Want to be a smart nation? Invest in citizens

As Bangladesh strides towards its vision of a 'Smart Bangladesh' by 2041, it is the right time to ask: Are we truly investing in our future? Despite our lofty aspirations, the stark inadequacy in health and education expenditure has exposed some uncomfortable truths. 

What message does the government convey about its priorities when healthcare spending has remained stagnant at less than 1% of GDP for the past two decades? Furthermore, why is the education budget lagging behind, leaving us near the bottom among South Asian countries?

As we envision a digitally advanced society, let us not forget that the true measure of smartness lies in our commitment to the well-being and education of our people. It is time for Bangladesh to invest in its greatest asset — its citizens.

Last month, the revised FY24 Annual Development Programme (ADP) allocated Tk2,45,000 crore, with the transportation and communications sector receiving the largest slice of 25.8%. This marks a steady growth averaging 25.5% in allocation from FY15, highlighting a strategic focus on infrastructure development, aimed at fostering economic growth and connectivity while ensuring long-term sustainability.

However, while the allure of gleaming infrastructure beckons, a shadow falls upon the education and health sectors. Their allocations plummeted, not just in absolute terms but also as a shrinking share of the overall budget. 

The revised FY24 ADP marked a five-year low for education with a meagre Tk17,230 crore, while the health sector is struggling with a four-year low of Tk12,067 crore. In simpler terms, what these sectors received in FY15 (11.5% and 6.7% respectively) have now dwindled to just 7% and 4.9% in FY24. 

Years of prioritising transportation and communication in the ADP have certainly strengthened the country's infrastructure. People are witnessing the tangible benefits of megaprojects like the Padma Bridge and the Metro Rail, which are driving the wheels of progress.

But building bridges will not bridge the knowledge gap. 

The disheartening reality of educated youths in Dhaka, queuing for job recruitment tests nearly every weekend, depicts the harsh reality of the educational sector's challenges. The doubling of unemployed graduates to 8 lakh in just five years further underscores this urgency. 

Not a single Bangladeshi university ranks among the global top 650 in the QS World University Rankings 2024. We even hold a dismal position in the Global Knowledge Index 2023, ranking 112th among 133 countries. Bangladesh not only placed at the bottom in South Asia after Pakistan (117th), but also lagged behind African countries such as Kenya (99th), Zimbabwe (103rd), and Ghana (105th). In the seven areas considered in the index, the poorest performance was observed in the country's research, development, and innovation sectors.

These are just a few indicators that portray a concerning picture of the weakening quality of our "backbone".

On the flip side of the coin of government spending lies a troubling reality: the education budget has been languishing below 2% of GDP for the last two decades. This notion stands in stark contrast to the Education 2030 Framework for Action, adopted by UNESCO Member States in 2015, which urges governments to allocate at least 4–6% of their GDP to education.

Despite the ambition laid out in the 8th Five Year Plan to elevate the education budget from 2% of GDP in FY19 to 3% by FY25, the current fiscal year reflects a budget allocation of only 1.76% of GDP for education. 

When it comes to education spending among South Asian nations, Bangladesh trails only Sri Lanka in allocation. The latest World Bank data reveals that Bhutan leads the region, investing 8.14% of GDP in education in 2022. This is followed by the Maldives (4.58%), Nepal (3.65%) and Pakistan (1.97%). In 2021, India earmarked 4.64% of GDP for education, while Afghanistan allocated 4.34% in 2017. Meanwhile, Sri Lanka allocated 1.20% in 2022.

Moreover, according to a recent report by Education Watch, out-of-pocket expenses surged by 51% for secondary-level education and 25% for primary-level education during the first half of last year in Bangladesh. 

Looking closely at the budget efficiency adds insult to injury – education budget utilisation dropped to 87% in FY22 from a commendable 95% in FY19. 

On the other side, the efficiency of government authorities in utilising the health sector budget also tells a disheartening tale: from an admirable 94% in FY12, it plummeted to a concerning 78% in FY22.

The Human Rights Watch and numerous studies, including from the World Health Organization (WHO), have estimated that providing Universal Health Coverage (UHC) will generally require governments to spend the equivalent of at least 5% to 7.5% of their GDP on health care – this is far from our current reality.

The data speaks for itself as the Bangladesh Sample Vital Statistics 2023 report shows that the country has deteriorated in some key health indicators including a fall in life expectancy, a rise in death rates for newborns, children under one year and five years of age, and a drop in contraceptive prevalence rates, despite the country once taking pride in these indicators.

Out-of-pocket health expenditure in Bangladesh is the second highest in South Asia, only after Afghanistan. The Global Health Expenditure database shows Bangladeshi people spend 73% of their health expenditure out of their pockets, which is 19% in Bhutan and 50% in India.

Moreover, it's worth noting the extremely alarming air quality situation in Dhaka demands action. The city consistently ranks among the worst three globally for air pollution. Dhaka breathed in 16 times the WHO-recommended PM2.5 concentration in 2023. 

The World Bank sheds light on a harrowing truth: Air pollution, unsafe water, poor sanitation and hygiene, and lead exposure cause over 2.72 lakh premature deaths and 5.2 billion days of illness annually. 

The goals ahead

Bangladesh is on a bold mission to achieve several significant milestones. 

First, the nation aspires to reach Upper-Middle-Income status by 2031 and High-Income-Country status by 2041. However, it's important to emphasise that these ambitions are pursued in close harmony with the United Nations' Sustainable Development Goals (SDGs), whose target date is 2030.

To guide this vision, strategic documents like the Perspective Plan (2021-2041), the 8th five-year plan (2021-2025), and the Delta Plan-2100 have been formulated and are currently being implemented. These plans lay the foundation for a developed and smart Bangladesh by 2041, as outlined in the recent budget speech.

The ambitious "Smart Bangladesh" vision rests on four pillars: smart citizens, smart government, smart society and smart economy. 

The budget speech outlines specific targets for this objective where the per capita income will be at least $12,500; less than 3% of people will be below the poverty line and extreme poverty will be reduced to zero; inflation will be limited between 4-5%; budget deficit will remain below 5% of GDP; revenue-GDP ratio will be above 20%; investment will be 40% of GDP.

Imagine a runner sprinting with powerful legs but a frail spine. The short-term burst of speed might be impressive but long-term stability and resilience remain elusive. Similarly, focusing solely on infrastructure without nurturing intellectual capital creates an unsustainable path to progress. 

As Ho Chi Minh, the founding father of Vietnam, aptly stated, "For the sake of 10 years' benefit, we must plant trees. For the sake of a hundred years' benefit, we must cultivate the people."

Bangladesh needs to channel its resources towards the true drivers of progress: a healthy, educated population. The time for action is now. 

Let us contemplate: How can we break the cycle of high out-of-pocket expenditure in health and education? How can we ensure that our budget allocations not only reduce the people's cost burden but also enhance the quality of both? The answer to these questions has to be reflected in the forthcoming national budget for FY25.

Mohsin Bhuiyan is a Senior Research Analyst at The Business Standard.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.