Bangladesh receives huge amount of remittances every year, but the quantity would be much bigger if they have enough skills and education. Bangladeshi workers, who go outside, are normally paid less and often discriminated for their lack of skills.
The Bangladesh economy has been going through a period of rapid growth over the past decade. Bangladesh is the 40th largest economy in the world and 2nd largest among the South Asian countries. The Centre for Economics and Business Research forecasted that Bangladesh will be the 24th largest economy within the next decade. The Bangladesh economy has been witnessing an average economic growth of 7.39% for the last 5 years. Unfortunately, the world economy is seriously affected by the outbreak of coronavirus worldwide. It hampers normal economic activities which have a significant effect on people’s income and expenditure as well as on overall national GDP.
As World Bank projected, manufacturing output of South Asia will shrink by 2.7%. It also projected that South Asia will contact a GDP growth of 2.7% where Bangladesh’s GDP growth will be just 1.6% in this year. But the good news is that the ADB projected a 7.5% growth rate in fiscal year 2020-21 which started on July 1.
Bangladesh has some advantages which really helps its economy to grow faster. Bangladesh has a population of over 163 million. A report from World Bank in 2019 projected a labour force of total 7,00,09,461. It helps Bangladesh to produce products at a very low cost. A rapid increase in foreign remittance also helps Bangladesh economy. According to a Bangladesh Bank report, the remittances in Bangladesh averaged $1255.91 million for last 8 years and reached all-time high of $1832.63 million in June 2020. The Ready-Made Garment (RMG) export earned over 10% of Bangladesh’s GDP and provided 84% of country’s foreign exchange earnings in the 2018-19 fiscal years. The Bangladesh government aimed 8.2% growth rate for fiscal year 2010-21. Bangladesh needs to be more creative and mindful to achieve the target.
Ways to maintain Bangladesh’s positive economic growth
Development of human capital: Population is an asset when it is skilled and educated. On the opposite, it is a burden when the majority of them are unskilled and uneducated. Bangladesh has a huge population but majorities have no minimal skill or education, which is necessary for any kind of job. Bangladesh receives huge amount of remittances every year, but the quantity would be much bigger if they have enough skills and education. Bangladeshi workers, who go outside, are normally paid less and often discriminated for their lack of skills. Developing an education system comprised of both conventional subjects with technical knowledge is necessary to develop a skilled labour power.
Incorporating youth into labour force: According to United Nations, Bangladesh has nearly 20% of population ages between 15-24 years. Normally, youths are more energetic and creative which are necessary for the prosperity of a country’s economy. The government of Bangladesh needs to take proper steps to nurture the youths and prepare them for the future.
Infrastructural and technological development: Infrastructure and technology are two major elements for economic growth. Lack of proper infrastructure hurts Bangladesh economy. Bangladesh has only three sea ports, which are not enough for Bangladesh. Bangladesh has also very few international airports. Many parts of Bangladesh still not connected to the capital and some parts have no supply of electricity. These are not really helping the economy.
Exploring new sector of production and reviving the old one: RMG sector of Bangladesh contribute more than half to Bangladesh’s foreign exchange. Bangladesh needs to explore new sectors and nourish the goal to be the major contributor in foreign exchange as well as in domestic consumption. Electronics and raw foods are two potential sectors which can bring fortune for Bangladesh. Bangladesh once was very much famous for its jute known as “golden fiber”. But over the time, it gets unpopular and incompetent because of the government carelessness. The Bangladesh government needs to reinvest in this sector to revive this.
Solving the refugee crisis: Bangladesh is hosting nearly 1.1 million Rohingya refugees since 2017. Bangladesh almost spends $300 million monthly for them. Although Bangladesh gets support from various countries and international organizations, this is not enough. It also hurts local job market as many refugees come out illegally from camp and take the job at a very low salary. The refugees also involved in various crimes which create social tension. Unless a proper solution comes out, it will continue to hurt local economy as well as national growth.
Protection against natural calamities: According to Asian Development Bank, Bangladesh yearly suffers an average loss of about $3.2 billion for natural calamities like cyclone, flood, river erosion. The Bangladesh government needs to take measurements to protect the economy against such calamities.
Reducing the dependency on single foreign market: Bangladesh’s biggest trade partners are China and United States. Current stalemate in the relations between China and US seriously hurts global market as well as Bangladesh. Bangladesh needs to explore new markets, create joint ventures, encourage foreign investments, make trade facilitating agreements to reduce the dependency and create a balance of trade. Bangladesh can utilize South Asian Association for Regional Cooperation (SAARC) for regional economic communication, but it needs great efforts to do that.
Ensuring the supply of energy: In the modern world, energy is necessary to run all the machines. In order to ensure the continuity in growth, the government must ensure enough supply of energy. Bangladesh already discovered many potential sources of energy resources underneath, but lack of technology and knowledge is affecting Bangladesh from extracting it.
Proper utilization of the Digital Bangladesh: In order to facilitate the growth, Bangladesh needs to use the online platform to open up its local market to the foreign customers. It will help to create a demand of Bangladeshi products outside.
Bangladesh has full potential to be a major economic force in the world. But in order to achieve that it needs to consider creating new opportunities and face the upcoming challenges to survive in this competitive world market and hold its positive economic growth.
