Resource for development
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The document discusses resources for development in Bangladesh. It provides reference books on topics like constitutional law, economics, and Bangladesh studies. It discusses how procurement of internal resources is important for a country's development. Developed countries achieved growth based on their own resources. The document also discusses classification of resources, strategies to increase resource mobilization in public and private sectors, foreign aid, types and role of foreign aid in Bangladesh's economic development, and reasons for continued aid dependence. It provides an overview of topics related to resources and development in Bangladesh.
Resource for development
- 1. Bangladesh Studies Resource for Development Reference Books: 1. Constitutional Law: Barrister Halim 2. Secondary Economics: NCTB 3. Bangladesh Studies: Md. Shamsul Kabir Khan 4. Bangladesh Economics(Bangla Version): Akmol Mahmud 5. The Economics of Development and Planning: ML Jhingan
- 2. Procurement of resources for development Development of a country depends on procurement and exploitation of its internal resources. The magnitude of a country’s development can be viewed from the volume of resources and its scientific utilization. It also a pre-requisite for development to preserve the accurate statistics of main resources of a country. Developed countries of the world achieve their development largely on the basis of their own resources. The countries which utilize much of their own resources, gain achievement to that extent. Procumbent of resource and capacity to utilize the same are completely different issues. If available resources cannot be tapped due to inability of any country, she cannot be treated as developed one and the county without resources, on the other hand, can develop itself.
- 3. Necessityofresourcemobilizationfordevelopment From different viewpoints, the necessities of resource mobilization are discussed below: 1. To build socio economic infrastructure 2. To establish mills and factories 3. To increase investment 4. To develop standard life 5. To increase per capital income 6. Decrease foreign aid The importance of resource mobilization is so much important which cannot be discussed with a narrow range. To keep racing with the modern competitive world, resource mobilization is so much more necessary.
- 4. ClassificationandsourceofresourcesfordevelopmentofBangladesh The additional resources for development may be collected from different sources. According to nature of sources, resources may be classified into two categories - 1. Internal resources 2. External resources 1. Internal resources: The savings of public and private sectors created within a country’s economic condition is called internal resources. Internal resources may be divided into two types- a. Public sector savings b. Private sector savings
- 5. a) Public sector savings: Savings created in public sectors if public revenue is greater than revenue expenditure. So revenue surplus is called savings of public sector which includes- o Tax revenue o Fees of fine o Interest due on govt. fund o Profit of state organization etc. b) Private sectors savings: Savings is created in private sectors from household savings & corporate savings. Corporations may create savings by preserving a portion of distributable profit.
- 6. 2. External resources: i. Grant & loan ii. Soft & hard loan iii. Untied and tide loan iv. Food, commodity & project aid v. Monetary aid & Technical aid vi. Bilateral & Multi-lateral aid vii. Foreign direct investment Present position of resource mobilization in the public sector of Bangladesh: The main sources of resource allocation in public sectors are – Tax revenue: tax revenue contributes public sectors by the rate for about 80% which contributes12% on GDP. VAT: Contribution of Value Added Tax is less significant compared to other countries. Indirect tax: Contribution Indirect tax is less significant in public sectors.
- 7. Strategyforincreasingresourcemobilizationinpublicsector The following strategies should be adopted for increasing resource mobilization in public sectors: Personal income tax Corporate Income tax Taxation in agricultural sectors Customs Duties Value added tax Revenue Curtailment of Govt. expenditure
- 8. Present positionofresourcemobilizationintheprivatesectorofBangladesh Now a day’s private sector is progressing rapidly. The present statuses of resource mobilization of private sector are – Low personal saving: Sometimes individual invest by personal savings. Generally personal savings is deposited on bank and it is handover to the investor. Loan provided by financial organization: The commercial bank and specialized bank grant loan for investment. This investment creates through resources mobilization. BSB, BSRS, BKB etc. sanction loan for investor. Selling share in stock market: Business organization mobilize the resources thorough selling share. Individual and financial organizations invest through purchasing share. Bond issue: Bond issue helps to mobilize resources. BTTB, DESA ,PDB, city council etc. mobilizes resources through the issue of bond. Undistributed profit: Corporations may not distribute the total revenue among the shareholder and a part of profit is reserved for reinvestment.
