Monday | 7 October 2024 | Reg No- 06
বাংলা
   
Monday | 7 October 2024 | Epaper

Middle-income country by 2024: Achievements and challenges

Published : Tuesday, 8 June, 2021 at 12:00 AM  Count : 1094
Rajib Chakraborty
The reclassification of the Bangladesh as a lower middle-income country (LMIC) and recent increase of per capita income to $ 2227 within corona outbreak has been a highlight in its long voyage towards economic development. No doubt that the recent remarkable financial growth with government's friendly business policies has made Bangladesh an investing hub for other developed countries. In the field of social development also, the significant achievements in the areas of primary schooling, gender parity in primary and secondary level education, lowering the under-five mortality rate and improvement in the human development index including an increase in life expectancy have minimized the distance from achieving Millennium Development Goals (MDGs).  

Upgrading the existing facilities and diversifying the export baskets are the main key challenges for the country like Bangladesh to become a middle-income country. Many LMICs have been trying to attract the foreign direct investments by exploiting their low-wage advantage. But lack of energy, un-skilled manpower, ambiguity in the FDI policy, less coordination between the public private partnership (PPP) makes the developmental works of Bangladesh slow.

By exporting only the low value readymade garments, middle income country (MIC) status cannot be achievable. Again, achieving the milestone of LMIC doesn't mean that inequality has been removed. It doesn't ensure the high human development index. Though the income per capita has been increased, the other inequalities such as assets and consumption inequality have become widened. Still there is a huge difference between economic growth and public welfare. The quality of education and healthcare services also remains a problematic area in spite of social achievements.

As exports and remittance are the two most important sectors for Bangladesh to become a middle-income country, so it has to include more products in export baskets. Diversification in the product list may find the new market in the international business to increase the foreign earnings. Despite various bottlenecks such as political instability, poor governance and natural disasters, the graduation of Bangladesh as LMIC and recent per capita increase is an indication of the further development. To become a country of middle-income group by 2024, a long-cherished vision of Bangladesh; it leads its actions in the following directions:

Inflow of Foreign Direct Investment (FDI) in any country is pre-requisite for the rapid development. From the employment generation to infrastructural development, increased efficiency of local labour force, FDI plays a vital role in achieving the tag of a country of developed economy. So, this is the prime time for Bangladesh to attract the FDI by giving tax exemption to assurance in making a favourable business environment.

There is also no doubt that high remittance has made a significant contribution to increase the per capita income. Over the last three decades remittance has financed much of Bangladesh's trade deficit, reducing the current account deficit. Thus, to encourage the migrant workers, government can provide various facilities like provident fund, housing loan, education loan for their children.

Along with ready-made garments industries, more export-oriented items such as processed food, dry fish, leather, medicine, and small technologies should be included in the export basket. Even in the case of pharmaceutical sector, Bangladesh has already earned reputation by exporting medicine to the foreign countries.  To boast up exports, government can also establish more Special Economic Zones. By offering privileged terms, SEZs attract investment, spur employment and boost the development of improved technologies and infrastructure. Furthermore, manufacturing under a single umbrella will not only increase the internal competition of the companies, but also will ensure the quality products.

Made by Bangladesh and Made in Bangladesh should be the strategy of Bangladesh to make the country a manufacturing hub. Since it has a cheapest labour what is the basic criteria for establishing manufacturing company, Bangladesh should be considered as the destination of the multinational manufacturing companies. The domestic economy is the life-blood of any country. Thus, government should give various tax benefits for the start-up local business more specifically the small and medium entrepreneurs that may create scope of huge employment in the rural and urban economy.

Without adding the rural economy in the main stream financial system, no country can achieve its targets. With the agricultural sector, the non-farm activities like cottage industry and fishing are also very popular in rural Bangladesh. The educated young villagers should be encouraged to join small scale entrepreneurial activities which will stop the migration from village to urban areas. High involvement of the private sector in building service organizations in rural areas like hospital, clinic, training centre, good colleges, vocational institutions, rural branches of the private commercial banks will expand the rural economy.

The full-fledged industrialization is not possible without infrastructural development. Uninterrupted power supply, globally inter-linked sophisticated financial market, skilled local labour force, smooth transportation, recognized chain hotels, availability of specialized technical personnel and compliance, developed IT sector etc are the pre requisites for the rapid development and this ultimately result highest outputs through effective utilization of the resources.

Revenue is one of the main incomes of a country from where it can spend money for its developmental works. According to the National Board of Revenue (NBR), the actual tax collection never reaches to the desired level. By giving better services, the local government has to widen the range of taxation. Underutilization of fund for Annual Development Programme (ADP) is yet another problem of Bangladesh. Institutional incapability, lack of policy, transparency, corruption and also lack of co-ordination between the government organizations, are attributed as the reasons.

With unplanned policies in the government organizations, unethical financial transaction and subsidy are other key players that derail the developmental works. The state-owned organizations like banks, oil sector, aviation industry, jute industry, power sector and railway incur huge financial losses every year. For running these, government has to take loans from the banks and other financial institutions that accumulates debt and this badly affects the banking sector. Hence full or partial privatization will make these organizations more competitive, efficient and responsible.
Dr Rajib Chakraborty,
Researcher & Writer






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