First we need to stop smuggling phones from outside and then reduce raw material tax to zero...and keep increasing tax on finished goods. Start doing it not only cell phone but all finished goods of electronics. But does bd have enough STEM graduate? I dont think we are even top 30 counties. Our record on filling patents very low as our universities dont spend money on r and d and Bangladesh bank dont allow local companies to invest outside bd in fear of money laundering. But if we allowed that this will help local companies transfer of technology and patents from foreign companies. Something Indian auto manufacturers and many other sectors did successfully.
Bangladesh Economic & Infrastructure Development - Updates & Discussions
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https://thefinancialexpress.com.bd/views/columns/the-gdp-paradox-1558538192
The GDP paradox
Helal Uddin Ahmed | Published: May 22, 2019 21:16:32
Broadly speaking, there are three measures of national income or output in a country. These are: the sum of all incomes, in cash and kind, accruing to factors of production in a given time period; the sum of net outputs produced in various sectors of the economy; and the sum of consumers' expenditure on goods and services, government expenses on goods and services and net expenditure on capital goods. The total of income flows, net outputs and final expenditures will be the same, but the significance of each emanates from the fact that they reflect the total operation of a country's economy at the level of three basic functions - distribution, production and expenditure.
The most comprehensive measure of the total output in an economy is gross national product or GNP. The GNP is the market value of all final goods and services produced by an economy per year. It is simply the sum of personal consumption expenditure (C), government expenditure on goods and services (G), investments (I), and net exports (X-M). Gross Domestic Product or GDP is arrived at by deducting net exports from GNP. The national product equals the domestic product only in case of a completely closed economy, having no economic transactions with the outside world.
Estimation of national income accounts in Bangladesh is one of the core functions of Bangladesh Bureau of Statistics (BBS). Initially, national income accounting was a joint activity of BBS and Planning Commission. Since 1975, BBS has been engaged in calculating national accounts entirely on its own. It started compiling and publishing GDP and other national income accounting aggregates in 1972 by following production and expenditure approaches in line with the concepts and classifications of the 1968 UN System of National Accounts (SNA-1968). The fiscal-year 1972-73 was used as the base year for constant price estimates until 1988-89. The base year was then changed to 1984-85 in 1988-89; 1995-96 in 2000; and lastly 2005-06 in 2013 by adhering to the stipulations of SNA-1993. 2015-16 would be used as the new base-year from July 2020, when the latest system of national accounting (SNA-2008) would be applied. The number of sectors measured would then jump to 21 from the current 15, thereby expanding the scope for GDP.
Estimates of national income by expenditure components are less elaborate. Here, estimates are made for basic aggregates like private and public consumption, gross fixed capital formation by private and public sectors, savings, exports and imports. Provisional GDP estimation by BBS based on production approach are subject to a number of qualifications, often due to non-availability of needed data. On the other hand, expenditure-based GDP estimations are relatively imprecise in nature because of the weaknesses in database used in the calculations. The estimates are also affected by limitations of the methodologies used in estimating components. Uncertainties in the actual expenditure are also likely to affect the volume of public sector investments. The basis for extrapolating private consumption expenditure and investment is quite fragile. Overall, stock changes are not accounted for owing to data limitations.
In the above backdrop, some criticisms have been levied recently by the country's leading think-tanks regarding the system of GDP measurement in Bangladesh and its credibility. During a recent discussion held at Bangladesh Institute of Development Studies (BIDS), questions were raised about the quality of GDP statistics. GDP growth rate can be judged or evaluated from two perspectives. One is income inequality, which is constantly getting worse in Bangladesh as revealed by latest official data. The other is employment, which has not improved despite claims of high growth rate. A similar analysis was made by the South Asian Network on Economic Modelling (SANEM), which claimed there was lack of consistency between remittances and high growth. The high industrial growth as shown by official GDP also does not match the figures for private investments. Besides, the gradual decline in incremental capital output ratio also raises questions, as Bangladesh ranks very poorly in the global cost of doing business chart. Most importantly, whereas the rate of decline in poverty during 2005-10 was 1.7 per cent, it deteriorated to 1.2 per cent during the high growth period of 2010-16.
