Real Estate in the Economy of Bangladesh

Importance of Real Estate in the economy of Bangladesh
Over the last 15 years the Real Estate development sector has made significant contribution to many sectors of our economy.

• 1200 families homes has created since 1985 in Metropolitan City
• 1000 acres land development for housing (For lower middle and middle income families)
• Construction materials purchased Tk. 1000 crore
• 1200 construction worker employed by RE and pay Tk. 45 crore annually
• Professional development and pay Tk. 2 crore annually (Architect, Engineers & Others)
• 5000 management staffs (Accountants, Supervisors) and pay Tk. 25 crore
• VAT pay approximately Tk. 150 crore from 1993
• Cement manufacturing industry get impetus by RED
• 2500 diploma engineer are engaged in the sector

Problems of Real Estate development in Bangladesh/Metropolitan City:
Lack of Government policy or cooperation as for example:

• In 1989 the ministry of industries declared construction of residential complexes on commercial basis as an industry. However, today this notification from the ministry of industries is not recognized by the National Board of Revenue. Therefore this sector is not entitled to any benefit of industry.
• Transfer fees of stump duty, highest in the world. In Metropolitan City 22% of total value paid by the purchaser as fees.
• Housing is one of the basic needs and in almost all development countries 90% of the value of the property can be borrowed from the government financing institutions.

1. Only for middle and higher income groups
2. Destroys the harmony in sky line
3. Increase pressure on limited services
4. Traffic and public problems
5. Creation of air and light circulation
6. Lack of community space
7. Socio-psychological problems
8. Located/Clustered in and around CBD of Dhaka city

Some current problems on Real Estate Development

1. Different embargoes on high rise construction
2. In appropriate rules of housing development
3. Harassment of environmental directorate for environmental clearance
4. Lack of coordination between utility and agencies
5. Procedural delay in plan approval
6. Procedural delay in registration and transfer

Summary recommendations to boost Real Estate sector:

• Coordination among all the concerned agencies including utility agencies must be ensured
• For RAJUK approval of drawings, one window service need to be established
• Government land can be allotted to the developers at government land price
• Registration fee and procedures for the government and non-government land should be similar
• There should be a law which ensures the implementation of DMDP Master Plan and Bangladesh National Building Code (BNBC) in 1993
• Law and order situation should be drastically improved, so that terrorist activities do not occur in the site Building construction rules 1995 of RAJUK and other Metropolitan City needs to be totally reviewed
• Institutional credit facility must be increased at a lower rate for low income households to promote housing for fixed income families
• Representation of REHAB in decision making in RAJUK, WASA, DESA, TITAS and other concerned agencies.   

Problems & prospects of Real Estate business in Bangladesh

1. Background information:

• Dhaka heritage 400 years old
• Last four decades recorded tremendous growth in population and area
• 3.5 million in 1981, 5.7 million people in 1991 within 171 sq. miles
• Population will be 10 million by 2001
• Housing problem acute; continuous deterioration of service facilities
• Huge housing backlog; according to World Bank in 1981, 1.9 million housing units for 11.8 million urban population
• Pressure on build able residential land is very high
• High land price, 60%-90% consumer price index during 1974-1987

2. Housing in Dhaka City: Public and Private performance
   Public sector housing (Performance):
   

• Little success, supply less than effective demand
• Large investment goes to benefits of the upper and middle class of people
• Public Works Department (PWD), Housing & Settlement Directorate (HSD) are construction agencies for government accommodation
• According to World Bank in 1981, only 7% of total housing stock was built by public sector and rest by the private sector

         Private sector housing (Performance):

• Housing development in the form of apartment development
• Individual or company construct one or more buildings
• Increase in real estate companies
• 20 years before buyers reluctance to purchase apartment
• Increase in cost of land and construction
• Wage income earners in middle east & other countries
• Because of return influence, many apartment builders have come up in the market
• In 1988, 20 developers engaged in Dhaka city
• 20 companies developed about 5000 new building units in 1990.
• Considerable contribution for increasing the housing stock in Dhaka City

3. Prospects:

• Delivered housing facilities to the urbanities
• Utilization of minimum land
• Planned residential development
• Better environment
• Employment opportunities
• Tax return higher
• Positive effects on city
• Form and design of city

4. Problems of Real Estate Business:

• Only for middle and higher income groups
• Destroys the harmony in sky line
• Increase pressure on limited services & lack of community space
• Traffic and public problems
• Creation of air and light circulation
• Socio-psychological problems
• Located/Clustered in and around CBD of Dhaka city (Why?)

