Bangladesh: A development miracle at 50

The nation has come a long way in its prosperity, owing to the positive policies of the government

Bangladesh is today recommended for a developing country, following the fulfilment of the criteria introduced by the United Nations Committee for Development Policy.

It is one of the most glorious achievements Bangladesh has ever attained since her independence. It is an achievement that other least developed countries may follow to attain this status.

All the three criteria required for qualifying as a developing country have been met simultaneously by Bangladesh,thus stunning the rest of the world. The economic development of Bangladesh has become enviable to many countries in the region and beyond the region, mostly because of the pragmatic policy adopted and pursued by the Government of Bangladesh led by Prime Minister Sheikh Hasina over the last decade.

In terms of economic size and population, Bangladesh is the largest of all the least developed economies (47 economies) in the world. The concept of least developed economy was introduced by the United Nations in 1971 when Bangladesh emerged as a new country on the globe and there were only 25 least developed countries (LDCs) that time.

In 2015, Bangladesh was recognised as one of the lower middle income countries in the world because of the positive economic indicators and overall economic development in all sectors. In 2016, Bangladesh met one of the three criteria, which is Human Asset Index, for the qualification of a developing economy. Finally, only after two years in 2018, the country met its expectation i.e. ultimate target of becoming a developing economy (Vision 2021) fulfilling all the three criteria with comprehensive margin beyond any doubt. With this, Bangladesh would fulfill vision 2021 and it is also hoped that the country would fulfill vision 2041, meaning that it would become a prosperous, high income by the year 2041.

Since its independence, Bangladesh has come a long way in improving its economic conditions. In 1972-73, the country fetched only $348 million as export income from 25 products to 68 destinations. Basically, that time Bangladesh was an agrarian economy having contribution from the agricultural sector to the gross domestic product (GDP)at 78 per cent. Now the contribution of the same sector to the GDP has come down to 14 per cent marking a sign of development. Presently, Bangladesh has the third highest GDPin terms of purchasingpower parity (PPP) in South Asia, after India and Pakistan. The GDP increased tremendously manifold from $5.7 billion in 1972-73 to $330.2 billion in nominal terms in 2019-2020 and $831.588 billion in PPP terms in 2018-2019. As a result, there has been considerable increase in the per capita GDP which is now $2064 from around $70 in 1972-73, whereas the GDP per capita in PPP terms in 2019 was $5,028.

As a result of the enhancement of the per capita GDP, the poverty in general has declined to 20.5 per cent in 2019 from 57 per cent in 1990-1991, although the GINI coefficient is .458 (scale of measuring inequality of income). The sustained economic growth could be attributed to the broad economic sectors consisting of agriculture, industry and services. The contribution of the agricultural sector to the GDP now stands at 14 per cent, while that of the services and the industry sectors increased to 51 per cent and 35 per cent respectively.

The economic growth in Bangladesh has been largely assisted by three major drivers of growth: export income from ready-made garments, remittances sent by expatriate Bangladeshis, and growth in the agricultural sector. Bangladesh boasts of becoming the second largest exporter of ready-made garments (RMG) and apparels in the global market after China,capturing a market share of 6.4 per cent, although it was earlier 6.5 per cent. The Chinese share has been declining over the years which now stand at 31.3 per cent, still retaining the top position as supplier of ready-made garments and apparels. For Bangladesh, the export income from this sector stood at $34.13 billion in 2018-2019 fiscal year contributing 84.19per cent to the total income of the export basket(all products) and 15per cent to the GDP of the country. There are 6,150 garment factories in the country employing around 4.5 million people in the sector of which 80 per cent are women. The garment sector flourished rapidly because of the export quotas and preferential market access in the developed economies especially in the EU and other ten countries of the world.

The growth of the sector has been averaged at 11.66 per cent through to 2018-19 from 1972-73. The export income rose from $6.8 billion in 2005-2006 to $34.13 billion (products only) in 2018-2019.

The impressive growth of the garment sector has brought about structural transformation in the economy of Bangladesh: dependence on export and decline in foreign aid, dependence on manufactured goods rather than on primary goods, providing employment to female workers making them empowered specially among the poor and the uneducated. This sector is a contributor to the eradication of poverty where the extreme poverty is 10.5 per cent. The total number of labourers working abroad was 11.5 million in 2017, which is 4.5 per cent of the total population and 11 per cent of the total labour force, and the remittance figure from the expatriates stood at $18.21 billion registering all-time high in the last fiscal year. As a result, the country's foreign currency reserve was increased, which was $44.03 billion contributing to the economic development and reduction in the in the poverty level. During the first five months of the current fiscal year, remittance inflow has even increased by 22.67 per cent.

The flow of remittances into the country shows upward trend in the current fiscal year as the Government has taken measures, including two per cent cash incentives to streamline the legal channel for encouraging the Non-Resident Bangladeshis to send money to the country. The major factors contributing to higher remittances through the banking channels include depreciation of Taka against the US Dollar, higher rate offered by local banks, and the surveillance of Bangladesh Bank on Hundi.