By Ashis Biswas
Even while struggling economically during the Covid 19 pandemic, Bangladesh has eclipsed India in terms of per capita GDP earnings, achieving a major milestone. Its growth story does not end here: IMF and other agencies estimate that it will stay ahead of India for the next five years or so. The reason: despite a decline, its GDP growth was higher than in other countries in South Asia during the pandemic and the trend would continue in the medium term barring unforeseeable eventualities.
The recent recognition by the UN and concerned agencies in the inclusion of Bangladesh, Nepal and Cambodia among middle income countries comes as further endorsement of the notable economic progress made in recent years by Pakistan’s former, much neglected Eastern province. Expectedly, analysts, especially in Islamabad and Dhaka, have keenly monitored the positive socio-economic changes in recent years in Bangladesh. Self-critical Pakistani observers, good-humouredly appreciating the Bangladesh success story, have even suggested that during the next decade, it may be necessary for Islamabad to seek soft term loans from Dhaka!
To their credit, Dhaka-based policymakers/economists are not crowing about their remarkable performance. A sense of quiet satisfaction, going by the recent trend of articles and analyses in the Dhaka-based Bengali/English mainstream media, is evident, but not much more. There have been a few contemptuous allusions to the arch conservative ex-US Foreign Policy observer Henry Kissinger for his derisive dissing of the ‘bottomless basket‘ called Bangladesh in the early seventies, but that is understandable.
There is a general awareness in Bangladesh that that regardless of the long distance they have travelled in their struggle to overcome grinding levels of mass poverty, very difficult challenges lie ahead. Political leaders, senior administrators and academicians during serious conversations about their country’s future refer to the humongous challenges that confront them. To mention only a few: global warming, the rising of sea levels that could inundate up to 15 per cent of its land space by 2050; further congestion of people on the shrinking landmass with all its attendant issues of social tensions and stress, threatening an equitable sharing of existing resources; loss of tariff concessions etc enjoyed in exports as a low income country, which could impact forex earnings; rising inflation, and a worsening of socio/economic disparities which in turn could contribute to a revival of Islamic extremism, never far below the surface of social consciousness among the people….. By any reckoning these are problems that both in the short and longterm should keep responsible policymakers awake night after night.
However, if all this seems much too depressing, it needs stressing firmly that Bangladeshi leaders and planners are not scared about facing up to future challenges, some of which may be serious on the existential level. In sum, that is the essence of the prevailing mood of positivity in Bangladesh. It is the symbol of the new nation’s strength in its 50th year, even as a difficult 2021 rolls to a close. In almost every sector of the economy, there is now a major effort to increase efficiency, driven by a serious research and experiment spirit.
This has led to some major new initiatives both at home and abroad that have strengthened the economy: new strains of rice that survive flood, salinity and water logging have been found, techniques of ‘floating agricultural production ‘of vegetables and crops are being devised. In parts of Africa and the Middle East where Bangladeshis have settled or served as UN appointed peace keeping troops, crops have been grown experimentally in arid land where nothing had been cultivated for centuries, to the pleasure/wonder of locals!
In industries, a base has been created for the manufacture of pharmaceuticals, as a measure to reduce the over-dependence on only garments exports, to boost the GDP. Initial exports of around $135 million have been reported. The shipbuilding (and breaking) industry has been expanded. Small to medium mechanized boats and ships have been exported to neighbouring Asian/ EU countries. The export of fruits like mangoes, jackfruit, and fruit-processed juices and pickles has increased, along with a special drive launched to increase the sale abroad of fish (even scales!), sea food and related items.
All these measures seek to increase the range of Bangladeshi exports, following the example of other advanced Asian countries. The South Korean model is taken as an example. Initially exporting footwear and garments, South Korea morphed into an exporting powerhouse in two decades, as it begin manufacturing high quality industrial items like electronic goods, transport equipment, chemicals, steel products, cars……As for Bangladesh, the export of garments amounts to over 80 per cent of its total earnings! The current share of exports in its GDP is around 14 per cent, a drop from over 18 per cent in 2012.More worryingly, its slippage in terms of international rankings for ease of doing business/having a good business environment also cause concern, never mind the political stability. During the last few decades, the country had made little progress in diversifying its production base, beyond turning out jute, jute products and making garments.
But there are strongly positive elements in the present situation too.
What drives the country forward at present is due among other things to the very high remittance amounts — over $40 billion annually — sent home, thanks to the combined efforts/productivity of over 76,00,000 Bangladeshis settled/working abroad, spread over from South Africa to Norway, Japan to Brazil! Bangladesh also maintains the highest number of peace keeping soldiers posted in various continents by UN authorities to maintain civil order and peace. In Senegal, these troops were received so warmly by the locals in some places that in a few localities, Bengali has been introduced as a communicating language between sections of the populace!
During the past two decades the percentage of Bangladeshi middle class people has risen to 25 per cent in aggregate population of 160 million plus. Anyone earning between Taka 40,000 to Tk 80,000 a month is considered to be in the middle class category. (These days, the Indian rupee and the Bangladeshi taka are almost equivalent in value, and only occasionally the difference of 5/10 paise is reported in informal exchanges at Indo-Bangla borders.)
As for the remarkable reduction in poverty levels in Bangladesh in recent times, an international report in 2019 found that only 6 per cent of the people were earning less than$1.9 daily and could be categorized in the BPL category. In contrast, the percentage of people earning comparatively lower wages and struggling below middle class levels declined from 24 per cent in 2016 to 20 per cent in 2019.
Small wonder that some economists, including Dr Kaushik Basu, feel that less developed countries (LDC) could certainly follow Bangladesh as a model to follow when it comes to ensuring economic growth/development. As it braces up to face fresh challenges as a middle income country, Bangladesh has major reasons for its current optimism. (IPA Service)