Getting ready for the next big leap

Bangladesh's 50-year anniversary was indeed a milestone and critics and supporters alike took to reexamine the country's journey spanning five decades. Both quarters agree -Bangladesh tells a remarkable story of evolution - an example of social and economic progress, embracing technology, giving voice to the marginalized, combating natural disasters, being a hub for exports, reining in political instability, enhancing food security, and on track to graduating out of LDC status by 2026.

But we cannot rest on our laurels, the country must reflect on what the necessary steps are for growth in the next 50 years. How can it graduate further from a middle-income country to a high-income country? How can it begin to match the GDP per capita of countries like the USA and China? To reach these lofty goals by 2071, Bangladesh will have to be prepared with several critical success factors.

Economic policies and governance

Government regulations, incentives, and budgeting will be the first point of contention to reach the targeted Bangladesh of 2071. A major area of reform needs to be taxation – for both individuals and corporations. Bangladesh has one of the lowest tax-to-GDP ratios in the world, at 9.3% in 2020. Compared to our neighbours – India at 16.8%, Nepal at 23.1%, and Pakistan at 11.0% – this is unsustainably low and a cause for concern. To allow public expenditure in infrastructure and economic stimulation, a strong tax income base must be developed with revenue mobilization. 

Additionally, regulations surrounding FDI must be ameliorated to encourage inward investment. As Bangladesh continues to grow, it will attract increasing foreign attention, which must be catered to through regulatory support. Bangladesh ranked 168th out of 190 countries in the Ease of Doing Business ranking for 2020, signaling policy and infrastructural weakness in enabling investments. 

Logistics and infrastructure

Infrastructural capabilities must be built across sectors: connectivity, power, technology, and more. Significant megaprojects such as the Padma Bridge, Rooppur Nuclear Power Plant, and Matarbari Deep Sea Port are slated to prepare the country for the next stage of development. However, inefficiency of timelines and budgets indicate that much more needs to be done to improve planning and execution. 

Sea connectivity is an especially important aspect of infrastructure, with a need for efficient ports and deep seaports capable of supporting Bangladesh's import and export needs. Bangladesh's prime location in proximity to India and China in the center of Asia gives it the potential to be an international logistics hub if the opportunity is capitalized upon.

Human capital

"Brain drain" is a phenomenon that Bangladesh is suffering from when it comes to human capital. Each year, more than 1 million people leave the country in search of better futures or careers in developed nations such as the United States of America, Canada, and Australia. 

However, as the brightest minds of the country leave, this limits the country's capacity for growth and necessitates dependence on foreign managers and leaders. It is estimated that a quarter of the jobs in the ready-made garments industry, Bangladesh's top export contributor, are held by foreigners, which are mainly top management level positions. Only very recently have large MNCs begun hiring Bangladeshis as their CEOs and MDs, but this needs to be commonplace rather than a rare occurrence. 

To build up the capability of human capital in the country, both career and educational opportunities must be provided at a level higher than the status quo. This must include vocational education, to create high skilled labour for employment in advanced manufacturing industries, as well as managerial institutes to train the next generations of leaders. Moreover, this must be done being inclusive of the female labour population of Bangladesh, which is growing rapidly and can further accelerate the growth trajectory of the next 50 years.

Urbanization and Environment

Bangladesh is in the top 10 most densely populated countries in the world, with around 40% of this population residing in urban areas. Of that 40%, over a third is in two cities: Dhaka and Chittagong. As Bangladesh grows in the next 50 years, this dependency on two metropolitans must be distributed across other emerging urban centres, such as Khulna, Rajshahi, and Barishal. 

Additionally, the urban centres of 2071's Bangladesh must be smart cities - capable of supporting sophisticated, adaptive, and data-collecting technologies. With a population well above 170 million, Bangladesh is rich in people and thus has the potential to be rich in data as well. However, this development cannot be limited to urban areas - rural areas must also be technologically capable and have accessibility to economic opportunities, infrastructure, and connectivity.

As climate change becomes an increasing concern for a vulnerable country like Bangladesh, both urban and rural planning must be made resilient and robust in the face of what the world in 50 years may look like. Not only does this include necessary focus on renewable energy and conservation, but also a view on disaster planning and protection of those most vulnerable to the impact of climate change calamities.

Private sector's preparedness

Bangladesh's private sector has seen rapid growth in key sectors, such as ready-made garments, electronics, and FMCG products. Going forth, the local corporations must capitalize on the rising consumer expenditure as incomes rise and focus on export-readiness to elevate the Bangladesh brand.

This cannot be done without collaboration between the private and public sectors. However, there appears to be a "trust gap" between the two sectors. The public sector is viewed as inefficient and slow by corporations, and the private sector is viewed as profit-minded and greedy by public sector organizations. However, a strong collusion is needed between the two to allow for growth across any of the points mentioned above, whether it be effective regulation, infrastructural capability, or educational institutions. Public-private partnership (PPP) projects are one arena of collaboration, but two-way dialogue and alignment of goals for policy creation are equally important.

There are two possibilities for where Bangladesh may be in 2071: it may be in a similar situation as to where it is today, complacent due to the first 50 years of its development, or it can reach the ranks of developed countries by prioritizing the success factors above. This will depend on the combined efforts of the government, corporations, and citizens of Bangladesh.

Few countries can match Bangladesh's progress record, but these hard-fought achievements can be undone if growth is unsustainable. Thus, we need to invest more in quality education, forward-looking and cohesive policies, create a conducive ecosystem to support entrepreneurs to a regulatory framework that supports growth. 

Mamun Rashid is a Partner at PwC Bangladesh. Views expressed are personal.