Per capita income of Bangladesh has increased by $643 to $2,765 in the last five years (2019-2023), according to the latest data of Bangladesh Bureau of Statistics (BBS).
It was $2,122 in 2019, the first year of the 11th election, while it was only $91 in 1972, shortly after independence.
Data analysis also found that per capita income increased exponentially from 2009 to 2023, nearly increasing fivefold from $686 in 2009 to $2,793 in 2023.
Considering the per capita income on purchasing power parity (PPP), it also multiplied by five times in 2023 to $8,779.
According to the BBS data, from 1991 to 1996, per capita income increased by $104 from $283 to $387. Then from 1997 to 2001 per capita income increased from $395 to $410 to only $15.
It later reached $503 in 2006 from $407 in 2002.
Especially in the last five years’ per capita income jumped $643 from 2019 to see a 23.25% growth.
Planning Minister MA Mannan told media that the main reason for the increase in per capita income during the Awami League government is the contribution of the country’s hardworking people in various sectors, including expatriate income and from the export income from the ready-made garment sector.
The farmers of the country are now managing their agriculture through modern technology and machinery. As a result, crop yields are increasing, in turn increasing their income. Remittances from the expatriate Bangladeshis are also contributing to the economy, he added.
According to Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue (CPD), even if people’s incomes rise and poverty rates fall, income disparity continues to rise.
The type of work that low-income persons conduct does not increase their earnings. The majority of people work in the private sector. Salary increases are significant at the top but not at the bottom.
There is also no provision to ensure that low-income people are not trapped in poverty from generation to generation.
Income disparity would worsen if this tendency continues, he noted.
Golam Moazzem said: “We have not reached the extreme level of income inequality yet, but it soon needs to be dealt with.”
In response to this new data, Awami League General Secretary Obaidul Quader recently stated that the country’s overall income has also increased. The budget has expanded 12 times in the last 15 years, whereas per capita income has climbed five times. Bangladesh is now the world’s 33rd largest economy.
When asked about economic inequality, he said: “If the country’s income increases, people’s income increases as well. There is currently nothing the government can do if someone’s income climbs unnaturally or appears unappealing. You’ll see in the future.”
According to the Household Income and Expenditure Survey-2022, The Gini coefficient related to income rose to 0.499 in 2022, up from 0.482 in 2016 and 0.458 in 2010. Generally, a country is considered to have a high-income inequality if the Gini coefficient is 0.5 and above.
It reveals that the income Gini coefficient was 0.499 at the national level in 2022 – with 0.446 in rural areas and 0.539 in urban areas.
The Gini coefficient (Gini index or Gini ratio) is a statistical measure of economic inequality in a population. Generally, a country is considered to have high inequality in people’s income if the Gini coefficient is 0.500.
With a Gini coefficient of 0.499, Bangladesh sits precariously close to the territory of high inequality.
Regarding income inequality Mustafizur Rahman, a distinguished fellow of the CPD, said that the assets of the high-income people of Bangladesh were 30 times the lower income group in the Household Income and Expenditure Survey of 2010. Now, it has soared to 80 times. It shows the level of disparity in society and it is obviously opposite to the notion of inclusive development.
Noted economist Qazi Kholiquzzaman Ahmad said inclusive development is a part of Bangladesh’s heritage as it is rooted in the country’s spirit of liberation.
“But a great erosion of values remains as we want more wealth and power. We have to get out of this mindset. Our principles are fine, but when it comes to the individual level, our values have been greatly eroded,” he added.
Ahmad said alongside Covid-19 and the Russia-Ukraine war and some missteps by the authorities concerned have worsened the challenges related to ongoing inflation, the US dollar crisis and corruption.
He also said the issue of inclusive development was incorporated in the country’s policy framework.
What is per capita income and per capita GDP
Per capita GDP is calculated by dividing the total quantity of products and services produced in a country equally among its citizens.
This income excludes revenue earned outside the country, including expatriate earnings.
When expatriate income and money earned outside of the country are combined together, it is referred to as per capita income rather than per capita GDP.
According to the Bangladesh Bureau of Statistics (BBS), 96% of Bangladesh’s average per capita income is generated within the country.
In a decade, Bangladesh’s per capita income has more than doubled. Bangladesh’s per capita income is presently $2,765, according to the most recent calculations. Over the last decade, Bangladesh has experienced the greatest growth in per capita income among South Asian countries.
