Sri Lanka and Pakistan must follow ‘Bangladesh Economic Miracle’ model to avert their economic crisis. As Sri Lanka and to some extent, Pakistan is going through an economic recession, their South Asian neighbor ‘Bangladesh’ has confirmed as a South Asian Economic Miracle’.
As Bangladesh marks its 51th independence anniversary this year, its tremendous economic growth has made it an emerging hub for regional connectivity, attracting more trade and investment opportunities.
According to the World Bank, the country has been among the fastest growing economies globally over the past decade, supported by a demographic dividend, strong ready-made garment (RMG) exports and stable macroeconomic conditions.
Bangladesh is also on track to graduate from the UN’s Least Developed Countries (LDC) list in 2026. Poverty fell from 43.5% to 14.3% in two decades, while in the last seven years, the country’s garment industry has increased its annual revenue from $19 billion to $34 billion—a 79% rise, according to the International Finance Corporation (IFC).
The Friedrich Naumann Foundation for Freedom (FNF South Asia), Regional Office in New Delhi, India organized an online discussion titled, “Bangladesh: Henry Kissinger’s basket case is an economic success” on April 7.
According to the discussions, in 2021 Bangladesh celebrated its golden jubilee of independence. Labeled as a “basket case” by Henry Kissinger, the US secretary of state in 1972, this young nation stands today as a template of growth and economic success. Bangladesh started as a country with a low income per capita along with nations as Chad, Rwanda, Burundi, and Nepal. Today, the country has crossed the per capita income threshold of USD 2000, with a GDP of about USD 355 billion, securing itself a position In the top forty economies of the world in terms of GDP. So, our today’s discussions will look back into the story of growth.
Bangladesh has made various progress economically, and business wise, social and health service in good conditions. From being an extremely poor country in the 1970s. Today, Bangladesh is confidently marching towards becoming a middle-income country before the whole decade will be over. It will be graduating from a middle-income country and that is quite a huge accomplishment. While Bangladesh’s journey over the last 50 years is highly admirable. In the coming years and decades, it will have to address challenges to support or even excel compared to its past performance. From my perspective, Bangladesh has become an important partner of Germany. And it is one of my goals as a member of the German parliament to further ease the cooperation and ties between Bangladesh and Germany, as this will be a solution where everyone benefits.
Bangladesh, has fulfilled all the requirements for graduating out of LDC status in 2026. Now, the question is, how did that happen? The fundamental answer is, of course, it is the toils and sweat of workers, of people, workers, farmers, entrepreneurs, investors, policymakers, and NGOs all put together the effort by his diligent people all around. And the net result of mind efforts of all these variety, various groups of popular people in the country did produce the result. If you hear Henry Kissinger’s prediction, one would be extremely disappointed. But here is Bangladesh that surprises people. But it can be said it is not a surprise. It is not a paradox. It is the result of the efforts, hard toil and sweat of Bangladesh, people who are its main resources, we do not need mineral resources, mineral resources can be a curse, but people are not a curse.”
The systemic exploitation of the then East Pakistan, followed by a massive destruction of the economy, infrastructure and livelihoods caused by the Liberation War, posed insurmountable challenge to the government of the day. Millions of people returned home from India in a war-ravaged country and had no food, no shelter, no medical help, and other basic needs. It is at this point that Mr. Henry Kissinger called us a basket case. If he were there today, we are sure everyone would have edited his comments. Now after seeing the progress that we have made over the years in the past 50 years. To be precise. It is in this context is that the first generation of Bangladeshi NGOs appeared, primarily focusing on relief and rehabilitation.
It is well known that since the 1980s, Bangladesh has made astonishing progress in a wide variety of development indicators, such as reducing the prevalence of extreme hunger and poverty, increasing primary education, enrollment rates, and reducing child and maternal mortality, among others. This progress has been mirrored by an impressive record of sustained GDP growth, spending decades, much, if not most, of Bangladesh’s development has happened outside the purview of successive governments. For example, the 2003 four World Bank report showed that 34.1% of the foreign aid costs distributed for the NGO sector. The vibrant community of NGOs and civil society organizations working across the spectrum of development issues have been the principal drivers of progress. Undoubtedly, things like reducing poverty have been an enormous success. So, these are some of the contributions that NGOs have made to the development of Bangladesh and over the past 50 years and taking the country where it is today.