The analysis by the Centre for Policy Dialogue (CPD) shows that despite claims of high growth rate, commensurate contributions to GDP by relevant sectors are not being observed. As there have not been sufficient investments against high growth, the labour productivity should have risen. But no technological or innovative transformation has taken place in Bangladesh in recent times that could enhance the productivity radically. The workers' income should also have increased in case of productivity improvement. But even official data show the reverse to be true. CPD says the GDP shown by BBS has not been realistic in recent times and has demanded that BBS should explain how GDP was being calculated.
This controversy surrounding GDP in Bangladesh is nothing new. For example, the growth in agriculture sector was negative and the remittances also decreased in 2015-16, but the growth rate was shown to be 7.11 per cent. The growth rate was again shown to be 7.28 per cent in 2016-17, but the remittances had decreased by over 14 per cent and the export growth rate was marginally above 1.0 per cent. The growth rate was shown to be 7.86 per cent in 2017-18 following initial projection of 7.65 per cent, despite negligible increases in productive capacity, investment and employment.
Even a former secretary of the statistics division claimed last year at a citizens' dialogue that she had seen how development statistics were polished or doctored during her tenure in the civil service. It is sad that we have not yet been able to devise a credible statistical system even after 48 years of our independent statehood. This lack of credibility in our statistical system and methods need to be addressed swiftly. There should be a transparent and all-encompassing dialogue on the subject in addition to streamlining the statistical system, as otherwise the real picture of our socio-economic development cannot be gauged properly.
Dr. Helal Uddin Ahmed is a retired Additional Secretary and former Editor of Bangladesh Quarterly. hahmed1960@gmail.com
@Homo Sapiens, @TopCat, @Atlas, @Black_cats, @Nilgiri
The GDP paradox
Helal Uddin Ahmed | Published: May 22, 2019 21:16:32
Broadly speaking, there are three measures of national income or output in a country. These are: the sum of all incomes, in cash and kind, accruing to factors of production in a given time period; the sum of net outputs produced in various sectors of the economy; and the sum of consumers' expenditure on goods and services, government expenses on goods and services and net expenditure on capital goods. The total of income flows, net outputs and final expenditures will be the same, but the significance of each emanates from the fact that they reflect the total operation of a country's economy at the level of three basic functions - distribution, production and expenditure.
The most comprehensive measure of the total output in an economy is gross national product or GNP. The GNP is the market value of all final goods and services produced by an economy per year. It is simply the sum of personal consumption expenditure (C), government expenditure on goods and services (G), investments (I), and net exports (X-M). Gross Domestic Product or GDP is arrived at by deducting net exports from GNP. The national product equals the domestic product only in case of a completely closed economy, having no economic transactions with the outside world.
Estimation of national income accounts in Bangladesh is one of the core functions of Bangladesh Bureau of Statistics (BBS). Initially, national income accounting was a joint activity of BBS and Planning Commission. Since 1975, BBS has been engaged in calculating national accounts entirely on its own. It started compiling and publishing GDP and other national income accounting aggregates in 1972 by following production and expenditure approaches in line with the concepts and classifications of the 1968 UN System of National Accounts (SNA-1968). The fiscal-year 1972-73 was used as the base year for constant price estimates until 1988-89. The base year was then changed to 1984-85 in 1988-89; 1995-96 in 2000; and lastly 2005-06 in 2013 by adhering to the stipulations of SNA-1993. 2015-16 would be used as the new base-year from July 2020, when the latest system of national accounting (SNA-2008) would be applied. The number of sectors measured would then jump to 21 from the current 15, thereby expanding the scope for GDP.
Estimates of national income by expenditure components are less elaborate. Here, estimates are made for basic aggregates like private and public consumption, gross fixed capital formation by private and public sectors, savings, exports and imports. Provisional GDP estimation by BBS based on production approach are subject to a number of qualifications, often due to non-availability of needed data. On the other hand, expenditure-based GDP estimations are relatively imprecise in nature because of the weaknesses in database used in the calculations. The estimates are also affected by limitations of the methodologies used in estimating components. Uncertainties in the actual expenditure are also likely to affect the volume of public sector investments. The basis for extrapolating private consumption expenditure and investment is quite fragile. Overall, stock changes are not accounted for owing to data limitations.
