Bangladesh : MDGs and public spending on Essential Services
Razu Ahmed
June 27, 2008 MDGs and public spending on Essential Services
Public spending on Essential Services (ES) is crucial to achieving MDG targets for
Analyzing data available in different government documents including the budget texts, it can be shown that public spending on health, education and water-sanitation is poor in comparison to spending on other sectors.
The budgetary allocation on ES i.e. education and health seems to suggest an increase than those of the preceding years. Allocation for education in 2007 was 16.3% of the total public spending from 14.9 for the year 2006 which is 2.3% and 2.2% of GDP respectively and health sector follows the same trend amounting to 7.4% in 2007 while it was 6.7 in 2006. Public spending on water and sanitation sector is quite meager when compared with former two.
However, if the allocation in different sectors is adjusted with the pace of inflation, there seems to be a very meager increase in public spending on those crucial sectors. Although the government has repeatedly been claiming that the education sector always receives the highest budgetary allocation in term of both Revenue and Development outlays, the real case scenario is somewhat different and misleading. For example, over all education budgets involves allocations on religious affairs and science and technology making the total outlay a little bigger than the real one. In addition, religious education and military educational institutions take away a substantial amount of public money from the education budget further squeezing the education outlays. Eventually, the allocation on pure secular public education becomes scanty one. Why Education and Religion (and sometimes Science and technology) are reported under the same under the same sector remains a big question as this undermines the transparency in allocation structure. In fact, public spending on pure secular education is quite meager in comparison to other sectors/areas such as Defense or External debt repayment. This poor allocation of resources has huge adverse impact in terms of shortages of teachers, spending less on school buildings, text books and equipments and paying the teachers on whom the education systems rely; shortage of doctors, nurses, medicines, clinics, outposts, hospitals so on and so forth.
Illustrating examples from the health and education sectors seem to be highly important since they are the two proven sectors where the state can effectively intervene to bring about human development. Indeed two of the three components of the global human development index used by the United Nations- which is in sharp contrast to the Millennium Development Goals- happen to be education and health, besides per capita income. Understandably, the longer a person lives and the more educated one becomes the realm of choices available increases exponentially. When the realm of choices increases, so does the number of opportunities and potential for earning, which would in the end, although gradually but surely, reduce the stark inequality of wealth and income distribution.
In the last 27 years between 1981 and 2007, the population of the country increased from about 90 million to 140 million officially. During this time, the number of registered nurses has increased from 3,014 to 20,129 and doctors from 10,081 to 44,632 — that is, while in 1981 there was a nurse for every 30,000 people and one doctor for every 8,900 people, now there is a nurse for every 7,000 people and a doctor for every 3,140 people. The number of hospital beds have increased from 15,845 (one per 5,680 people) to 38,211 (one per 3,670). The number of dispensaries however, has decreased from 1,399 to 1,362, while the number Upazila (Sub district) health complexes have increased from 306 to 419.
Certainly, the availability of doctors and nurses has increased but not to a level that might be reasonably expected. The number of beds in public hospitals has also increased, but not in a similar proportion to that of doctors and nurses. The numbers of dispensaries and Upazila health complexes on the other hand have not increased at all or the increase has been insignificant. These have to care for a much larger number of people. What it means is that people’s access to health services has not increased although the number of doctors and nurses has risen. By implication then, the thousands of medical personnel are concentrated at urban centers serving at private clinics and hospitals and not in the rural areas where they are much needed. That beds, hospitals or dispensaries have not increased significantly means that the governments have not taken any initiative to build health care facilities, probably because infrastructure development requires much more public spending than the current level of budgetary allocation.
It would not be surprising if education has suffered a similar fate as well. While the number of perfect grade-point averages rises to a phenomenal high every year, breaking the preceding record, most of the students hail from cities and have parents who may afford some sort of private tuition in the least. There are also tens of schools and colleges that fire blanks in each public exam. One must then question the quality of schooling and naturally the quality of teachers at those institutions, which again people would readily agree is pathetic.
The numbers do not tell much of a different story either. During the 17 years between 1985 and 2002, the number of primary school students went from a little over 10 million to 17 million. During this time the number of teachers increased from about 1.83 lakh to 2.64 lakh meaning that the teacher-student ratio had actually worsened from one teacher for 54 students to one for 64. The number of schools increased from about 43,600 to 63,150, again in a worsening trend going from one school for 231 students to one for 269.
It was reported widely in the media during a movement of all primary school teachers of
In addition,
Given the scenario of public spending pattern on health, education and water-sanitation, it seems logical to raise question whether the existing pattern of spending and amount of money allocated to these vital sectors are sufficient to achieve the MDG targets by 2015.
