The Financial Express

Noise over per-capita GDP

| Updated: October 19, 2020 21:55:42

Noise over per-capita GDP

Bangladesh's per capita GDP (gross domestic product) has been on the rise with its economy growing almost uninterruptedly in recent years. Many at home and abroad have found the pace of growth barring the pandemic-hit immediate past financial year (FY) awe-inspiring. The achievements in both economic and social fronts have facilitated the country's graduation to lower-middle-income country status. It is now poised to acquire the developing country status in 2024.

So, there should be no reasons to raise noise over the country's per capita GDP going up. Yet it has happened this time, apparently, because of India's internal political tiff centring Bangladesh's latest per capita GDP figure. The Congress president in a tweet has attacked the Modi government pointing out Bangladesh's per-capita GDP crossing that of India's. The reasons for the Indian politicians becoming unduly sensitive towards Bangladesh's economic progress are not understood. A few South Asian nations are already much ahead of India and Bangladesh, in terms of per capita GDP.

The per capita GDP of the Maldives, Bhutan and Sri Lanka has been greater than that of India for many years. Bangladesh's economy has been growing at higher rates than India's in recent years. Moreover, the prediction is that the Indian economy would experience a massive contraction, leading to a 10.5 per cent decline in per capita GDP in 2020 when Bangladesh recorded a modest growth despite the onslaught of the Covid pandemic.

The growth of the economy and the consequent rise in the per capita GDP are considered achievements at the national level. Yet the higher per capita income, in terms of purchasing power parity (PPP), and increased gross national income (GNI) do represent better economic strength of a country. Bangladesh has to make further progress in many areas, including domestic resource mobilisation and investment, both local and foreign.

There is no denying that all do long for healthy economic numbers.  But the people, particularly those who are at the bottom of the ladder, do need to feel the impact of the positive numbers. For a country like Bangladesh, growth does not carry any meaning if enough employment opportunities are not there, poverty not brought down to a minimum, and income inequality narrowed down to a reasonable level.

Unfortunately, with the economy growing at a decent pace, income inequality has widened over time. There have been no serious efforts to address the issue either. Similarly, the rate of employment growth has decelerated, primarily due to a stagnancy in private investment in recent years. The pandemic has only worsened the situation lately with regards to unemployment and poverty. Thousands have lost jobs and sources of income. A sizeable part of the gains in poverty eradication made in the past three decades has just evaporated in a matter of months.

The fruits of higher economic growth could reach the doorstep of the common man only through good governance. When a government makes itself accountable--- the constitution provides for sufficient mechanism to ensure it--- and makes all its moves transparent, it can deliver results as per aspirations of the people.

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