Good planning requires accurate data
According to government statistics, the population of Bangladesh is now 165 million. The Bangladesh Bureau of Statistics (BBS) just finished its Population and Housing Census Survey 2022 and announced these numbers in Dhaka on July 27. According to the report, the rate of population growth is 1.22 percent, which came down from 1.47 percent in the 2011 census.
As with any major development, there is a good side and a bad side to the latest data released by the government. On the positive side, our rapid population growth, which was a source of some concern in the past, appears to have slowed down over the last decade. This strengthens the government's claim that our per capita GDP has risen to over USD 2,500, as frequently mentioned by our political leaders. On the other hand, the numbers are lower than the ones predicted by the last UN estimate, which had projected a population of 171 million. What is the implication of this underestimation on the budgetary allocations for healthcare, education and social safety net programmes? Will this lead to cutbacks in spending in these sectors?
What this discrepancy between the official figures and the estimates provided by non-governmental sources indicates is a common phenomenon observed in many developing countries – i.e. which numbers are more accurate and reflect the real situation in a country. For example, our GDP growth rate, inflation rate, foreign exchange reserves, national debt, and energy insecurity have come under scrutiny in the last few months, and the government's numbers are being challenged openly.
I can go on and on about the contradictory stories that emerge from the statistics released by the government agencies and the more dire predictions that come out of various watchdogs. The prime minister in a recent speech indicated that Bangladesh was self-sufficient in the energy sector, and meets petrol and octane needs from its own productions. According to a news headline, the prime minister said that the country had much more petrol and octane in reserve than what's required. "It is true that Bangladesh needs to import diesel. But it doesn't import petrol and octane as the country gets these as by-products of gas extraction," she said.
The truth of the matter is that petroleum and octane are not by-products of gas. Octane is refined petroleum, and petroleum is a source of energy independent of gas. Fifty-seven percent of our total energy requirement comes from gas. The country's liquefied petroleum gas (LPG) requirements are largely met by imports.
Similarly, the data on foreign reserves has come under scrutiny in the aftermath of its decision to seek loans from the International Monetary Fund (IMF) last month. Bangladesh became the latest South Asian nation to ask for assistance as costlier oil eats into the region's forex stockpiles. Foreign exchange reserves in Bangladesh slipped to USD 39.79 billion as of July 13, from USD 45.33 billion a year earlier. That's enough to cover roughly four months of imports, slightly higher than the IMF's recommended three-month cover. According to various independent economists, the actual reserves may be USD 7.2 billion less than the official claims due to prior commitments, and this has been pointed out by international financial institutions.
UN Secretary-General Antonio Guterres had in the past emphasised in no uncertain terms the need for reliable data for evidence-based policymaking. He subsequently also highlighted the "challenges faced in the collection, processing, analysis and dissemination of reliable, timely, accessible and sufficiently disaggregated data" and its vital role in sound decision-making.
Unfortunately, often governments don't like it when evidence comes to light showing that official data is inaccurate or totally false. People in power also don't want the public to question the veracity of the "success stories" or news flashes touting "rapid economic growth" achieved under its watch.
As I singled out China in one of my previous commentaries on this matter, I would be remiss if I didn't also mention that the leaders of that country, which now has the world's second largest economy, have not only frowned upon any fact-based reporting on politics, civil society and sensitive historical events in the past, but have also increasingly been striving to keep negative news about the economy under wraps. Even the US government, which prides itself on promoting an open society around the globe, is no exception. Just to give you a sample of the double talk at the highest level of the US government, President Joe Biden earlier this month said that "inflation is unacceptably high, but not as bad as it looks" in the US.
Recently, stories surfaced that China had in the past been cooking data on GDP and investment growth. Its government sent a directive to journalists in China identifying six economic topics that would be "managed" by the government. The list of topics includes: i) Worse-than-expected data that could show the economy is slowing; ii) Local government debt risks; iii) The impact of the trade war with the US; iv) Signs of declining consumer confidence; v) The risks of stagflation or rising prices coupled with slowing economic growth; and vi) "Hot-button issues to show the difficulties of people's lives." I cite this list in detail to alert my perceptive readers that they need to take all public pronouncements with a grain of salt.
I will end this brief note with a quick observation on the importance of the role of independent or "third party" sources of accurate and reliable data on GDP, market conditions in a country, and the economic well-being of the masses. An economy that has no independent source of data can be compared to an aircraft flying without its airspeed sensors. The analogy was drawn by Aidan Eyakuze, the executive director of Twaweza, a not-for-profit research organisation in Tanzania, in a critique of his government's actions a few years ago to silence those who questioned official data "releases." "Without the air speed reading, the computer systems failed and the pilots, flying literally data-blind, were unable to regain control of the aircraft," he wrote, referring to an airliner that crashed. A government that relies exclusively on its own agencies to provide the data and statistics it uses for planning and decision-making purposes is living in a fool's paradise and may drift off course, running into rough waters sooner than others, as the recent experience of Sri Lanka amply illustrates.
Dr Abdullah Shibli is an economist and works for Change Healthcare, Inc., an information technology company. He also serves as senior research fellow at the US-based International Sustainable Development Institute (ISDI).