We have just celebrated the 45th anniversary of our Victory Day -- a symbol of our independence, achieved despite severe odds and with great sacrifice. This December, 2016, I felt great satisfaction and pride in the manner in which we have moved forward, overcome evolving challenges, and emerged as a leader among developing nations.
We have taken giant strides towards socio-economic prosperity through commitment and dedication. Our population has doubled from about 75 million to nearly 160 million. Yet, we have tackled this growth sensitively and wisely. Measures related to family planning, better health care, gender empowerment, and growth in literacy, particularly functional literacy, have enabled us to achieve constructive growth.
This trend has been assisted through the incorporation of telecommunications, mobile phones, and digital technology. We have just crossed into the threshold of being a lower middle-income country. Our per capita income has crossed $1,450. Each year, for the last eight years, the number of mobile phone users has grown by about 10 million.
Today, over 133 million Bangladeshis use mobile phones. In terms of numbers, that is probably similar to the number of mobile phone users in the Scandinavian countries, Switzerland, and the Benelux countries combined. The number of internet users in Bangladesh, according to the Bangladesh Telecommunication Regulatory Commission, has also reached 66.8 million. Of them, interestingly, 62.9 million are connected through mobile devices, broadband, and wi-fi connectivity. These figures have emerged after the completion of the biometric registration process.
The second major advance towards a digital economy relates to the fact that 63% of government payments, or about $45bn, are now being transacted through digital channels. Bangladesh has experienced 120% year-on-year growth in mobile financial services transactions on average since 2011. This assumes importance given the gradual rise of e-commerce in Bangladesh.
The next movement forward has been with regard to payment of income tax by individuals. The National Board of Revenue announced on December 1 that the government had received over Tk302,600 lakh in income tax against 0.93 million individual returns submitted until the end of November this year. It may be added here that the total number of e-TIN holders as of December 10, 2016 was 2.5 million.
Of them, the number of individual tax payers in Bangladesh was 2.4 million, the number of companies paying tax was 53,760, and the number of corporate firms paying tax was 27,069. This indicates a growing awareness among citizens that paying tax and that too on time is the duty of citizens and required for the country’s development.
Despite reports of a slide in the country’s foreign exchange reserves on December 2 (to $31.37bn), we have also had the optimistic news immediately afterwards of expectations that the reserves will eventually rise to around $38.7bn by the end of the current financial year. Analysts have, however, disagreed with this projection given the recent negative growth in remittances (which has slumped by 17.71% in the first quarter of this fiscal year, partially because of the fall of oil prices affecting recruitment of expatriate workers from Bangladesh).
Some have also remarked that this extraordinary increase will be unlikely unless export receipts outpace import payments by quite a margin. This observation assumes significance given the report on December 6 that our current account balance has slipped into the negative territory for the first time in four years due to high growth in capital machinery. The actual import in terms of settlement of letters of credit rose to $15.14bn during July-October of FY 2016-17 from $13.19bn in the same period of the previous fiscal.
Nevertheless, what is important is that despite such a large population and their many needs and requirements, Bangladesh has been able to continue consolidating its foreign exchange reserve and that, today, it is the second highest in South Asia, after India. This, in its own way, has helped us to maintain better our value of taka against the US dollar and other major world currencies compared to India and Pakistan.
At this point, one also needs to reflect on our export sector. It took us about 20 years after we became independent to reach the figure of about $2bn. Since then, particularly over the last eight years, we have grown steadily despite challenges of different sorts that have confronted our RMG sector. Our exports during the July-November period of the current fiscal year have risen by 5.5% to $13.69bn compared to $12.87bn during the same period last fiscal. This was, however, 4.1% less than the target set for this period. This happened mostly because of woven garments which missed its notional mark by 12.15%.
Measures related to family planning, better health care, gender empowerment, and growth in literacy, particularly functional literacy, have enabled us to achieve constructive growth
Interestingly however, earning from leather and leather products has grown by 16.62% to $533.91m during this fiscal year period. This was more than export earnings both from jute and frozen fish.
It would be important to note here that the export dynamics is being assisted because of the government providing cash incentives to seven sectors on priority basis to bring forth diversification in the export sector. ICT apparently tops this list. It also includes pharmaceuticals (being exported now to nearly 100 countries) and agriculture based products. This is indeed good news and should help us to reach our export target for the current year -- $37bn.
We have to take note here that relying only on RMG for moving forward still has some residual challenges. It is not just finding new markets or resolving the problem of duty-free quota free entry into Britain after Brexit or finding the way out after we lose our duty-free and quota-free access into the EU under EBA (once we reach middle-income status) as an LDC. We have to also assure the international community that workers associated with the RMG industry are fully protected under Bangladeshi law and have the right to organise collectively.
The evolving circumstances will also require improved infrastructural support in terms of road communication and energy supply. Fortunately, these factors are being addressed with great seriousness. There has been improvement in road communications and inter-connectivity between Dhaka and other sub-regions. That should get better after completion of the Padma Bridge, dredging of inland waterways, and creation of better handling facilities for cargo at the different sea ports.
Similarly, we have definitely gone ahead in terms of energy production and hope to reach the power output target of 15,000MW soon. This figure might rise to 24,000MW by 2021. It will need substantial investment but that should not be a problem given the growth in our reputation as a country suitable for foreign investment. Such investment can also assist our efforts towards improved power transmission and distribution.
One can only hope that by 2021 Bangladesh will not only savour its status as a middle-income country but also as the largest contributor in the maintenance of international peace and security under the UN flag. We have a difficult road ahead but we can succeed if we have faith in ourselves.
Muhammad Zamir, a former Ambassador and Chief Information Commissioner of the Information Commission, is an analyst specialised in foreign affairs, right to information, and good governance.
