SDG aspirations face a stark clash with financial realities

Bangladesh finds itself at a turning moment in its search for the Sustainable Development Goals (SDGs) since it understands its progress and the tremendous financial challenges ahead. Though it has made considerable progress in reducing poverty, gender equality, and increasing educational enrolment, the nation has an insurmountable challenge.

One of the primary obstacles preventing Bangladesh from fully achieving the SDGs by 2030 is its financial deficit, particularly as it advances from Least Developed Country (LDC) to middle-income level. Budget restrictions could cause the country to stagnate, even with the hope this transformation generates, since big financial resources are needed to meet the SDG targets.

To accomplish its SDGs, the Bangladesh Planning Commission's recent projections show that the nation will have to spend more than $66.32 billion yearly from FY 2017 till FY 2030. Arranging local resources and getting outside help still depends much on the financial situation, with a tax-to-GDP ratio of 7.4% in December 2024, which stands below the Asia-Pacific region's average. The Asia-Pacific (36) average tax-to-GDP ratio was 19.3% in 2022, according to the Organization for Economic Co-operation and Development (OECD).

If we are to achieve long-term sustainability, this ratio reveals the country's insufficient internal resource mobilisation, a crucial area that must be reinforced. Though underused in key sectors, including social protection, health, and education, public-private partnerships (PPPs) have also shown significant success in infrastructure construction.

Although Bangladesh has achieved tremendous progress in reducing poverty, the rate is now projected to be 22.9% according to the World Bank Report. The situation is still somewhat unjust, particularly in rural areas. Considering poverty rates in less developed regions, the negative consequences of climate change compound the issue even further.

Moreover, the Gini index is higher than 0.499 according to a report by the Ministry of Finance, which shows increasing Bangladeshi economic disparity. The rising gap between the rich and the poor contradicts the general positive progress in eliminating poverty. The GDP growth rate is also projected to be as low as 3.9% according to the Asian Development Bank (ADB), dropping significantly from the previous year.

A 2024 World Bank study shows that approximately one-quarter of the population of rural Bangladesh still lives below the national poverty level, therefore underlining the unequal distribution of economic advantages.

Still, one of the pressing problems is food security. Although Bangladesh has lowered child malnutrition to 26.2%, it is still inadequate for a nation aiming at SDG 2 (Zero Hunger) by 2030. Approximately two-thirds of children (age less than 5 years) are living in food poverty (consume 5 food types), and among them, one in five are living in severe food poverty (consume 2 food groups); that means about 10 million children are living in food poverty, as reported by UNICEF.

Government initiatives such as iron-folic acid supplements and enriched rice campaigns have had some hopeful results, even if they are much underfunded. Crucially important for the accomplishment of food security, agriculture also receives inadequate government focus. Far less than the recommended 10% commitment for SDG 2, just 2.8% of overall government spending in FY24 went to the sector.

Bangladesh's health system requires further improvement, as neonatal mortality has decreased to 20 per 1,000 births, higher than the SDG target of 12 per 1,000 births. The nation also has new problems, including air pollution, antimicrobial resistance, dengue expansion, and access to healthcare services, which remain significant challenges and are not readily accessible.

Among the several difficulties the public healthcare system encounters nowadays is a shortage of suitably qualified doctors. Doctors per 1,000 people are far lower, with a current ratio of 0.67, below the recommended standard of at least 1.0 doctor per 1,000 people by the WHO.

Moreover, the general public's access to healthcare is significantly compromised by both the inadequate regulatory oversight of private healthcare institutions and the inefficiencies in public hospital management.

The quality of education still poses a significant obstacle, even if enrolment in educational institutions is increasing. Trained teachers in primary education accounted for 77.26%, and lower secondary education accounted for 67.714%, according to the Global Economic Data and CEIC Data. Still, continuous disparities in digital literacy, scientific, and technical education slow progress toward SDG 4 (Quality Education).

World Bank figures show that 65% of pupils do not satisfy the minimum literacy and numeracy criteria by the time they complete Grade 3. Early marriage is one crucial factor that accounts for 42% of rural female school dropouts reported by the Bangladesh Bureau of Statistics (BBS).

Women are contributing increasingly to businesses in Bangladesh, although challenges persist in the country's conservative demeanour. About 7.2% of businesses are owned by women, and women lead 24.6% of SMEs. The post-pandemic has seen 70% of new businesses by women, with a 65% increase in Instagram business. A report by Press Xpress stated that women-led enterprises are projected to contribute $20 billion by 2025, increasing from $12 billion in 2020.

