Austerity, economic recovery, and the debt trap

SALEEM SAMAD

Why developing nations such as Bangladesh must be especially wary of how they seek to recover from the Covid-19 fallout

Development economists and civil society organizations (CSOs) argue that austerity measures adopted by the governments of third-world countries are not a solution during the coronavirus crisis.

They raise questions about austerity, gradually imposed after the Covid-19 crisis due to the massive debt contract. Immediate suspension of debt payments and better still, cancellation of debt, must take priority.

Instead, they advise governments to opt for economic recovery. The economic recovery will only be possible from “debt relief” and “debt justice.”

Bangladesh and other developing countries have given special attention in the wake of the coronavirus crisis and engaged in servicing external debts to international financial institutions.

The governments are deliberately diverting funds from education, human development, and infrastructure development sectors, whereas the health and safety net programs are implemented under a shoe-string budget.

According to the United Nations Conference on Trade and Development (UNCTAD), the pandemic has pushed another 32 million people in poor countries into abject poverty.

Another report by the International Finance Institute highlights the $272 trillion global debt, a new high, in the third quarter of 2020 and warns us about the “attack of the debt tsunami.”

There are issues in which countries while seeking assistance from international financial institutions, are often imposed conditionalities that have not necessarily been negotiated with borrower states. These conditionalities are even seen in the context of the Covid-19 pandemic.

The government deliberately does not involve the citizens to participate in consultations, discussions, or negotiations. Such conditionalities increase the country's chances of falling into a “debt-trap.”

Ultimately, it is the people that have to foot the debt repayment after authorities impose additional taxes and levies to recover from the vicious cycle of debt.

According to standards of international law, international financial institutions should be held responsible for complicity in the imposition of economic reforms that violate human rights, which is well documented.

Governments and major multilateral institutions like the World Bank, the IMF, and regional development banks have used repayment of public debt to generalize policies that have damaged public health systems.

This has meant job cuts in the health sector, job instability, reduced numbers of hospital beds, closing down neighbourhood health services, increased medical costs both for care and medicines, under-investment in infrastructure and equipment, and privatization of various sections of the health sector along with public under-investment in research and development for treatment, which is to the advantage of big private pharmaceutical groups and companies.

Even before the Covid-19 pandemic broke out, these policies had already led to an enormous loss of human lives, and all around the world, health personnel were organizing protests.

Neither the World Bank nor the IMF have cancelled any debts since the beginning of the coronavirus pandemic.

Although they have made endless calculated declarations to give the impression that they are taking very strong measures. This is completely false.

Worse still, since March 2020, the IMF has extended the loan agreements that entail continuing with the structural measures enumerated above. As for the World Bank, since March 2020 it has received more in debt repayments from developing countries than it has paid out to finance either donations or loans.

Eminent development economist, Dr Atiur Rahman states that “We want to fight the coronavirus and, beyond that, improve the health and living conditions of populations, [for which] emergency measures must be taken.”

Immediate suspension of debt payments and cancellation of debt must take priority, suggests former Bangladesh Bank’s governor Dr Rahman.

The austerity measures do not contribute to economic recovery, but instead have negative consequences in terms of economic growth, debt ratios, and equality, and routinely result in a series of negative human rights impacts.

First published in the Dhaka Tribune, 8 December 2020

Saleem Samad is an independent journalist, media rights defender, recipient of Ashoka Fellowship and Hellman-Hammett Award. He can be reached at saleemsamad@hotmail.com; Twitter @saleemsamad

The depths of debt

SALEEM SAMAD

Developing countries such as Bangladesh are struggling to balance fighting Covid-19 and keep up with their growing public debt

The global leaders have realized that the coronavirus crisis has jolted the world from a slumber, to understand that the crisis has unveiled the spectre of a larger global crisis.

The health care crisis and its cascading economic consequences are predicted to further plunge many countries in the developing world into an unprecedented crisis, further pushing millions of people into poverty and starvation.

