Meeting development challenges in an indigent society

Whatever the detractors may have to say to the contrary, Bangladesh has been registering creditable growth over the last few years. It has been forging ahead despite depression in the developed economies and price of oil plunging to an all time low. But these two factors combined made very little impact on the economy although there has been some setbacks in terms of overseas employment due to falling oil prices. This is because other sectors of the economy responded well to meet deficits so created and things are generally looking up for Bangladesh. Still there are areas that need to be taken care of. In simple terminology, they may be called development challenges.
The GDP (gross domestic product) of Bangladesh has been registering a steady growth of more than 6.0 per cent since 2010. Very few countries of the world can boast of similar record. This means that considering international standard, Bangladesh has been performing creditably.  
One challenge that is continuously interfering with our development efforts is stagnant growth. As a matter of fact, growth in Bangladesh has been stagnant over the last few years, hovering around 6.0 per cent and the task to pull it out of the whirlpool and attain the targeted figure of 8.0 per cent appears to be a difficult task. There are some experts who are of the view that Bangladesh has the ability to achieve the target as it has successfully strengthened its capacity to combat calamities like flood and Sidr, withstand the impact of reduced aid and absorb the shock of declining overseas employment and rising food prices in the world market. It has also been able to bring down poverty level significantly by achieving steady growth.
While all these are true, income inequality remains a big challenge. Income inequality has actually increased over the years. Moreover, despite reduction in poverty level, the number of poor and ultra poor remains reasonably high as population increases. Again, a large segment of the people who reached above the poverty line, languishes in a marginal situation and is at a risk of sliding down below the poverty line again with only a little variation in income. Such variation may be caused by natural calamity or social and political unrest. Political unrest causes loss of income for the traditionally low income earners like day-labourers and agricultural workers. We witnessed similar situation from 2013 to 2015 when a large portion of working people were either out of work or were compelled to work at lower wages. If a worker with a normal wage rate of Tk.300 per day is paid Tk.50 less, it is definitely going to affect his/her standard of living.      
The biggest of challenges is of course lack of investment. In spite of a steady growth rate of around 6.0 per cent annually over the last few years, flow of investment has been far from being anywhere close to the desired level. There must be an increased flow of investment if a growth rate of 8.0 per cent is to be achieved by 2020. It may be mentioned that growth of investment has been only 2.0 per cent during the 6th Five Year Plan period, when investment grew by only 2 points from 26 per cent to 28 per cent of GDP.
A fresh target was fixed for the 7th Five Year Plan period.  According to the revised target, investment needs to be raised from 28 per cent to 34 per cent of GDP during the period and there has to be increased investment in both public and private sectors. A facilitating and friendly environment is needed for increased investment. At the same time, political stability is a must and necessary changes will have to be made in the economic policy of the government.   
In addition, attention will have to be paid to development of manpower. Bulk of manpower exported from Bangladesh is unskilled and only a small fraction of it is semi-skilled. In addition, 21 per cent of our present labour force do not have any formal education and only 6.0 per cent of them are university graduates.
There's a lot to be done in respect of manpower development. It has to be appreciated that middle income status, let alone the status of a developed country, can not be achieved with this kind of manpower. We need more engineers, doctors, scientists, technologists and technicians. In USA, one can not have a suitable employment without graduation or some kind of technical education. The country which has been the world's number one economy through the ages, has a per capita income of $55,000, which is close to 42 times more than that of Bangladesh. Bangladesh in its own latest  calculation has a per capita income of US$1466.
In spite of being the wealthiest of nations, 15 per cent of US citizens still live below the poverty line which is according to US standard below an annual income of US$23,000. As a matter of fact, the definition of poverty changes with development which necessitates continuous improvement of the standard of living.
Allocation has been made to build a social security system in the country which is a commendable effort by the government. Unfortunately, the benefits of this allocation can not be reached to the common people due to corruption and irregularities. But the important aspect of the matter is the introduction of the system and once the system is introduced the holes can be plugged with a little bit of effort. Now the defects are to be repaired and allocation increased.
There are of course some good signs of challenges being conquered. Villages are changing and they no longer present a picture of agriculture and agricultural workers. About 55 per cent of rural income now comes from non-agricultural sector. A sizeable portion of the huge foreign exchange remittance by Bangladeshis working abroad, is invested in villages.
Improvement is taking place in communication, education and power supply. Migration of work force from one place to another and synergy between rural and urban areas is taking place.  
There is no dearth of workers for industrial and commercial enterprises. Especially, RMG industries are getting adequate work force regardless of their locations. Investment is increasing in the once partly famine stricken backward areas in the northern part of the country and people are migrating for jobs from there to other areas. In short, Bangladesh is now an investment friendly country.  
On the other hand, as pressure on land is decreasing, there is now an increased bargaining opportunity for non-agricultural workers. Rural people can now take up jobs of their choice. With the construction of Padma bridge investment will increase in south-western area.
But in spite of all these positives, we are not being able to reduce income inequalities despite creditable performance in the economic field. Undeniably, the socio-economic condition of all classes of people in a country can not be the same, but the extent of inequality is a matter to be taken care of. If the neglected class is given more attention and if investment towards education and health sectors is higher, the society will be more welfare oriented which is an essential prerequisite for reducing inequalities.
In the developed world, higher taxation is being imposed on the wealthy section of the people and the money so realised is spent on various welfare activities for benefit of the poor. It may be mentioned that personal income tax in Bangladesh is only 1.4 per cent of GDP, whereas, 35 per cent of the GDP is controlled by 10 per cent of people who are wealthy. If the average rate of income tax is 10 per cent, 3.5 per cent worth of GDP can be realised through personal income tax.  
There are challenges, but response to such challenges should be in place so that poverty can be reduced, income inequality reduced, standard of living elevated, medicare facilities ensured and quality of manpower improved.  
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