Fast GDP growth and other targets

These past few days have seen Bangladesh being the focus of a number of auspicious news items about its economy, especially about the growth of the Gross Domestic Product (GDP).These include being the fastest growing economy in Asia in 2019, to the fifth fastest in the world. Bangladesh's two major development partners, the World Bank and the Asian Development Bank forecast growth rates of 7.3 per cent and 8.0 per cent respectively for the same period, while the government's own statistical repository, the Bangladesh Bureau of Statistics, put it around 8.13 per cent. The Bangkok-based Economic and Social Council for Asia and the Pacific (ESCAP) of the United Nations also put this figure at 7.3 per cent. The International Monitory Fund has recognised it as a `major economy' of the world with a GDP of around 290 billion dollars, being placed at 41st in the world list of countries. By economists' other calculation, that of purchasing power parity (PPP), Bangladesh's position goes up further, to 31st.

These are all positive indicators for the economic strength of the country. More domestic growth would mean more jobs, more business and more personal income. The growth process has been accelerated by workers employed abroad, a vibrant garments-cum-textiles industry and a growing service sector adding uninterrupted numbers to the computation. As Bangladesh tracks its progress of Sustainable Development Goals (SDGs) of the United Nations, the GDP growth is of paramount importance. Experts are of the opinion that sustained GDP growth rate above 8.00 per cent will be required to achieve all the Sustainable Development Goals (SDGs) by 2030.

These comforting facts, however, should not detract one from the flip side of it. As happens everywhere, serious environmental, health and traffic-congestion issues have arisen in Bangladesh too. Rivers in the thickly-populated and industrialised areas have been polluted. Inequality between the poor and the rich grew in Bangladesh with fast economic growth; and over eight per cent of the population still lives below USD 1.90 per day. Although official unemployment is only 4.2 per cent, there is incidence of disguised unemployment. True, state-sponsored social safety nets have been put in place, but these require more expansion and success. One of the ways to mobilise resources would be to bring more people and institutions under tax coverage. It is well-known that a population of 160 million has an insignificant number of tax-payers. Project costs could be rationalised to cut on wastage and time-consuming exercise. The banking sector, both public and private, needs reforms to keep people's money safe and intact. Capital flight will have to be stemmed. The share market must be subject to continuous introspection, vigil and monitoring. It can hardly be overemphasised that financial discipline is of paramount importance when the country is firmly set on a growth trajectory. All these call for the development of effective state institutions. As Bangladesh takes on the path to fulfil its SDG targets, albeit with an ever-increasing GDP growth rate, priority should now be placed on strengthening the key institutions.