These conditions shine a strong light on the continuing debt problem that stands in the way of people’s survival -- the fight against inequality, the realization of their human rights, sovereignty and the self-determination of people, economic, gender, and ecological justice, and the pursuit of a dignified life.

Hundreds of international, regional, and civil society organizations (CSOs) including Action Aid, CADTM International, Oxfam, Third World Network, joined by 120 Bangladesh NGOs led by Coast Trust, are demanding to suspend the realization of debt instalments for all public debts of developing countries combating the Covid-19 pandemic so that the ongoing coronavirus crisis is not aggravated.

They call upon world leaders, national governments, and financial institutions both public and private, to take urgent action in compliance with their obligations and responsibilities, and commit to unconditional cancellation of public external debt payments.

The CSOs demanded the suspension of all instalments of public debt for at least the financial year 2020-2021 so that countries can develop the capacity to combat the pandemic and overcome the impact of this disaster on its citizens’ health, food, and economic vulnerabilities.

An international statement issued during Global Week (October 10-17) of action for debt cancellation sought the decisive and full solution to the debt problem as part of the profound transformation of economic and financial systems that the present crises so urgently demand.

Meanwhile, the CSO network appealed to the World Bank, International Monetary Fund (IMF), Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB), and other bilateral, regional, and multilateral development financiers of Bangladesh.

Bangladesh’s economy is severely under stress due to the additional burden of pandemic management, while the country has a budget deficit of $17.65 billion in the current financial year.

The CSOs in Bangladesh are trying to urgently bring to global attention that the government of Bangladesh for the current financial year is being forced to allocate $6.20bn for servicing external debts to international financial institutions.

They are urging the multilateral, regional, and bilateral financial institutions to strictly follow the suggestions made by the World Bank and IMF and suspend the servicing of the public debts for 2020, so that the government can use its resources to fund initiatives to help the people in overcoming the Covid-19 challenge.

On the other hand, the G-20 governments announced the Debt Service Suspension Initiative (DSSI) -- not a cancelation but merely an eight-month delay of up to $12bn worth of payments for public debts.

Much of this debt is illegitimate, the CSO network argues. The international creditors lend irresponsibly and unfairly, driven by predatory lending. The money is used to finance harmful projects and policies, failing to comply with legal and democratic requirements, is saddled with onerous and unjust terms, and incurred by private corporations but assumed by governments or incurred through public guarantees of private profits.

The conditional loans, including cuts in public services and social protection, and severe austerity programs, have also caused as great if not greater harm than debt servicing, especially on women and girls, indigenous people, and the most impoverished and vulnerable people and communities.

CSOs argue that the demand is much more than “debt relief,” but also for “debt justice.”

First published in the Dhaka Tribune on 24 November 2020

Saleem Samad is an independent journalist, media rights defender, and recipient of Ashoka Fellowship and Hellman-Hammett Award. He can be reached at saleemsamad@hotmail.com; Twitter @saleemsamad

Spending in Bangladesh: The most bucks for the biggest bang

Buddy, can you spare a dime? A very, very large one?

THERE is no lack of world-beating records in Bangladesh. It starts as the world’s most densely populated country (not counting city-states and the like). Its capital, Dhaka, merely an undistinguished district headquarters at time of partition from India in 1947, can now be counted as the fastest-growing city in the world. Female leaders have ruled the country for longer than have men—which is to say, longer than women have anywhere else. No country at peace with its neighbours has more citizens shot dead by the security forces of one of its neighbours. The world’s biggest NGO, also apparently the best, BRAC (formerly the Bangladesh Rural Advancement Committee), bears the name of its home country. Despite astounding progress, 53m Bangladeshis, fully one-third of the population, still live below the poverty line.

