Recently Bangladesh has experienced significant economic growth averaging at 6% annual economic growth rate. This indicates the potential for Bangladesh partaking as a major economic player in Eurasia. With the prospects of BRI (Belt Road Initiative), Bangladesh is likely to take part in it which will expose the Bangladeshi markets to the greater Eurasian region. There are a few vital factors that have played a role in the continuous growth in Bangladesh’s economy. Firstly, Bangladesh’s long-standing presence in global economic activity, recent political stability & positive economic policymaking, and, growth in overall development prospects in Bangladesh. This article will focus on these main paradigms to why and how Bangladesh has become among the fastest economies in the world. There still remains a lot of work to do in order to maintain the growth as well as enhancing its infrastructure, battling corruption and improving/providing education will be crucial to achieving its development goals.
Bangladesh’s presence in Global economic activity
Since the 1980s Bangladesh has started to heavily get involved in the international market primarily by producing raw materials such as jute and leather. However, they have started to make readymade garments in the 1980s and that moved Bangladesh from a primary sector based economy (in terms of international trade) to a secondary sector based economy. Cheap labour is the primary attractive point for foreign companies to invest in the country, later grew to become a specialised country in the clothing industry. This gave Bangladesh a widespread international recognition for its clothing products. All the major companies have flocked to Bangladesh to get their products to be manufactured there, mainly due to rising costs in their home countries. As a result, Bangladesh became a hub for the clothing industry bringing in billions of dollars to the local economy and increasing the national reserve further strengthening the economy.
This process from being among the least economically developed country in the 1970s, and 40 years later turning out to be among the rising economies in the world took some hard work and focus from the industries. The persistence on exporting quality goods benefited Bangladesh’s image as a reliable producer despite having political difficulties throughout its short history. Yet, Bangladesh managed to constantly protect its garments industry and the results of that are now appearing to Bangladesh. Now as the fourth industrial revolution forthcoming, many developed and advanced economies are moving into the automated industries. Until the full-fledged automation of all productions which is still quite some time away, the cheaper option in countries like Bangladesh is an attractive prospect for profit-seeking international firms.
As China is rapidly transforming itself into an advanced economy and its rapidly growing home economy provides with more demand for other countries to take the role of China in efficiently producing mass goods for the rest of the world. Bangladesh has a massive opportunity in capitalising on the void that will appear in the future when Chinese labour will become too expensive for Western firms to take advantage of. Consequently, Bangladesh must be prepared to take its share in this in the future as China is pending to replace the USA as the largest consumer in the world economy. Moreover, Bangladesh must not only look towards the West (traditionally developed economies) but along with the West, they must incorporate dynamism to benefit from the rising markets in the East, primarily China, India, Russia and other rising economic powerhouses including, Malaysia, Indonesia, Brazil, Turkey and foremost the vast African continent. All these countries will provide Bangladesh with many opportunities and vice versa.
Recent political stability & positive economic policymaking
Bangladesh since the 1970s has experienced several military coups and foreign covert interventions that often hampered the political situations within the country. The “democratisation” of Bangladesh in the 1990s as hoped did not bring stability. However, Bangladesh has started to flourish as recently the ruling government has maintained stability in the political level. During the “democratic” period of Bangladesh, it experienced the most unstable times in its short history. Hartals (countrywide strikes) were a daily occurrence and the “opposition” party whoever was in that position attempted to cripple the country’s economy in order to make the ruling party ineffective in the eyes of the general public.
This suicidal political situation has been averted for now. This is a much-needed development as now for the past 9 years, the country has not faced many hartals (countrywide strikes) crippling the local economy. Rather businesses have flourished and internationally Bangladesh has grown as a reliable and much stabler country bringing in further foreign direct investments. Although elections are to come at the end of this year bringing in the possibility of further turmoil. However, it is predicted that the ruling party will win the elections maintaining their grip in the administrations. In actuality, this is much needed for the country’s economy to grow as the administration’s plans, projects and prospects will continue it will not be disrupted with a change in the administration like it was in the previous era. Usually, when a newly elected government takes office in Dhaka they would start off with scraping everything the previous administration engaged in.
Growth in Bangladesh’s overall infrastructure and resource development
The government of Bangladesh has put emphasis on infrastructure development and bettering its internal prospects to attract more foreign investments. Following the Chinese model of development, Bangladesh ought to focus on bettering its infrastructure in order for better transport, accessibility and swifter movements. Also, Bangladesh must focus heavily on developing its younger population by investing in education and specialities to enhance the competition within the home market as well as building a greater opportunity for the local market to be more diversified. Furthermore, Bangladesh needs to maintain its current economic activities as well as heavily diversify its focus. Primarily Bangladesh has focused on readymade garments manufacturing, it is high time for Bangladesh to put emphasis on the growing high tech industries as well as other manufacturing industries. This will bring in a large amount of capital into the economy which will enhance the living standards and opportunities for the local economy.
Additionally, Bangladesh under the current administration has taken bold steps against foreign interventionism where the so-called “developed world” would lend money through institutions such as the IMF and the World Bank and would impose various conditions and regulations on the country restricting its political and economic freedom. This was further proved as Bangladesh initiated self-funded infrastructure projects as well as getting Chinese and Japanese firms to aid in other development projects. Therefore, it is crucial for Bangladesh to maintain a balanced relationship with the West and the rising power of the East i.e, China, Russia, India, Brazil, Turkey, etc. Being one-sided for a growing country like Bangladesh will only restrict its potential and would lose out on the enormous opportunities that the above-mentioned countries have to offer as well as the other developing countries in Eurasia and Africa.
In conclusion, the economic improvements for Bangladesh have various factors that are enabling it to grow. The opportunities that are appearing due to the global economic shifts primarily due to the stagnant Western economies and the rising economic involvement of China presents an enormous opportunity for Bangladesh. Furthermore, the political stability, infrastructure developments, and a growing educated workforce are driving the Bangladeshi economy into new heights. Yet, many challenges remain including corruption and political disorder.
The policymakers must put emphasis on internal political stability as well as maintaining peace with its neighbours. Recently, Bangladesh has faced testing times as 1 million refugees entered the country on short notice, thus, disrupting the local communities and relations with Myanmar continues to fall apart. Also, continuing the infrastructure developments will boost the local economic activity as well as attract foreign investments into the country due to increased economic conditions and ease of business. Educating, equipping with specialised skills and training the young workforce will further enhance the possibilities for the country. The policies must be forward thinking and must incorporate future trends and possibilities.
By the year 2030 many things can happen, there are various threats that may cause disrupting effects on the growth of the Bangladeshi economy. Therefore, it is vital to have contingency plans and increase responsiveness to immediate economic and political shocks. There still remain many challenges that the authorities must tackle, importantly, widespread corruption in the public sector of the country. Also, climate issues, as well as foreign interventionism through hybrid warfare or rise of terrorism, remain the challenges that will need to be averted by the Bangladeshi authorities. If the country maintains its political stability, continues its growth rates and equips the future generation with skills and education the country will achieve new heights in its short history of independence.