THE Prime Minister Sheikh Hasina once again confirmed that all steps necessary would be taken by her government to achieve the status of middle-income country (MIC) by 2021 while marking the 50th anniversary of our independence. It is important to be clear about how middle-income status is defined-MIC is based on nominal Gross National Income (GNI) measured in Atlas dollars, and economies are divided according to 2012 GNI per capita, calculated using the World Bank Atlas method. The income thresholds are: low income—$1,025 or less; lower middle income—$1,026 to $4035; upper middle income—$4036 to $12,475; and high income—$12,476 or more. Our country is rich in resources and in entrepreneurial spirit and if the government and the private sector work together, there is no reason why we cannot achieve the goal. What good MIC status will do if it is not accompanied by overall economic development of the country to bring change and uplift standard of living of common people?
Per Capita Income indicates the income each person would have if Gross National Product (GNP) were equally divided among the population of a country. It is nothing more than the average estimate which hardly shows how income is distributed among the population but doesn't indicate whether they are living fulfilling life or not.here it's the growth factor that matters the most.
We must understand what growth without development is and how it can affect the nation. Growth and development are two different economic phenomena. Economic growth and development is often used interchangeably, but there is a difference. Growth refers to the simple increase in per capita income of a country or measured by an increase in a country's GDP (Gross Domestic Product). It has no relevance to the much desired economic equality. A common area of development includes literacy rates, life expectancy, unemployment, and poverty rates etc. Economic development leads to the economic growth of a country.
Bangladesh is ranked 146th out of 186 countries in the 2013 Human Development Index (HDI) and 68th out of 79 countries in the 2012 Global Hunger Index (GHI). Somewhere around 55 million people are still living in poverty and two-fifths of children chronically malnourished. More than 25 million people lack access to an improved water source. Over 67 million people don't have access to improved sanitation and over 7,000 children under five years old die annually from poor water and sanitation. A nation will not survive morally or economically when so few have so much, while so many have so little. On the positive side we have the resources and opportunities to change the situation. It has been a popular assessment by economic predictors that we have the potential to be one of the biggest players in production and trade in the coming decades we have made significant progress in achieving the Millennium Development Goals (MDGs), particularly relating to eradicating extreme poverty and hunger, promoting gender equality and empowering women, ensuring universal primary education and reducing child mortality. But despite all these achievements, poor infrastructure, corruption, dysfunctional parliamentary government, a poor human rights record, communal conflict, good governance, low, quality education, poor Tax-GDP ratio, environment pollution etc are preventing our further progress and development. So focusing on being a middle income country is fine but simultaneously we must also address the above issues which will lead to overall development of the country.
Another problem is corruption. By some estimates, bribes and other off-the-record payments paid by firms related to public procurement, tax and customs collection, and other regulatory authorities are reducing annual GDP by 3 percent. The country has lagged in promoting the effective rule of law. The judicial system remains vulnerable to political interference, and property rights are not strongly protected. As far as Tx-GDP ratio is concerned we have one of the lowest Tax-GDP ratios in the region. According to the National Board of Revenue (NBR), less than one per cent of the populations pay their income tax. With the population of 160 million, the total number of the holders of Taxpayers Identification Number (TIN) is only 3.5 million, of which only 1.1 million have submitted their tax returns in September 2012.
Population is undoubtedly a huge problem; it will grow into around 200 million in year 2050. At present, eighty percent of our total population is under 40 years old, 65 percent is under 25. We are coming soon what's called the demographic dividend. Currently, we are into the productivity years, this massive bulge of young people who, if properly employed, will generate massive amounts of economic activity. On the other hand, they can become a threat to stability if we were unable to provide job for them. A recent report issued by the World Bank states that Bangladesh's GDP needs to increase from 7.5 percent to eight percent and sustain eight percent remittance growth in order to qualify as a middle-income country by the end of the next decade. Remittance earning is a vital issue for an over-populated country like us and currently it has contributed around 35 per cent to our total foreign earnings mainly from unskilled and semi-skilled people. We must put more emphasis in investment in human capital, life long learning and quality education help in the development of society.
World Bank studies also show that access to power, or more correctly, the lack of access to power, is another of the top obstacles to investment in Bangladesh. Viable power generation and production, the further development of nation-wide telecommunications systems, and the improvement of seaport and connectivity of our highways, railways, waterways between our major cities is the most important determining factors in desired rise to MIC status and economic development.
To achieve all of the above we will need a clean and stable government with zero tolerance for corruption, rule of law, a strong economy. The culture of politics has to change too. Parliament should be the place for all reasonable arguments. We need to start thinking of a national reconciliation to further improve our economy to reach middle-income status and a developed nation.
The writer is a Businessman.