Bangladesh, a country with 2.2 per cent of the world's population, has progressed to a level which has placed it in the world map as a 'Role Model' for development through extraordinary macroeconomic management of the government, tremendous efforts from the private sector to cope with competitors from around the world and resilience of the people to win over every odd starting from devastating natural calamities, ending up to the Covid – 19 pandemic. As data shows, the country’s GDP had been growing at a compound annual rate of 7.68 per cent since its independence in 1971. Once called a basket case, Bangladesh now earns a per capita GNI of $2,554. Total export of the country stood at $45. 367 billion in June 2021, which is around 1.60 times its 2013’s figure, reflecting a 5.3 per cent compound annual growth rate. Total import of the country has also seen a phenomenal compound annual growth of 7.05 per cent over the last eight years, causing 2013’s import figure to grow to 1.70 times and reach $61.571 billion.
The constantly rising trend of national income, along with policy support from the government, caused the country to develop an interesting Middle and Affluent Class Consumer (MAC) group. Prime Minister Sheikh Hasina mentioned that the MAC group of the country now contains more than 30 million people. Presenting the growth potential and commendable consumer market of the country, she further added that mobile internet penetration will be 41 per cent by 2025, 48 per cent of the people will live in cities and towns by 2030, electricity consumption will drastically increase and the country will become the 26th largest economy by 2026 — echoing the projection of HSBC. Demographic dividends of the country have also become a primary force for development of Bangladesh. Around 2/3rd of the overall population of the country is aged 25 years and below. Such a young and energetic workforce is always an asset for every nation.
The visionary leadership of the Prime Minister along with tremendous efforts from the private sector has caused the nation to also experience enviable development in the socio-economic front. According to the World Bank, Bangladesh had around 40 per cent of its people living below the poverty line. This ratio has declined to around half and reached 24.3 per cent within just 11 years. Malnutrition, however, is still high in Bangladesh. Studies indicate that mother’s educational levels and family wealth have significant negative relationship with moderate and severe malnutrition for children. This raises the issue of female education. The country has had tremendous development in child and female education. 98 per cent of all the children are getting enrolled in primary schools. Gender parity has also been achieved. Around 50.9 per cent of all enrolled students were girls in 2016. This ratio, however, falls at higher levels of education.
To get a better idea about the progress of Bangladesh in the socio-economic front, a comparative analysis of the Human Development Index (HDI) data of the UNDP can be analysed. In terms of expected and mean years of schooling, the country has room to improve its performance. Of course, the country is well behind in all the components of HDI compared to the developed nations. The GNI is not included in the table since the primary focus of the comparison is non-monetary developmental issues of HDI. It shows that the advancement in terms of education is still not good despite efforts from the government and different international organisations. Steps such as— taking different projects at the post graduate colleges of the country and development of selected private colleges with the help of information technology to improve the quality of education scheme. Through schemes such as Secondary Education Sector Investment Programme (Cesip), Generation Breakthrough Project (Phase-II), and others, the government failed to fulfill its objective to impart quality, modern and effective education at every level.
The government has also adopted 'Education Policy – 2010' with the objective of building thoughtful, rational, capable future leaders, secular, tolerant and patriotic citizens. Unfortunately, however, the policy itself is flawed in many dimensions which fails to ensure that the objective is attained. For example, the policy offers a targeted student teacher ratio of 30:1, whereas the average of this ratio in the USA is around 16:1 and the same in Malaysia and Singapore are around 11 – 12:1. Practically speaking, this ratio in Bangladeshi educational institutions is much higher than what is mentioned in the policy. Therefore, the students do not get appropriate attention and quality education at schools, colleges and even in the universities. Furthermore, UN data shows that more than 90 per cent of the schools in Bangladesh do not have internet connections, depriving the students the opportunity to get free and high-quality educational materials.
Apart from these basic issues, another important concern is setting the right objective at the education policy. Finland, for example, sets 'Learning how to learn' as one of their most important objectives for education. I am citing this example since Finland arguably has the best education system in the world. Our progresses, as mentioned earlier, is not negligible though. However, compared to Finland, we have a long way to go.
Another important area to look into is the matter of inequality. As figure two shows, income inequality of the country has had a somewhat stable journey since 1995. The Gini Index hovered around 32 since then. Once compared with other peers as well as developed economies, we can say that Bangladesh has really fared well in terms of inequality. We had the lowest value of Gini index when compared against Vietnam, China, Sri Lanka and the USA . Therefore, it is only fair to conclude that the development of the country, at least as much as the data shows, was comparatively inclusive if compared against some selected economies. However, it is important to remember that as per the suggestions of the Inverted U hypothesis, inequality may increase with economic growth. Therefore, adequate policy supports are needed to ensure that it does not happen moving forward.
Bangladesh has also had tremendous infrastructural development in the recent past. Nominal expenditure of the country in FY 2020 rose by 6.1 per cent, year on year (y-o-y). Like all other sectors, this sector also has taken a hit due to Covid – 19 induced shocks. Development expenditure reduced in the fourth quarter, as major infrastructure projects were also delayed due to the movement and travel restrictions. However, with the lifting of the lockdown and implementation of mass vaccination, normalcy is gradually returning. In the most recent national budget, a few mega development projects like the Padma Multipurpose Bridge Construction, the Rooppur nuclear power plant construction, Hazrat Shahjalal International Airport Expansion, etc. have received the highest priority. Around $5.5 billion have been allocated in these projects so far.
These advancements of Bangladesh have offered its countrymen with the pride of LDC graduation to be realised in the year 2026. The economy of the country has also become the 38th largest one in the world — in nominal terms — and 30th largest in the world in terms of purchasing power parity (PPP), according to The World Bank. The graduation, however, has brought about a plethora of challenges starting from loss of duty-free quota-free facilities, requirement of export product and destination diversification, reduced access to grants and low-cost financing, elimination of cash incentives and subsidies among many others. The country is also vulnerable to climate change. These issues have placed the country in a really challenging state requiring the think tanks, policy makers and the researchers to identify probable remedies.
Despite these challenges, it is needless to say that the ever-growing MAC consumer group, rising GNI, stable income inequality, high demographic dividends and lucrative incentives to the traders and investors of the world has surely made Bangladesh an attractive destination for world businesses. The socio-economic picture of the country, as mentioned in this article, also presents ample opportunities for service sectors and non-profit organisations of the world to come and offer their services to fulfill their own objectives. Bangladesh, is therefore, no longer a basket case. It has rather turned itself into a 'Land of opportunities'. Quite a transformation, indeed.
The author is a qualified accountant, a doctoral candidate at the IBA, DU, an independent researcher and Deputy Editor-in-Chief of the International Journal of Management and Accounting (IJMA)