Until the end of January, Bangladesh was also the location of South Asia’s biggest infrastructure project to funded by donors. The Padma bridge, a proposed river crossing that was to cost $3 billion to build, would also have been the world’s longest, at a length of about 10km. But its fate has become forlorn, since the Bangladesh government withdrew its request to the Word Bank for financing, on January 31st. The decision to turn down $1.2 billion in cheap loans—the biggest pile of cash the World Bank has ever offered to a single country—came a day after the bank’s president, Jim Yong Kim, forcefully stated his commitment to not allow crony capitalism to persist under his watch. (Mr Kim went on to use the Padma bridge as an example of the bank’s stance in the face of “insufficient response by the authorities to the evidence of corruption”.)

Thanks, but no thanks, seemed to be Bangladesh’s reply. With the refusal of the World Bank’s conditions went the loans that had under negotiation with the Asian Development Bank and the Japan International Co-operation Agency: altogether nearly $3 billion. Since Bangladesh cannot borrow from international markets, the net result of the government’s apparent intransigence is that 30m people, who are cut off from Dhaka by the vast Padma and the Jamuna (known to India as the Ganges and the Brahmaputra, respectively), and cut off from the rest of the country as well, will have to be patient.

But forget the bridge for a moment. It appears that the government has developed a taste for other symbols of power, of the kind that were till recently in the preserve of regional-powers-with-adversaries. No longer. Last year Bangladesh ordered its first satellite. Only last week it announced plans to buy its first submarines. Finally, Bangladesh intends to spend the single-largest amount of cash it has ever seen devoted to a single project—and start building nuclear power plants.

More than 50 years after politicians in what was then East Pakistan conceived the idea, the government has found a donor in Vladimir Putin, the president of Russia. Mr Putin’s conditions, compared with those of Bangladesh’s other international partners, are financially inferior but politically irresistible.

This is a country, after all, where as recently as 2007 the army stepped in to lock up the political class, including the two heads of dynasty, and installed its own military-backed administration. One must be prepared for exigencies, and it helps when the men in green see things the same way. Russia made a $1 billion loan to Bangladesh, to buy Russian-made arms, last month, which might well punch a hole in those recent statistical estimateswhich showed that Bangladesh might be at especially high risk of suffering a coup d’etat in 2013.

The arms sale however will be small in comparison. The price tag for the country’s first nuclear plants is believed to be somewhere between $2 billion and $4 billion; the Russians have agreed to lend $500m to kick-start the project. The idea is for Rosatom, the Russian state’s nuclear company, to build and operate two plants in Rooppur, in western Bangladesh. If all goes well Bangladesh may soon be the seventh Asian country with an operational nuclear power plant (the others being China, India, Japan, South Korea, Taiwan and Pakistan).

So how bad an idea is it?

The first thing to say is that Bangladesh has an energy problem the scale of which tends to be, like the country as a whole, hugely underreported. According to the World Bank, there is no country where businesses find it more difficult to get electricity than Bangladesh. In its latest “Doing Business Survey”, the bank ranks Bangladesh an unflattering 185th out of 185 countries in this category. More than 60% of people do not have access to electricity.

So if the size of the problem were to suggest the size of the solution, a chunky 2,000MW more from two nuclear power stations might be a good start. The Russian plants would generate enough power to fill the current supply gap and would be a big step towards meeting the government’s goal of producing 20,000MW by 2020. The country’s current electricity-generation capacity stands at a mere 5,000-6,000MW. Domestic reserves of gas, the main source of energy, are not plentiful. The government’s short-term strategy, to fix the power crisis by installing oil-based power plants, is both unaffordable and environmentally precarious. Coal deposits exist, but too many people live on top of them. Any politician who dares touch the coal is likely to get a hostile reaction similar to the one experienced last week by foreigners who offered to help in digging it up.

The obvious solutions to Bangladesh’s long-term energy future would be a mix of coal and gas imports from Myanmar or the Middle East. But they don’t sound nearly as impressive as indigenous nukes, do they? Bangladesh’s political parties cannot agree on much, but they both like the idea of nuclear power.

