Human capital boosts Bangladesh’s total wealth over $3 trillion: World Bank

Driven by human capital, total wealth in Bangladesh increased more than twofold between 1995 to 2018, reaching $3,109 billion in 2018, up from the $905 billion in 1995, says a World Bank's report on global wealth accounting.

The report titled "The Changing Wealth of Nations 2021" released on Wednesday is the latest in a series that introduces the concept of wealth as a complementary indicator to gross domestic product (GDP) for monitoring sustainable development in a country.

Beyond economic output, the bank's calculations to measure Bangladesh's total wealth in 2018 was based on natural capital, human capital, produced capital and net foreign assets, accounting for $197.4 billion, $2,087.1 billion, $862.6 billion and -$38.6 billion respectively.

Although on the surface the picture looks rosy, the trends of sustainability of Bangladesh in terms of its human capital are worrying.

While Bangladesh's human capital has occupied the largest share of its total wealth since 1995, it is constrained by persisting gender gaps over the years.

It was estimated that men accounted for around 92% of the human capital in 1995, or $612 billion out of the total $665 billion, while women only contributed 8%.

Of the $2,087.1 billion of human capital, around 93% was contributed by men in 2018, indicating little or no progress in gender parity.

Moreover, human capital contributed 74% to the country's wealth in 1995, but declined to 67% in 2018.

On the other hand, the contribution of produced capital, such as buildings and infrastructures, had increased significantly, but the share of natural capital dropped by half -- from 12.8% in 1995 to 6.4% in 2018.

The asset value of Bangladesh mangroves increased significantly by 402% to $10,236 billion in 2018 according to the report, up from the $2,040 billion in 1995.

The fastest growth in mangrove value occurred in several economies where mangrove coverage increased and the value per square kilometre of protected assets grew: in China, Vietnam and Bangladesh.

The fourth edition of the report tracks the wealth of 146 countries between 1995 and 2018, by measuring the economic value of natural capital, both renewable (such as forests, cropland, and ocean resources) and nonrenewable (such as minerals and fossil fuels), human capital (earnings over a person's lifetime), produced capital (such as buildings and infrastructure), and net foreign assets.

Countries regularly track GDP as an indicator of their economic progress, but not wealth, and national wealth has a more direct and long-term impact on people's lives, said the report.

Wealth in South Asia

Total wealth in South Asia has grown since 1995, but due to population growth in the same time period, per capita wealth remains among the lowest in the world, said the bank.

Human capital makes up over half of the region's wealth, but is extremely unbalanced, with over 80% attributed to men, with little change in the past two decades.

Since 1995, with the increasing trend of global wealth, India has remained the wealthiest country in South Asia.

Total wealth in India reached $32,601 billion in 2018, followed by Pakistan ($3,476 billion), Bangladesh ($3,109 billion), Sri Lanka ($650 billion), Nepal ($429 billion) and the Maldives ($26 billion).

In terms of per capita, Bangladesh's wealth ($19,264.9) was higher than that of Pakistan ($16,379.8) and Nepal ($15,280.4) in 2018.

The highest per capita wealth in the region was observed in Maldives ($50,794.6), followed by Sri Lanka ($29,971.9) and India ($24,102).

The bank recommended actively investing in public goods like education, health, and nature, to prevent unsustainable depletion, and manage future risks.