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.

The advantages of such recycling extend beyond mere cost-cutting. If provided with the requisite policy support for local value addition, exports from garments made from recycled textile waste can earn an additional annual revenue of $4 billion to $5 billion, according to exporters in the industry

Bangladesh could trim its cotton imports by a substantial 15% through efficient recycling of garment waste, a move that has the potential to save several hundred million dollars annually, say industry insiders.

The advantages of such recycling extend beyond mere cost-cutting. If provided with the requisite policy support for local value addition, exports from garments made from recycled textile waste can earn an additional annual revenue of $4 billion to $5 billion, according to exporters in the industry.

Bangladesh Textile Mills Association (BTMA) President Mohammad Ali Khokon said the country produces a huge amount of garments waste during pre- and post-production stages.

“If we can transform it into recycled materials, it will contribute to a 15% reduction in cotton imports,” he told The Business Standard.

According to the BTMA, the country imported over 18 lakh tonnes of cotton worth over Tk47,869 crore in 2022. The amount of imports in the first 11 months of the current year  is 12.27 lakh tonnes worth Tk32,408 crore.

If garment waste were recycled reducing cotton imports, Bangladesh would have realised a staggering savings of Tk7,180 crore (almost $700 million) in 2022 alone and Tk4,861 crore in the first 11 months of this year.

Detailing the specifics, garment-exporting factories generate a substantial 4-5 lakh tonnes of waste, commonly known as “jhut”. This waste primarily consists of cutting remnants, scraps, and fluffs. A mere 5% of this waste is currently recycled to create exportable items. Meanwhile, 30%-35% is repurposed to craft clothing for the domestic market, and the remaining portion is exported.

Shahidullah Azim, vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said, “The industry could potentially export an additional $5 to $6 billion worth of garments by locally recycling around 4 lakh tonnes of garment waste.”

At present, the country generates a mere $300 million to $400 million from exporting a portion of garment waste, with a significant amount ending up in landfills or being burned, posing environmental hazards, Shahidullah Azim noted.

He added that recycled yarn, being a process that does not require water or chemicals, is more environmentally friendly than other yarn options.

Policy supports that exporters want

Exporters pointed out that the garment recycling industry faces some major challenges related to financing and taxation.

BTMA President Mohammad Ali Khokon said the main challenge is the imposition of a 22% VAT. “In the procurement of garment waste, there is a 7% VAT, and during sales of recycled yarn, a 15% VAT is applied,” he said.

BGMEA President Faruque Hassan said the government should offer policy and tax support to encourage recycling.

“When these wastes go to the landfill or into the drains, the government does not get anything. But when we add value and transform a Tk10 waste into a Tk500 product, there is VAT. We have communicated this to the NBR several times, but no action has been taken,” he said.

Faruque Hassan said the BGMEA and its member factories are actively engaged in waste recycling efforts to reduce dependence on the 98% of imported cotton meeting current demand.

To address issues in garment waste collection, he said the BGMEA is considering the establishment of waste collection centres.

BGMEA Vice President Shahidullah Azim said most garment waste recycling technology companies are European as high investment is required in this sector which is a major challenge.

He called on the government to offer low-cost financial support to the garment recycling industry through a circular financing scheme. Additionally, he noted that if buyers or donor agencies provide financial support, the apparel industry would be better positioned to realise its full potential.

“If the government allows entrepreneurs to import post-consumer apparel wastage, it will encourage them to invest further in this sector,” said Square Textiles Director (operations) Taslimul Hoque.

The market players in garment waste recycling

According to the BTMA, Bangladesh has 40 small and large scale factories that recycle garment wastes to produce recycled yarn including Simco Spinning & Textile Ltd, Square Textiles PLC, Beximco Group (jointly with Spanish company Recover), Akij Group, Badsha Group, Mosharaf Group, Aman Textiles, Hameem Group, S Alam Group and Mother Textile Mills.

Three more factories – Pacific Jeans, DBL Group and Bitopi Group – are now in the pipeline to recycle garment wastes.

Umer Khan, general manager of Simco Spinning & Textile, told TBS, “With the latest available technology, we can currently recycle 95% of garment waste, and a further technological upgrade will enable us to achieve 100% recycling.”

Established in Bhaluka, Mymensingh in 2009, Simco presently produces approximately 6,000 tonnes of recycled yarns annually.

The official highlighted that each kilogram of CYCLO-recycled fibres can contribute to saving up to 20,000 litres of water, 200 grams of pesticides and fertilisers, 2.7 kg of dyes and chemicals, 3.2 kilowatt-hours of energy, and 11 kg of CO2 equivalent.

Ha-Meem Group, a prominent apparel exporter, inaugurated a recycling plant at Ha-Meem Spinning Mill in Mauna, Gazipur, on 26 February this year.

According to media reports, the initial phase of this plant is set to produce 16 tonnes of recycled cotton per day, with an additional 16 tonnes planned for the second phase. Ongoing efforts for the third phase aim to yield 45 tonnes of fabric from recycled cotton.

Ha-Meem Group Managing Director AK Azad told TBS that the group envisions entering fabric production from recycled yarn by 2024.

Syed Mohammad Tanvir, managing director of Pacific Jeans, said they are investing in a recycled fibre project scheduled to commence production by March 2024. Pacific Recycle Fibre Ltd aims to produce approximately 3,500 tonnes of yarn annually.

Tanvir said this initiative focuses on recycling waste, aligning with sustainability principles.

Taslimul Hoque, director of operations at Square Textiles Recycling Plant, said their facility can currently recycle about 12 tonnes of waste per day. With that, they can produce 24 tonnes of yarn per day with recycled fiber.

He said the factory utilises pre-consumer apparel wastage as raw materials, but the current supply is insufficient to meet their daily production needs. He emphasised their careful selection of raw materials to maintain product quality.

Brands targeting recycled or sustainable materials

Since 2013, the innovative Dutch brand G-Star has been leading the charge in sustainable fashion by renewing denim using 20% post-consumer denim wastes.

H&M aims for 100% of the materials to be either recycled or sourced in a more sustainable way by 2030, and 30% recycled materials by 2025, according to their website.

The Spanish brand Inditex is targeting to make 100% of its textile products exclusively from materials with a reduced environmental footprint by 2030.

“We are aiming to have 40% of the textile fibres we use come from conventional recycling processes,” according to the Inditex website.