Key statistics:
With a population exceeding 168m, Bangladesh is among the most densely populated countries in the world and one of the fastest growing economies in South Asia.
Sharing land borders with India and Myanmar and a coastline along the Bay of Bengal, Bangladesh is a relatively young country having gained independence just over 50 years ago. Despite its relative youth, it achieved the highest cumulative GDP growth globally from 2010 to 2020 and while poverty remains a major issue, the World Bank referred to the country in 2020 as ‘a model for poverty reduction’.
The country reached lower-middle-income status in 2015 and is on track to graduate from the UN’s Least Developed Countries list to become a developing country in 2026. It aspires to become a high-middle-income country in 2031 and a developed country by 2041 but in order to achieve these goals, it will need decisive policy actions to cater for the changing needs of a growing economy, its diverse working population (the majority of whom are informally employed) and the impacts of climate change.
Bangladesh is the eighth most populous country in the world. The median age is 27.6 years and just under two-thirds of the population live in rural areas. Since 2000, Bangladesh has seen more than 25m people lifted out of poverty, but gender inequality continues to be a critical issue.
Addressing socio-economic challenges
The economy of Bangladesh is characterised as a developing market economy and growth has been supported by strong ready-made garment exports, remittance inflows from expatriate labour, and stable macroeconomic conditions. The country has enjoyed consistent annual GDP growth of over 6% since 2005 and growth is expected to remain resilient in the medium-term as pandemic-related economic disruptions ease.
The services sector drives Bangladesh’s economy (52% of the GDP in 2020-2021) followed by the industrial sector (36%) with the manufacturing industry accounting for 23% of GDP. The ready-made garments industry contributes significantly to the economy and represents 84% of the country’s exports and Agriculture (12% of GDP) represents approximately 40% of the employed population.
The social care system in Bangladesh is highly fragmented and in 2015, the government launched an inclusive social protection programme - the National Social Security Strategy – to address the problems of poverty, vulnerability and marginalisation. The strategy focuses on a lifecycle approach covering peoples’ needs over their entire life with the social inclusion of marginalised and vulnerable groups at its core.
Bangladesh is low-lying and extremely vulnerable to the impacts of climate change and extreme weather events such as cyclones, storm surges and flooding. In June 2022, for example, the country witnessed some of the worst flooding in over 100 years in the Sylhet region, hitting at a time when it was still recovering from floods in late May caused by the early arrival of the monsoon season.
It is estimated that by 2050, one in every seven people in Bangladesh will be displaced by climate change. With a projected 50 cm rise in sea levels, Bangladesh may lose approximately 11% of its land by then and up to 18m people may be forced to migrate because of sea-level rise alone.
In order to mitigate the effects of climate change, the country launched the Bangladesh Climate Change Strategy and Action Plan in 2009 and established the Bangladesh Climate Change Trust Fund in 2010 and as the World Bank has observed, continued investment in coastal resilience is critical for sustainable growth in the country.
Closing the people protection gap
Insurance penetration in Bangladesh as GDP percentage declined to 0.4% in 2020 from 0.49% the previous year. This very low insurance coverage means that the vast majority of the country's population remain uninsured – making financial inclusion development an essential priority particularly for women, farmers and informal sector workers who are marginalised.
Bangladesh’s 2021-2026 National Financial Inclusion Strategy has the goal of social cohesion and stability through ensuring the scope of access and usage of quality financial services for all with the core theme "Journey towards Sustainable and Impactful Financial Inclusion through Digitisation and Innovation". Bangladesh is also one of 21 countries selected by the Insurance Development Forum’s Inclusive Insurance Working Group (IIWG) which is coordinated by the Microinsurance Network.
With poor insurance penetration and just under two-thirds of the population categorised as ‘emerging consumers’, it is incumbent on public-private partnerships and development partners to continue working in tandem to drive forward meaningful and sustainable change – including financial education, product diversification and easy-to-access distribution – to close the people protection gap.
Furthermore, given Bangladesh’s position on one of the front lines of climate change impacts, the global re/insurance sector has a responsibility to support risk mitigation, adaptation and sustainable insurance initiatives in this South Asian country.
For further insights on the inclusive insurance landscape in Bangladesh, dig into our latest country briefing note.
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