Why investing in people is the ultimate saviour for Bangladesh
From parents to teachers to policymakers to industry professionals – nobody is happy with the quality of public education. Yet, this has continued for decades.
The majority of parents find no alternative but to send their kids to public educational institutions. Those who can afford additional expenses send their children to private institutions.
The gap in learning quality between these two groups keeps widening. When they enter the job market, there is unequal competition between them, leading to disparities in earnings.
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While policymakers search for ways to contain rising income inequality, the existing education system itself has emerged as one of the major factors driving inequality in society, undermining one of its core goals – reducing inequality.
Take, for example, the quality of our primary education.
More than 60% of third graders and 70% of fifth graders lack proficiency in math appropriate for their grade level, according to the National Student Assessment 2022 by the Directorate of Primary Education and Unicef. The report also states that as many as 51% of third graders and 50% of fifth graders lack grade-level competence in Bangla.
This grim picture highlights acute educational poverty, which, in turn, affects the quality of higher education.
Around the world, a higher degree unlocks the road to higher income. People with a bachelor's degree typically earn substantially more than those with only a high school diploma.
But in Bangladesh, the situation is the opposite.
Among unemployed youth, 31.5% have completed higher education, 21.3% have completed secondary education, and 14.9% have completed higher secondary education, according to the Bangladesh Bureau of Statistics (BBS) Labour Force Survey 2023.
The gloomy picture of educational poverty depicted by government surveys clearly concludes that the education system has gone wrong.
Students are still struggling to recover from Covid-19 learning loss. The adverse impact of climate change has begun disrupting classes due to rising heatwaves and frequent floods in some parts of the country.
Yet, no effective measures are on the cards to reverse the situation by revamping the public education system.
A dozen commissions have been formed by the interim government to reform the state institutions. Most of the reform initiatives focus on improving political and human rights. No commission has been formed to build a better public education system.
The constitution reform commission has, however, proposed to include education as a fundamental right.
The question is what kind of education should be people's fundamental rights? Should the kind of public education children are getting now be their fundamental rights?
Why people deserve better
Banking on a rising youthful workforce, Bangladesh achieved lower-middle-income country status in 2015, one and a half decades after the country began harnessing economic growth through demographic change. It was a spectacular rise from the ruins of the Liberation War of 1971.
Bangladesh did not need to look back and continued marching toward progress, thanks to the indomitable spirit of its workforce – though most of them were not well-skilled or trained. The country's economy kept growing, and people's per capita income was on the rise. Living standards improved. The physical strength of Bangladesh was reinforced through numerous large and medium-sized infrastructure projects, offering improved communication networks for livelihoods.
Behind all these successes, the major drivers and unsung heroes were the people – particularly the three big armies of farmers, migrant workers, and RMG workers. The remarkable increase in food production despite all odds, the astonishing rise in remittance inflows by millions of low-skilled migrant workers, and the growth of the apparel industry – propelled by cheap labour, most of them women – helped Bangladesh progress rapidly, drawing global praise.
But beneath the surface, many things were going wrong. A perfect storm was brewing. The people's march toward progress has stumbled due to a complete governance failure, economic mismanagement, rampant corruption, looting of banks, and violations of human rights, including the trampling of voting and other political rights. Corruption has eroded the economic freedom that people earned through their hard work over the years.
Again, it's the people who made the difference. Youth bravehearts brought an end to the regime presiding over those misdeeds, ushering in a new era of hope.
But by that time, massive damage had already been done. Bangladesh is now in big trouble, with an ailing economy that economist Zahid Hussain describes as having "the economy's pulse is currently beating low while the pressures from inflation and expectations are running high."
Once again, the very people who propelled the country's progress in past decades are now the worst victims. Low- and middle-income people, who constitute the overwhelming majority of the population, are struggling to stay afloat in times of high inflation and unemployment.
One thing is for sure – people will not call it a day. Their indomitable spirit will keep them moving forward for survival.
The all-important question is whether the workforce is ready and competent to make the big leap needed to overcome the stagnation in productivity.
Those who were behind the growth were not given quality education, training, or good skills. Those who have entered the job market in recent years – and those about to join the labour force – are facing the same fate.
Bangladesh has been blessed with a youthful population, which drives a country's economic growth. But its failure to transform them into real human capital by offering quality education, training, and healthcare has made Bangladesh pay heavily in times of crisis.