In the above backdrop, some criticisms have been levied recently by the country's leading think-tanks regarding the system of GDP measurement in Bangladesh and its credibility. During a recent discussion held at Bangladesh Institute of Development Studies (BIDS), questions were raised about the quality of GDP statistics. GDP growth rate can be judged or evaluated from two perspectives. One is income inequality, which is constantly getting worse in Bangladesh as revealed by latest official data. The other is employment, which has not improved despite claims of high growth rate. A similar analysis was made by the South Asian Network on Economic Modelling (SANEM), which claimed there was lack of consistency between remittances and high growth. The high industrial growth as shown by official GDP also does not match the figures for private investments. Besides, the gradual decline in incremental capital output ratio also raises questions, as Bangladesh ranks very poorly in the global cost of doing business chart. Most importantly, whereas the rate of decline in poverty during 2005-10 was 1.7 per cent, it deteriorated to 1.2 per cent during the high growth period of 2010-16.
The analysis by the Centre for Policy Dialogue (CPD) shows that despite claims of high growth rate, commensurate contributions to GDP by relevant sectors are not being observed. As there have not been sufficient investments against high growth, the labour productivity should have risen. But no technological or innovative transformation has taken place in Bangladesh in recent times that could enhance the productivity radically. The workers' income should also have increased in case of productivity improvement. But even official data show the reverse to be true. CPD says the GDP shown by BBS has not been realistic in recent times and has demanded that BBS should explain how GDP was being calculated.
This controversy surrounding GDP in Bangladesh is nothing new. For example, the growth in agriculture sector was negative and the remittances also decreased in 2015-16, but the growth rate was shown to be 7.11 per cent. The growth rate was again shown to be 7.28 per cent in 2016-17, but the remittances had decreased by over 14 per cent and the export growth rate was marginally above 1.0 per cent. The growth rate was shown to be 7.86 per cent in 2017-18 following initial projection of 7.65 per cent, despite negligible increases in productive capacity, investment and employment.
Even a former secretary of the statistics division claimed last year at a citizens' dialogue that she had seen how development statistics were polished or doctored during her tenure in the civil service. It is sad that we have not yet been able to devise a credible statistical system even after 48 years of our independent statehood. This lack of credibility in our statistical system and methods need to be addressed swiftly. There should be a transparent and all-encompassing dialogue on the subject in addition to streamlining the statistical system, as otherwise the real picture of our socio-economic development cannot be gauged properly.
Dr. Helal Uddin Ahmed is a retired Additional Secretary and former Editor of Bangladesh Quarterly. hahmed1960@gmail.com
@Homo Sapiens, @TopCat, @Atlas, @Black_cats, @Nilgiri
The above says of the reality of BBS falsification all the time. It is too shameful for any nation for this kind of altercation. I am always personally skeptical about the GDP figure. It is on paper but is not reflected in the people's living standard or the way Dhaka looks with its broken roads and water cloggings although I must attest that some infrastructure development works are going on which is added to the Secondary Sector of GDP.
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What investor confidence? The whole world is investing big time in BD now and
they are not idiots.
Even China was accused of fudging GDP data and look where they are now.
Well I think it's not possible to fudge GDP growth for a long time. If they claim growth is 8% then the growth can be 7% or even 6.5% but it's certainly not 4% or negative like Mr. Idune used to claim. If you look at GDP to tax ratio then you'll see it increasing. Exports are increasing. Forex were increasing couple years back but not now due to high import payments. Also GDP PPP figures are also increasing. Purchasing power is difficult to fudge. It's certain that BD is improving. Whether they are improving as fast as BAL want us to believe is debatable and the answer is perhaps not. But it's certainly not doing worse than before.
Homo Sapiens
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Do you think a country with just 1900 dollar per capita GDP will have a very good living standard ? or there will be no broken road and water clogging?
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I know you guys do not go out to see if people like us drink a 300 a cup tea or not that is why you do not see the reality in the living standard in BD. When the CPD guys are talking about the very low living standard of the normal people not compatible with GDP figure but you are talking about 1990year base rate. Not related.
By the way, did I do the back researches on the falsification of GDP data that are written in the news? It is the most renowned people who did this and is asking the govt on the reliability of data. It is not a matter what a novice like me or you talk. Better send a protest letter to the CPD and other educated people cosigned by that brat @UKBengali and Noakhailla @Bilal9 protesting their negative observation of GDP and call them Sanghi for telling it without fear and backlash.