1. Easy access
2. Proximity of supporting facilities of office
3. Higher rate of return on investment

5. Recommendations for Real Estate business:

• No magical solution to solve the housing problems
• High rate of population growth as well as high land value, apartment development should be encouraged in the future development
• Walk up (5-6) storied apartment should be encouraged
• Co-operation among the service delivering agencies
•  A private housing bank should be established
• Proper rules and regulations for high rise construction
• Zoning law for Dhaka and building height should be formulated and reformed
• Lift, park, community, fire-fighting etc. should be provided
• Loan, short and long term credit for housing construction

Leadership Development

Q. what are the good leadership development criterions?

Leadership studies historically went hand-in-hand with studies of elites: political, financial, military, aristocratic, or cultural elites. Leadership was considered an art, for which some fortunate people had an inbuilt genius; the rest of us could only engage in admiring post-game analyses. Leadership means different things to different people.
Stodgill (1974) suggested eleven perspectives of leadership. Leadership may be defined as (a) personality or effectiveness of personality, (b) the art of inducing compliance, (c) the exercise of influence, (d) a function of group process, (e) a form of persuasion, (f) a set of acts or behavior, (g) a power of relationship, (h) an instrument of goal achievement, (i) an effective interaction, (j) a differentiated role, and (k) the initiation of structure.

1. A Leader's Key Functions
   

   The leader accepts three key functions in his role:
   

• Authority: the right to make decisions.
  
• Responsibility: assignment for achieving a goal.
  
• Accountability: acceptance of success or failure.
  

1. Good Leadership Criterions
   

• Our good leadership principles are our touchstone. They guide us and provide a basis for the programs and services we offer. Criterions of good leadership are given below:
  
• Good leadership development begins with discovering our own passion, motivation, strengths and limitations.
  
• The practice of good leadership is right in nature and includes a responsibility for the rights and welfare of all members of the public.
  
• It is about people working together, influencing each other to achieve intended results.
  
• Good leadership is more than "what you need to know" and "what you need to do," it is about who you are.
  
• One learns in a holistic fashion which integrates mind, emotions, and body.
  
• Everyone can and should exercise effective leadership, not just the person "in charge."
  
• Good leadership development is an ongoing process and should be grounded in the day-to-day challenges of our life.
  
• Good leadership always respect for the Law and System of Government. It also respect for Cultural Values, Custom & Tradition
  
• Good leadership also respect for the People on whose behalf Leaders exercise power
  

On the other word we can say that leader have some functional & soft skill ness to develop the good leadership. These are another criterions for develop the good leadership.

Q. "Leadership is originated, not created"

Leadership means Management, control, guidance, headship and direction. In every instance it has something to do with being in charge. Having others follow your lead supervising others. And because the idea leadership of a country touches more than just politicians and goes as far as business, church, schools, community and non profit organization it is sad that there is no institution in the Caribbean islands that is dedicated to developing leaders to serve our societies.

The word leadership can refer to:

• Those entities that perform one or more acts of leading.
  
• The ability to affect human behavior so as to accomplish a mission.
  
• Influencing a group of people to move towards its goal setting or goal achievement.
  

Richard M. Cyert, president of Carnegie- Mellon University and author of books and articles on organizational theory, has divided leadership into two dimensions – Consideration and Initiating Structure.

The Consideration Dimension is characterized by an emphasis on good relations. The leader is friendly, approachable and a good listener. Leadership behavior can be described as open and enlisting mental trust.

The Initiating Structure represents the leadership behavior involved in directing the organization, helping it to define its goals and structure for execution – including the ability to understand the actions others can act upon.

From these two dimensions, it is possible to generalize three basic functions that a leader performs:

• Organizational
  
• Interpersonal
  
• Decisional
  

Leadership has sometimes been described as taking people to a place that they would not normally go to on their own. Once a sound strategic planning process has determined what that place should be it is the leader's prime and fundamental responsibility to assure that there is cultural alignment with the vision and that the full resources of the organization are effectively brought to bear to achieve that destination.

If the leaders are wrong then people have to suffer a lot for his/her wrong decision. Due to the poor quality of leadership and management in this country, the workforce is confused with regard to the needs of the company over the employee's own needs. This confusion results in lack of motivation, direction and desire for the company to succeed, and with it go the fortunes of employees and shareholders.

