High rates of infant mortality, chronic malnutrition, unsustainably high school-dropout rates and bleak investment opportunities. This was Bangladesh in a nutshell in the early 2000s: a nation plunged in a confluence of climatic, financial, and economic calamities. Fast-forward two decades and the state has earned the moniker “Asian Tiger” for being the fastest-growing and most promising Asian economy.
Over the years, Bangladesh’s Human Development Index (HDI) has risen steadily as a consequence of an upward trend in the metrics making up the index, including life expectancy, predicted years of schooling, mean years of schooling, and per capita gross national income (GNI).
Leaving behind other South Asian countries like Nepal (143rd rank in the HDI), Pakistan (161st), and Afghanistan (180th), Bangladesh pulled up its ranking from 133 out of 189 countries in the 2020 iteration of the United Nations Development Program (UNDP) HDI report to 129 out of 191 countries in the 2022 iteration, scoring 0.661 out of 1.
Figure 1: HDI trends in Bangladesh (1990-2021)
Expeditious growth in all sectors has indeed earned the country pride of place in the medium human development group, yet the issue of rising income disparity continues to be a major concern, despite its impressive record of lifting 25 million people out of poverty in the last 20 years.
With just 10% of the population holding 44% of the nation’s total income, the disproportionate distribution of income persists to hinder Bangladesh’s untapped potential to be a strong contender in the Asian development sector.
Decades of real wage stagnation exacerbated by acute inflation and a nosediving rate of savings have eroded purchasing power and widened the income inequality between the rich and poor Bangladeshi citizens.
To corroborate this exclusionary growth, the nation’s Gini index – a statistical measure of economic inequality in a population – hasn’t shown any extraordinary signs of decline; on the contrary, it increased from 0.456 in 2010 to 0.482 in 2016. Large-scale migration from rural areas to cities has also brought attention to the nation’s unsustainable urbanization tendencies.
Figure 2: Income and wealth inequality in Bangladesh (1995-2021)
This dip in Bangladesh’s gross savings trendline over the past 10 years – from 35.9% of GNI in 2010 to 33.9% in 2020 – has two far-reaching ramifications. First, while savings encourage investment, particularly in emerging economies, a decline in the latter dampens asset formation, production, and employment, impairing the economy’s ability to grow sustainably.
Second, if household resources are not adequately invested in infrastructure development, particularly through government infrastructure projects, it adds to the budgetary strain already experienced by the Bangladeshi government, making infrastructure spending an unsustainable and expensive affair.
Figure 3: Bangladesh’s gross savings (percentage of GNI, 2010-2020)
Sustainable development
The United Nations’ Sustainable Development Goals (SDGs) adopted in 2015 are an integrated global call to action to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity. SDG 10 requires countries to “leave no one behind” by shrinking the wide income divide and empowering low-income earners to participate in the respective nation’s broader economic growth.
That Bangladesh could truly emerge a frontrunner in the achievement of global goals isn’t an overestimation of its capacities vis-à-vis inclusive development.
Although Bangladesh’s overall SDG score has increased gradually but consistently from 59.37 (out of 100) in 2016 to 64.22 (with a rank of 104 out of 163 countries) in 2022, it continues to fare poorly in East and South Asia, where it stands 14th out of 19 nations, ahead of only Pakistan, India, the Laos, Mongolia and Cambodia.
Other crucial challenges to sustainable development in the country include the integration of coastal communities in the government’s national plans, illicit financial flows and insufficient resource mobilisation, and building more democratic institutions to achieve the SDGs.
Figure 4: Overall SDG score (out of 100) of Bangladesh (2016-2022)
A noteworthy point is Bangladesh’s method of development, which is very much tailored to its unique socio-political state of affairs.
While conventional development strategies adopted by the Global North dictate a moderately unidirectional pattern of development entailing the execution of implementation strategies by local partners following the ideation of the same by large institutions, Bangladesh’s approach is distinguished by the significant role played by grassroots establishments.
Microfinance institutions like Grameen and international development organizations like the Bangladesh Rural Advancement Committee (BRAC) take ownership of the design, finance and scale in tandem with local requirements and solutions; this mechanism enhances viable and concrete results.
The widespread presence of localized actors such as medium and large-scale non-governmental organizations has improved village-level access to essential services such as sanitation and water supply, apart from empowering marginalized minority groups. Additionally, it has increased the presence of women in both public and private spheres, increasing the average life expectancy and the health and education of children.
Even while countries in the developed world struggled to safeguard a majority of their populations from slipping into vulnerable categories in the midst of a pandemic that wreaked havoc on global HDI rankings, Bangladesh held fast to its developmental goals.
With enormous potential to transform the face of development in the construction, information technology, garments, shipping, tourism, and environmental technologies sectors, Bangladesh definitely has the potential to be seen as an Asian leader in the making.