Bernhard G. Gunter

What's Wrong with the HIPC Initiative and What's Next?

This article reviews the problems of the enhanced HIPC initiative and outlines possible steps towards a more efficient debt and poverty reduction initiative. After brief comments on the rationale for debt relief, it analyses some key issues related to the HIPC initiative’s aim to achieve debt sustainability, describes other fundamental problems of the HIPC framework, and discusses some less known but still crucial flaws of the initiative. It then proceeds with necessary improvements for an efficient debt reduction programme, possible modifications for a revised HIPC initiative, and some suggestions on how to overcome financing constraints. Apart from being in several respects unfair, the current framework is unlikely to permit a lasting exit from unsustainable debt for many HIPCs, and may lead to a decline in traditional development assistance.

Substituting Wood with Nonwood Fibers in Papermaking: A Win-Win Solution for Bangladesh

Bangladesh is facing an acute shortage of fibrous raw materials for the production of pulp and paper. On the other hand, the demand for paper and paper products is increasing day by day. This study reviews the availability and suitability of nonwood raw materials for pulp production in Bangladesh. It shows that Bangladesh has a huge amount of unused jute fiber, which is highly suitable for papermaking in Bangladesh. Other agricultural wastes like rice straw, dhaincha, golpata fronds, cotton stalks, corn stalks, and kash are also available and may be used for some pulp production. Given the different properties of these different nonwood fibers, jute pulp can be used as a reinforcing agent with other nonwood pulps for the production of high quality paper in Bangladesh.

How Vulnerable are Bangladesh's Indigenous People to Climate Change?

This paper compares the vulnerabilities to climate change and climate variability of the indigenous people with the Bengali population of Bangladesh. It distinguishes between (a) individual vulnerabilities that are related to an individual’s capability to adapt to climate change and; (b) spatial vulnerabilities, that is, vulnerabilities that are related to the location of a person (like the exposure to climate change-induced disasters). While an individual’s capability to adapt to climate change is determined by many factors, some relatively simple approximation is to look at poverty, landlessness, and illiteracy. Spatial vulnerabilities are reviewed by looking at drought hazard maps, flood hazard maps, landslide hazard maps, and cyclone hazard maps. Hence, the paper compares levels of poverty, landlessness, illiteracy, and the more direct though also more subjective exposures to increased droughts, floods, landslides, and cyclones across the two population groups. The paper concludes with some broad suggestions on adaptation strategies of indigenous people as well as suggestions for policy interventions to reduce climate change-induced vulnerabilities for indigenous people in the Chittagong Hill Tracts (CHT).

Analyzing Bangladesh's Debt Sustainability Using SimSIP Debt

The ability to pay for a government-led investment strategy to achieve the millennium development goals (MDGs) is determined by the resources available to the government through economic growth, taxation, loans, and grants. Unsustainable public debts increase poverty directly through negative impacts on economic growth as well as indirectly through cuts in spending. Hence, the issue of fiscal debt sustainability is critical for achieving the MDGs. In this paper, we use the debt projection module of SimSIP Debt to project the evolution of Bangladesh’s public debt over a 15-year horizon (from fiscal year 2006 to fiscal year 2021) under three different macroeconomic scenarios and two different financing scenarios of an ambitious government-led investment strategy.

Free Falling Terms of Trade Despite Industrialization: The Case of Bangladesh

Considering Bangladesh’s successful industrialization, Bangladesh’s sharply deteriorating terms of trade (ToT) are a puzzle for the original Prebisch-Singer hypothesis. The Prebisch-Singer hypothesis suggested that countries exporting primary products will experience deteriorating ToT, while countries exporting manufacturing goods will experience ToT improvements. This paper provides an empirical review of Bangladesh’s ToT from 1980 to 2013. It reviews the theoretical literature explaining the Prebisch-Singer hypothesis and uses econometric analyses to determine some of the key factors for Bangladesh’s ToT deterioration. It shows that exchange rate devaluations and increases in export quantity have a negative impact on the ToT, while improvements in export quality have some positive impact on the ToT. In the case of Bangladesh, the problem however is that export quality has been decreasing, contributing to sharply falling ToT. The key policy implication is that export promotion policies need to be refined, focusing also on export quality, not only export quantity.

Economic Structure and Macroeconomic Uncertainty: Policy Implications for Bangladesh

This paper begins with examining Bangladesh’s economic structural transformation during 1980-2010, which is compared and contrasted with the transformation of India and Pakistan. It then calculates and compares the three countries’ macroeconomic volatility and uncertainty for the observation period (1980-2010), using unbiased volatility and uncertainty measures. It also reviews the evolution of Bangladesh’s macroeconomic uncertainty for each decade (i.e., the 1980s, 1990s and the 2000s). It shows, for example, that Bangladesh’s GDP volatility and uncertainty have been increasing over time. Reflecting on the fact that macroeconomic uncertainty has a negative impact on investment and growth, the paper derives various policy implications for Bangladesh, highlighting the importance of economic diversification, countercyclical monetary policy, smoothing external factors, and building up reserves and buffers.