Despite these, women-led or owned enterprises face significant challenges. There is an evident lack of access to collateral and participation in corporate chains, which is hindering their growth. As reported by the Bangladesh Bureau of Statistics, over 64% of working-age women lack credit and funding.

With the projection of Bangladesh's Government at 75-80%, the current forecast of safe access to drinking water is at 60.6%. Regional disparities do remain, particularly in the centre and northwest regions. Some 18 million or so people are still believed to be consuming arsenic-contaminated water. Urban sewage management still lacks sufficient emphasis, highlighting the challenges of providing sanitary services to keep pace with urban expansion. Judging by the current trends, the SDG targets 6.1 & 6.2 will be hard to achieve according to WHO's comparative analysis.

Energy access in Bangladesh has tremendously improved; approximately 99.5% of homes have access to electricity, rising from just 79% in 2010, according to the International Energy Agency (IEA). However, this progress has been undermined by inefficiencies in power sector planning. Over the past decade, numerous power plants have been built without securing a reliable fuel supply, leaving over 25% idle yet still receiving capacity payments.

This has increased financial pressure and passed additional costs to consumers. Despite projected demand reaching 16,000 MW in March and 18,000 MW in April, expected generation remains below capacity, ranging from 13,000 to 15,000 MW. To sustainably meet rising electricity demand, prioritising domestic gas exploration is essential for ensuring long-term energy security and reducing reliance on costly imports.

Next, the national target set by the government was 20% of the total energy production from renewable energy. Only 1.3% of the total energy production came from renewable energy in April 2025, as reported by Ember, an international organisation. Development toward SDG 7 (Affordable and Clean Energy) is improving as the CPD states that the government plans to reduce customs and duties on solar panels, wind turbines, and battery storage systems to encourage investment in renewable energy. The budget plan also mentions phasing out fossil fuel subsidies starting in FY 2026, which aligns with recommendations from the IMF.

Bangladesh boasts a very low unemployment rate of 4.49% in the first quarter of FY 2025. However, according to the Bangladesh Brand Forum, individuals aged between 15 and 24 experience a notably higher unemployment rate at 15.74%. A study by the Bangladesh Institute of Development Studies (BIDS) reveals that 28.24% of National University-affiliated colleges remain unemployed. Technical and vocational education and training (TVET) initiatives, Bangladesh Skill Development Institute (BSDI), and Coding Bootcamps offer people certificates and skills training, providing a viable pathway to employment. Additionally, 5.21% of the GDP, amounting to $23.91 billion, is earned from remittances in FY24.

Bangladesh's infrastructure development remains uneven, with rural areas suffering from inadequate road links. Industrial growth has contributed to GDP expansion, and digital access has also been on the rise. According to Data Reportal (a private digital research and insights platform), 77.7 million individuals use broadband internet, 44.5% of the population. Research and development (R&D) investment is modest, at barely 0.3% of GDP, compared to the global average of 2.2%, according to the World Bank. Underinvestment in infrastructure and innovation hampers the country's capacity to achieve long-term economic sustainability and realise its industrial potential.

Still, a big challenge is Bangladesh's SDG financing gap. The government has developed an SDG financing strategy that includes sovereign bonds, Islamic finance, South-South cooperation, climate financing, and more internal resource mobilisation. Regulatory challenges and mistrust of financial systems have impeded the adoption of initiatives, including diaspora and green bonds.

Although their contributions are scattered, foreign partners, including the World Bank, the Asian Development Bank (ADB), and UNDP, have supported various initiatives. Less than 14% of the total funds needed for sectors connected to the Sustainable Development Goals (SDGs) in fiscal year 2024 come from outside aid. This result illustrates the need for more extensive and long-term cooperation since it shows the limited involvement of international players in closing the financial gap.

Bangladesh's pursuit of the SDGs is distinguished by unmet potential hampered by insufficient financial resources rather than bad performance. The objectives remain aspirational even with their feasibility unless we improve governance and apply innovative financing strategies. The SDGs will remain promises until Bangladesh can identify fresh, sustainable, varied financing sources. Given the severity of the situation, Bangladesh may lose the chance to fully utilise its development goals and present a sustainable future for its people if it overlooks robust financial rules.

Syed Ershad Ahmed is the President of the American Chamber of Commerce in Bangladesh and the former president of the Foreign Investors' Chamber of Commerce & Industry (FICCI) Bangladesh.

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.