Bangladesh has recently got the status of a middle income country of the world by the United Nations Committee for Development Policy (CDP). There are three main criteria behind its graduation from Less Development Country (LDC) status. In a celebration in Kolkata to commemorate the achievement of Bangladesh , H.E. Syed Muazzaem Ali, High Commissioner of Bangladesh said that his country achieved all three criteria for graduation, namely, 1) Gross National Income (GNI), 2) Human Asset Index (HAI), and 3) Economic Vulnerability Index (EVI).
Development of Bangladesh
It has lowered maternal mortality, increased literacy rate, minimized open defecation, etc. In all these areas Bangladesh has been much ahead of India. Lowering growth rate of population has an enormous impact on the economy of Bangladesh. It is expected that Bangladesh is going to overtake Pakistan in earning higher per capita income by 2020. Its comparison with Pakistan is significant because Bangladesh was liberated from Pakistan in 1971 after prolonged suffering from severe financial and cultural exploitation. The main reasons behind the success of Bangladesh are two. At present, the GDP growth rate of Bangladesh is more than 7%. The high growth rate has been experienced since 2006. Since then, Bangladesh’s annual GDP growth has exceeded Pakistan’s by roughly 2.5 percentage points per year. Secondly, at 1.1% per year, Bangladesh’s population growth is well below Pakistan’s 2% rate. With the help of these two factors alone, per capita income is growing faster than Pakistan’s by approximately 3.3 percentage points per year. One can remember that India went ahead in per capita GDP of Pakistan in 2005.
Another important factor behind Bangladesh’s notable performances has been its significant prolonged and targeted effort towards educating girls and giving women a greater voice, both in the household and the public spheres. This has helped improvements in children’s health and education. That has been reflected in Bangladeshis’ average life expectancy which is now 72 years, compared to 68 for Indians and 66 for Pakistanis. At present, Bangladesh’s official claim is the complete electricity connection to households. In India it is about 84% as of now.
The story of success in some of the social sector and growth performance is not all. The other areas of notable performances like agriculture, small scale industry with pharmaceutical industry. But at the same time, there have been many signs of weakening garment industry in Bangladesh. The garment industry is the most important of all economic sectors after agriculture in Bangladesh. Kaushik Basu, professor of economics, Cornell University and former Vice President, World Bank, mentioned an important point about its advancement in social inclusion in Bangladesh. He pointed out that the Bangladesh government deserves credit for supporting grassroots initiatives in economic inclusion. Among Bangladeshi adults with bank accounts, 34.1% made digital transactions in 2017, compared to an average rate of 27.8% for South Asia. Moreover, only 10.4% of Bangladeshi bank accounts are “dormant”, compared to 48% of Indian bank accounts.
Challenges before Bangladesh economy
The main challenges before the Bangladesh economy are to sustain its high growth of GDP and its high social indicators. In the case of industry, the garment sector needs to be given importance to maintain its position in the world. The income inequality is increasing around the world and in Bangladesh also it is rising. However, the government is cautious about this and the minimum wage rate has been recommended as 6,500 taka from 5,500 at present. Corruption is one of the major problems of the country. On this issue, Muazzem Ali said that a few years ago we were at the worst place in Corruption Perception Index, now we have climbed to 28th. The present government of Bangladesh is very proactive to reduce corruption. It is expected to achieve higher and higher position in future. Another important challenge is to get cheap international loan. Muazzem Ali also said that as the country has been graduated from LDC status it would be more difficult to get soft international loan that was possible in earlier days. In spite of all there remains perhaps the biggest challenge of religious fanaticism.
Rising fundamentalism in political and social spheres have been a cause for concern for Bangladesh. The Awami League government is proactive to suppress fundamentalism but world experience suggests that rise of fundamentalism is a hindrance to openness in thought and action of the citizens and it hampers the progress of economy and society. It is widely believed the slowdown of Pakistan from a good development road map may also be caused by rise of fundamentalism. Kausik Basu mentioned in the article mentioned above that Portugal’s heyday of global power in the 15th and 16th centuries passed quickly when Christian fanaticism became the empire’s driving political force.