Bangladesh @ 50: from a “basket” to a case study, how the country got on the fast track


History has proven that former US Secretary of State Henry Kissinger’s famous description of the fledgling state of Bangladesh in 1972 was wrong. Bangladesh has twice declared independence – once as part of Pakistan in 1947, and again as a present nation in 1971. In both cases, the situation was considerably worse in economic terms. Yet it is to his credit that as it stands – the last 15 odd years being the key – the average income of a Bangladeshi is higher than that of an average Pakistani or even an average Indian. .

This is not to say that Bangladesh’s aggregate gross domestic product (GDP) is greater than that of either of the two “parent” countries; in 2020, it accounted for 83% of Pakistan’s GDP and only 11% of India’s. But faster annual GDP growth rates, a lower overall population and, equally crucially, slower population growth rates – for the past 15 years, its population growth rate has been lower than that of the United States. India (18.7% vs. 21% in India from 2005-20) – have meant that its GDP per capita is now the best among the sub-continental nations.

Beyond these macroeconomic figures, Bangladesh’s economy has excelled significantly. Unlike India, which has shifted from a predominantly agrarian economy to one dominated by the service sector, Bangladesh has successfully developed and maintained a thriving industrial sector. A key element was to pass labor laws that encouraged the creation and operation of large companies. This allowed it to pull millions of farms and provide better paying industrial jobs. In particular, Bangladesh has specialized in clothing manufacturing and has emerged as a key global player in clothing exports, competing with countries like China and Taiwan, while leaving India and Pakistan far behind.

What has made Bangladesh stand out more are improvements in social and human development parameters, such as health, sanitation, financial inclusion, and the political and economic status of women. For example, the Global Gender Gap Report (2021) of the World Economic Forum (WEF) ranks Bangladesh 65th out of 156 countries, up from 91 in 2006. India is 140th, below its 98th place in 2006. Women have played a central role in Bangladesh’s recovery. Women’s labor force participation rate is close to 40 percent – well above that of India (at 22.3 percent).

In the UNDP Human Development Index 2020, Bangladesh is only a few places below India, but it is crucial to note that its trajectory is quite different. As India’s score and ranking stagnate, Bangladesh is improving rapidly. For example, between 2014 and 2019, India’s HDI rank improved by one and Bangladesh’s by eight. While he is marginally
loses to India in terms of educational attainment, it exceeds health and nutrition indicators. Life expectancy at birth is 72.6 years, three years more than in India.

Additionally, it ranks much higher (76) than India (101) and Pakistan (92) on the World Hunger Index. When it comes to the proportion of the population that is undernourished or the prevalence of wasting among children, its scores are half of India’s levels.

It has also made giant strides in financial inclusion. The World Bank’s Global Findex shows that even though the proportion of the population with bank accounts is lower than that of India, the proportion of dormant bank accounts is much lower. Likewise, when it comes to sanitation, while a lower proportion of its population has access to basic sanitation, the death rate attributed to unsafe water and sanitation in Bangladesh is much lower. than in India.

However, enormous economic and social challenges lie ahead. Bangladesh still has high poverty levels – it was over 20% in 2019, according to figures from the Asian Development Bank. It is also plagued by great inequalities. The poorest 50% make up just 17% of national income, while the richest 10% account for 43%, according to the World Inequality Report 2022, released last week. It also scores very poorly on corruption – Transparency International’s Corruption Perceptions Index ranks it 146 out of 180 countries in 2020, much worse than India (86) or Pakistan (124).

In the final analysis, what will determine the continuous improvement of the socio-economic parameters of Bangladesh will be its commitment to deepen democratic principles and to avoid majority and totalitarian tendencies.


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