Becoming a developed country by 2041
In 1962, US president John F Kennedy declared in his famous moon speech, "We choose to go to the moon." Since then the US increased its budget and efforts to beat the then Soviet Union in the space race and eventually, American astronauts landed on the moon in 1969. A definite target coupled with a strong leadership made the American dream possible. Kennedy also articulated that the mission will be accomplished within the decade – and so it happened, even though the great leader was assassinated in 1963. No country has ever achieved a great dream without an ambitious, definite target.
Similarly, we hear from our Prime Minister and many leaders that Bangladesh will be a developed country by 2041. Only 24 years are left and we need to make per capita income more than USD 12,000, which is an eightfold increase from the current level of around USD 1,500. As history shows, we increased our per capita income in current dollars by around five times over the last 24 years. Not too bad. But this happened during the quarter century of growth acceleration under market economy and liberalisation. That trend of acceleration is no longer in place right now. We needed 42 years to reach the current level marking an eightfold increase in per capital income. If the past is any guide to the future, augmenting per capita income by eightfold will be extremely difficult for the country, given the current infrastructural bottlenecks, knowledge gap, institutional flaws, and judicial backwardness.
Per capita income is not the only qualification for being a developed nation. Other attributes, such as high standard of living, quality education, timely justice dispensation, environmental upgradation, and political stability are essential. Let's say one morning we discover oil under the soil. This gain may make our per capita income skyrocket to reach USD 12,000 dollars, but social standards will not develop overnight. Even if we assume that only a rise in income will solve everything, reaching the developed-country income level by 2041 seems impossible under the current scenario of income and population growth. All we need to focus on is per capita income (PCI) growth, which is approximately equal to GDP growth minus population growth. Three ways can make PCI growth possible: 1) raise GDP growth 2) lower population growth, and 3) do both simultaneously. Bangladesh seems to follow the first line at present.
It is hard to reduce population growth, which was the highest at 3.3 percent in 1967 in this country. It took us fifty years to reduce the growth rate by only 2 percentage points. The government expects that by the end of FY2017, our per capita income will reach USD 1,598, which appears to be an overestimation. The World Bank's classification requires per capita income to be at least USD 12,476 to qualify as a developed economy. Assuming FY2017 figures such as population growth is at 1.3 percent, GDP growth at 7.2 percent, and thus per capita income growth is 5.9 percent, we need another 36 years to be a developed country, suggesting it would be by 2054 and not by 2041.
We are not sure who did the math for our Prime Minister and who convinced politicians in power to sell the number to the public. The slogan of being a middle-income country by 2021 has delivered much credibility to the government, which, in contrast, is losing its credibility by suggesting that we will become a developed nation by 2041. We require so many ifs and buts to justify the target line of 2041, turning a noble dream into a fantasy. We should instead focus on when we can be an upper middle-income country. Based on the current numbers and assumptions, reaching that level - with per capita income at USD 4,036 - will require another sixteen years. We can be an upper-middle income country if we can accelerate both GDP growth and birth control even in 2031 – the year that marks the diamond jubilee of our independence. Pledging to become an upper-middle income country by 2031 could be a brilliant campaign instead of pointing to the distant year of 2041 that lacks proper forecasting and credibility.
Simple math shows that we need to achieve at least nine percent growth in per capita income if we really want to become a developed country by 2041. That number will require at least 10 percent GDP growth per year on average for 24 years assuming that population grows by 1 percent. The regime must be ambitious to radiate aspirations to the public, but these numbers seem impractical even though we assume that there will be a drastic improvement in our infrastructure and institutions. Hence, while the slogan of becoming a developed country should prevail to inspire the nation toward the best, the year should be revised to 2054 or 2051 that marks eighty years of our independence.
Undoubtedly, our GDP growth has been rising marginally in recent years, but the rate of rise in GDP growth shows a slightly declining tendency, demanding immediate attention to address deficiencies in institutions first. Otherwise, even aspiring to become an upper middle-income country by 2031 will be difficult. The most feasible way to realise our dream is to reduce population growth to as close to zero percent as possible. Population control was the most successful public policy in Bangladesh's history, followed by universal primary education. The government witnessed tremendous success in birth control in the 1970s and 1980s. We do not know why the campaign kept losing steam since the 1990s. More births are taking place in poorer areas leading to lingering poverty and aggravating income inequality in this heavily populous country.
Bangladesh can become a developed country in 2046, instead of 2053, at the current GDP growth only if population growth can be reduced to zero. No matter how ambitious this sounds, any success in population control could hasten our journey of becoming a developed country.
The writer is visiting fellow of Bangladesh Institute of Development Studies (BIDS) and guest faculty at the Institute of Business Administration (IBA), Dhaka University. Email: [email protected]