- 9. Strategy for increasing resource mobilization in private sectors Development Bank service: Development Bank service is very important for public resource mobilization in free market economy. If Bank service becomes available, then the people will easily deposit their savings. Besides savings is also increased by raising interest rate on their savings. Developing share market: At present, the share market of Bangladesh is underdeveloped .Recently Investor becomes disappointed by the ups & downs of share market. So share market must be developed so that investor can get opportunity for capital investment through purchasing share. Financial organization: The activities of financial organization (commercial bank, stock exchange, insurance companies etc.) should mobilize savings dynamism. So government should encourage to financial organizations for increasing savings and investment. Monetary policy and Fiscal policy: For encouraging private savings, the monetary policy and Fiscal policy should be applied properly.
- 10. Foreign Aid Foreign means abroad or not home and aid means donation or grants. Foreign aid means donation or grants from abroad. So the loan and grants which get from various donor countries and organizations for continuing economic development process is called foreign aid. In others words, Foreign aid can be defined as grants loans which is given for development and betterment to the host countries by the foreign countries or organization. According to United Nations, “Foreign aids are given in two ways (1) loan and (b) grants. Loan is long term but both interest and loan must be paid after specific period. But grants are not repayable.” There must be stated two elements for foreign aid transaction: i. The main objective of this transaction is debtor must work for development of the country. ii. 25% Grants must be allowed for charitable characteristics.
- 11. Methods of foreign aid Foreign aid is generally provided in three ways: a) Relief; b)Grant and c) Loan. a) Relief: Relief is provided for meeting emergent rehabilitation works caused by famine, natural calamities etc. this is provided by the friendly countries and relief organization/ institution of different countries of the world. Relief is given only on humanitarian ground. b) Grant: Grant money is not refundable or recoverable. This is provided for maintaining good ties between two countries. This is given sometimes at government level, sometimes through agencies and personal initiatives. Grad is provided for financing development projects of a country. c) Loan: Loan is advanced on certain terms and conditions. Loan money is repayable or has to repay with in specific time; interest is charged against it on compound rate.
- 12. Types of foreign aid a) Technical assistance: since developing countries are backward in technological education, the donor countries/ agencies send experts for different projects. b) Project aid: project aid also includes necessary equipment and spares, raw materials and other ancillaries or implementing any special types of project in developing countries. c) Commodity aid: apart from economic complications, most of the developing countries have food shortage. Foodstuff which is supplied by developed countries for consumption is considered as a part of loan. In addition to this, aid is supplied through medicine, raw materials, equipment or ingredient to be used in the laboratories. d) Cash aid: cash money also provided as project aid to strengthen the economy and expedite development activities of aid-receiving countries.
- 13. Therole of foreign aid in economic development of Bangladesh Lack of internal resource mobilization Trade deficit Lack of capital To solve unemployment problem Rapid industrialization To create skilled entrepreneur To prevent inflation Gaining foreign currency Need for big push Building infrastructure Spread of technical knowledge and experience Natural calamities Food problem
- 14. Why aid dependence is not decreasing? Limited internal saving Deficit in foreign aid Food deficit Natural calamities Self facilities of government Necessity of higher economic growth Luxurious consumption High price High rate interest Dependency on others
- 15. Foreign Direct Investment (FDI) FDI stands for Foreign Direct Investment. Foreign direct investment (FDI) refers to long term participation by country A into country B. It usually involves participation in management, joint-venture, transfer of technology and expertise. Foreign direct investment is investment of foreign assets into domestic structures, equipment, and organizations. Foreign investment can be a significant driver of development in poor nations. It provides an inflow of foreign capital and funds, in addition to an increase in the transfer of skills, technology, and job opportunities.
- 16. The positive and negative aspects of FDI in host country POSITIVE ASPECTS: 1. FDI help to increase the investment level and thereby the income and employment in host country. 2. The transnational corporations have become vehicles for the transfer of technology, especially to the developing country. 3. They kindle a managerial revolution in the host countries through professional management of high sophisticated management technique. 4. The FDI enable the host countries to increase their export and decrease their import requirement. 5. They work to equalize the cost factor of production around the world. 6. FDI provide an efficient means of integrating national economics. 7. The enormous resources enable them to have efficient research and development systems. Thus, they make a commendable contribution to invention and innovations. 8. FDI helps to increase competition and break domestic monopolies. NEGATIVE ASPECTS: 1. Their technology is designed for world-wide profit maximization. 2. Through their power and flexibility, can evade or undermine national economic autonomy and control. 3. They destroy competition and acquire monopoly power. 4. The tremendous powers of the global company pose the risk that they may threaten the sovereignty of the nations in which they do business. 5. They cause fast depletion of some of the non-renewable natural resources in the host country. 6. Transfer pricing enables MNCs to avoid taxes by manipulating prices on intercompany transaction.