Bangladesh will achieve middle-income country status by 2021, according to the upcoming budget speech to be placed in parliament on June 4.
Finance Ministry officials said the speech will contain a section on the country’s imminent graduation from low-income to middle-income status, explaining how this will be achieved by 2021.
The proposed budget document will explain that to achieve middle-income country status as defined by the United Nations, Bangladesh must post a per capita income above $1,398 four years in a row.
The country’s per capita income grew by 12.9% to $1,190 during the current fiscal year, bringing the country closer to the middle-income bracket.
Several months ago, Finance Minister AMA Muhith said Bangladesh could become a middle-income country in the next three to four years, as per capita income nears the middle-income threshold.
The country’s status as a middle-income nation would be consolidated by 2021 when per capita income is expected to be around $2,000, he said.
Former adviser to the caretaker government, AB Mirza Azizul Islam, told the Dhaka Tribune that just increasing per capita income was not sufficient to make Bangladesh a middle-income country.
He stressed that social indicators must also improve. “It will take time for Bangladesh to reach middle-income country status.”
But the longer it takes, the higher the bar may go.
In FY2010-11, achieving upper middle-income status required a per capita income in excess of $3,975. Two years later, the goalpost shifted – countries must now show a per capita income greater than $4,085 to reach upper middle-income status.
In the post-war era, from the 1950s onwards, many economies managed to rapidly reach middle-income status but few went on to become high-income countries.
A comprehensive study by the World Bank estimates that, out of 101 middle-income countries in 1960, only 13 graduated to high-income status by 2008.
The Bangladesh economy is growing at 5.4% per annum. According to the World Bank’s Atlas conversion, the per capita gross national income in Bangladesh is $1,021.
Bangladesh’s per capita income in FY2014-15 was $1,190 compared to $1,044 in FY2013-14.
Export earnings witnessed 11.69% growth in the same period. Revenue collection grew by 8.35% over the previous fiscal year.
