Towards Accelerated, Inclusive and Sustainable Growth in Bangladesh
November 13, 2012
- In spite of global shocks and natural crises, Bangladesh’s economy has maintained a healthy 6%-plus plus growth rate in past years and significantly reduced the number of absolute poor.
- Bangladesh now needs to accelerate GDP growth to 7.5% to 8% and sustain 8% remittance growth to reach its aspiration of middle-income country status by next decade.
- The distribution of economic opportunities across all population groups, and particularly those at the bottom, needs to improve in order to make middle-income country status meaningful.
Bangladesh has managed to accelerate overall GDP growth by one percentage point on average every decade -- from 3% in the 1970s to 6% in the last 10 years. Thanks to declining population growth, the acceleration in per capita GDP growth was even higher -- 1.7 percentage points every decade. Acceleration of growth also helped 15 million people leave absolute poverty behind in the past three decades.
The country’s remarkably steady growth was possible due to a number of factors including population control, financial deepening, macroeconomic stability, and openness in the economy. Building on its social-economic progress so far, Bangladesh now aims to become a middle-income country (MIC) by 2021 to mark its 50th year of independence.
Is it possible, and what would it take to realize Bangladesh’s aspiration by 2021?
A new World Bank report, “Bangladesh: Towards Accelerated, Inclusive, and Sustainable Growth—Opportunities and Challenges” (Overview, Main Report) says that both GDP growth and remittances would play an important role in attaining middle-income status. According to the report, Bangladesh needs to accelerate GDP growth to 7.5%-8% and sustain 8% remittance growth to achieve its goal by the next decade.
To attain 7.5%-plus plus GDP growth, Bangladesh must enhance manufacturing-based export growth and overcome the many hurdles standing in the way, including weak economic governance; overburdened land, power, port, and transportation facilities; and limited success in attracting foreign direct investments in manufacturing. Inadequate infrastructure remains a major bottleneck to growth, which urgently needs to be addressed.
Achieving Middle Income Country status by 2021 will require more than business as usual. Bangladesh will need to do more of the same and beyond.
"Achieving Middle Income Country status by 2021 will require more than business as usual. Bangladesh will need to do more of the same and beyond," says Dr. Zahid Hussain, author of the report and a senior economist at the
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