The World Economic Forum’s (WEF) Global Risk Report 2024 paints a concerning picture for Bangladesh’s economy, highlighting five key risks that could derail its progress.
1. Fuel Shortage: The current fuel shortage tops the list, with its impact already disrupting production in gas-dependent industries like ceramics, steel, and textiles. Rationing due to gas scarcity further exacerbates the problem, particularly for small and medium enterprises.
2. Rising Inflation: Inflation emerges as the second major threat, directly impacting consumer purchasing power and business investment decisions. The report warns of long-term uncertainty and reduced export competitiveness due to high inflation.
3. Growing Wealth and Income Disparity: This newly identified risk raises concerns about social stability and economic limitations. High income inequality restricts the purchasing power of the majority, hindering market expansion and potentially leading to social unrest.
4. Lagging Sustainable Development Goals (SDGs): The report predicts Bangladesh’s SDG investment falling short of the USD 400 per capita target, reaching only USD 230. This funding gap may impede progress towards crucial goals like poverty reduction and environmental protection.
5. Increasing Government Debt and Unemployment: The WEF warns of rising government debt slowing private sector credit and investment. Additionally, unemployment is a growing concern, with potential instability in the macroeconomy and investor unease.
The Road Ahead:
Addressing these risks requires a multi-pronged approach. Prioritizing fuel supply, tackling inflation through responsible economic policies, promoting income equality, seeking alternative SDG funding sources, and managing government debt are crucial steps. Fostering a business-friendly environment and investing in education and skills development can also contribute to sustainable economic growth and job creation.
Additional Points:
The report identifies both short-term and long-term global risks, with misinformation, extreme weather events, and societal polarization being among the top concerns in the next two years. The WEF report comes on the heels of the World Bank’s prediction of a global economic slowdown in 2024. CPD, a local research organization, partnered with the WEF for the Bangladesh risk assessment.
Bangladesh’s economic future hinges on its ability to proactively address these significant challenges. By implementing comprehensive and effective measures, the country can navigate these turbulent times and emerge on a stronger and more sustainable path.