From being termed as the ‘bottomless basket’ to becoming a ‘developing country,’ Bangladesh is now addressed as the ‘Fifth Asian Tiger’ on the global frontier, upon experiencing a phenomenal GDP shift in recent years.
In its former years as East Pakistan, Bangladesh was drudging through issues like poverty and famine. Prior to the war, the country had experienced a devastating tropical cyclone in 1970, which killed hundreds of thousands in that year.
Subsequently, after gaining independence from Pakistan in 1971, Bangladesh had a dwindling economic growth, given that industries made up 6-7% of its Gross Domestic Product (GDP) with over 20% in Pakistan. Additionally, the war brought forth various other inconveniences such as displacement of locals, damaged roads and railways and also disconnection with business giants in banks and industries.
What’s admirable is that, even with its lingering issues, the country has been going to great lengths to cement the cracks in its foundation. As a result of which, Bangladesh’s economic success shot up, in the mid-2000s, in terms of trade and business.
While many argued that this was just a one-off situation for Bangladesh, time and again, the country has shown resilience and forged ahead regardless of its many setbacks. At the moment, Bangladesh has even crossed Pakistan, in terms of economic success, despite being sidelined and oppressed prior to the divide.
In the decade since 2004, Bangladesh’s GDP growth averaged a 6.5% coming from exports in the domestic agricultural sector, RMG and remittances. Fish and seafood, textiles, jute and leather goods, as well as shipbuilding are among areas of export that the country excels in.
In comparison to the early 2000s, Bangladesh’s annual GDP growth has crossed Pakistan’s by roughly 2.5% points per year. And it seems that this year, our country’s growth rate is most likely to exceed India as well. Moreover, studies are also suggesting that by 2020, Bangladesh may even overtake Pakistan in terms of per capita income.
Nevertheless, the predictions for Bangladesh’s glories don’t end right there; in fact, in early January, World Bank’s flagship report, The Global Economic Prospects, stated that the estimated economic growth for the country over fiscal years 2018-2020 would grow an average of 6.7%. a year, thriving from strong domestic demand and strengthening exports.
The question may lie as to how a country that once fell under the category of ‘underdeveloped’ skyrocketed to the top and is now among the Next Eleven emerging market economies?
First and foremost, the introduction of women empowerment plays a pivotal role in establishing a thriving economy. Women’s involvement in the labour market has shaped various sectors, one of which happens to be Ready Made Garments (RMG).
The main garment firms in Bangladesh are bigger in comparison India, primarily because of the differences in the labor laws of the two countries. India’s 1947 Industrial Disputes Act stresses on heavy restrictions on firms with regards to recruiting workers and expanding their workforce.
The law was to be applied for both India and Pakistan and was also enacted few months before the August 1947 independence of India and Pakistan from British imperial rule. However, it was revoked in 1958; so given that our country was still a part of Pakistan back in those years, they didn’t inherit the laws upon becoming a separate entity. So naturally, the environment for business in Bangladesh was better as it encouraged increasing scope for employment.
A 2017 report from World Economic Forum cites that ‘Bangladesh’s economy has been one of the top performers in Asia over the past decade, average annual growth of more than 6%. Much like Hong Kong, Singapore, South Korea and Taiwan during the industrialization of their economies, most of the growth that Bangladesh has experienced has come from garment exports, which the CIA World Factbook says accounts for more than 80% of its exports.’
Aside from RMG exports, non-government organizations, the likes of BRAC and Grameen Bank are also creating academic opportunities for women, thus making them more capable to become a part of the labour pool. What’s more is that these organizations along with the government are also doing their part in improving children’s health to such an extent that the average life expectancy of Bangladeshis is now 72 years, whereas Indians are at 68 years and Pakistanis are lagging behind at 66 years.
During its transformation period, Bangladesh was able to withstand various threats starting from natural disasters, that resulted in lands submerged in floods, crops ruined and people evicted from their homes. Among man-made issues lie political unrest, corruption and chaos carried out by fundamentalist groups. However, with secularism being the norm for our government, demands made by extremist groups will not be met by the ruling parties as they may stunt economic growth. In fact, history has shown that pressures coming from religious leaders and groups have toppled over neighboring countries like Pakistan as well as India in more ways than one.
Prior to the military rule, Pakistan’s economy was performing well with a per capita income that was above India. But with the introduction of military rule, imposed restrictions on individuals and from there on, Islamic fundamentalists took over. Eventually, by 2005, India surpassed Pakistan in terms of per capita income and has continued to lead till present.
India too was known to be a secular democracy, and the country was growing at an annual rate of 8%. But because of its Hindu fundamentalists, the nation is now facing issues like discrimination against women and minorities which in turn threatens its growth.
Although Bangladesh’s efforts to keep a more than steady success rate is lauded, it does, however, bring to light the areas which are still in dire need of improvement.
A report in World Bank states as the country has the capacity grow further (6.8-7%), it’s essential that Bangladesh doesn’t become complacent as it would rope in domestic and external risks. Furthermore, in order for it to achieve higher than 7% growth, it requires increased productivity growth as well as higher female labour force participation.
Additionally, if Bangladesh strives to promote gender equality in labour markets, reduce the prevalence of early marriage, encourage women to develop careers, improve job orientation of education providers and foster non-discriminatory workplace environments, then the economy would no longer be speculated as one which cannot flourish in the years to come.
Sources: World Bank, Project Syndicate, Dhaka Tribune