At the time of Independence on 16th December, Bangladesh had a GDP of only US$ 6.3 billion in 1971. It increased to US$ 100 billion in 2009. The GDP of Bangladesh has quadrupled since then to US$ 460.2 billion in FY2021 -22. The country which was born merely half a century ago from a bloody nine-month war of independence against the tyranny of Wet Pakistani forces and their auxiliary local collaborators of East Pakistan (Al Razakars, Al Badar, and Al Shams, amongst others).
The West Pakistani army and its ancillary spared nobody – women, children or be it Muslims, Hindus, Christians, everybody alike. It is estimated nearly ten million refugees poured into neighbouring India for safety and refuge. The West Pakistani army and collaborators carried out an inhuman campaign of rape probably one of the worst atrocities in the subcontinent. Post independence Bangladesh was bankrupt and was heavily dependent on international aid for staying afloat. The US Under Secretary of State for Ural Alexis Johnson dismissed Bangladesh as an international basket case and Mr Kissinger agreed but replied “but not necessarily our basket case”.
Bangladesh’s economy stands testimony to a remarkable and impressive growth rate, a credit due for the government under the stewardship of Prime Minister Sheikh Hasina. In the four-year period preceding the pandemic (FY2015-16 to FY 2018-19), the country exhibited a consistently high GDP growth rate, averaging 7.4% per annum, reaching further to a record a high of 8.2% in FY 2018-19. The Father of the Nation, Bangabandhu Sheikh Mujibur Rahman, dreamt of a golden Bengal, an ambitious vision indeed.
The Covid-19 challenge
With the onset of the Covid-19 pandemic, growth plummeted to 3.4% in FY 2019-20, the lowest since 1991, which was in alignment with the rest of the globe, especially its neighbourhood in southeast Asia. It rebounded to 6.9% in FY 2020-21, supported by the government’s fiscal and monetary stimulus to tackle the impact of the pandemic. Post the recovery, it grew further to 7.25% in FY2021-22, supported by a buoyant economic stimulus, predominately in the industry and service sectors. The strong domestic demand is also reflected by sharp import growth and supported by a continued external demand indicated by remarkable export growth. Moreover, with the help of the government ‘s growth-supportive monetary policy, an uninterrupted inflow of credit to both the private and public sectors played a crucial role in output growth.
A surge in the social sector
Bangladesh is a nation of approximately 170 million people, and reaping the Democracy Dividend has indeed played a critical role in the country’s journey to be nicknamed the Asian Tiger. The transformation of the government ‘s policies to a stable, prosperous, progressive, and inclusive nation has won immense praise and accreditation not only regionally but globally. The multi-ethnic democratic fabric of the country is the fundamental asset that needs to be preserved and can only be achieved through a peaceful and thriving democracy with rock-solid mechanisms that are independent in place.
Active engagement in various multilateral and multinational forums, including the United Nations, the Commonwealth, and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) initiative, is another notable seal of approval to this process. Bangladesh has taken a pivotal position and leadership in addressing global challenges ranging from climate change to terrorism from migration to humanitarian crises, for example, in the immediate neighbourhood of Myanmar. Thus the Democracy Dividend has not only proven to act as a catalyst for the economic transformation, but it will further complement the propulsion of the economy to global standards, acting in synergy.
A Neighbourhood First policy for Bangladesh
Implementation of several mega-projects is currently underway in the country that are strengthening the basis of economic progress. The operations of the Padma Bridge and the Metro Rail have already begun. Completion of several other significant projects, including Payra Seaport, and Matarbari Seaport, is near. The soon-to-be inaugurated Terminal 3 at the Dhaka International Airport will equip the country to handle up to 37 aircrafts and 12m passengers annually. The terminal will also have integrated metro rail connectivity for a seamless transfer to the city. In terms of cargo handling, the terminal will add in multi-fold benefits to exports. Currently, the project is being jointly implemented by Japanese manufacturer Shimiju and Korean company Samsung, with Japan International Cooperation Agency .
Bangladesh has recently inaugurated a fully homemade newly constructed urea fertiliser factory in Narsingdi. Once inaugurated it is expected to become one of his largest kind in the Southeast Asia and will significantly reduce the trade deficit in what is predominantly is an agricultural economy. With the help of Russia, Bangladesh is building its first nuclear power plant in Rooppur, with a projected capacity of 2.4GW. Operations are due to begin next year and aims to contribute 15% to the national grid.
Connectivity and cooperation with neighbouring India is also on an upward trajectory. In November 23 three mega projects were inaugurated: the Akhaura-Agartala cross-border rail link, the Khulna-Mongla port rail line and Unit II of the Maitree super thermal power plant. All will play a critical and crucial connection in amplification of connectivity in trade and development.
It is all not rosy
According to the IMF, in 2022, the per capita GDP was $2,688, compared to $1,470 for Pakistan, $3,474 in Sri Lanka, $2,389 in Nepal, $1,096 in Myanmar and higher than neighbour India, which stood at was $2,389. However, Bangladesh is not immune nor insulated from economic pressures, which are associated with high global commodity prices, high imported inflation, and critical supply chain disruptions. International geopolitical scenarios in Central Asia and the fallout of age-old conflicts in the Middle East are of particular concern. Bangladesh also relies heavily on foreign remittances; hence, a slowdown in any vital labour market could also impact the country’s GDP.
There has been growing unset, violent protests and bloodshed pertaining to the upcoming elections which may derail the internal security and amicable environment inside Bangladesh. The people’s wishes are paramount and only a stable democratically elected government can ensure stability – not only for Bangladesh but for the entire region.
It is beyond doubt that, a basket case economy has now transformed into a nest of plentiful prospects, surpassing and, to an extent, surprising some. A Tiger’s triumph.
Header photo by Shafiqul Islam on Unsplash
