Better days ahead for Bangladeshby Nadim Jahangir
AT THE start of 2012, both the United States and 17 major European counties faced a great deal of economic uncertainly. Unemployment along with patchy economic growth rate prevailed in these economies. Only Asian and large emerging economies (such as Malaysia, South Korea, Thailand) performed credibly, effectively preventing the world from sinking into recession. Towards the latter part of the year, the additional threat of the US ‘fiscal cliff’ — basically a combination of revenue and automatic expenditure cuts — added to the risks. In such a global situation, Bangladesh economy still maintained a steady growth rate of 6-plus per cent last year.
In recent times different studies conducted at home and abroad have made a projection that Bangladesh will reach middle-income country status by 2021 and even earlier, and can become the 30th largest economy in the world by 2030. It is possible for the country to become a powerful economy of $ 1 trillion GDP within this period if all its potentials, as indicated by different international organisations, are utilised effectively.
Bangladesh has all the potential to be a power economy by 2030 and following facts would be key indicators for us to be hopeful. Bangladesh is the 8th largest country in the world as far as population is concerned and, in terms of purchasing power parity in US dollar, it is the 44th largest country in the world. Its international trade accounts for 40 per cent of its national wealth. The secret of Bangladesh’s growth lies in human resources development, employment generation and release of creative energies of the people. More and more people are getting training and moving out to the world job market as trained employees. Increased trained manpower in the world market translates into increase in remittance into the economy.
Every year about two million people are joining the job market but only one million get jobs, including jobs overseas. The remaining one million people are disguisedly employed. If all the resources available can be put together, Bangladesh can grow much faster. The economy and rising wage structure in China has given rise to an opportunity of a lifetime to us to attract investment. Indeed, monthly wages in Bangladesh, albeit on the rise, are much lower compared to, say, Cambodia ($61), China ($150-250), India ($87), Indonesia ($140-155), and Vietnam ($63-90).
Yet, the declining competitiveness of China for labour-intensive manufacturing is opening up a huge market for a country like Bangladesh. As China is moving towards high-tech industry, two million jobs for labour-intensive market would be open for the world market which China used to control. Bangladesh would need to be quick and make all-out efforts to exploit the emerging opportunities.
To attract investment, Bangladesh needs to develop its infrastructure. For that the country needs capital. Currently, the country’s foreign exchange reserve remains at an all-time high of over $12.7 billion (as of December 2012) propelled by unfaltering growth in the inflow of remittances and decrease in import bills. The country can use this money efficiently and effectively to develop the infrastructure to attract foreign investment. Things are going right for Bangladesh now — at least the international scenario is very much in favour of Bangladesh. Coupled with these both the leaders must act sensibly to grab the opportunity that exists for us.
At present, Bangladesh has three economic agendas — to become a middle-income country by 2021, to maintain an 8 per cent GDP growth, and to have a GDP near the European Union and other western countries by 2030. According to the Guardian, an influential British newspaper, Bangladesh can easily become a middle-income country within 2021 and easily join the rank of the European Union and western economy by 2030-2050. Egypt, Indonesia, Iran, South Korea, Mexico, Nigeria, Pakistan, Philippines, Turkey, Vietnam, and Bangladesh would be the upcoming economic giant and these countries are considered as the ‘Next Eleven’. According to the Boston School of Business, within 2030, all the countries of the ‘Next Eleven’ would have a GDP close to 27 countries of the European Union.
Economic progress of Bangladesh is nothing but a wonder to economic analysts. Per capita income in Bangladesh tripled after the war of independence in 1971; average life expectancy increased from 50 to 65 years and the rate of literacy doubled. Meanwhile, population growth has decreased from 3.5 per cent to 1.5 per cent. Annual GDP growth rate was 3.7 per cent in 1990 and is more than 6 per cent now.
There have been remarkable improvements in some social factors. Enrolment of girls in school has gone up while infant mortality rate has come down. According to the Indian Nobel laureate Amartya Sen, the social improvement rate in Bangladesh is much higher than that in India. In the past four decades or so, Bangladesh has shrugged off its ‘bottomless basket’ label and become a role model for many developing countries.
The world economy is not out of the woods yet. A vicious spiral of public debt, unemployment and reduced incomes continue to plague high-income economies. China, which has been the major contributor to the global growth, is performing moderately; China’s growth rate has come down to a single digit and it is anticipated that the low growth rate for China will continue in 2013 as well.
Against the global phenomenon of recession, Bangladesh’s 6.3 per cent growth last year was remarkable and expectation is that the economy will grow by a further 1 per cent. Based on the positive economic forecast, some analysts conclude that Bangladesh would soon become one of the most preferred countries to give birth to a child. The current economic growth promises a job and prosperous life for the child. People still go to developed countries to give birth to their children in the hope of ensuring a prosperous life for them. However, the table seems to be turning.
2030 is far but not too far away. We are looking forward to 2030. Bangladesh seems to be on the right course and may become an economic power in future.
Dr Nadim Jahangir, professor and dean, School of Business, Independent University, Bangladesh.
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