In the 21st century, Bangladesh has transformed into a formidable economic force. This metamorphosis is exemplified by its journey from a once aid-dependent nation in the 1970s to a self-sufficient and aspiring economic powerhouse. The key to this remarkable turnaround? Its people, especially the youth, representing a demographic dividend ready to be harnessed, Zaidi Sattar, economist and Chair of the Policy Research Institute of Bangladesh, writes in WhiteBoard, a premier policy magazine.
Half a century ago, Bangladesh grappled with a food deficit and a population considered a burden. Fast forward to today, the nation boasts a food production of 40 million metric tons, showcasing its journey to self-sufficiency. The country’s economic stride is further marked by its graduation from a lower-middle-income country in 2015 to a developing country status set for 2026 by the United Nations.
This economic renaissance hasn’t gone unnoticed. The Wall Street Journal in 2010 wrote “Bangladesh, ‘Basket Case’ No More,” leading global investment firms like Goldman Sachs and JP Morgan to view Bangladesh as a new investment frontier, Sattar writes. Today, Bangladesh stands as the world’s second-largest apparel exporter, a remarkable feat considering its initial lack of a significant textile industry.
Development economist Amartya Sen lauded Bangladesh’s human development progress, outpacing its South Asian counterparts. Despite advancements, challenges like the low female labour force participation, at 40%, remain. Addressing this could further boost economic growth. The nation’s resilience is also evident in its self-funded mega-infrastructure, the 6.4 km Padma Bridge, highlighting its economic independence.
Under the leadership of Sheikh Hasina’s government, Bangladesh has maintained over a decade of macroeconomic stability, crucial for its current and future growth. The nation’s economic tale is one of balance, with agriculture providing food security and rural employment, while trade and industry propel its development forward, writes the economist.
The year 2022 posed significant challenges to global economies, including Bangladesh. However, its robust macroeconomic management over three decades allowed it to withstand shocks like the Russia-Ukraine war, highlighting its resilience during global crises.
Bangladesh’s economic strategy has been pivotal in its success. Since the 1990s, the country embraced an export-oriented trade policy, a shift from its previous inward-looking approach. This transition was influenced by the successful models of East Asian economies and has played a crucial role in Bangladesh’s development since 2010, Sattar is of the view.
The country’s export success, especially in clothing, is a testament to its effective use of comparative advantage. Embracing an export-led growth model, Bangladesh has seen consistent increases in GDP growth rates and a significant reduction in poverty rates. However, the nation must also focus on modernizing its tariff structure to diversify exports and further its development agenda.
Looking forward, Bangladesh’s economic story is not just about exports but also includes a strong role in global trade in services, bolstered by remittances from migrant workers. The country’s future competitiveness lies in developing world-class service industries, adapting to global trade trends, and adhering to international trading blocs’ disciplines.
As Bangladesh strides towards its graduation from the least developed country status, it faces the challenge of evolving its industrial policies in line with global trends. Its long-term Perspective Plan 2041 aims to transform Bangladesh into an advanced high-income economy, requiring strategic coordination between government and businesses.
Bangladesh’s economic journey from a struggling nation to a promising global player is a story of strategic policy choices, resilience, and innovation. As the world anticipates the “Asian century,” Bangladesh is poised to be a significant player, showcasing its remarkable journey from struggle to prosperity, writes Sattar.
