Few countries have confounded critics like development superstar Bangladesh. In 1971, Bangladesh gained independence after a 9-month long struggle with the then West Pakistan. At that time, the Washington Special Action Group meeting was held in Washington on the situation in South Asia under the chairmanship of US Security Advisor Henry Kissinger. There, Henry Kissinger called Bangladesh a ‘basket case’ or ‘bottomless basket’ in response to an affirmative question at one stage of the discussion about the fear of a major food crisis and famine in Bangladesh. Later, that title was attached to Bangladesh. After the war, the newly independent country fell behind due to various reasons including large population, poverty, fragile economy, natural disasters. Finally, Bangladesh celebrated half a century of independence in 2021 as a secular and democratic country, a role model of frugal social development and an incredible economic warrior in South Asia.

However, the leaders of the country were praised for such progress in Bangladesh. The country’s government has adopted progressive social policies for a long time. Bangladesh has made a lot of progress in education and health especially for women and girls. Women’s chances of getting jobs have increased. Bangladesh has left behind India and Pakistan in the index of social development.

Garment industry has contributed the most to the economic progress of Bangladesh. As we explain, before the corona pandemic hit, Bangladesh grew at an annual rate of 7 percent in the ten years, compared to China’s 8 percent. The country’s per capita GDP at market prices is about $2,500, which is higher than that of India. In 2026, Bangladesh is supposed to be promoted to the list of least developed countries of the United Nations. Bangladesh’s ambition to become an upper-middle income country by 2031 is a commendable initiative.

But those prospects are somewhat clouded, says The Economist. Rising import costs, low capital and balance-of-payments pressures have put many developing countries under strain. Due to such a situation, Bangladesh was forced to secure a loan of 4.7 billion dollars from the International Monetary Fund (IMF) in January this year. Bangladesh’s economy is not as shrinking as that of crisis-hit Pakistan or Sri Lanka. But standards need to be maintained.

The Economist advises that economic performance should be increased to sustain the progress of Bangladesh. The problems, however, indicate structural and political weaknesses that are at serious risk of deterioration.

Bangladesh’s economy is heavily dependent on the garment sector, which accounts for about 85 percent of total merchandise exports. Bangladesh may soon lose preferential trade terms associated with LDC status. But Bangladesh’s efforts to diversify into high-value-added industries such as pharmaceuticals and electronics are unstoppable. However, these industries are hampered by various factors including corruption, restrictions, difficulty in getting credit.

Bangladesh Prime Minister Sheikh Hasina has been in power since 2009. She is the daughter of the Father of the Nation and the first President of Bangladesh, Bangabandhu Sheikh Mujibur Rahman. He touched every sector of economy to realize Bangabandhu’s dream.

The Economist says that the dominance of the ruling party has increased in all areas, starting from jobs. Foreign direct investment has declined over the past few years. The country’s business rating has deteriorated within South Asia. There are also fears of violence surrounding the national elections next year.

75-year-old Prime Minister Sheikh Hasina’s commitment to a strong government is not unreasonable. Bangladesh has been plagued by instability many times, including 29 military coup attempts. Awami League needs to take the necessary next steps to build a culture of more sustainable governance. Even if it’s to protect his family’s legacy and possibly it. It has also become imperative to restore the independent institutions that will underpin the country’s future growth.

Western governments are reluctant to apply pressure, says The Economist. However, they are cautious about China’s investment in Bangladesh. Many of the country’s elite view their relationship with the West favorably. Especially from business opportunities to educating their children. Bangladesh is more dependent on foreign capital than in the past.

Environmental threats to Bangladesh are also increasing due to global warming. The World Bank predicts that 1.3 million people in Bangladesh may be displaced by 2050 due to climate change with an increase in temperature of 1 decade and 5 degrees Celsius. A third of agricultural land could be wiped out. Such perturbations can destabilize an acutely sensitive region. Bangladesh needs more developmental progress to reduce that risk.

Source: The Economist

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