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.