During this period, Bangladesh has been successful in transforming its economy rapidly, growing its GDP nearly 51 folds since independence (US$450 billion in 2023 vs $8.75 billion in 1971). Like our economy, FICCI has also come a long way. It played an integral part in developing the industrial and investment ecosystem of Bangladesh. Today, the industrial (37.7 per cent) and service sectors (51.2 per cent) contribute over 88 per cent of the total GDP, signifying a major shift since independence, and FICCI members have been a catalyst to this transformation. Apart from being the largest source of Foreign Direct Investment (FDI) for the country (90 per cent), FICCI members are some of the highest contributors to the government's exchequer (30 per cent).
Despite the recent short-term economic volatility, we are confident that these fluctuations are temporary, and will not impede the growth potential of the economy in mid to long term if fundamental economic policies are corrected and measures are taken without delay. The government is already working with a vision and has made significant strides to form several progressive policies including National Industrial Policy 2022.
We at FICCI, have also taken an initiative to reflect and strategise on how we can put in the building blocks for Bangladesh @ 75, i.e., when Bangladesh will reach its 75th anniversary of independence.
I am not an economist, and my experience has been around transformation and disruption so I will contextualise it from that perspective and see how best we can leverage technology to disrupt and solve the economic problems that we have.
Firstly, we will have to explore and identify the right opportunities. If we can maintain the GDP growth rate of around 5 per cent, we will reach the trillion USD GDP mark by 2041. However, if we can utilise the full potential of our demography, we will be able to accelerate the growth momentum and reach the target way before 2041. As we have a strong consumer base in a relatively small geography, scaling up innovation and ideas will be effective and efficient. Boston Consulting Group (BCG) predicted that Bangladesh will become a very strong consumer market by 2040 and a good portion of this growth will come from domestic consumption. As Bangladesh will enjoy demographic dividend for the next two decades, the youth work force can be a crucial asset, both as contributors and consumers. This opportunity can be further leveraged if we can utilise the digitalisation spree as data dividend, which refers to extracting actionable insights based on data to build distinctive capabilities. For example, we are still not delivering affordable, accessible, and quality healthcare for all due to infrastructure limitation. But given that we now have universal penetration of our national ID and mobile connectivity, we can easily build a health platform that can detect the frequency of diseases and based on that we can build healthcare ecosystem in that geography. By implementing this data driven policy, we will be able to ensure that we are optimizing health care costs and ensuring infrastructure is evenly distributed and responsive. The technological backbone is there, and the example is achievable if we can build the right smart platform.
Similarly, we can rethink our linear value chain approach of leveraging 'cost' as an arbitrage and build smarter ecosystem and platforms using data-driven insights. We can convert both data and density dividend to platforms and ecosystems that can really help build lasting solutions for the economy. This will also enable us to go beyond the current 'low-cost, low skill' arbitrage and leverage more on human capital. Till now, as a country, our gravitational force has always been the world's lowest cost solution provider, be it RMG, or the overseas workers we send or be it of recent, the freelancers. We need to move the needle and move to the higher part of the value chain. We need to ensure that we are building human capital through skill development. We cannot continue to talk about superlative outcome without superlative thought leadership. If we could build the right, skilled human resources, we will be able to move towards the higher value adding activities of the value chain, which we will require to drive the economy. We cannot create just menial labours, rather we need to create people who can leverage their intellect to find creative solution and build distinctive skill-sets for data, programming, and is adept on platforms and ecosystems.
Though the government is focusing on tertiary skill development, most of our resource invested in education is spent of creating generalists. While we may need those skill-sets, it is time for Bangladesh to setup our IIMs, IITs, MIT, and Harvard. STEM (Science, Technology, Engineering, and Mathematics) needs to take on the lead as this will help in building specialist human capital amidst us.
The government is already aware of these issues and has taken action to bridge the gap. Initiatives like High-Level National Skills Development Authority under the direct supervision of Prime Minister's Office or the Prime Minister's Scholarship, Skill based Curriculum Upgradation, Innovation Labs, or Startup Ecosystem Development Fundings are inspiring and are great examples.
Industry linkage, knowledge transfer and co-creation are always vital if we are developing human capital. As investors and employers of these people, FICCI is in the right position to support these human capital development initiatives of the government. FICCI members have global knowledge base and insight regarding the skill gaps along with the right mindset, insight, and capability to partner with the government to develop right human capital for future.
While developing this human capital, we must ensure that we are taking everyone with us. Though Bangladesh is praised globally for women participation in workforce and school enrolment, we need to ensure inclusion at all levels. Still today, only a handful of females are reaching leadership positions. Whereas we take pride in the fact that FICCI members are leading the way in inclusion and diversity. We have taken a bold and ambitious target of having 30 per cent female leadership representation by 2030. We are collaborating among ourselves to share best practices, creating industry platforms, and collectively advocating for progressive policies and we will be delighted to collaborate with others.
Along with inclusion, we need to embed ESG values within our DNA as well. We must see ESG as part of growth, not as a voluntary commitment. We need to embed ESG values in our growth journey organically. As we have expertise regarding global best practices, we can also collaborate and share our learnings to develop ESG capabilities.
These initiatives will require a steady flow of public funding. One of the major challenges for our government to achieve our vision will be the relatively low Tax to GDP ratio of the government. Like inclusion and ESG, taxation is also a culture. Individuals and businesses must understand that the Tax they are paying is coming back to them. On the other hand, the government should assure and convince the taxpayers that their tax money is being invested properly. Digitalisation, data and technology can help ensure compliance and transparency to make the process efficient, build trust and help bridge the gap.
FICCI traditionally has always been seen more as a repository for FDI. But the technical knowledge and the expertise we bring can be unparalleled and we need to leverage this network for those technicalities. Opportunities to collaborate and build platforms and ecosystems will require differential knowledge base and FICCI can be the fulcrum to gather those interests and findings for a better future for the country.
In our five-decade of existence, we have spent the first two decades to define what our competitive advantage is and then the next three focusing on leveraging that competitive advantage. Now as we cruise for the next 25 years, till we reach our 75th anniversary, the same actions will not take us where we want to go. We need to disrupt ourselves and embark upon some very distinctive path by building competitive moats that differentiates us from rest of the countries. That is what will catapult us to the next level of growth and value creation and make Bangladesh a breakout nation.
Zaved Akhtar is Director, FICCI BoD 2022-2023; President Elect, FICCI BoD 2024-2025 and Chairman and Managing Director, Unilever Bangladesh.
sm.faysal2@unilever.com