The Backdrop: Aspiration of a Nation: Bangladesh has set her ambition to be a middle income country by 2021 when our nation and our people will be celebrating fifty years of our glorious independence. This ambition has now got reflected in the ten year Perspective Plan and the Sixth Five Year Plan of the present government. The past performance and future potentials of the Bangladesh economy have also attracted increasing global attention and high appreciation.
Inclusion of Bangladesh, according to a number of prestigious projections, as one of the prospective next eleven emerging economies of the world also reinforces the aspiration of Bangladesh and gives credence to our ambition to be a middle income country over the next few years. Setting this lofty goal for ourselves could also be interpreted as a way of paying our homage to our martyrs who made supreme sacrifice for the birth of our country, and a tribute to our valiant freedom fighters who took up arms and fought in our war of liberation, inspired by the visionary leadership of Bangabandhu who dedicated his life for a Bangladesh that will be free from hunger, poverty, exploitation, inequality and injustice. Our goal of graduating to a middle income country status ought to be guided by these ideas which go beyond mere economic well being, but also include ideas of inclusiveness in development and justice and fairness in distribution.
The Confidence: Impressive Track Record
Bangladesh's track record of achievements, in different sectors and according to various performance indicators, bear evidence that she is making impressive and encouraging progress towards attaining her goal of being a middle income country by 2021. Bangladesh was able to accelerate her GDP growth from under four per cent per year to over six per cent within a span of two decades; the per capita national income has increased at even higher rate thanks to robust flow of remittance sent by our migrant workers and the diaspora; percentage of population living below the poverty line has almost halved to about 31 per cent compared to the early 1990s with the pace of poverty reduction doubling in recent years; our country has been able to make commendable transition from a predominantly aid-dependent economy to a trading nation, with the share of aid as a percentage of GDP coming down from about 6 per cent in the 1980s to less than 2 per cent in recent times; Bangladesh has been able to take advantage of opportunities originating from globalisation through increased earnings from export of goods and services - the combined net foreign exchange earnings from export of goods and remittance are at present about fifteen times more than the aid we receive annually; Bangladesh has established herself as the second largest exporter of apparels in the world, after China; our shipbuilding, footwear, pharmaceuticals and other non-traditional exports are showing encouraging signs; our farmers have increased food grains production by more than three-fold since independence enabling Bangladesh to move towards food security; our economy has been able to demonstrate impressive resilience in the face of multiple global and financial crises. Bangladesh's track record in attaining key Millennium Development Goals (MDGs) including in the areas of poverty alleviation, gender parity, and access to health and education has received high global acclaim; indeed Bangladesh has been making impressive progress in terms of attaining most of the MDG targets by 2015.
These aforesaid achievements were possible through a combination of factors: supportive government policies and targeted resource allocation; the hard work of our farmers and workers - both at home and abroad; contribution of the private sector and our vibrant entrepreneurial class; proactive role of our non-government actors including in areas of disbursement of micro-credit, development of micro-enterprises and raising consciousness about economic and social issues; targeted support provided by development partners. There is widespread confidence among our citizens that Bangladesh 'can', that 'her time has come', but also that the 'window of opportunity' is narrow and that we will need to move really fast. The next few years will thus be critically important if the goal of middle income country status is to be realised by the time Bangladesh turns fifty.
Going Ahead: The Challenges and Attendant Tasks
Continuation of our past successes and acceleration of the growth process in future which will be needed to attain the goal of middle income status will hinge crucially on our ability to identify and make work the drivers of future growth and on creating conducive and supportive environment for businesses to work, commerce to take place and economic activities to flourish. Undertaking the needed reform measures, strengthening development administration and building the capacity of relevant institutions of economic governance must be given highest priority by the policymakers if the pace of development is to be accelerated.
As is well-known, the threshold for middle-income country status is a moving goal post. The present benchmark of per capita income of USD 1026 for (low) middle income status (according to 2011 benchmark which is revised annually) will undergo multiple upward revision as we move towards 2021 (incidentally, the upper middle class threshold at present is USD 4036). So, in a way we shall be in a race against time where our journey and progress towards the goal of middle-income status will need to be non-linear, robust and more strategic over the coming years. Moving forward will be more challenging than had been in the past, for several reasons - in alleviating poverty we will need to focus more on dealing with the issues of hard-core poverty; in addressing literacy we will need to tackle more effectively the issues of quality; in accelerating growth we will need to put more emphasis on raising labour and capital productivity through upgradation of skills and technological endowments. The adverse impacts of climate change are likely to become more visible in the coming years requiring significant reallocation of resources. Raising annual GDP growth rate to double-digit and creating employment opportunities for the two million additional people joining the country's labour market each year will be crucially important to achieve the middle income country status.
The coming years will also offer us opportunities to reap the benefits of the 'demographic dividend'. It will thus be important to make the needed investments for translating this demographic dynamics into human resources capable of contributing to our transformational journey in the coming years and decades. This will call for significant structural changes in our economy which will necessitate a blending of the advantages of ICT, human resource development, productivity gains and the opportunities of the knowledge economy. Public sector will need to play a strategic role in all of these, with the private sector taking the lead role to ensure that the investment - GDP ratio is raised to more than 32 per cent from the current rate of about 25 per cent. Of critical importance here will be our ability to undertake the huge investments required for infrastructure development, greater connectivity and new power generation. Ensuring higher domestic investment, attracting more FDI, getting our diaspora involved in Bangladesh's development, developing public-private partnerships and giving opportunities to our young generation of entrepreneurs and innovators to deploy their creativity and talent will be important in this context. We will need to come out of the business as usual mode and think strategically if we are to generate the needed momentum to be a middle income country by 2021.
Status change in terms of income will call for important structural changes in our economy. And we have to be mindful that the expected outcomes will need to be delivered in an environment of heightened global competition. If we walk and others run, we will fall behind; we will need to run at the same speed as the front-runners if we are to remain ahead of the curve.
Concluding Remarks
When we talk about being a middle income country we should not limit our thinking to only economic well-being, but also keep in mind other aspirations of our people which will make achievements in terms of improving standard of living more meaningful and more fulfilling to the citizens of the country. Recalling the spirit of our liberation struggle, we must not lose sight of the fact that our ambition to be a middle income country ought to also reflect the aspiration of our people for a pattern of growth which will be inclusive in nature, based on distributive justice, sense of fair play, compassionate, and opportunities for upward social mobility.
Thus, as we strive to attain the goal of middle income status, we will need to give equal emphasis and attention to issues of establishing good governance, eliminating corruption, enhancing transparency, ensuring distributive justice, strengthening our democracy and our institutions of check and balance, promoting rule of law and encouraging a culture of tolerance and respect. A Bangladesh which is a middle income country will become meaningful to the common people if these other variables also receive equal attention and importance as we move towards 2021. Indeed, the very realisation of the ambition of middle income country status will, to a great extent, hinge on our ability to also adequately address these aspirations and our capacity to make commensurate progress on these other fronts. Only then can Bangladesh aspire to be not only merely a middle income country, but also an inclusive middle income country. Indeed, it is that particular type of a middle income country which will reflect the true spirit of our independence and embody the vision of the Sonar Bangla of Bangabandhu's dream.
[The writer is Executive Director, Centre for Policy Dialogue (CPD), Dhaka]