A worrying characteristic of the labour force is that millions of youths are jobless, and the education system is producing unemployed graduates. The gap between academia and industry has widened. Lack of proper planning and low investment in education and healthcare over the years have worsened the situation. The alarming rise in out-of-pocket healthcare expenditures by households has been contributing to poverty for years.
Here is another piece of bad news. Today's Bangladesh, like some other middle-income countries, is aging faster than high-income countries did in the past, according to a World Bank study on the middle-income trap – offering plenty of food for thought.
The demographic dividend period for Bangladesh, which began in 2000, will close 20 years from now. This means Bangladesh has only 45 years to harness economic growth by utilising its demographic dividend.
The transition from an aging society to an aged society took about 61 years in today's high-income countries, as long as 69 years in the United States, and 115 years in France, according to the study released last August.
For other middle-income countries, the estimated remaining time for this transition is about 26 years.
Historically, demographic dividends have fostered economic growth in many countries. A country enjoys demographic dividends when the number of young people outnumbers the non-working-age population.
The working-age population in Bangladesh is still larger than the non-working-age population, but this will not last forever.
The proportion of working-age people has started declining, decreasing to 65% in 2023 from 66.58% in 2021, according to a survey by the Bangladesh Bureau of Statistics (BBS). This trend will continue.
The consequences of a growing aged population are worrisome. The dependency ratio of people over 65 rose to 9.4% in 2023 from 8.6% in 2022. The economy must prepare over the next two decades to bear the burden of an expanding aged population.
Life in the middle income trap – how long?
Bangladesh has "sleepwalked" into the middle-income trap, according to the white paper on the state of the country's economy. Overcoming this trap will not be easy.
The lifespan of Bangladesh as a lower-middle-income economy has been less than a decade since 2015. If it can efficiently utilise its youthful population, it can chase the dream of becoming an upper-middle-income country in the next two decades.
Failure, however, will keep Bangladesh trapped in lower-middle-income status. For how long? The history of countries that graduated from lower-middle-income to high-income status offers food for thought.
The Netherlands remained a lower-middle-income country for 128 years before becoming an upper-middle-income country. But it took only 15 years to transition from upper-middle-income to high-income status. The United Kingdom remained a lower-middle-income country for 108 years before becoming an upper-middle-income country just 20 years later. The United States took 72 years to become an upper-middle-income country and 21 years to reach high-income status.
The data shows that overcoming the middle-income trap is extremely challenging and can be prolonged. However, once a country escapes the trap, it can accelerate its progress toward becoming a high-income country.
In Asia, however, Singapore, South Korea, and Taiwan offered different examples by rapidly transitioning from lower-middle-income to high-income status. South Korea remained a lower-middle-income country for only 19 years and took just seven years to become a high-income country. Singapore was a lower-middle-income country for 28 years before becoming an upper-middle-income country and then took only 10 years to emerge as a high-income country.
The key to the success of South Korea and Singapore is the quality of their human capital. Through massive investments in education and healthcare, both countries transformed their populations into skilled, intelligent, innovative, and highly productive workforces.
It is an undisputed fact that investing in education yields unparalleled returns – higher earnings, better career prospects, and more. The return for the state is enormously significant as well. Investing in education drives economic development, peace, and stability. But Bangladesh has already missed the opportunity to grow beyond what it has achieved.
Is there any solution for Bangladesh?
The WB study proposes a "3i strategy" for countries to reach high-income status. Depending on their stage of development, all countries need to adopt a sequenced and progressively more sophisticated mix of policies.
It states that low-income countries can focus solely on policies designed to increase investment –the 1i phase.
"But once they attain lower-middle-income status, they need to shift gears and expand the policy mix to the 2i phase: investment and infusion, which consists of adopting technologies from abroad and spreading them across the economy," the study says.
It says at the upper-middle-income level, countries should shift gears again to the final 3i phase: investment, infusion, and innovation. In this phase, countries no longer merely borrow ideas from the global frontiers of technology – they push the frontier.
"The road ahead won't be easy, but it's possible for countries to make progress even in today's challenging conditions," said Somik V Lall, director of the 2024 World Development Report. "Success will depend on how well societies balance the forces of creation, preservation, and destruction."
But without a skilled, intelligent, and trained workforce, it is difficult to move forward with the solutions proposed by the World Bank.
The message is, therefore, clear and loud: invest in education and healthcare like never before to unlock the road to a better future.