There are a few problems with trying to produce 5,000MW of nuclear power (ie a fifth of the total projected generating capacity) by 2030 in what is essentially one big hot river delta. The lack of an alternative source of power, in case cooling systems collapse, and annual flooding, which, in a bad year, can cover up to two-thirds of the delta, come to mind. An earthquake once shifted the course of the mighty Brahmaputra, which used to flow east of Dhaka, to its current riverbed, 150km west of the capital. Experts may find that the plants’ proposed site on the bank of the Padma river is safe. Yet public protests, like the one in Kundankulam in the Indian state of Tamil Nadu, over the same type of Russian reactor, are to be expected nonetheless. 

Bangladesh is not set to enrich its own uranium in any case; Russia would provide the radioactive fuel rods. But both the Bangladeshi public and neighbouring India, whose border with Bangladesh is only 25km from the proposed site, are likely to demand guarantees concerning the safe transport of nuclear material. The rods would have to travel from the port of Chittagong on roads that are among the world’s deadliest.

And if the transport of nuclear material is to circumambulate the urban sprawl of Dhaka, then they will have to cross the Padma. So unless the government puts the Chinese, say, in charge of constructing that bridge quite swiftly, the nation’s first nuclear-fuel cask will have to take a boat.

First appeared in The Economist, February 6th 2013

The World Bank battles corruption in Bangladesh

DAVID BOSCO

For months now, the World Bank and the government of Bangladesh have been sparring over a planned Bank loan to help construct a bridge over the Padma River. The Bank backed out of the project in June, insisting that it had uncovered evidence of high-level corruption. Specifically, the Bank alleged that representatives of a major Canadian engineering firm bribed Bangladeshi officials (Canadian authorities are reportedly investigating two firm executives). The Bank's move produced outrage in Bangladesh, which insisted that it would find other financing.

More quietly, however, conversations about how to address the Bank's concerns proceeded. The Bank presented a stiff list of conditions: Bangladesh would  have to suspend all officials suspected of corruption, initiate a special investigation domestically, and give an international expert panel access to all relevant information. Last week, the international lender reported that the Bangladeshi authorities had begun fulfilling these terms:

The Government of Bangladesh has now begun to address the evidence of corruption the Bank identified. The World Bank understands that all government employees and officials alleged to have been involved in corrupt acts in connection with the project have been put on leave from Government service until an investigation is completed, and that a full and fair investigation is now underway.

But even that apparent bridging of differences has now run into trouble. Speaking in New York earlier this week, Bangladesh's prime minister insisted that the Bank had no credible evidence of corruption and suggested that the project was resuming because the Bank had accused Bangladesh prematurely. Other officials in Dhaka have said much the same. Yesterday, the Bank tried to correct the record:

The Bank remains concerned about corruption in Bangladesh in general and in the Padma bridge project in particular. It is for this reason that we have also made it clear that to engage anew in the project will require new implementation arrangements that give much greater oversight of project procurement processes to the Bank and co-financiers.

It is only after satisfactory implementation of all these measures as well as a positive report from the external panel of internationally recognized experts that the World Bank will go ahead with the financing of the project.

The people of Bangladesh deserve a clean bridge. If we are to move ahead, we are insisting that a credible investigation is undertaken and any project implementation be done in a manner that ensures transparency and enhanced oversight.

The episode has become one of the most sustained and direct clashes between the Bank and a national government over corruption. And Bangladesh is not just any World Bank client; it has consistently been one of the largest borrowers in the Bank's program for the poorest countries. The controversy is a notable reminder of how prominent anti-corruption efforts have become at the Bank, which for much of its history avoided the subject altogether. This campaign is popular with the Bank's largest shareholders, but it complicates lending to the poorest and weakest states, where corruption is often significant.

