Economic Independence still a far cry
Abu Sazzad: After 49 years of independence, the economic emancipation of the country is still crying to consider the economic disparity and the current per capita debt burden of the people.
The country’s GDP has increased by 35 times after independence, but the citizens are counting heavy state debt burden arising concern for macro-economic stability of the country, said experts. The GDP was US$8.75 billion in 1971 and it is now over $300 billion, according to a report. Actually, the per capita debt burden is increasing gradually due to mainly higher government borrowing from the internal and external sources. The government is forcing to take huge amount of loan for implementing the ongoing development projects as well as to maintain the regular expenditure especially the salary of the public officials, they said.
The per capita debt is now US$795 which means that a new born baby will have to pay Tk 67,233 for born in Bangladesh. In the last one decade, the per capita debt burden increased to about Tk 7,233, according to the data of Bangladesh Bereau of Statistics (BBS). The BBS data also hinted that, the current per capita debt will increase more Tk 7,000 in the upcoming five years, which means that the per capita debt may touch almost Tk 80,000 to consider the higher internal and external loan of the ruling government in last year 2019.
So far, Bangladesh received $52 billion foreign loan after impendence and the total outstanding external debt of the country stood at $33.52 billion in June last year. On the other hand, the net bank borrowing has reached at Tk 508.42 billion until January 15 of the current fiscal year 2019-20, according to an internal report of Bangladesh Bank, but such borrowing may cross Tk 600 billion at the end of the current fiscal.
Government debt to GDP in Bangladesh is expected to reach at 25.50 percent by the end of 2020, according to Trading Economics global macro models and analysts, but sources said it is almost 35 percent.
Experts said, the macro-economy would face severe hardship when such ratio would over 40 percent. Still the debt burden ratio to GDP is in a comfortable rate, but the current state of economy is imposing a threat on country’s reserve.
Although the per capita income has increased 15 times after the independence, people will not be able to afford the debt burden because most of classes of people are facing hardship to maintain the expenditure, they said. Already, country’s economy is facing multifarious challenges including the infrastructure bottlenecks, insufficient power and gas supplies, bureaucratic twisting, corruption, political instability, natural calamities and a lack of skilled workers, they mentioned.
Meanwhile, the expansion of private sector and industrial production halted for corona virus outbreak. According to Global Economist Forum, country’s annual GDP growth is almost 7 percent, but the corona virus panic may cut 3 percent GDP growth. If such ongoing locked down situation continues in the upcoming three to four months, it is not possible to attain the goals of SDGs by 2024 as well as to attain $50 billion export income target by 2021.
On the other hand, the tremendous economic growth has failed to generate the employment opportunity for a large section of the population raised a question that is the real development only in a bookish term.
Many experts said, the per capita income has risen significantly, simultaneously, the purchasing power parity (PPP) declined drastically mainly from income inequity of the people.
Bangladesh per capita income stood at $2,068 in February last. According to a report, Bangladesh has now approximately 1 lack millionaire depositors while the number was 492 in 1975.
Talking to Daily Industry, SHUJAN Secretary Badiul Alam Majumdar told Daily Industry that most of the millionaire depositors gained their money in an unethical way. Corruption was the main strength to earn the huge amount of black money of the vested quarters, he added.
Commenting on the public debt, he said, the government is taking loan from internal and external sources heavily to expose the surface development activities, but the public is losing their real financial capability.
Actually, the country needs the real democratic culture to eradicate corruption; otherwise, the public burden would increase in the upcoming days which are not good for attaining a sustainable economy.
Former caretaker government adviser Dr. AB Mirza Azizul Islam said, the government borrowing is gradually increasing for implementing various development projects. He has underscored the need for utilising the loan money accordingly so that people can be benefited in the future.
Talking on the per capita debt, he laid emphasis to collect higher revenue for reducing the public debt and government borrowing. Actually, the government is forcing to undertake higher borrowing for the failure of the National Board of Revenue (NBR).
The further debt burden to GDP will hinder the macro-economy as well as increase public debt burden which is not rational for attaining sustainable economy.