Apart from showcasing markers of economic and societal growth, Bangladesh has also seen a transition toward digitization, which has effectively given rise to a growing pool of entrepreneurs who are positively impacting lives in both urban and rural societies, such as through greater financial inclusion. Bangladesh is now a role model for other developing countries, owing to the participation of many stakeholders in both the public and private sectors. The online seminar referred to this theme of progress through the lenses of a sustainable economy, poverty reduction, and the impact of information technology in development.
Last year, Bangladesh celebrated its golden jubilee of independence after gaining independence from Pakistan in 1971. Over the years, the image and identity of post-independence Bangladesh have changed in the world arena. It has become a donor country from an aid recipient country. A silent revolution has taken place in the country.
The Coronavirus pandemic has devastated the world economies. The economies of all South Asian countries, including Bangladesh, have been negatively affected. However, in the midst of the pandemic, Bangladesh has surpassed the South Asian countries in terms of economic development. This success has been achieved in the 50th year of independence mainly through manufacture and export of ready-made garments and remittances from expatriates.
The World Bank, an international lending agency, has given a positive outlook on the South Asian economy, overcoming the effects of the pandemic. In a report, titled South Asian Economic Bounce Back but Face fragile Recovery, the agency said that the average growth of South Asia’s gross domestic product (GDP) in the fiscal year 2021 could stand at 7.2 percent. After that, in the 2022 fiscal year, the average growth may be less than 4.4 percent.
Bangladesh is ahead of its two neighbours, India and Pakistan, in achieving this growth. The government has set a growth target of 6.1 percent for the current fiscal year and 7.2 percent for the next fiscal year.
Although Bangladesh is ahead in per capita GDP, India is one of the largest economies in the world in terms of size. India’s economy is 10 times bigger than Bangladesh’s. The best way to understand how rich a country’s citizens really are is to determine how much purchasing power they have. That is, with the money he earns, he can buy what he wants. This is why the size of GDP is calculated on the basis of purchasing power parity (PPP) to compare the economies of different countries. According to the IMF, India’s share of the world’s GDP on a PPP basis this year is 7.39 percent, while Bangladesh’s share is only 0.659 percent.
In terms of GDP, Bangladesh surpassed India for two consecutive years, but in some social indicators, Bangladesh surpassed the neighbouring country seven years ago. For example, Bangladeshi girls have a higher education rate and female birth rate than Indian girls. In Bangladesh, infant and under-five mortality rates are lower than in India.
However, in terms of GDP, Bangladesh surpassed India for two consecutive years, but in some social indicators, Bangladesh surpassed the neighbouring country seven years ago. For example, Bangladeshi girls have a higher education rate and female birth rate than Indian girls. In Bangladesh, infant and under-five mortality rates are lower than in India.
India is a very big country. There are states like Bihar and Chhattisgarh, as well as states like Delhi and Punjab. So, on average, the real picture of everyone does not come up. But Bangladesh is undoubtedly doing well. So, with the increase in per capita GDP and income, we have to look at different social indicators.
On the other hands, Bangladesh, which former US National Security Adviser Henry Kissinger acerbically referred to as a “bottomless basket case” in 1972, has in the last 50 years performed better than Pakistan, the nation it separated from, says International Forum for Rights and Security (IFFRAS), an international think tank headquartered in Toronto, Canada. Bangladesh’s progress is not accidental. The economies of Bangladesh, India and Pakistan have grown at a much faster rate since 2004. This progress was maintained till 2016. But the situation started to change in 2017. Bangladesh’s growth rate has risen sharply in the Coronavirus pandemic.
Bangladesh shows the path rests. Sri Lanka can follow this model to avert its economic recession as Bangladesh’s rise is ‘from bottom less basket to economic rise Model’.