Replacement of the 2015-16 baseline price year used for calculating Bangladesh's economic output is overdue because of significant changes in its industrial sector and price weights. Countries the world over do this every five to ten years to include new industries, drop dead sectors, if any, and update outdated price weights. But the country proposes to do more this time. It wants updating the framework of the 2008 System of National Accounts (SNA) it has so far followed to compile GDP (gross domestic product). The Bangladesh Bureau of Statistics (BBS) seeks inputs from academics, economists, think tanks and major data providers for rebasing the GDP. In the past also, the statistical agency sought expert opinions from academics and economists but this time broader and extensive consultations have been planned to recalibrate the proposed framework as accurately as possible to measure the country's output.
The new baseline price year has to focus on modern technology including artificial intelligence (AI), digital services and new industries or manufacturing units that have undergone phenomenal transition by this time. Indeed, outdated SNA either leaves such productive sectors out of calculation or the old price weights of the traditional industries do not reflect the changes that have taken place in the intervening period. The effect of price changes is not reflected in the system. True, GDP was revised and rebased several times since the country's independence, but there was always an element of doubt about the methodology, data coverage and assumptions behind the estimates. There was always some credibility gap. This fresh attempt seeks to put such suspicions at rest. Now that the BBS has decided to approach experts from specialised institutions and academies for their considered opinions on the issue, there are good reasons to be optimistic about real-time data sets so crucial to tracking developments on the economic front. Such authentic data will help policymakers plan for measures aimed at meeting crises and advancing development programmes.
Updating statistical framework in effect means recalibration of data sets that no longer reflects the diversified economic activities with the introduction of advanced technology, machines and equipment. With the change in means of production, a whole new business ecosystem with development of backward linkage industries or sub-sectors appears on the scene. Calculation of GDP has to take into account the economic snowball effects. The backward linkage industries of the garment industry present a clear picture of such a development.
Bangladesh's economy may be overly reliant on readymade garments but digital services and products ranging from cell phone to semiconductor, e-commerce, logistics and modern agriculture etc., have added new dimensions to it. The government move to promote Bangla QR code among small retailers can be cited as an example of digital transactions demanding accommodation in the financial system. The records of transactions can effectively be a substitute for collateral for small enterprises to qualify for bank loans. Tracking their potential economic expansion is necessary to understand the growth of economy at the grassroots level. Integration of these small and marginal retailers into the mainstream economic channel can have a proper reflection in the GDP calculation. Inclusion of such areas of economy so far excluded from calculation will project a real picture of the GDP. The BBS must take such informal areas of economy into account while calculating the GDP.
