South Asian neighbors can gain by following Bangladesh’s economic growth model

According to the Center for Economic and Business Research (CIBR), a British economic research institute, Bangladesh will be the 34th largest economy by 2025, 26th by 2030 and 25th by 2035 if its economy continues to grow and develop like it is now, writes Pathik Hasan for South Asia Monitor

Pathik Hasan Oct 11, 2021
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Bangladesh’s economic growth model

Bangladesh is now one of the world's developing economies. In 2015, Bangladesh graduated from Least Developed Countries (LDC) status and became a low-middle-income country. Many Asian, European and American economists are positive that soon Bangladesh will become one of the middle-income countries in the world. Today, Bangladesh is moving forward at a good pace in various indicators of the economy.

The country, once infamously labeled a “bottomless basket case” in 1972 by then US Secretary of State Henry Kissinger, is rapidly advancing in national growth, per capita national income, export income, foreign exchange reserves, electricity, communication, economic and social infrastructure which are essential for development. India, Pakistan, Sri Lanka, Nepal, Maldives, Bhutan, and even Afghanistan can follow Bangladesh's economic growth model.

Despite the global coronavirus pandemic, the per capita national income of Bangladesh is positive. According to various local and international media outlets, in the fiscal year 2019-2020, the per capita income of Bangladesh was USD 2064. And in the fiscal year 2020-2021, it went up to USD  2228. In the fiscal year 2018-2019, the Gross Domestic Product (GDP) growth of Bangladesh was 8.15 percent. And in the2019-2020 fiscal, this growth has been 5.24 percent. According to an Asian Development Bank (ADB) report, in the 2020-2021 and 2021-22 fiscal year, this growth is expected to be 6.8 percent and 7.2 percent respectively even amidst the Covid-19 pandemic.

Under Prime Minister Sheikh Hasina, Bangladesh is on the highway of development today. Bangladesh has fulfilled the various conditions of the United Nations and is qualified to enter the list of developing nations. According to a 2020 survey, Bangladesh is the 41st largest economy in the world and one of the 11 countries being considered emerging for future development.

According to the Center for Economic and Business Research (CIBR), a British economic research institute, Bangladesh will be the 34th largest economy by 2025, 26th by 2030 and 25th by 2035 if its economy continues to grow and develop like it is now,

Growth of exports, remittances

While the global economy is in the grip of coronavirus and stagnant, Bangladesh's economy is moving forward, albeit at a relatively slow pace. And one of the strong factors behind this move is the growth of Bangladesh’s overall export earnings, the growing inflow of remittances and the positive flow of per capita national income. The other South Asian economies can follow the Bangladesh model of quickly overcoming economic stagflation during the Covid-19 period.

According to a survey by the World Bank's Multi-Donor Trust Fund the Global Knowledge Partnership and Development, Bangladesh ranks 8th among the top ten countries in the world in terms of remittance flows by 2020. At present, Bangladesh's remittance reserves are over USD 45 billion and it ranks 45th in the world in terms of remittances. According to an EPP statistic, in the first ten months of the 2020-2021 fiscal year, Bangladesh's export earnings were USD 32.07 billion, an increase of 8.75 percent over the same period last year.

This rise and progress of Bangladesh's economy is now a surprise to the whole world. People all over the world are now amazed at the progress Bangladesh has achieved.. State thinkers, economists and the mainstream media of various countries are now praising Bangladesh. They are monitoring the country’s economic development strategy. Some countries are also considering whether this development strategy can be followed or implemented in their countries.

 Another US daily, the Wal-Mart Journal, recently wrote that Bangladesh's economy is now the 'fastest horse' in South Asia. Mike Hard, a commentator for the Washington Post, writes that at one time South Korea was cited as an example of development. Now Bangladesh has occupied that slot.

Praise from India

The remarkable economic successes that Bangladesh has achieved are reflected in various reports published by national and international news outlets. Before presenting the 2021-2022 budget, India’s Finance Minister Nirmala Sitharaman said in February that there was a lot to learn from Bangladesh on increasing export earnings in certain sectors.

The Economic Survey presented by her commented, ‘Bangladesh has emerged as an important exporter in the international arena. Between 2011 and 2019, the country's compound annual growth rate was 7.8 percent, 0.9% higher than India and 0.4% higher than the rest of the world.”

India has also been attracted to the growing per capita national income of the people of Bangladesh. By end of 2020, the IMF had forecast that Bangladesh would surpass India in terms of per capita national income. Towards the end of 2020, the IMF predicted that Bangladesh would surpass India in terms of per capita national income. And that has happened. On June 1, Blumberg headlined, "South Asia now needs to look at the region's stars." Needless to say, this star is Bangladesh. '

According to a report in the Indian online journal The Print on May 26, Bangladesh has built up deep ties with its neighbors, from sending India Covid-19 epidemic relief supplies to Sri Lanka's economic crisis through loan assistance.

Moreover, Bangladesh is one of the 40 countries that sent relief twice in the second wave of coronavirus to India. On May 8, Bangladesh sent 10,000 medicines to India. Later on, on May 16, Bangladesh also sent 2,072 boxes of antiviral drugs and Covid protection materials to India.

It may be noted that Bangladesh recently agreed to exchange USD 200 million with Sri Lanka. This money will go a long way in strengthening the Sri Lankan economy. The currency exchange process will also help Colombo overcome the huge debt crisis. Through this initiative, it is clear to the outside world that Bangladesh is currently on a strong economic footing.

Praise from Pakistan

The rise and development of Bangladesh's economy have also attracted the attention of Pakistani intellectuals. Abid Hassan, a former adviser to the World Bank's Pakistan program, compared the situation in Pakistan with Bangladesh's economic accomplishments in an article in the leading Pakistani daily The News International. He said even 20 years ago, it was unthinkable that by 2020, Bangladesh's per capita GDP would be higher than Pakistan's. He felt if Pakistan maintains its disappointing performance, it may have to seek aid from Bangladesh by 2030.

If Bangladesh can pay USD 20 million to Sri Lanka, waive the IMF's Bangladeshi share of money from Somalia and Sudan, help Indonesia with Covid-19 medical equipment, shelter a large number of Rohingya refugees from Myanmar, it can also extend financial help to Pakistan. This requires a change in Pakistan's mentality.

The Canada-based think tank International Forum for Rights and Security recently published a report on Bangladesh and Pakistan. It has been shown there that Bangladesh is ahead in all areas of the index.

So, it is expected that if the Bangladesh government can continue to handle the Covid-19 epidemic in the same way as it has done in the past, then in 2035 Bangladesh will be the 25th largest economy in the world and in 2041 emerge as a developed and prosperous country, fulfilling the dream of its founding father Sheikh Mujibur Rahman.

South Asian countries such as India, Pakistan, Sri Lanka, Nepal, Maldives, Bhutan even Afghanistan are very close to Bangladesh geographically. The nature and trends of socio-economic factors in Bangladesh and other South Asian states are almost alike,  although Bangladesh is an overpopulated country. There is also the burden of the Rohingya refugees on Bangladesh. Bangladesh is developing despite having many other problems such as Covid-19, climate change, etc. The other South Asian countries would be the gainer if they follow the Bangladeshi approach and model of economic management and system. 

(The writer is a Dhaka, Bangladesh-based NGO activist and researcher-writer on international relations. The views expressed are personal. He can be contacted at pathikhasan1141@gmail.com)