Per Capita annual income crosses $1000

Capping its stellar performance in the social sector, Bangladesh has achieved another economic milestone.

Its per capita income has crossed $1,000-mark as the Bangladesh Bureau of Statistics (BBS) started calculating the Gross Domestic Product (GDP) taking 2005-06 as the base year.

With its latest economic feat, Bangladesh now stands fourth in South Asia in terms of per capita income.

On Wednesday, Finance Minister AMA Muhith said instead of 1995-96 that has so far been used as the base year for these calculations, 2005-06 will be used as base year from now on.

The new base year will be used to calculate GDP as has been done to work out the rate of inflation.

“Bangladesh’s annual per capita income has risen to $1,044 in 2012-13 fiscal year from $923 after the base year was altered,” Muhith said.

BBS Joint Director Abul Kalam Azad presented a report on changing the base year.

With 2005-06 as the base year, the 2012-13 fiscal’s GDP growth would stand at 6.18 percent primarily but with the old 1995-96 base year, the growth would be 6.03 percent.

The new base year calculation has increased the GDP size by 13 percent compared to old base year, Azad said.

After independence, GDP estimation started with 1972-73 as the first base year. In 1993, GDP calculation started with 1984-85 as the base. Since 2000, such calculations were done with 1995-96 as base year.

With base year change, information of a total of 124 crops production, including 24 new crops in the agriculture sub-sector, have been included. This will increase the ‘Gross Value Added’ (GVA) by nearly nine percent in the farm sector, according to the report.

GVA in the industries and public service sectors will increase by five percent and 16 percent respectively, it said.

Muhith said: “Our social sector performance is getting better by the day and that is reflecting on the economy. That is why there is a rise in per capita income.”

The ruling Awami League-led government treated statistics as sacrosanct and was trying to keep it ‘above politics’, he contended.

According to him, various new sectors had been added with the change in the base year, which would increase GDP growth to some extent.

The government aims at achieving 7.2 percent GDP growth (calculated on the old base year) in the current fiscal – an ambitious but not unattainable target, he would imagine.

Sri Lanka with an annual per capita income of $2,923 in 2012-13 tops the South Asian countries.

India’s per capita income of $1,527 may be somewhat eroded by the fall in the value of the rupee vis-a-vis the dollar, much the same way as Pakistan’s annual per capita income that now stands at $1,380.

India is the world’s fourth largest economy but ranks 94th in per capita income in the world.

Having a per capita income of at least $1,190 is one of the three conditions to shake off the Least Developed Countries (LDC) tag. Bangladesh will also have to show considerable development in economic stability and human resource index as well.

The Cabinet approved a ‘work plan’ last month to achieve the three goals.

A recent World Bank report shows Bangladesh’s successes in social security and poverty alleviation over the past several years.

“Bangladesh Poverty Assessment” published in June said Bangladesh would attain the United Nations’ Millennium Development Goal (MDG) in poverty alleviation within 2013.

In 1990, around 57 percent Bangladeshis lived below the poverty line. The MDG aims at reducing the rate to 28.5 percent by 2015.

Analysing information of the past decade, the World Bank believes Bangladesh would be able to reach the goal two years before the deadline.

The report said the country’s poverty rate came down successively based on its purchase ability.

In 2000, there were 63 million poor people in Bangladesh. The number came down to 55 million five years later and stood at 47 million in 2010.

According to the World Bank, the number of poor would go down two percent by 2015 to around 26 percent. The poverty rate is below 27 percent at present in Bangladesh.

Bangladesh achieved this success due to two reasons, the Washington-based global lender believes. They are a hike in wage in both public and private sectors in the past decade. The other is the decline of people ‘dependent on others’ due to a slow population growth.

The per capita income has increased by $414 from $630 in 2008.