The per capita gross national income (GNI) and purchasing power parity (PPP) are relatively more acceptable in the global arena than the Gross Domestic Product (GDP) per capita. The PPP calculates how comfortable the people of a country are in their lifestyles. But, Bangladesh lags far behind India in terms of GNI and per capita PPP.
The Covid-19 pandemic has temporarily dropped India's per capita GDP as India's economic growth has shrunk by more than 10% in one year. The situation will change next year if India's growth becomes normal.
It is good for us that our GDP has been growing steadily for more than a decade. But surpassing India can never be our main goal.
According to the World Bank, Bangladesh is still in the lower-middle income group. And as per the United Nations, we are still on the list of least developed countries.
Our aim should be to quickly graduate to a high-middle income country to make Bangladesh one of the richest countries by 2041. In order to meet all these goals, apart from surpassing India in terms of income, we will have to face many challenges.
However, it is very upsetting that the existing structure of our macro-economy does not have the logistics to meet the challenges to take the country forward.
Bangladesh this time overtakes India in per capita GDP due to temporary fluctuations.
There is no point to be too obsessed with that achievement, rather we need to focus on the existing challenges to move the country towards sustainable development.
Our current growth rate is not enough to graduate to a higher-middle country by increasing national income – the weakest standard of development. We have to increase our growth rate a lot if we just want to increase our income.
But raising income alone would not yield much as we have to improve in many socio-economic indexes, including poverty reduction and minimising inequalities. If we want to make progress in all these development indexes, we will have to face bigger challenges.
We have to ensure overall development by reducing inequality. For this, we need to think about avoiding the middle-income trap – an economic situation in which many countries get stuck for a long time. Many countries have been remaining in the category for even 50-60 years.
We have to focus on formulating and implementing an action plan on how to take the country forward by overcoming all the issues.
Dr Mustafa K Mujeri is former director general of BIDS