Act is a detailed instrument of control and regulation, but the standards and penalties contained in the Act often are not enforceable, efficient, or effective. Community participation in resource protection has been accepted as a management tool at the policy level, but the statements lack clarity and direction and are full of ambiguities. For example, the Forest Policy states the need to establish a triangular partnership among the Forest Department, communities, and NGOs, but how the partnership should function is not well explained.

Finally, we must say that 50 years is not a long time for a rapidly developing country like Bangladesh. From a totally war-ravaged country, Bangladesh has achieved quite good progress in its economic and social parameters. The environmental dimension of sustainable development has been its weakest point. This now threatens the vision of Prime Minister Sheikh Hasina to make Bangladesh a developed country by 2041. Doing that would require   consistent economic growth rate of 8 per cent per year, leading to a per capita GDP of over U.S. $12,000 in current prices. The million-dollar question is whether such an uninterrupted trajectory of rapid growth can be ensured while maintaining environmental sustainability. This is a hard question, but we believe, given a transparent and accountable system of governance involving the GoB, an independent and strong civil society, and the private sector, enough space can be found for win-win options to realise the vision of sustainable development in the next two decades. [Concluded]

Dr Saleemul Huq is Director and Mizan Khan is Deputy Director, International Centre for Climate Change and Development, The Brookings Institution. www.brookings.edu

[The piece originally published as a part of the working paper titled "Keys to Climate Action: How developing countries could drive global success and local prosperity," edited by Amar Bhattacharya, Homi Kharas, and John W McArthur and published by The Brookings Institution based in Washington, DC.]