The Platform

Garment workers returning home after work in Dhaka, Bangladesh.

Despite leading in a number of indicators, unless Bangladesh roots out corruption, and improves education and infrastructure, it’s going to miss its window of becoming the next South Asian economic superpower.

Bangladesh is seen by many as an economic miracle. Just going by GDP per capita, it has already overtaken Nepal, Pakistan, Cambodia, and Myanmar.

It is noteworthy how a country utilizes its own people and how they become an asset. Regarding the utilization of a capable workforce, economists label this a “demographic dividend.”

As defined by the United Nations Population Fund, a demographic dividend is: “Countries with the greatest demographic opportunity for development are those entering a period in which the working-age population has good health, quality education, decent employment and a lower proportion of young dependents. Smaller numbers of children per household generally lead to larger investments per child, more freedom for women to enter the formal workforce and more household savings for old age. When this happens, the national economic payoff can be substantial. This is a ‘demographic dividend.’”

However, a country may only reap the benefits of the demographic dividend if it invests heavily in human capital, education, a skilled workforce, and responsible resource management. When a nation achieves dominance in these areas, it can fully realize the benefits of the demographic dividend.

Furthermore, the population dividend applies to the working population aged 15 to 64. A country is said to be in the demographic dividend period if it has more than 50% of its population working. Bangladesh is now in this stage.

To measure Bangladesh’s performance, first, we have to mention some factors such as the age dependency ratio, population growth, and the age structure of Bangladesh.

Trading Economics predicts Bangladesh’s age dependency ratio will be 46.29% in 2021, up from 68.4% in 2011. That means that 46 individuals depend on 100 active workers, compared to 68 people in 2011. It implies that the reliance ratio has decreased in a decade, which is extraordinary for Bangladesh.

Population growth has plummeted from 1.37 in 2011 to 1.22 in 2021. Also, Bangladesh has an incredible result in the index of age ratio. In 2021, 68.4% of the total population was aged 15 to 64, up from 63.7% in 2011. It demonstrates that Bangladesh’s working population has increased over the past decade.

However, there are concerns about how long Bangladesh will benefit from the demographic dividend and whether it will persist. Typically, the demographic dividend only lasts for a while. Because age is not fixed, every human will become old and unable to work. Consequently, a country must capitalize on the demographic dividend before its working population retires.

Japan could be an example of this. Japan has the world’s largest population of senior adults with 126 million. Even before Japan’s demographic dividend ended in 2004, it had fulfilled all of the conditions for the dividend. It capitalized land and technology appropriately, mobilized a workforce, financed human capital, and diversified its economy. Japan’s agricultural sectors were automated in parallel with its industrialization.

Moreover, the Japanese government emphasized focusing on productive education, providing healthcare, subsidizing research in science and technology, and upgrading transportation. Significantly, Japan has been upholding government openness, proclaiming zero-tolerance for corruption, and protecting law and order. This is how Japan utilized the demographic dividend.

However, the situation in Bangladesh is quite different. Although Bangladesh is reaping extraordinary benefits from demographic dividends, this won’t last forever. Many Bangladeshi economists predict that Bangladesh’s demographic dividend began in 1978 and will begin to decline in about ten years. The country is expected to be especially impacted by an aging population by 2047.

That means the window for reaping the benefits of the demographic dividend is narrowing. The country must configure land, capital, technology, and human resources within the next decade. This could pose a serious challenge to the government.

First and foremost, Bangladesh has a large population of educated but unemployed people. Almost half of all job searchers with a higher degree who enter the labor market each year are either unemployed or unable to find work. Furthermore, newly graduating students need more skills.

The country is still reliant on cheap labor. They need more technological knowledge. As a result, Bangladeshi migrant workers lag behind Indians and Filipinos. These two countries are exporting qualified people abroad to work in Silicon Valley. In Bangladesh, technical schools are viewed as factories that produce laborers.

Meanwhile, Bangladesh is still striving to build a business-friendly environment and attract foreign direct investment. Bangladesh ranks last in terms of business convenience. Also, gaps in wealth, disregard for rural development, corruption, and a lack of good governance and transparency are impediments to utilizing demographic benefits.

If the situation continues this way, the country’s population will be a burden rather than an asset because the young labor force will reach middle age, and those who are middle-aged now will become elderly citizens by 2040.

Bangladesh must leverage land, capital, technology, and investment to take advantage of the demographic dividend. Vocational training and job-oriented education should be prioritized. Importantly, promoting good governance and transparency is necessary. The government needs to root out corruption.

Bangladesh should take advantage of the demographic dividend before time runs out. If not, its dream of becoming the “next Asian miracle” will end.

Ashiq Iqbal Jishad is pursuing a Bachelor's degree in Education from the University of Dhaka. His research interests include defense, immigration, Transatlantic relations, Eurasia, the European Union, and NATO.