Among South Asian economies, Bangladesh is considered as astonishing. In 2019, its per capita income was $1,856. It phenomenally higher than Pakistan’s $1,285 and only $250 less than that of India. In 2020, Bangladesh might have gone ahead of India as it registered a growth rate of 2.4 percent whereas India’s GDP compressed by 7.3 percent. These numbers especially the satisfactory rate of growth during the pandemic year are really surprising part of an impressive growth performance that has averaged close to 6 percent per annum since the turn of the century.
Recently Bloomberg’s COVID-19 Bangladesh was ranked 24th out of 53 economies in the world. Moving Forward: Connectivity and Logistics to strengthen Competitiveness’ released in April 2021, says the uncertainty created by COVID-19, the outlook for Bangladesh’s economy is positive. It judged that Bangladesh did extremely well when the pandemic hit and it had also launched a good number of incentive packages to keep people employed in spite of the shocks. It was once an embodiment of poverty and hunger and now it has solid success of gross domestic product a figure of diligent enterprise. It is cheering to see a South Asian nation once designated ‘basket case’ by Henry Kissinger being projected as a future ‘Asian tiger’. This should not have come as a surprise at all. In 2019, Bangladesh’s was the world’s seventh fastest growing economy, with a GDP growth that was rising steadily surpassing an 8 percent mark. Even in fiscal year 20, when economies around the world declined as a result of pandemic lockdowns, Bangladesh managed a 5.24 percent growth. In fiscal year 2021, its average per capita income stood at $2,227, higher than India’s $1,947.Focusing on its traditional labor-intensive light manufacturing industry, Bangladesh is currently the world’s second-largest clothing exporter behind China. It powered ahead with a traditional development planning of simple export-oriented industrialization the economic policy that was applied with high success by the Asian Tigers. The large Bangladesh’s exports relates to the textiles, apparel and footwear industry which are excessively labor-intensive and employ unskilled and semi-skilled labor. Bangladesh’s vast successful economic performance is also a picture of its careful fiscal management. The budget deficit has been restricted to 5.0 percent of GDP or less. Restricting public spending left space for the private sector to borrow from the financial system and invest. Fiscal alertness and export performance have been essential to reducing poverty in Bangladesh. Cottage industry whether small and medium sized enterprises create about 7.8 million direct employments and contribute about 25 percent to Bangladesh’s GDP. Each category is treated differently since they each have classics characteristics.
Bangladesh’s annual GDP growth has exceeded Pakistan’s by approximately 2.5 percentage points per year. This year, its growth rate is likely to exceed India’s. Further, at 1.1 percent per year, Bangladesh’s population growth is well below Pakistan’s 2 percent rate, which means that its per capita income is growing faster than Pakistan’s by about 3.3 percentage points per year. Bangladesh’s economic transformation was driven in large segment by social changes, starting with the empowerment of women. The efforts by the nongovernmental organizations Grameen Bank and BRAC, along with more recent work by the government, Bangladesh has made substantial efforts toward educating girls and giving women a greater voice, both in the household and the public life. These efforts have gone into improvements in children’s health and education, such that Bangladeshis’ average life expectancy is now 72 years, compared to 68 years for Indians and 66 years for Pakistanis. The Bangladesh government also is praised for supporting modest initiatives in economic inclusion, the good effects of which are seen in recently released data from the World Bank. Among Bangladeshi adults with bank accounts, 34.1 percent made digital transactions in 2017, compared to an average rate of 27.8 percent for South Asia. Moreover, only 10.4 percent of Bangladeshi bank accounts are “dormant. Bangladesh’s progress is the success of its garment manufacturing industry. That success is itself encouraged by a number of reasons. One point is that the large garment firms in Bangladesh are large particularly compared to those in India, owing largely to different labor laws. All labor markets need regulation. But, in India, the 1947 Industrial Disputes Act imposes heavy limitation on firms’ ability to contract workers and expand their labor force, finally doing more harm than good. The law was enacted a few months before the August 1947 independence of India and Pakistan from British rule. Thus, without the law, Bangladesh offered a beneficial environment for manufacturing firms to generate a large number of jobs. Bangladesh still needs much stronger regulation to protect workers from occupational risks.
The coronavirus pandemic impacted all national economies and saw per capita incomes slip, but Bangladesh’s deserves lies in applying its disaster experience of floods, cyclones etc, to handle the COVID-19 crisis. India’s neighbor, a country of 168 million people, was able to do better because of timely economic motivation packages, judicious cash incentives, improvement in exports and huge remittance inflows. Despite its huge population, the Bangladesh model is a good example that has helped it in becoming a better in the Asian region. A number of experts have tried to explain its remarkable transformation from a country known for famines and natural disasters to one of the fastest-growing economies in the world. Bangladesh’s dynamic performance on several social indicators, the success of its garment exports, remittances by migrant workers, the spread of microfinance, and the remarkable role of NGOs need to be mentioned in this regard.