While questions remain about the current state of our economy, it is true that Bangladesh is the closest it has ever been towards achieving its middle income aspirations. But crossing that threshold has its fair share of downsides and, unless we want to fall into the middle income trap, it is imperative that we focus on some key areas that will help ease Bangladesh's graduation away from the LDC status.
That Bangladesh is in desperate need of some diversity in the export basket has been well known for years now -- indeed, our RMG sector has proven to be a veritable workhorse in ensuring the continued expansion of our economy, but given the rise of increased global competition in this industry coupled with the high barriers to entry for new companies, the writing is now on the wall: Bangladesh needs a more diverse set of goods that we can export overseas.
To that end, we have some promising sectors that the government can consider propping up: From light engineering to our nascent electronics sector, to jute and jute-related products, there are certainly a number of promising sectors that can introduce some much needed diversity in our export basket.
One of the other fatal flaws that stands to greatly impact the economy post-graduation is the sorry state of our tax system, specifically in relation to how it holds back our tax net from being any wider. The system as it stands is far too archaic, which is relatively easily addressable -- what our tax system needs to focus on to truly progress is the very culture upon which it operates.
Our tax culture is woefully opaque in that tax-payers hardly ever know how their hard-earned money is being spent, which has led to the erosion of trust and hence a narrow tax net. Financial transparency, then, is an area that our country has to improve on well before we shed our LDC tag.
Bangladesh cannot afford falling into the middle income trap, and it is incumbent on the government to identify and address any and all issues which can throw our nation into it.
