In 2021, Bangladesh achieved a massive economic breakthrough when its per capita income reached $2,554. The country surpassed the GDP per capita income of both India ($2191). If that was not enough, in 2022 its ’s per capita income further rose to $2,824. The fiscal year 2021-2022 proved to be even better for Bangladesh’s economic prospects when the country’s GDP grew by a staggering 7.25% while the nominal GDP was $465billion. Only nine percent of Bangladesh’s population now lives below the poverty line, a massive alleviation rate from the previous nineteen percent.
Bangladesh went from being one of the poorest and least developed countries in the region to “a model for poverty reduction” in 2020, as declared by the World Bank. Bangladesh’s garment export industry is trailing only behind China’s. Gone are the memories of 1974 when the country suffered from a famine, considered to be one of the worst of the twentieth century. Now Bangladesh has achieved self-sufficiency in food production for its 166million inhabitants. It has achieved self-sufficiency in the pharmaceutical sector as well, with approximately three hundred local companies meeting ninety-seven percent of the domestic requirements along with initiating exports. Previously ranked as a low-income country, Bangladesh is now identified as a lower-a middle-income country.
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Bangladesh on the way to prosperity
Reports suggest that if it continues on the current trajectory, Bangladesh could become the 25th biggest economy by 2035. Bangladesh was once regarded as a “basket case” by Henry Kissinger and is now one of the fastest-growing economies in the world. Formerly known as East Pakistan, Bangladesh was one of the most impoverished and least developed regions of the country. A sense of economic exploitation at the hands of West Pakistani elites became a catalyst of the secession movement and the eventual independence from Pakistan in 1971. Throughout the seventies, Bangladesh suffered from natural disasters as well as political turmoil.
In 1975, a bloody coup by the military saw the country’s founder and his family- with the exception of his two daughters-massacred. One of Mujib-ur-Rehman’s daughters PM Sheikh Haseena is now credited with ushering in the current era of economic prosperity, effective disaster management and women empowerment. In 1982 another Martial Law rocked the country, though tremulous democracy prevailed throughout the nineties only to be constantly offset by the frequent natural disasters and economic foes. Since the nineties, democracy has managed to sustain itself in Bangladesh.
Though the economic conditions only began to improve after 2008 with decisive actions taken by the government as well as the Non-Governmental Organizations (NGOs). The country had become so synonymous with economic turmoil and abject poverty that when Bangladesh’s GDP growth exceeded that of Pakistan’s in 2006, the development was dismissed as being mere luck and a one-time event. The country’s social changes, particularly women’s participation in the labor force, played a major role in transforming the country’s economy. The most decisive part however was played by progressive NGOs. Experts cite the role of NGOs as being central to the country’s economic recovery and alleviation of poverty.
Consecutive governments in Bangladesh allowed NGOs to establish and expand services, which channeled aid into sustainable social enterprises “grounded in local communities”. BRAC- the international development organization and Grameen Bank-a microfinance lender, changed the country’s fortune. BRAC’s services ballooned to the effect that almost every single member of the Bangladeshi population received services from it. Grameen Bank awarded microfinance credits to the senior female member of the household. This decision led to a greater say afforded to women in the household, which in turn resulted in greater spending on child welfare and consequent improvement in human development indicators such as a decrease in malnourishment.
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The country’s vibrant microfinance sector allowed middle and lower-income households to circumvent the debt trap and establish small businesses. Both BRAC’s and Grameen’s microfinance entities provide services to Bangladeshis at one of the lowest interest rates globally. BRAC alone propelled ten million people living below the poverty line towards sustainable employment by providing vocational training. Contributions made by the country’s labor laws are also worth mentioning.
Currently, Bangladesh’s garment sector exports goods worth $ 35 billion
Four million people are employed in the manufacturing industry, a large share being women. Unlike Pakistan and India, labor laws in Bangladesh do not curtail the labor market flexibility and prevent blanket power to corporations hence protecting workers and laborers from exploitation. The labor laws were crucial in Bangladesh becoming a hub for the manufacturing industry. The Sheikh Haseena government worked towards economic inclusion by supporting grass-root initiatives. Bangladesh is on its way to becoming the Asian Tiger.
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Its path was riddled with challenges ranging from political turmoil to natural disasters. However, the biggest advantage for Bangladesh was the lack of external security threats. This allowed both the governmental and non-governmental sectors to prioritize economy and human capital. India borders Bangladesh on three sides; realizing the folly of antagonizing it, Dhaka institutionalized good bilateral relations with New Delhi. This automatically made Bangladesh’s foreign and security policy easier, shifting the primary focus on education, health, job creation and better living conditions.
The writer is a Political Scientist and Assistant Professor at the Department of Political Science in Abdul Wali Khan University Mardan. The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.