Bangladesh: towards middle-income status

Transcription

1 Bangladesh: towards middle-income status Martin Rama Chief Economist for South Asia, the World Bank * SANEM Annual Economists Conference Dhaka, 2016 * With Miklos Bankuti. Zahid Hussain, and Fan Zhang

2 Outline What is middle income? World Bank (already middle-income) UNESCAP (middle-income by 2021) Recent performance Accelerating growth Progress on human development The not-so-bright spots Limited export diversification Messy urbanization The challenges going forward Infrastructure development The investment climate

3 What is middle income World Bank statistical classification: based on GNI per capita, using Atlas method Classification Low Income Lower Middle Income Upper Middle Income High Income Threshold $1,045 or less $1,046 to $4125 $4,126 to $12,735 $12,736 or more Number of Examples Countries 31 Afghanistan, South Sudan, Cambodia, Ethiopia, Haiti, Nepal, Tanzania, Uganda 51 Bangladesh, Kenya, Myanmar, Tajikistan, Bhutan, Egypt, Indonesia, India, Nigeria, Pakistan, Philippines, Sri Lanka, Vietnam, Zambia 55 Brazil, China, Colombia, Cuba, Libya, Malaysia, Maldives, Mexico, South Africa, Thailand, Turkey, Mongolia, Paraguay 80 US, Japan, Germany, UK, France, Croatia, Kuwait, Oman, Qatar, Saudi Arabia, Singapore, United Arab Emirates, Austria, Greece, New Zealand, Hungary

4 What is middle income World Bank graduation from the International Development Association (IDA) GNI per capita in excess of cutoff (currently $1215) an agreed operational Credit worthiness to access capital markets, as determined by the Bank Not an automatic process (between 4 and 16 years after crossing the GNI threshold) Intermediate period can include blend terms and transitional IDA

5 What is middle income ECOSOC graduation from Least Developed Country status Three-year average of the levell of GNI per capita, which the World Bank uses for identifying low-income countries ($1,035) The threshold for graduation is three-year average ($1,242) set at 20 percent above the In addition, the country needs to meet a series of human development thresholds to be eligible for graduation.

6 Recent performance Pace of GDP growth has risen by about 1 percentage point per decade GDP Growth Tr rend ( 5 years moving average) Percent (five-year moving average) s Average GDP Growth 3.7% Per Capita growth 1.0% 1990s Average GDP Growth 4.7% Per Capita growth 2.6% 2000s Average GDP Growth 5.6% Per Capita growth 4.2%? FY85 FY87 FY89 FY91 FY93 FY95 FY97 FY99 FY01 FY03 FY05 FY07 FY09 FY11 FY13 FY15 GDP Growth Per-capita GDP Growth

7 Recent performance Poverty rates have declined rapidly 75 Poverty Hea adcount Rate (percent) National Poverty Line PPP$1.25 Poverty Line

8 Recent performance Bangladesh has performed well on human development and may achieve most MDGs Indicator GDP per capita (PPP$) Social indicators for Bangladesh, India and sub-saharan Africa Bangladesh India Sub-Saharan Africa 1971* n/a Life expectancy at birth 39 Infant mortality rate 150 Under-5 mortality rate 225 Total fertility rate 6.9 Access to improved sanitation (%) Mean years of schooling, age Literacy rate, age (%) n/a Female 27 Male * ,883** n/a 3,876** 2, n/a n/a [74] [88] 76 Prevalence of undernourishment (%) Child immunization rates (%) DPT Measles Notes: *or earliest available **2012; [..] estimate; Source: World Development Indicators

9 The not-so-bright spots Bangladesh did well but other countries did better GDP per capita, PPP (current international $) GNI per capita, PPP (current international $) CAGR CAGR India Sri Lanka Indonesia South Korea Thailand Philippines China Bangladesh Source: WDI

10 The not-so-bright spots Key governance and public sector challenges CPIA SUB B-COMPONENT RATING Social policies Overall CPIA Structural policies Economic Management Public sector management and institutions

11 The not-so-bright spots Country Overall Institution Ranking Overall Institution Score... Also in comparison with other countries Comparison of Institutio on Quality ( ) Property Rights Public Trust in Politicians South Asia Bangladesh Bhutan Sri lanka India Nepal Pakistan East Asia China Indonesia Philippine Korea, Rep Thailand Vietnam Cambodia Source: Global Competitiveness Reports, World Economic Forum Judicial Independence Favoritism in Decisions of Government Officials Burden of Government Regulation Efficiency of legal framework

12 The challenges going forward Persistent infrastructure deficiencies Ranking of Bangladesh in Global Competitiveness Indicators Rank/133 Rank/139 Rank/142 Rank/144 Rank/148 Rank/148 Rank/140 Overall Rating Quality of overall infrastructure Quality of port infrastructure Quality of electricity supply Mobile telephone subscription Source: The Global Competitiveness Report ( )

13 The challenges going forward Shrinking supplies of domestic gas increase the cost of electricity generation (USD) 6,000,000,000 5,000,000,000 Total Expenditure on Gas by Source LNG Offshore Domestic Gas 4,000,000,000 3,000,000,000 2,000,000,000 1,000,000,000 -

14 The challenges going forward The pricing of gas may be a reason for insufficient exploration and exploitation

15 The challenges going forward Country Ease of Doing Business Rank Weaker Doing Business indicators than in comparator countries Comparison of Ranking Ease of Doing Business, 2015 Starting Business Dealing with Getting Construction Electricity Permits South Asia Bangladesh Sri lanka Nepal Maldives Bhutan Pakistan India East Asia Korea, Rep Thailand Vietnam China Philippine Indonesia Cambodia Registering Property Getting Credit Protecting Minority Investors Paying Taxes Trading Across Borders Enforcing Contracts Resolving Insolvency

16 The challenges going forward The top concerns of businesses in Bangladesh