US Wall Street extols Bangladesh’s booming economy
Business desk || shiningbd
Renowned US-based business daily The Wall Street Journal has praised the staggering development of Bangladesh’s economy in recent years, dubbing the country as “South Asia’s economic bull case.”
Bangladesh is the closest proxy in South Asia for the successful export-led development models employed in Southeast Asian nations Vietnam and Cambodia, as well as global economic powerhouse China, said the newspaper in a report on Wednesday.
The WSJ report follows in the wake of the UN Committee for Development Policy’s recent recommendation that Bangladesh graduate from Least Developed Country (LDC) status.
A massive 80% increase in exports in Bangladesh over the past decade has coincided with a dip in neighboring India and Pakistan. The gap in GDP per capita between Bangladesh and India was 40% in 2011, but the former has now caught up.
However, exports in Vietnam more than tripled and in Cambodia more than doubled over the same 10 years. WSJ stressed the need for Bangladesh to follow the example of Vietnam and transition to high-value manufacturing and exports to maintain growth and reduce dependency on the garment industry.
The diversification of Bangladesh’s exports would require greater participation in Asian trade blocs, such as the Association of Southeast Asian Nations, Regional Comprehensive Economic Partnership, or the Comprehensive and Progressive Trans-Pacific Partnership, the newspaper added.
According to them, the next steps for Bangladesh would be to transition toward higher-value forms of manufacturing and exporting, as Vietnam has done. Its export industry is still overwhelmingly focused on garment manufacturing. The country’s economic complexity, ranked by Harvard University’s Growth Lab, is 108 out of the 133 countries measured. That is actually lower than it was in 1995.
Bangladesh also finds itself, like India, outside of major Asian trade blocs. It isn’t a member of the Association of Southeast Asian Nations, or the Regional Comprehensive Economic Partnership, or the Comprehensive and Progressive Trans-Pacific Partnership. Diversifying its manufacturing exports would require greater participation in intra-Asian supply chains—and probably a closer economic relationship with its neighbors to the east.
Caveats aside, Bangladesh’s exit from LDC status is probably a sign of further progress ahead—and a shot across the bow of other South Asian neighbors taking a very different approach to development.