Bangladesh has achieved remarkable economic progress in recent years. It maintained a steady growth rate of 6% and above for the last decade. Bangladesh’s efforts to accomplish the SDGs and Agenda 2030 have been made in the context of the country’s constantly changing development conditions. The pandemic’s effects have resulted in a multifaceted crisis. Maintaining the current rate of advancement will become increasingly difficult as government policies face persistent and complicated issues that affect these policy initiatives and quality of life of its people.
In March 2018, Bangladesh offered plans to move from a Least Developed Country (LDC) to a developing country by 2024 (UNCTAD, 2017). It is doing this by fulfilling all three criteria – per capita income, human assets, and economic vulnerability. This is truly a remarkable achievement for a country that not too long ago was referred to as a ‘basket case’ by Henry Kissinger.
Dependence on aid has reduced over time, as demonstrated by the fact that government spending has increased at a far higher pace than aid. Bangladesh’s economy is not overly reliant on help, with aid accounting for only approximately 2% of the country’s GDP. Furthermore, since FY2008-09, loans have outweighed grants. The Loan-to-grant ratio increased from 1.8 in FY2009 to 15.5 in FY2018. Statistics show that the contribution of domestic resources to ADP funding was 43.03% in FY1994–95, while in FY2017–18 it has risen to 64.92%. Therefore, it can be assumed that the economic dependence on foreign assistance is continually decreasing.
The country is also witnessing a higher receipt from exports and remittances since the 1980s which positively contributed to the foreign exchange reserve. The Government has recently agreed to use a portion of the country’s FOREX Reserve which currently stands at 44 USD billion to finance development projects.
The country’s biggest infrastructure projects – Padma Multipurpose Bridge, Dhaka Metro Rail Project, Rooppur Nuclear Power Plant – almost nearing its completion, are all of particular interest.
The most expensive development project, Padma Bridge Project, is worth an estimated $3.6 billion, and has experienced several obstacles – the biggest one was the cost which did not stop its development and is financed without dependence on any aid.
It is an indication that the government is using financing from Bangladesh. At present, the strategies are helping to become self-reliant. In other words, the country is gradually establishing the necessary funds for its own development. The reduction in the proportion of overseas assistance to GDP, and simultaneously the achievement of economic growth of the country, provides a new approach in the relationship of foreign aid with economic progress. The impact of ODA on its growth is minimal because Bangladesh’s dependency on ODA has declined.
Bangladesh is a country that still needs assistance in some areas, but it is also a country that has established some core goals and done well to achieve them. Bangladesh has grown into a ‘rising tiger’ among the Asian nations as no other country in the continent has grown as much and achieved such strong examples of development.
The New International Development Conference and Trade show, launching in Brussels on the 17th and 18th November alongside the established event AidEx, will showcase Bangladesh’s development success story with the international development community and share best practices and innovative ideas to inspire other LDCs wishing to move in the same direction. This timely new event is called ‘Development2030’ and is an event for professionals in the evolving international development space. It focuses on international relations, stability and economic development. With the sector evolving in unprecedented ways and less than ten years to achieve the 2030 Sustainable Development Goals, the international community requires substantial means to reach our ambitions within this timeframe.
Only by working closely together through the sharing of ideas, forming partnerships, and collaborating effectively can we achieve this. Development2030 – Beyond Aid will offer a unique platform specifically for overseas development actors. Development2030 will explore the world beyond aid.
Mehrin Karim is working as a Research Officer in UNDP Bangladesh and can be reached at email@example.com.