The government of Bangladesh is quite hopeful of realizing majority of the goals (if not all) by the stipulated time and a review of the MDG progress, jointly prepared by the government of Bangladesh (GoB) and UN country team in Bangladesh, suggests that country is 'on tract' on majority of the targets such as infant mortality, child mortality, expansion of primary and secondary education, reduction of gender disparity, and eradication of hunger in the form of child malnutrition. In addition, the Bangladesh Poverty Reduction Strategy Paper (PRSP) holds that the rate of actual progress achieved by the country during 1990-2000 is consistent or even higher than the pace of annual progress required for achieving MDGs by 2015. Despite showcasing such progress in the different sectors, the statistics provided in the report suggest two emerging challenges that may impede the 'steady' progress of the realization of the Goals. First, there exists a very high degree of social inequality, which cuts across all key social targets. Second, the rich-poor divide is striking and showing a secular upward trend. The worrying is the gap between the poorest and the rest of the society. A high level of inequality in spatial dimensions and socio-economic categories needs to be seen as factors likely to cause divergence in the progress in MDGs in the coming decade (Unnayan Onneshan: 2005).
According to the GoB/UNDP Bangladesh MDG Progress Report of February 2005, Bangladesh faces serious challenges in meeting the targets it has set towards attaining the important MDGs in eradicating extreme hunger and poverty, reducing child mortality and improving maternal health. The challenging outlook for Bangladesh with regard to meeting the MDG targets is also strongly emphasized in the ADB report 'MDGs: Progress in Asia and the Pacific 2006', which categorizes Bangladesh as a 'country of greatest concern', by falling further behind and score negatively on both the progress index and the latest status index. Specific reference is made to increasing inequality, severe school drop out rates which undermine the good enrolment rates, disparities between urban and rural access to education, gender disparities especially at tertiary level in education, alarming child malnutrition, worsening urban access to sanitation and a disastrous environmental situation.
Assessments by international agencies suggest that most low-income countries are far from achieving these objectives by 2015. Halfway to the target date of 2015, the world is still falling short of meeting the Millennium Development Goals. The World Bank and the United Nations have estimated that anywhere from $40 billion to $75 billion annually will be needed globally if we are to achieve the MDGs (Devarajan: 2002). A key requirement is to ensure that government and donor resources are increasingly targeted towards the achievement of MDGs.
The UNMP estimates the annual cost of achieving the MDGs in low-income countries at US$253 bn in 2006, rising to US$348 bn. in 2010 and US$529 bn. in 2015. It is assumed that roughly three quarters of the figure will be met through the mobilization of domestic resources, leaving an annual shortfall of US$73 bn. in 2006, rising to US$135 bn. by 2015.
Furthermore, it is estimated that meeting the MDGs in middle -income countries will require an additional US$10 bn per year, and that funding international components of the goals will require a further US$15 bn. in 2006, rising to an annual US$31 bn. by 2015. In total, therefore, the UNMP estimates that additional external annual financing of US$121 bn. In 2006, US$143 bn. in 2010, and US$189 bn. in 2015 will be required if the MDGs are to be met in all countries.
The assumption of a rising contribution of domestic resources to MDG expenditure has been questioned in some quarters as overly optimistic. The UNMP (2005) suggests that the average domestic contribution for the least developed countries would be 5% of GDP in 2006, rising to 9% by 2015 (for low income countries the corresponding figures are 7% and 11%).
Given that government revenues in low-income countries have averaged between 12% and 14% of GDP since 1990 (Culpeper and Kappagoda, 2006), these estimates would appear perfectly reasonable, if not a little pessimistic. A corollary to this, however, is the scope to further increase the domestic tax take in developing countries. It is well known that tax revenues as a proportion of GDP are strongly related to a country’s level of development, so that low-income countries have a significantly lower level of tax revenues as a proportion of GDP than do high-income countries. However, the importance of domestic resource mobilization cannot be overstated. The more a country can fund its activities – including but not restricted to MDG expenditure needs – through domestic resources, the more autonomy the country has, the lower its needed external and internal borrowing and thus the more sustainable its debt.
However, given the rising trend of government revenue earnings in Bangladesh, very scanty part of it is being invested on essential services such as education, health etc. Public expenditure of these vital services account for only 25% of total spending and a meager 5% of GDP. So, where does the public money go?
(This article is a research report jointly prepared by Monowar Mostofa and Razu Ahmed)
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Tags: External Debt , Bangladesh , Essential Services
