Worth savoring, not really a fluke

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Bangladesh surpassing India in per capita GDP in 2020 as forecast by the International Monetary Fund is not a fluke and is quite a reflection of the country's steady economical growth and a good foundation, said economists yesterday.

Based on the IMF's latest World Economic Outlook report, Bangladesh's per capita growth of gross domestic product (GDP) would rise to $1,887.97 in dollar conditions and at current prices by the end of the year, while India's per capita GDP would fall to $1,877.

"Apart from technical issues and the projection that Bangladesh will just be a notch richer than India this season, along with five years later, for Bangladesh which started its independent journey 24 years later, that is a distinction worth savoring," said Zahid Hussain, a former lead economist of the World Bank's Dhaka office.

The progress can be an achievement thanks to Bangladesh's steadily growing economy, said Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue.

"Bangladesh's economic foothold isn't a fluke. We also beat India in lots of social sectors an extended ago," said Monzur Hossain, research director of the Bangladesh Institute of Development Studies.


"We are consistently doing better and continue and India isn't doing well. That is clear."

India's GDP per capita growth has been constantly slowing since 2016 and is likely to have slipped below Bangladesh this year because of a 10.3 % contraction in how big is the economy.

Bangladesh has maintained steady growth, as officially reported, and is estimated to get a 3.8 % growth within the last fiscal year, Zahid Hussain said. 

India has taken a more severe hit because of the Covid-19 and can be likely to take longer to recuperate from the pandemic. Both countries are projected to stay remarkably close, however.

India's slower ascent back reflects the continuing spread of the pandemic and overwhelmed healthcare systems, the greater need for severely affected sectors such as for example tourism and the higher reliance on external private finance.

Notwithstanding the Covid-19 hit, Bangladesh's economy was able to fare better since it was in a better state in accordance with India before the hit. Exports and investments, although weak, were better than India and less susceptible to global shocks.

But Bangladesh should not get carried away and become complacent, said Zahid Hussain.

"Economic prosperity in both countries can complement one another and produce synergies if we can cooperate better to expand inter-regional trade, strengthen regional infrastructure connectivity, share water more equitably, build our resilience to climate change and get the Rohingyas back again to their original homes safely."

Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, said despite the growing per capita GDP, Bangladesh continues to be a developing country.

He said Bangladesh's per capita GDP is approximately $1,800 whereas it really is a lot more than $60,000 for America and the united states is shivering due to the pandemic.

"We've our problems and we have to address them. We must bring in reforms. We must grow further."

Bangladesh must boost earnings collection and raise investment to GDP ratio to sustain the growth, said Mansur. Monzur Hossain said Bangladesh's long-term investment in the social sectors such as for example health and education has generated a sound base for monetary growth.  

Going forward, the sectors, including the cottage, micro, small and medium enterprises that have been hard-hit by the pandemic ought to be given stimulus support to ensure that they can reunite on the feet again, he said.

"The federal government should emphasize more on raising investment in the infrastructure sector and other areas to push GDP growth to a fresh high. As well, entitlement support should continue for the indigent and vulnerable."

According to Monzur, implementation of the mega projects must be accelerated. Export sectors need to be made more vibrant and competitive and diversified.

There must be a mapping of the poor regions to provide a leg-up to poverty reduction by the method of expanding the social back-up coverage and creating jobs, the research director said.

CPD's Mustafizur said Bangladesh has to create decent jobs, diversify exports and distribute the fruit of the growth equitably to sustain the growth.

"We've structural challenges. We need to be brought in reforms."

Shekhar Gupta, editor-in-chief and chairman of ThePrint, an Indian news website, said if Bangladesh's per capita income exceeds India's, then your latter could be the fourth-richest country in South Asia after Sri Lanka, the Maldives, and Bangladesh.

"This might be an eye-opener and an extremely rude shock due to the common perception among Indians that Bangladesh is a basket case, especially in today's political atmosphere and in the context of the Citizenship Amendment Act," he said on the media outlet's YouTube channel. 

Furthermore, if Bangladesh keeps growing fast it is because it is an export powerhouse today, something India no more is. Even though Bangladesh's exports have boomed, India's exports have stalled and declined, he said.

"India must acknowledge that Bangladesh is leaving us behind and that it's no fluke."

India's exports declined about 5 percent to $330 billion in the fiscal year that ended on March 31.

For Bangladesh, earnings from merchandise exports in the recent past fiscal year fell 16.93 percent year-on-year to $33.67 billion as a result of the Covid-19, which has damaged production and dampened demand. 
Source: https://www.thedailystar.net

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