Opinion and Analysis: Economic and Social Unraveling in Bangladesh
As Bangladesh celebrated fifty years of independence in 2021, it was lauded internationally as an economic success story. However, Ali Riaz, a senior fellow at the Atlantic Council South Asia Center and a distinguished professor at Illinois State University, argues that the narrative of Bangladesh’s economic triumph is now under serious threat. Recent data and projections from global institutions like World Bank indicate that the country faces significant economic challenges. Furthermore, various social indicators suggest that situation is deteriorating, raising concerns about sustainability of Bangladesh’s development
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Economic Downturn: A Closer Look
World Bank’s Bangladesh Development Update, published on April 2, 2024, forecasted a GDP growth rate of 5.6% for the fiscal year. However, the Bangladesh Bureau of Statistics (BBS) reported a mere 3.78% GDP growth for second quarter of current fiscal year, a sharp decline from previous quarter’s 6.01%. This is a substantial drop from higher growth rates of 9.3% and 7.08% in second quarters of fiscal years 2022 and 2023, respectively. government’s initial projection of 7.5% growth for fiscal year 2024 was revised down to 6.5% in January, yet analysts deem even this target unachievable.
| Fiscal Year | GDP Growth Rate |
| 2022 | 9.3% |
| 2023 | 7.08% |
| 2024 (Q2) | 3.78% |
| 2024 (Projected) | 5.6% |
Roots of Crisis
economic crisis, evident since mid-2022, did not arise abruptly. It has been brewing for years, exacerbated by external debt exceeding $100 billion for first time in late 2023. This mounting debt, coupled with increasing debt servicing costs—$2.03 billion in first eight months of current fiscal year alone—has strained Bangladesh’s foreign exchange reserves, which have fallen below IMF’s suggested $19.26 billion.
Concurrently, nonperforming bank loans have surged, reaching about 10% of total outstanding loans. Bangladesh Bank’s decision to relax write-off policies and merge weak banks with stronger ones has been criticized as counterproductive by experts, including World Bank. se policies risk shifting liabilities of weak banks onto stronger ones, furr destabilizing banking sector.
Social and Economic Impact on Citizens
broad economic crisis is severely affecting middle class and poorer segments of society. Despite official claims of sub-10% inflation, market prices for food and essentials suggest orwise. In 2023, government raised electricity and gas prices thrice, furr burdening citizens. BBS’s “Food Security Statistics 2023” survey revealed that 37.7 million people experienced moderate to severe food insecurity, with over a quarter of families taking loans for daily necessities.
| Indicator | Value |
| Food Insecurity | 37.7 million affected |
| Household Borrowing (2023) | 28% of households |
| Inflation Rate (Official) | Below 10% |
| Price of Electricity and Gas (2023) | Increased thrice |
Strains in Social Indicators
Social indicators have also shown troubling trends. Life expectancy, which had been rising, declined from 72.8 years in 2020 to 72.3 years in 2023. This decline is partly attributed to increasing child mortality rates. BBS’s Bangladesh Sample Vital Statistics-2023 (BSVS-2023) reported increases in mortality rates for children under five, newborns, and children under one year. Additionally, child marriage rates have surged from 31.3% in 2020 to 41.6% in 2023.
| Indicator | 2020 | 2022 | 2023 |
| Life Expectancy (years) | 72.8 | 72.4 | 72.3 |
| Child Mortality (per 1,000) | 28 | 31 | 33 |
| Infant Mortality (per 1,000) | 21 | 25 | 27 |
| Newborn Mortality (per 1,000) | 15 | 16 | 20 |
| Child Marriage (%) | 31.3 | N/A | 41.6 |
Education and employment indicators are also concerning. number of secondary school students dropped by one million over four years, and percentage of youth not in education, employment, or training (NEET) increased significantly. BSVS-2023 revealed that 40.72% of children aged five to twenty-four were not in educational institutions in 2023, up from 28.46% in 2020.
| Indicator | 2020 | 2023 |
| Students (Secondary Level) | Decreased by 1 million | |
| NEET (Youth 15-29 years) | 30% (2016-17) | 39.88% |
| Children Not in School (%) | 28.46% | 40.72% |
Governance and Economic Policy
ongoing economic and social challenges are occurring under a government increasingly seen as unaccountable. absence of transparent and democratic governance has fostered a crony system that undermines economic stability. Elections in recent years have been neir free nor fair, resulting in an economy dominated by a small group of people loyal to incumbent regime.
Conclusion
Ali Riaz’s analysis underscores fragility of Bangladesh’s economic and social fabric. once-celebrated success story is now marred by economic downturns and social setbacks, exacerbated by governance issues. country’s future hinges on addressing se multifaceted challenges through transparent and accountable governance. Without significant reforms, optimism that marked Bangladesh’s fiftieth anniversary of independence may soon seem a distant memory.
For a more detailed understanding of Bangladesh’s current economic challenges and
