Japan-based global economic journal Nikkei Asian Review today came up with an extensive study on Bangladesh saying the South Asian nation continued to witness “rise and rise” with booming economy while ruling Awami League’s victory in the upcoming elections would keep up the development spree.
The journal today carried its cover story titled “The rise and rise of Bangladesh” with the journal’s Editor-at-large Gwen Robinson being its author who wrote “with remarkably little international attention, Bangladesh has also become one of the world’s economic success stories”.
The analysis said after two consecutive five-year terms for the ruling party, analysts point to a palpable “anti incumbency” sentiment among some voters but “from an economic standpoint, many agree that a ruling party victory would support further development”.
“If the polling passes without too much strife and the status quo is maintained, then [Bangladesh] would seem an attractive long-term story,” said Christopher Wood, managing director and chief strategist at Hong Kong-based
Earlier this year, Bangladesh celebrated a pivotal moment when it met United Nations criteria for graduating from “least developed country” status by 2024. To Prime Minister Sheikh Hasina, the elevation to “developing economy” means a significant boost to the nation’s self-image.
“Exiting LDC status gives us some kind of strength and confidence, which is very important, not only for political leaders but also for the people,” Sheikh Hasina told the Nikkei Asian Review in an exclusive interview in December.
“When you are in a low category, naturally when you discuss terms of projects and programs, you must depend on others’ mercy. But once you have graduated, you don’t have to depend on anyone because you have your own rights,” she said.
Hasina said Bangladesh’s strong economic growth will not just continue, but accelerate. “In the next five years, we expect annual growth to exceed 9 percent and, we hope, get us to 10 percent by 2021,” she said.
“I always shoot for a higher rate,” she laughs. “Why should I predict lower?”
The analysis said with remarkably little international attention, Bangladesh has also become one of the world’s economic success stories. Aided by a fast-growing manufacturing sector — its garment industry is second only to China’s — Bangladesh’s economy has averaged above 6 percent annual growth for nearly a decade, reaching 7.86 percent in the year through June, it added.
It said the country has achieved near self-sufficiency in food production for its 166 million-plus population. Per capita income has risen nearly threefold since 2009, reaching $1,750 this year. And the number of people living in extreme poverty — classified as under $1.25 per day — has shrunk from about 19 percent of the population to less than 9 percent over the same period, according to the World Bank.
On many fronts, the journal said Bangladesh’s economic performance has indeed exceeded even government targets. With a national strategy focused on manufacturing — dominated by the garment industry — the country has seen exports soar by an average annual rate of 15-17 percent in recent years to reach a record $36.7 billion in the year through June. They are on track to meet the government’s goal of $39 billion in 2019, and Hasina has urged industry to hit $50 billion worth by 2021 to mark the 50th anniversary of what Bangladeshis call their Liberation War, said the journal.
A vast community of about 2.5 million Bangladeshi overseas workers further buoys the economy with remittances that jumped an annual 18 percent to top $15 billion in 2018, it said, adding that but Hasina also knows the country needs to move up the industrial value chain.
“Political and business leaders echo her ambitions to shift from the old model of operating as a low-cost manufacturing hub partly dependent on remittances and international aid,” it said.
Hasina launched a “Digital Bangladesh” strategy in 2009 backed by generous incentives. Now Dhaka, the nation’s capital, is home to a small but growing technology sector led by CEOs who talk boldly about “leapfrogging” neighboring India in IT. Pharmaceutical manufacturing — another Indian staple — is also on the rise.
The government is now implementing an ambitious scheme to build a network of 100 special economic zones around the country, 11 of which have been completed while 79 are under construction.
Speaking at her official residence in central Dhaka, the prime minister rejected local and international criticism of creeping authoritarianism. Her party, she insisted, is “committed to protecting democracy in Bangladesh.”
Business seems largely on the ruling party’s side — if only for stability’s sake. In recent interviews in Dhaka, executives and political analysts dismissed suggestions that political turbulence could derail the country’s growth trajectory.
“We feel relieved that all political parties are participating in the elections,” said Faruque Hassan, managing director of Giant Group, a leading garment manufacturer, and senior vice president of the Bangladesh Garment Manufacturers and Exporters Association.
“We feel positive that despite political differences we can continue to keep economic issues separate — although we know that without political stability you can’t grow, and you could scare international customers,” Faruque Hassan added.
More successful is Hasina’s digital push. With her son, a U.S.-educated tech expert, as a key adviser, the program has introduced generous tax breaks for the information and communications technology sector and a sweeping
scheme to build 12 high-tech parks across the country.
Hasina said the government is taking a more proactive role in the financing alongside international partners such as China, Japan and international financial institutions.
“We have undertaken to establish our own sovereign wealth fund, worth $10 billion, to bankroll long-term physical infrastructure development. This is possible because our foreign exchange reserves stand at more than $32 billion
now, from $7.5 billion 10 years ago,” she said.
Chinese investors also bought 25 percent of the Dhaka Stock Exchange in 2018, and Bangladesh is now the second-largest importer of Chinese military hardware after Pakistan.
While some may question so much investment from Beijing, Hasina said it is simply a fact that China is set to play a bigger role in the region.
“Our foreign policy is very clear: friendly relations with everyone,” she said.