The Non-farm Road to Higher Growth: Comparative Experience and Bangladesh's Prospects The Non-farm Road to Higher Growth: Comparative Experience and Bangladesh's Prospects

To prevent poverty and unemployment from becoming socially insupportable and politically explosive, Bangladesh must aim for a growth rate of 7-8 per cent using the most labour intensive techniques while still being efficient. The paper explores the role that non-farm sector can play in supporting this push for higher growth, and the lessons regarding non-farm development that can be derived from examining the experiences of growing countries in Asia. The thesis of this paper is that rapid growth in Bangladesh is likely to be a function initially of agricultural productivity and prosperity. It will be difficult to expand non-farm income if agriculture is stagnant. Comparative experience from some of the successful East and Southeast Asian countries and empirical evidence from Bangladesh suggest that investment in transport infrastructure and the mechanisation of farming would give the strongest push to agriculture and generate the most potent spread effects. Agricultural growth stimulate growth of RNF activities through demand and input-output linkages. But in order to turn rural manufacturing into a leading sector with the potential to employ a large number of people and good export prospects, impetus must come from other directions as well.