The bridge project is also an interesting test for new Bank president Jim Kim. The initial decision to cancel funding was taken at the end of Robert Zoellick's tenure. Shortly after taking office, Kim publicly backed that move, insisting that Bangladesh had been given multiple opportunities to address the problems. Both the Bank's funders and borrowers will be watching carefully as the story plays out. 

First published in Foreign Policy magazine, September 27, 2012

David Bosco is a contributing editor at Foreign Policy and the author of Five to Rule Them All: the UN Security Council and the Making of the Modern World, a history of the world's most elite club. He is an assistant professor at American University's School of International Service and was a senior editor at FP from 2004-2006

Bangladesh: Troubled waters

A foreign-funded bridge is hostage to murky local politics

THE BIGGEST infrastructure project in South Asia to be paid for by foreign donors is a $3 billion bridge in Bangladesh intended to span the Padma river, which is what the main branch of the Ganges is called as it flows through its delta to the Bay of Bengal, receiving the flow from the vast Brahmaputra river for good measure.

The bridge is the stuff of donors’ dreams. Its point is to end the isolation of Bangladesh’s poor south-west, home to 30m people who are cut off by these vast waters from the capital, Dhaka, and the rest of the country. The region’s isolation is compounded, to the south-west, by a high-security fence along the border with the Indian state of West Bengal; and, to the south, by the tidal Sundarbans, where dense mangrove forests are home to tigers. The proposed 6 km (3.8-mile) bridge could be a gateway to India, tying Dhaka to the great metropolis of Kolkata. It is also a crucial piece of an even more ambitious dream of connecting South Asia with South-East Asia, via Bangladesh and Myanmar. Official estimates say the bridge could raise Bangladesh’s annual growth rate by 1.2 percentage points.

The planned bridge, some 40km south-west of the capital, is designed to carry four lanes for traffic, as well as a freight railway and a gas pipeline. Complex works to channel the Padma’s flow are planned. Alas, it is easier to train the 5km-wide river than Bangladesh’s politicians to keep their hands out of the till. In June the World Bank cancelled a $1.2 billion loan, citing alleged corruption by Bangladeshi public servants. The World Bank has identified various officials as being unable to leave the money for the bridge alone. Sacking crooked-seeming officials has, for the World Bank, become a precondition for resuming lending. Bangladeshi newspapers have said that the prime minister’s chief economic adviser, Mashiur Rahman, is in the Bank’s sights. He says he has done nothing wrong and will only resign if the prime minister, Sheikh Hasina, tells him to. Regardless of Mr Rahman’s case, Bangladesh has a culture of impunity. Only one senior politician has ever gone to jail under an elected government for corruption, and that was a former dictator.

The Asian Development Bank is more ready than the World Bank to be a cheerleader for the Bangladeshi government and is keen to resuscitate the project. Like the Japan International Co-operation Agency, another backer, it has kept the door open. However, more Bangladeshi officials will have to step down before the World Bank is prepared to return. Probably the government will come back to the table, but not without hectoring its perceived enemies first. Sheikh Hasina has accused Mohammad Yunus, a pioneer of microfinance and a Nobel peace laureate, of putting the World Bank up to walking off.

The Padma bridge project has been in the works for over a decade. Western governments do not want to see it snapped up by a state-backed Chinese company (in return, perhaps, for an equity stake and for economic influence, as has happened with ports in Sri Lanka and Pakistan). India, with which Bangladesh has usually had good relations, would do its best to block a high-profile Chinese involvement in its neighbour’s economy.

Sheikh Hasina says Bangladesh will “not beg” from the World Bank. A sense of injured national pride has given rise to the unworkable notion that the bridge must now be built with Bangladesh’s “own resources”. The government is mulling a levy to help finance the bridge.

