Bangladesh: A success story in itself

Bangladesh is one of the most promising economies in the region. Though rated as a lower middle-income nation by international lenders, it has all the potential to make it big. With a booming population of more than 160 million, it offers a great market to the region and beyond in terms of investment, productivity and consumption. Today, the size of its economy is to the tune of $180 billion, with a per capita income of $1,286 as of the year 2016 estimates. Moreover, its competitive index ranks the South Asian country at 107 among the comity of nations.
Bangladesh is second to none in entrepreneurship, and coupled with the reforms that the government has introduced to galvanise the economy, it has worked wonders. Some of the major potentials of macro-economy are inexpensive labour, skilled workforce and an expanding consumer market. This is more than enough to attract foreign direct investment, and Bangladesh in the last two decades has been at the centre point of big-ticket projects from developed countries.
Russia, China, Japan and the European Union pumped in billions of dollars, and have projects on ground on a turnkey basis in the fields of oil and gas, power generation and communications. Nonetheless, during the last 10 years multilateral institutions such as the Asian Development Bank, the World Bank and the International Monetary Fund have upped their aid, which indicates their confidence in the economy.
With a growth rate of around 6.5 per cent, Bangladesh is the 44th largest economy and 32nd in terms of purchasing power parity. As far as SAARC is concerned, it is the second largest economy after India. The country's economic progress is laudable despite difficult socio-political circumstances. Years of political instability and turmoil had pushed it on the edge. But the good point is that soaring exports and sustained consumption patterns kept the wheel of the economy moving. This is why investors are smart in reposing their faith in economy and foresee ensured returns.
The challenges that the country faces today are in the form of decline in agricultural growth and power shortage. Bangladesh is primarily an agrarian economy, which has helped it overcome poverty to a great extent. More than 70 per cent of people directly or indirectly are related to farms, and while Bangladesh had put an end to landlordism, it had helped alleviate most downtrodden classes. Estimates say that around 85 per cent of rural households rely on agriculture as their prime source of income, with the upcoming industrial base contributing less than 10 per cent of employment.
The government's interest in human development has picked up in the last three decades, and budget allocations for health, education and infrastructure development are sizeable. Bank and services sector have a greater scope in economy, especially with the rise of the middle class. Bangladesh youth are known for their entrepreneur and scholarly skills, and open-heartedly welcome dissent. This has been one of the major factors for the opening up of economy to the outside world. However, progress on export development and market diversification remains slow.
Last but not least, ready-made garments are the pride of the country accounting for a staggering business of around $27 billion. Bangladesh has a liberal investment policy that allows 100 per cent foreign direct investment (FDI), which is unique at a time when economies are reverting back to protectionism.
The backbone of the economy, nonetheless, is expatriates' money. Bangladeshis are gainfully employed in many of the modern economies, including the US, Canada, European Union and the Middle East. The expatriates have made a mark for themselves by their zealous hard work and commitment in many trades, especially the hospitality industry and domestic services. Remittances to the tune of $15 billion are an inevitable source of strength that cushions trade deficits to a great extent.
All that the country needs is an inclusive growth strategy, and a regulated regime with stringent approach towards reforms. Bangladesh is rightly termed as the next tiger of Southeast Asia. The country needs sustained macro-economic management and political stability to churn out wonders.
-mehkri@khaleejtimes.com