PurposeThis study aims to investigate whether Bangladesh would avoid the middle-income trap (MIT) in its transition to a high-income country (HIC) according to its “Vision 2041”.Design/methodology/approachUsing both actual and forecasted secondary data, three MIT models of different approaches were used to evaluate the government’s vision-based projections. Moreover, crucial indicators of deindustrialization and institutional strength were linked to the investigation of potential transitions.FindingsAccording to the absolute definition and international forecasts, the Bangladesh economy might not fall into an MIT at its lower-middle-income level within the intended period due to being shorter than the defined limit. However, its real GDP per capita relative to the USA would remain far below the defined threshold limit of an upper-middle-income country (UMC) in 2041. Meanwhile, Bangladesh has reached the third of the five gradual phases and is awaiting a new transition in 2029. However, its vision-based plan would face challenges such as skills gaps, institutional reforms and successive global crises.Practical implicationsBangladesh might be trapped in MIT at the UMC level in the 2030s, with no path to renovate after the demographic dividend ends in 2047. In this regard, the government must demonstrate a strong political will to ensure the effectiveness of its policies and the viability of its institutions.Originality/valueThis study not only compared projections to forecasts using different MIT models but also connected transition phases to industrial policies and institutional strengths.
This study evaluated growth experiences and identified policy gaps with Bangladesh compared to a few advanced Asian countries. It used secondary data over 120 years in retrospect along with projection to some extent. Whether would Bangladesh be able to enter into subsequent stages along linear stages growth model was a major research question. Bangladesh entered into the third of five stages in the early 1990s. On the other hand, Malaysia reached at the fourth and South Korea at the fifth stage. Bangladesh was too envisioned to reach at peak within 20 years with creative industries and demographic dividend. Some industrial conglomerates and new industries were expanded here in the 2000s. This economy would soon enter into fourth stage satisfying stage-specific indicators like two other economies. It had some policy gaps identified through comparison of stage-specific policies and strategies with others. However, its government, in the second perspective plan (2021-2041), emphasized on ICT based product-innovation and job creation in industry 4.0. Major challenges to moving forward in here was to reducing gaps between planned and actual development.
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