Leadership means not only to give leads but also to give the proper lead in proper way. For choosing the proper way need an effective and capable people. A good leader have some quality and charters tics to be a leader such as Knowledge of the Work, Knowledge of Responsibilities, Skill in Instructing, Skill in Improving Methods, self-disciplined, good communicator, experienced, well organized, Trust, Good communicator, Decisive, Motivational, Inspirational, People focused, Visionary, Strategic, Driver of change, Charismatic , Entrepreneurial, A risk taker etc. Effective leaders create results, attain goal, and realize vision and other objectives more quickly and at a higher level of quality than ineffective leaders.

All of these qualities are not created or trained in centers. These qualities are the capability to be a leader. This quality are gained by own capacity or self-sufficient, own experience, intelligence. And all of this developed by leaders self-capacity which are not gained by trained or created. Leadership is an original or internal capacity of a man. And this internal capacity is enriched by education, experience etc.

For example: in a democratic country like Bangladesh leaders are chosen by election method. Through this method an illiterate person can be a leader. But his/her capacity to being a leader is ineffective because he/she have not the quality of an effective leader. The leader have no education background, which is the own capacity of a leader, which are not gained in one day or one year. And also, a leader can be a higher educated person but he can not motivate the people or influence the people into proper way. Because, to motivate people is an internal or self capacity which are not trained or artificially created. It's an original capacity of a man or leader.

From the above description it's easy to say "leadership is originated, not created". And for this reason I am comply with this view.

Women Wage Distribution

Q. Would you agree with the lower status of women than men in terms of wage distribution? Show the logic in favor of your arguments?

I agree with the lower status of women than men in terms of wage distribution. Because yet women are neglected in the wage section of the economy. Women are now contributing in the sectors like men; a figure can be showed for women involvement in rural life in the next page. From the figure it can be seen that there are no virtual difference but there is a difference in wage scale.

From various study it can be shown that women labors are having 80 to 130 BDT for daily basis but male labors are getting 120 to 150 BDT. But there are a different picture can be shown in some cases of urban employment sector or formal sector. But majority of rural poor women are having lower status of wage than men.

Women Involvement in Rural Development

Q. Give a general picture on women involvement in rural development activities of Bangladesh?

"Involvement" has to be ensured with two dimensions as economic and social dimensions. ‘Involvement’ is seen to relate to the user’s power. Rao and Kelleher (1995:70) define women’s Involvement as “the capacity of women to be economically self-sufficient and self- reliant with control over decisions affecting their life options and freedom from violence”. In the existing socio-cultural milieu of Bangladesh, embodied within the phrase of ‘Involvement’ is the concept of change. Women’s mobility and access to information are strengthened both by the requirement and, in many cases, because their economic activities require interactions in the public sphere. These are some of the ways in which "Involvement,” could strengthen demand and make women more successful in overcoming obstacles to management of family.

The general picture of women’s involvement in rural development activities of Bangladesh is given below-

• Economic involvement of rural women

  • Women in agricultural sector

  • Women in rural non farm activity

  • Women in rural industry

Women in Agriculture: Agriculture related activities like post harvest operations, seed preservation, nursery business, jute stripping, vegetable cultivation, homestead gardening, floriculture, production of horticultural seeds, establishment and management of cottage industries based on locally produced agricultural commodities, etc. are very suitable for women.

Women in rural non farm activity: For the development of rural non farm activity women participation is very essential. Women play a vital role for in rural non farm activity. Rural non farm activity means especially that kind of activity which is excluded from all agricultural activity. Tailoring, stitching, pottery, home stead gardening, bamboo product etc. are included in rural non farm activity.

Women in rural industry: Women can play a vital role in rural industrial sector. Women can work into the Husking mill, rice mill, small scale industry etc into the rural area.

Women’s Economic Empowerment also ensured by rural markets and transports.

• Women in social involvement:

Since the 1990’s women have been identified as key agents of sustainable development and women’s equality and empowerment are seen as central to a more holistic approach towards establishing new patterns and processes of development that are sustainable. Women are also involved in social development such as school teaching, nurse etc.

• Political involvement of women:

Women face handicaps to their involvement in politics, their participation in SHGs has altered them, and these women can be prospective leaders in the local political field. Nonetheless various constraints like discriminatory practices in labor, a low level of skills etc. operate to contract a woman’s potential for empowerment. Into the rural area union parishad can play a vital role for political empowerment of women. Women can be participated all decision making process of the rural political conflict and they can raise their own thinking about that matter.

