Bangladesh's graduation to a lower middle-income country (LMIC) status is indeed a cause for celebration. The next target, of course, is the middle income status. Indications so far are clear that the country will be able to gain the coveted status by 2021, the deadline set for the purpose, or, maybe, even before. If and when that happens, Bangladesh would meet one of the goals of the Istanbul Programme of Action set for least developed countries (LDCs) at the 4th United Nations Conference on LDCs held at Istanbul in 2011.
That the country has broken free from the low-income criterion of per capita gross national income (GNI) under US$ 992 to get positioned at a comfortable slot with per capita GNI US$1,338 has given the country's political leaders and policy-makers a wonderful opportunity to have a close look at the development. A country's transition from the LDC status means that it has to get past three criteria that characterise such a ranking. Along with per capita GNI, a country's human assets and economic vulnerability to external shocks are taken into cognisance. A triennial review by the Committee for Development Policy (CDP), a subsidiary body of the United Nations' Economic and Social Council (ECOSOC) is responsible for determining the status.
Now this phase of development is of particular importance because from here on there will be enough scope to address the weaknesses in the development paradigm shift. The Human Asset Index (HAI) should figure prominently if the fruits of becoming a middle income country have to be shared rationally, if not equally. After all HAI is based on indicators such as nutrition, health as measured by life expectancy and child mortality (rate of mortality of children under five years), education (secondary school enrolment and adult literacy). The third criterion, Economic Vulnerability Index (EVI) is based on indicators like population size, share of agriculture, fisheries and forestry in gross domestic product, concentration of merchandise export, stability of goods and services, share of population living in disaster-prone areas, instability of agricultural production.
While the EVI is subject to weather patterns and lately climate change, the element of unpredictability for countries like Bangladesh is very high. To earn recommendation for graduation, therefore, a country has to be eligible at two successive triennial reviews by the CDP. The country's first step into the primary category of lower middle-income country has not been a gift either. It had to earn the status by making a strong statement. No wonder, celebrated Nobel laureate Amartya Sen often draws comparison between India's social progress with that of Bangladesh to highlight where the latter has a clear lead. Poverty alleviation, reduction in child mortality, improvement in sanitation, gender empowerment are the areas where the country has outpaced its larger neighbour.
Such positive outcomes must not be undermined. But then there is a need for staying alert about the danger of getting obsessed with flawed MIC status. If GNI increases at the cost of the bottom half of the population, inequality takes a most dangerous turn. Already the signs are quite alarming. Inequality has been rising at an unrelenting pace in the country since the early 1990s. That Gini coefficient -the measure of income inequality - in Bangladesh has risen from 0.36 in 1973-74 to 0.46 in 2010 speaks volumes for the rising inequality. It should be noted that Gini coefficient of 0.40 is considered a danger mark. The Bangladesh Household Income and Expenditure Survey 2010 shows that the top 10 per cent of the households had substantial increase in income while the bottom 40 per cent of the households experienced considerable income erosion.
Such GNI gains negate the objective of national prosperity. If income erosion continues at the bottom segments of population, it will impact the development parameters in society. Not only will it affect the nutrition status of foods available to the poor, their health and hygiene too will be grossly compromised. In term of education, the poor are the most disadvantaged in this country. Absurdly commercialised education is for those children whose parents can spend pots of money for the purpose.
So the challenge before the nation for the next five to six years is to raise the GNI but at the same time distribute its benefit in a manner that ensures the bottom 40 per cent enjoys its major share. Only then can the yawning gap between their incomes and those of the higher levels can be tolerably narrowed down. If the budget for education and health shrinks -which is the case this year -there is no possibility of getting development on the right track. Bangladesh has to spend more on human capital and social sector if it is serious about attainting its MIC status on a sustainable basis. The practice of distributing fruits of growth has to be made operational right now in order not to allow it to go off track. Any hope that if the growth is there, its trickle-down benefits will be enjoyed by all is a misconception. Measures should be taken right now with particular focus on the poor and the deprived.
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