The only politician openly to reject Sheikh Hasina’s obsession with self-reliance is A.M.A. Muhith, the finance minister and a former World Bank official himself. Mr Muhith is too venerable to be required to call the prime minister “elder sister”. He knows that Bangladesh needs the multilateral agencies: only earlier this year the IMF helped out with a $1 billion loan. Bangladesh relies heavily on Western aid for a vast array of projects that otherwise would not exist. Without the Bank, there can be no bridge.

Sheikh Hasina’s Awami League is livid enough that it will be unable to keep its election promise of building the bridge before the end of 2013. Yet it would be even more appalled if the Bangladesh Nationalist Party, led by Sheikh Hasina’s arch-rival, Khaleda Zia, took office at the next election, bagging credit for the bridge. (That prospect is real: no elected government has won a second term.) And so, in the end, Sheikh Hasina has no strong incentive, other than the country’s best interests, to mollify the World Bank.

First published in The Economist, Sep 8th 2012

The Female Factor: Success in a Land Known for Disasters

Photo: Munem Wasif for the International Herald Tribune: Nur Jahan cared for a relative at a hospital. Ms. Jahan worked on a road maintenance crew for two years and hopes to one day run for a local government position.

BETTINA WASSENER

SOMESHPUR, Bangladesh — To many outsiders, Bangladesh is best known for its poverty and the natural disasters that hit it with depressing regularity.

When it comes to the position of women, however, this country has made progress that would be unthinkable in many other Muslim societies. Bangladeshi women have served in U.N. peacekeeping missions. There are women ambassadors, doctors, engineers and pilots. Two powerful women — the prime minister, Sheikh Hasina, and her political rival, Khaleda Zia — have been alternating at the country’s helm for years. The proportion of parliamentary seats held by women is 19.7 percent, not much lower than the 22.3 percent in the British House of Commons.

“This is a country where women are active in every field,” Dipu Moni, the minister of foreign affairs, said at her office in Dhaka, the capital. Ms. Moni, the daughter of a prominent politician and a Western-educated lawyer and physician, has campaigned for years for women’s rights and improved health provisions in the country.

Such efforts by successive governments and development organizations have led to major improvements in the lives of women across the country, with expanded access to health care and basic education in rural and urban areas. Decades of microlending and, more recently, the burgeoning garment sector have underpinned the progress by turning millions of women into breadwinners for their families.

Nur Jahan, who lives in Someshpur, a ramshackle village of about 1,000 people four hours from Dhaka, illustrates how tough life remains for many Bangladeshi women, but also how many women’s lives are transforming.

Ms. Jahan’s husband abandoned her, penniless and in rags, on the main square of Someshpur when she was pregnant with her second child about 10 years ago. A compact and vivacious woman who is about 26 years old — no one keeps exact records — Ms. Jahan spent years doing odd jobs for other households to keep herself and her children above water. In a country that ranks as one of the poorest in the world, she was about as low as it is possible to get.

Then, two years ago, luck finally arrived, in the form of a development project that arranged for women who had been widowed or left by their husbands to get jobs maintaining roads in the vicinity.

The project, funded by the European Union and the U.N. Development Program, and implemented with the assistance of local governments, helped about 24,400 women like Ms. Jahan across Bangladesh.

For two years, they cleared shrubs and smoothed surfaces. They were paid 100 taka, or about $1.20, a day. But the savings they accumulated allowed many of them to buy a plot of land or a humble dwelling. In addition, they were taught to start tiny businesses that should allow them to make a living going forward.

Ms. Jahan now makes and sells compost, and trades dried fish. Others in the village sell wood, cookies or stationery for a slim profit. One became the proud owner of a hand loom. Instead of being destitute, these women are now merely poor. They can afford to eat and to send their children to school.

Ms. Jahan hopes to run for a local government position in a few years. Already, people come to her for help, she explained proudly. Recently, the relatives of a sick neighbor asked her to accompany them to the local clinic. Before, they would have hardly looked at her.

“When I think about my past, I want to cry,” she said. “When I think about life now, it is nothing but smiles.”