• Legal status:

In Bangladesh women have inadequate access to the law due to illiteracy, lack of legal literacy, information and resources, insensitivity and gender bias. They also lack awareness of women’s human rights in general. The law-enforcement officers and the judiciary do not really know how to make law more gender sensitive. Women may also lack access to justice or human rights because of race, ethnicity, culture, and religion. In Bangladesh the most important events in a woman’s life, e.g. marriage, divorce, custody of children inheritance etc.

• Women in Decision Making:

Participation of women in the decision-making process of farm activities and investment in homestead and cultivated lands along with household activities cannot be looked at in isolation. The participation of men, women and children in a family is so interdependent that they support each other in everyday life in a large number of social, productive and economic activities (Hussain et al 1988). A woman is engaged with several responsibilities at the same time. Forty nine per cent of decisions concerned with homestead cultivation such as vegetables and other plant species were done by women. Forty per cent of house making, 48% of social festivals, 32% of selling vegetables, 25% of selling other crops, 17% of cattle sales, 21% of goat sales and 70% of selling and purchasing poultry and its byproducts were executed by women. Fifty percent or above 50% of decisions were taken by women.

These are the areas where women’s involvement exists and development of their activities in these areas can ensure rural development of Bangladesh.

Cause of Rural and Urban Unemployment

Q. Compare between the cause of rural and urban unemployment.

Causes of rural and urban unemployment are different. Service facilities and other issues make the differences here. A Comparison between the cause of rural and urban unemployment are given below:

Cause of rural unemployment:

Causes of rural unemployment can be described as:

• Lack of work

• Lack of education

• Land less poor farmer

• Lack of resource

Cause of urban unemployment

• High population, scope for work decrease

• High number of skilled & active manpower than job opportunity

• Because of political imbalance people could not get job legally

From these points of views differences between urban and rural areas unemployment issues can be defined.

Problem with Employment Growth Policies

8. (b) Is it possible to remove unemployment problem with the help of Employment Growth Policies?

Employment growth policies support different policies for income employment generation such as fiscal policies, monetary policies, soft budget and others. All the policies are efficient for the development of employment and reduce poverty. But these policies are not sufficient enough for removing unemployment issues. As:

• Implementation of these policies is not appropriate.

• Delineation of these does not address removal of the issues.

• Wage selection policy does not taken in an appropriate way.

• Soft budget constraints allowed public enterprises to hire more workers than necessary, resulting in losses and the perpetuation of low productivity. For the private sector, lax credit discipline was the analogue of the soft budget constraint, with similar results in terms of productivity. As the reforms progress, particularly as fiscal and credit disciplines are strengthened, it is no longer possible to sustain the surrogate social security system.

These are the general problems of employment growth policies in addressing unemployment issues. But if the policies were implemented in a judicious way, removal of unemployment issues through this would became possible.

Unemployment Issues of Bangladesh

Q. Give a general picture on unemployment issues of Bangladesh.

Unemployment issue is a major cause of poverty. A person of age 10 years and over is considered as unemployed if he/she did not work at all during the preceding week of survey and was actively looking for work or was available for work but did not work due to temporary illness or because of there was no work available. A person is employed if he or she spent most of the previous week working at a paid job. Thus a person is unemployed if he or she is on temporary layoff, is looking for a job or is waiting for the start date of the new job.

Unemployment issues of Bangladesh

The natural scenario unemployment issues of Bangladesh are-

• Rural to urban migration- Rural to urban migration create high unemployment issues.

• Fringe area to urban migration.

The major unemployment issues of Bangladesh are--

• Over population;

• High number of active population;

• Landless poor (manually poor);

• Gradually landlessness-come to urban area for job;

• Landless because of river erosion;

• Push labor force-if any center push labor force then the city will full of unemployment;

• Seasonal farmer;

• Growth of the labor force- The rate of growth of the labor force was high, increasing trend of female entering the labor force and an extended working age; The rate of job creation did not keep pace with the growth in labor force as reflected in the declining employment to population ratio;

• Illiteracy.

• Government policy for wage selection-wage selected by the government, does agree the garments industry labor, thus the industry could not expand and increase jobseekers and unemployment.

These are the common unemployment issues of Bangladesh.

Reducing Urban to Rural Migration

Q. Provide some guidelines on urban to rural migration in context of Bangladesh?

Guidelines both for rural and urban areas can be provided for urban to rural migration. Such are as follows:

• Creating an appropriate rural urban economic balance.

• Expansion of small scale, labor-intensive industries.

• Eliminating factor price distortions.

• Choosing appropriate labor intensive technologies of production.

• Modifying the linkage between education and employment.

• Reducing population growth.

