Bangladesh Economy Outperforming India AND FAR Of Asia
Image: Bizbangladesh.net
As U.S. President Donald Trump prepares for his historic visit to India next week, he could not know that neighboring Bangladesh - once derided as a “basket case” by Henry Kissinger - is enjoying an financial boom and outperforming its giant neighbor.
Bangladesh Prime Minister Sheikh Hasina even compared her long-suffering nation to the economic powerhouse of Singapore.
“The political and monetary conditions have managed to get easier for them [Singapore government] to accomplish development,” she said, noting that Bangladesh has to cope with chronic political violence and overpopulation.
Nonetheless, she noted, Bangladesh has somehow improved the lives of tens of millions of folks and is currently on the same footing with a lot of its Asian neighbors.
“We are prior to the countries not only in South Asia, but also those in Southeast Asia. You want to build a Singapore out of Bangladesh, but actually we are economically much more robust than Singapore. It is the least I can claim,” she said.
Bangladesh has not only delivered high monetary growth, but in addition has witnessed a large increase in remittance payments from its millions of immigrants in the centre East, Southeast Asia, Britain and North America, helping it to keep up a minimal current account deficit.
In January 2020, expatriate Bangladeshis sent $1.63 billion home. If the rate continues, remittance will reach $20 billion by the end of the fiscal year.
Since 2009, Bangladesh’s economy has expanded by 188%. Over that time, 15.8 million people escaped poverty, the entire poverty rate plunged from 31.5% to 21.8% and per capita income almost tripled.
HSBC Bank has forecast that Bangladesh will become the world’s 26th largest economy by 2030 (up from 42nd place lately 2018).
“The starting place for a country is a key part of its potential growth. It is extremely clear a country such as for example Bangladesh has far more potential growth than one like Norway, which is far richer,” HSBC said.
HSBC projected Bangladesh’s real gross domestic product growth will total 7.1% annually through 2030 -- at that time it will boast a $700 billion economy (up from $300 billion now).
International investors have already been watching Bangladesh closely. Since 2018, net foreign direct investment has mushroomed by 42.9%.
Sanjiv Shankaran of the days of India wrote that India could learn something from Bangladesh’s monetary renaissance.
“Bangladesh in the last couple of decades has emerged as an integral hub for apparel exports,” he wrote. “To place this in context, about three decades ago its exports of footwear and apparel accounted for under 1% of the global exports in these products. Now, it’s about 7%, behind only China and Vietnam. These sectors employ about 3.6 million persons [in Bangladesh], of whom over half are women.”
Shankaran also said a “low income” country such as for example Bangladesh offers “relevant lessons“ how to attract more global value chains to India. “In popular imagination, Bangladesh could be a basket case, still sending monetary migrants into India,” he wrote. “This view masks the changes [going on] there.”
In the almost 50 years since its war of liberation in 1971, Bangladesh has accomplished significant progress in economical and social indicators, leaving its former master Pakistan far behind.
“If the economical growth rates of India and Bangladesh diverge for a couple more years, Bangladesh will surpass India in per capita GDP terms,” he added.
Shankaran conceded however that everything isn't rosy in Bangladesh. To begin with, the economy depends an excessive amount of on garment exports and the bank operating system is burdened by bad loans amounting to almost 9% of GDP.
“Yet, Bangladesh’s policies offer some lessons for India and it'll be our loss to ignore them,” he added.
Efosa Ojomo, a senior research fellow at the Christensen Institute, a nonprofit, nonpartisan think tank based in Boston, commented that “a lot of Bangladesh’s growth over the past decade has result from the country transforming itself right into a garment manufacturing hub.”
Bangladesh currently exports about $38 billion worth of textiles and garments yearly -- by next year, the government’s projects that figure could reach $50 billion.
“Bangladesh can continue its economical ascendancy by buying market-creating innovations,” Ojoma wrote. “If the government and entrepreneurs within the united states focus on making product or service more affordable for Bangladesh’s 166 million people, in areas such as healthcare, food production, manufacturing, insurance, and entertainment, these new markets that will bring about more sustainable jobs.”
The Asian Development Bank, or ADB, projected that Bangladesh will deliver 8% GDP growth, the highest in Asia, in today's fiscal year. (India’s projected growth rate is approximately 5%, an 11-year low).
“ADB's outlook indicates that Bangladesh will probably continue as the most effective growing economy in Asia and the Pacific,” said ABD Country Director Manmohan Parkash.
Parkash cited the country’s ongoing growth to “buoyant exports, robust private consumption with higher remittances, accommodative monetary policy, ongoing reform to boost business climate for private investment and public infrastructure investment.”
Prakash added that despite weaker global growth, “favorable trade prospects are expected to keep [in Bangladesh]. Exports and remittances will tend to be further strengthened. Strong public investment because of continued policy environment and expediting implementation of large infrastructure projects are also envisaged.”
Source: https://www.ibtimes.com