Per capita income and development

Saleh Akram | Published: September 22, 2015 00:00:00 | Updated: November 30, 2024 06:01:00

Bangladesh is now a lower middle income country. Its annual average per capita income which was only US$129 in 1972 has risen to US$1314 in 2014-15. Although the increase is 11 times over the period, the purchasing power has not gone up in the same proportion. Significant improvement in standard of living is, however, noticeable alongside rise in average life span, reduction in child mortality and increase in literacy rate. Â
But the question that comes next is whether this rise in per capita income has augmented the standard of living of the people. The answer is negative as the purposes for whichÂ lion's share of the increased income is spent are not included in our list of priorities for development. Similarly, major portion of the money remitted by the non-resident Bangladeshis (NRBs) is spent on luxury items which is not only leaving a negative impact on the economy, but is also giving rise to social complications. Inevitably, the significant increase in income is not contributing proportionately to enhance our standard of living which is an essential prerequisite for economic development.
In addition, the education sector has not benefited proportionately to the phenomenal rise in per capita income. The literacy rate has registered a moderate increase and has not risen by even 5 times which could take us close to 100 per cent. The society is also less inclined to spend money on education both at individual as well as national level. Acquiring reading-based knowledge is gradually declining with a staggering rise in the number of on-line readers, most of whom are not readers in the real sense of the term. The same is true to health sector where the impact of increased per capita income is minimal and improvement in health services for the poor has so far been negligible.
The number of libraries in the country is declining alarmingly. If the situation continues like this, public libraries will soon become a matter of history. Very little is being done about it both at individual as well as at national level.
Since a sizeable amount of money is being spent for unproductive and less important purposes, it is imperative that a coordinated plan be drawn to spend the income in a more result oriented manner. Although the government is the leading player in this respect, social organisations and civil societies also have an effective role to play. It has to be identified first which areas are pulling us back from achievable improvements in standard of living. Having done so, priorities are to be fixed and our income is to be channeled accordingly.
Reaching lower middle income status is no mean achievement and if the trend continues (hopefully it will), we should be able to promote ourselves to middle income category even before 2021. In order to do so, it is important that alongside income increase, other components of real standard of living will have to be improved. Mere increase in per capita income does not signify development, as economic development is the sustained and concerted actions of policy makers and communities that promote the standard of living and economic health of a specific area. It can also be referred to as the quantitative and qualitative changes in the economy. Such acts can involve multiple areas including development of human capital, critical infrastructure, regional competitiveness, social inclusion, health, safety, literacy and other initiatives. Greece is still acclaimed as a leading civilisation of the world not simply because of its material development, but because it achieved phenomenal progress in education, science, philosophy, art and culture at the same time. Â
saleh.akram26@gmail.com