• Decentralizing authority to cities and neighborhoods.

• Rural areas service facilities should be developed.

• Education and other institutional supports should be provided for rural areas.

• In some extent entry for urban area should be controlled with some rules and regulations.

In general for rural areas:

Service facilities and other issues related to income and employment should be closer to urban areas, thus people urge no need for migration.

In general for urban areas:

Some restrictions should be provided for decrease urban entry.

These are the guidelines for this concern. As in a sense if we can develop rural areas with more service facilities and income employment growths like towns, then rural urban migration ultimately stops.

Implications of Rural to Urban Migration

Q. What are the implications of this migration?

Implications of migration are the things implied by migration. Migration means a change or shift in or casual or residance from one location to another involving movemnt of an administrative border, that border may be that of village, district, state or a nation. Migration like any other process shapes many fields of life, having both advantages and disadvantages. Implications of migrations are:

• Changes in population distribution

• Demographic consequences: since migration is selective of particular age groups, migrants are mostly young and in productive age. It can cause a demographic crisis – population ageing, what in turn can be followed by economic problems (shrinking group of economically active population has to finance extending group of inactive population). Economically active people are increasing in urban areas.

• Economic results, which are of the greatest importance for the development of the countries.

• Sometimes migration of rural labor in urban area provide a burden on urban living.

• Living standard of urban labor became more worse as of more people than service facilities accommodation.

• Judicious wage of urban labor sometimes hamperred for more labor than requirement.

• Stress on urban fringe without maintaining any dvelopment standard.

These are the implications of rural to urban migration.

Causes of Rural to Urban Migration

Q. What are the causes of rural to urban migration?

Migrations are response of individual decision-makers. Some causes of migration are constant, and some are not. In general we can divide factors causing migrations into two groups of factors: Push and pull factors. In general:

• Push Factors are economic, political, cultural, and environmentally based.

• Pull Factors are economic, political, cultural, and environmentally based.

• Some certain factors are both push and pull like education, industry etc.

On the macro level, the causes of migration can be distilled into two main categories: security dimension of migration (natural disasters, conflicts, threats to individual safety, poor political prospects) and economic dimension of migration (poor economic situation, poor situation of national market). Push and pull factors are those factors which either forcefully push people into migration or attract them. A push factor is forceful, and a factor which relates to the country from which a person migrates. It is generally some problem which results in people wanting to migrate. Different types of push factors can be seen further below. A pull factor is something concerning the country to which a person migrates. It is generally a benefit that attracts people to a certain place. Push and pull factors are usually considered as north and south poles on a magnet.

Push Factors

• 
  

• Not enough jobs

• Few opportunities

• "Primitive" conditions

• Political fear

• Poor medical care

• Not being able to practice religion

• Loss of wealth

• Natural Disasters

• Death threats

• Slavery

• Poor housing

• Landlords

• Bullying

• Poor chances of finding courtship

It is the negative factors for migration and the main factors are:

• High unemployment and little opportunity.

• Great poverty.

• High crime.

• Repression or a recent disaster (e.g., drought or earthquake).

Pull Factors

• Job opportunities

• Better living conditions

• Political and/or religious freedom

• Enjoyment

• Education

• Better medical care

• Security

• Family links

• Better chances of finding courtship

These are the positive factors of migration and the gross reasons are:

• High job availability and higher wages.

• More exciting lifestyle.

• Political freedom, greater safety and security, etc.

Employment, Migration and Urbanization Procedure

Q. It is known that employment issues are related with migration of population. Why those issues encircle urbanization procedure?

Employment issues are related with rural to urban migration of population which encircles the total urbanization procedure and the rural to urban migration affecting both the pull and push factor of migration:

• Migrants are pulled toward urban area:

• Prospect of jobs and higher incomes.

• Most early urbanization was the result of pull considerations.

• Pushed out of rural areas:

• “Push” factors predominate as the motivation to move.

• Poverty, lack of land, declining agricultural work, war, and famine.

• Play more importance today than push considerations.

Urbanization is the agglomeration of population in urban area due to rural-urban migration which increases the proportion of the population living in the cities. Now, urban growth gives stress on the urban land, so urban areas are also increasing. So, Expansion of urban infrastructures and land use would be required for the migrated population. And economic process as creation of secondary, tertiary and quaternary sectors for the surplus labour for their employment opportunity arises in the urban areas. And then a society creates, where values and lifestyles are with urban characteristics. Thus it can be said, that employment issues related with migration of population encircle urbanization procedure.