The roots of much of the development work were laid in the aftermath of the Bangladeshi war for independence from Pakistan in 1971. What started off as efforts to support the tens of thousands of women who were widowed during the fighting was later expanded into much wider efforts to alleviate poverty and facilitate women’s empowerment, said Ferdousi Sultana Begum, senior social development officer at the Asian Development Bank in Dhaka.

“There is still a long way to go, but there has been a lot of gradual progress, especially over the past two decades,” she said. Girls’ education, in particular, has been embraced widely, she added.

Statistics, too, underline the improvement in women’s lives. The number of births by teenage mothers, for example, plummeted to 78.9 per 1,000 in 2010 from 130.5 in 2000. That is still high by Western standards (the figure for the United States is 41.2), but it is below the 86.3 recorded in India.

Fewer babies die in Bangladesh than in India: 52 out of 1,000, compared with 66 in India and 87 in Pakistan.

And population growth has been stemmed. In the late 1980s, women in Bangladesh had on average 5.1 children. By 2009, the rate had been more than halved, to 2.3. India has a rate of 2.7, according to the World Bank.

The progress comes despite the toughest of backdrops. Over all, Bangladesh ranks 146th of 187 countries on an index measuring human development compiled by the U.N. Development Program — ahead of Myanmar and many African countries but behind Iraq. Nearly one-third of the population lives in poverty. Corruption, red tape and poor infrastructure mar everyday life. Access to clean water and electricity is scarce in the villages that dot the flat landscape of the country, whose 160 million inhabitants squeeze into an area smaller than Florida and larger than Greece.

Conservative traditions are deeply enshrined in this country, where about 70 percent of the population lives in the countryside. There are frequent reports of domestic violence, often related to demands for dowry payments. And many women who have achieved top leadership positions owe their prominence in part to powerful male relatives.

But while women in many other Muslim nations are seeing their rights eroded by the rise of conservative Islamism, this is not the case in Bangladesh. Extremism is a fringe phenomenon, and women’s development projects encounter little religious opposition.

The country is predominantly Muslim, but moderate; Buddhist and Hindu traditions are widely respected, and there is a widespread acceptance of the concept that women can work outside the home.

Microlending, which took off in the 1980s, has allowed many women to start tiny businesses over the years.

More recently, millions of people have found work in the garment sector, which accounts for about three-quarters of exports from Bangladesh.

At the Mustafa Garments Industries factory in the southeastern port city of Chittagong, hundreds of women, most in their 20s and early 30s, were recently bent over sewing machines and cutting tables, making shorts for customers in the United States and Europe.

The factory employs about 500 people — 95 percent of them women — who earn between 4,500 and 5,000 taka a month, according to Kallol Majumder, the general manager. That is about $2 a day — but even that gives them breadwinner status. And it underlines the fact that women in Bangladesh are not simply recipients of Western charity, but active economic agents in their own right.

“Bangladesh is undergoing a structural change in the economy, from agricultural to manufacturing,” said Stefan Priesner, the U.N. Development Program country director in Dhaka. “Women have played a huge role in this.”

On the education front, men still outnumber women in universities. But the number of women enrolling has risen steadily. In an attempt to help redress the balance, a women-only university was set up in Chittagong in 2008.

Kamal Ahmad, a Bangladeshi who worked for many years in development organizations and as a lawyer in the United States and Britain, spent years raising donations and lobbying the government for land for the university. The goal for the Asian University for Women, he said, is to create women leaders capable of bringing about change across Asia.

The first class is expected to graduate next year, and many of the students already have plans to set up businesses, campaign groups, banks or schools in their 12 respective home countries.

“I have a real responsibility to help social progress,” said Moumita Basak, a bubbly 21-year-old from Chittagong. Her goal: to become a writer, and set up organizations aimed at promoting social causes.

First published in The New York Times, New York, USA, April 9, 2012