Growth despite lower edn, health spending puzzles economist

Economist Prof Wahiduddin Mahmud said Thursday Bangladesh's higher economic growth and better social indicators are a surprise amid low per capita public expenditure on education and health.

"I become puzzled when the Gross Domestic Product (GDP) growth rises and social indicators show better improvement even after lower public investment in education and health sectors compared to many other similar countries in the globe," he said while presenting a keynote paper at a seminar in Dhaka.

The Programming Division under the Ministry of Planning organised the seminar on "Rebasing and revision of GDP: Bangladesh perspective" at the Planning Commission in the city.

The Bangladesh Bureau of Statistics (BBS) would rebase and revise the 2015-16 base year for future national accounts.

Meanwhile, former finance and planning adviser of the caretaker government Dr Mirza Azizul Islam raised a question about the data of the Bangladesh Bureau of Statistics (BBS).

"For example, although Monga seasonal joblessness is almost absent, migration for jobs from the northern region to other areas has dropped, but poverty in Rangpur is estimated at 43.8 per cent by household income and expenditure survey. I have confusion about the data on the higher rate of poverty there," he said.

"When I compare the investment-GDP ratio with the incremental capital output ratio, those data make me confused," Mr Islam added.

He also said: "When we analyse raw materials' import, capital machinery import, remittance inflow data, these are not matched with the higher GDP growth of Bangladesh in recent years. In addition, employment elasticity has come down too."

"I think poverty reduction in Bangladesh is still a big challenge. How income inequality and higher economic growth going on simultaneously should be taken care of," Dr Islam said.

Prime Minister's Economic Affairs Adviser Dr Mashiur Rahman branded the national statistical body, BBS, as a "midget" organisation.

"The BBS is not growing, I mean its capacity. It needs to increase the number of professional statisticians. Only mathematical calculation is not enough for getting quality data."

"We have to remove errors in statistics. If we fail to provide quality data, our development and target of achieving the Sustainable Development Goals (SDGs) will not be possible," he added.

Dr Rahman suggested that BBS should bring the country's informal sector into the calculation of GDP.

He said only the expansion of labour force is not a solution to development, the quality of employment needs to be widened.

Former Bangladesh Bank governor Dr Mohammed Farashuddin said, "I did not have confidence in the capacity of BBS."

Economist Dr Selim Raihan has raised question on whether the current economic growth data and better social indicators are enough to become a developed nation by 2041.

Bangladesh Institute of Development Studies researcher Dr Rushidan Islam suggested that the BBS calculate the GDP at the divisional level as some regions are lagging behind.

Quoting the latest Labour Force Survey of BBS, she said since the dependency rate has risen over the three-year period between 2013 and 2015, it is a bad piece of news for the economy in its future development.

Defending the BBS, Planning Minister AHM Mustafa Kamal said, "We could not expect a big change overnight from the statistical body. But I am now trying to have quality data utilising the reliable methodology."

"Lot of discussions on the problem at BBS has taken place, but nobody suggesting how it could overcome those difficulties," he said.

Mr Kamal said many people claimed that the GDP growth does not match reality including the investment scenario. "But you can see that the GDP-investment ratio in Malaysia is 23 per cent. However, it was estimated at 30.5 per cent in Bangladesh."

"We have to find out ways in boosting the GDP, widening our productivity following lower investment rate. We are hopeful Bangladesh's GDP growth in the next financial year 2018-2019 will reach 8.0 per cent," he added.

Member of the General Economics Division Prof Shamsul Alam, Director General of BBS Amir Hossain, development researchers, economists, and bureaucrats, among others, also spoke at the seminar.

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