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Bangladesh scripts growth story with focus beyond exports

Bangladesh PM Sheikh Hasina steers the country into growth path despite challenges

Bangladesh’s success story in the exports sector is a lesson for India, according to the Economic Survey released by the finance ministry on Friday. It points out that Dhaka has focused on exports of commodities in which it has a competitive advantage to drive growth.

According to the survey, “Bangladesh seems poised to emerge as a dominant exporter as its outbound shipments posted an impressive compounded annual growth rate (CAGR) of 8.6 per cent during 2011-2019, compared to 0.9 per cent for India and 0.4 per cent for the world.”

The survey authored by KV Subramanian, chief economic adviser in the finance ministry, pointed out that the top five commodities — mainly pertaining to textiles, apparels and footwear — exported by Dhaka, account for more than 90 per cent of Bangladesh’s total exports since 2015. These sectors are “highly labour-intensive and employ unskilled and semi-skilled labour.”

“In case of India, on the other hand, export performance is more broad based as the top five export commodities jointly contribute around 40 per cent of total exports,” the survey said, adding that these comprise capital and technology-intensive goods.

Back on growth path despite Covid

As the Covid 19 pandemic broke out across the world spelling unprecedented uncertainty. Over 60 per cent of Bangladesh’s exports are directed to Europe, which is grappling with the second wave of Coronavirus. Importantly, Bangladesh economy bounced back despite weak exports. 

On March 8, 2020, after Bangladesh reported its first coronavirus case, the Sheikh Hasina government imposed a countrywide lockdown to contain the spread of the virus.

While exports hit rock bottom, many lost their jobs and poverty rate started to increase, Prime Minister Hasina reopened the economy in June.

“The reopening of the economy in June was a very bold move and proved to be a judicious one, as the virus did not go out of control,” The Daily Star said in a report. A robust domestic demand aided by healthy food production, remittances and a hefty stimulus package, equivalent to 4.3 per cent of GDP “put the country on the path to recovery,” the newspaper noted.

An increased public investment towards big infrastructure projects and a push towards the manufacturing sector have been beneficial. A significant pick-up in these critical sectors have created lakhs of jobs in the country. Besides, the country’s agriculture sector including fisheries has also shown an impressive growth in the last 10 years.  

"Despite the Covid-19 pandemic, Bangladesh was able to escape a contraction in 2020," UK-based Centre for Economics and Business Research said early this week.

The International Monetary Fund has projected a 4 per cent growth for the south Asian tiger in 2020 when most economies in the world are expected to witness contraction in the GDP.

An analyst said that the worst is behind Bangladesh, as it has also embarked on its Covid 19 vaccination drive after receiving the jabs from India.

A United Nations report, too, said that Bangladesh will return to the high growth trajectory in the next fiscal year “overcoming the scarring impacts of the coronavirus pandemic” the Daily Star said.

Bangladesh was considered a poor cousin of Pakistan

As Bangladesh, born in 1971 after fighting a bitter liberation war with Pakistan, gears up to celebrate its 50 years of independence, it is set to take centre stage in the regional economic dynamics. Hasina has also successfully steered the country away from extremism and radicalism. 

“Bangladesh sees its future in human development and economic growth. Goal posts are set at increasing exports, reducing unemployment, improving health, reducing dependence upon loans and aid, and further extending micro credit,” an article carried by the Pakistan based Dawn said in 2019. “For Pakistan, human development comes a distant second. The bulk of national energies remain focused upon check-mating India. Relations with Afghanistan and Iran are therefore troubled; Pakistan accuses both of being excessively close to India,” the article added.