By the way, when are you going to fix the waterlogging instead of falsifying the GDP data? It is sooo bad that cannot be covered by overstating GDP data. Shame on BCL brats.
@Atlas, @Nilgiri, @Mage
But, the unpatriotic BIDS/CPD guys are telling this $1,900 per capita is false. Send them a protest letter or bully them in the street BCL style short of murdering but, this is not the first time that the economists are doubting your GDP figures. Now I understand why the living standard remains soooo low!!!
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VikingRaider
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Unfortunately hardcore supporters always ignore the another side of the coin. Extreme poverty reduced in Bangladesh that's true ( like reducing beggars etc etc) , but on the other hand poor ( actually lower middle class who can't do odd jobs) people are becoming more poor and rich becoming more rich.
Any development is not going to be very satisfactory unless it's directly making common people beneficial. Govt must create a balance. And also people should keep in mind that some selected developed area doesn't represent the whole Bangladesh.
And govt should seriously focus on many other issues as you mentioned.
Here is another analysis of prothrom alo related GDP growth and reality.
https://www.prothomalo.com/amp/opinion/article/1593975/জিডিপির-হিসাব-কতটা-বিশ্বাসযোগ্য
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What Prothom Alo report says is more applicable to BD when its GDP remains low but its water/river/air pollution went as high as Himalaya. When the govt is busy to build some prestige projects, the traffic lights in Dhaka do not work and people have to bring out Dingi Boats after a half an hour rainfall. All the four rivers surrounding Dhaka are polluted and the fish there have become a source of poison instead of protein.
Govt should change all these and a hundred other things so that people can live a civilized life. But, the govt is focusing on GDP figure, real or falsified. By the way, @Homo Sapiens, have you already sent a few protest letters to those economists?
VikingRaider
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Yes right bro , it's the real pain. But I am wondering how is it possible to solve this issue in Dhaka ? Is there really any way?How water logging problem can be solved, can you please give me some clue?
I will remember your post and will some other day write a more detailed answer on solving the waterlogging issue. For now, please note that,
- Dhaka is surrounded by four rivers. These and waterbodies like Hatir Jheel can be made discharge points. However, the water level in the rivers is almost higher than Dhaka itself. So, at present, these cannot function as discharge points as water will not go down there.
- So, expert Japanese, Korean or European companies should be invited to fix the issue in a comprehensive way. A large-scale survey, stormwater design analysis, the building of drainage channels with pumping stations supported by raised river banks with embankments are needed to discharge the stormwater.
- A hundred other things are needed.
Homo Sapiens
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Why? I am not an obsessive fanatic like you. Perhaps you should do a Kamikaze attack on BBS building to protest their data ''falsification'' ?
There is no 'perfectly balanced' development model in the world. In a high growth capitalistic economy, inequality is bound to increase, at least in early stages. Even in Communist China, there is a huge wealth and developmental gap resulting from rapid growth of Economy. It takes time to trickle down the wealth from top to bottom. Not all people are equally capable to seize the economic opportunity.
Nilgiri
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BD could claim it spends 15 billion or 15 trillion dollars a year on whatever....numbers from BD govt don't matter.
How much 3rd party-vetted hard stuff do you get in return for it?
Not very much:
https://www.scimagojr.com/countryrank.php?category=3106
https://www.scimagojr.com/countryrank.php?category=2104
Gets even worse when you see the actual patents you get granted in the field too.
But, you are obsessed with 2041 status as a developed Golden Bangladesh when the govt is using fake data. Now, so many thinktanks are talking otherwise and busted your dream you must protest it.
A country's economy is a product of all economic activities of its population. A nation works hard to achieve development but BD people are talking development, not really working on it yet projecting this and that. BD has failed in 1IR, 2IR, and 3IR but now its politicians are talking about 4IR as if it is something of a toy you can buy in a shop.
Start from the bottom. I have seen many posts sent by @Bilal9 in the "Bangladesh Economic & Infrastructure Development------". One of the videos says of producing Boilers by many companies. This is what I can call a real achievement. There should be similar activities by the local industries that will cause an upward surge of economic development.
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