Good governance boosts Bangladesh to 'textbook example of inclusive growth': WhiteBoard

Rising female participation in labour force in the coming decade could add a few percentage points to Bangladesh's economic growth.

From projected hopelessness peddled by international analysts about war-ravaged Bangladesh after 1971, the country has transitioned to a steep development curve, owing to good governance and concerted efforts, remarked an analysis in the latest issue of policy-magazine WhiteBoard.

Citing an HSBC global forecast, the analytical assessment noted that Bangladesh would become the ninth-largest consumer market in the world by 2030, outshining the United Kingdom.

With appreciation for the country's economic policies for growth momentum and poverty reduction, the article titled "Trade and Industry in 21st Century Bangladesh" pointed out: "At its inception in 1971, Bangladesh was arguably the poorest country in the world. International analysts had projected hopelessness. With a per capita income of under $100, Bangladesh was ranked among nations such as Chad, Rwanda, Burundi, and Nepal. However, today it has crossed the per capita income threshold of $2,500, with an economy of about $450 billion, placing it among the top 40 economies in the world."

Economist Zaidi Sattar, the chair of Policy Research Institute of Bangladesh, authored the analysis, bringing in a holistic view of the key initiatives accelerating Bangladesh's economy to this stage.

"Leading economic historians have dubbed the 19th century the British century and the 20th century the American century. Now, leading pundits project the 21st century to be the Asian century, with the meteoric rise of Asian economies such as China, Japan, India, South Korea, Indonesia, Vietnam, and Bangladesh. By 2050, more than half of the world's economy is expected to be in Asia, as will three of the five largest economies. Bangladesh is poised to be a strong player in this Asian century," he added.

The former senior economist at the World Bank linked this phenomenal transition to export-led growth, observing that the tremendous success of the newly-industrialising East Asian economies of the 1960s and 1970s set a new paradigm for export-led growth.

Two decades later, Bangladesh made the switch in its own trade strategy, with an export-oriented policy. East Asia had set an example for other developing economies. Bangladeshi policymakers embraced a trade-led growth strategy, which has yielded significant growth since 2010. The country now has its own export-led model, the Bangladesh way, to show the world, he continued to say.

For Bangladesh, a liberalised export-led growth regime has established firmly itself in the realm of policy. The reforms initiated in the 1990s generated sufficient momentum to stimulate manufacturing, job creation, and poverty reduction. This momentum continues to this day. The average gross domestic product (GDP) growth rate per decade has increased consistently. The average growth rate was 4.8% in the 1990s, 5.9% in the 2000s, and 7.2% in the 2010s.

Meanwhile, the poverty rate, which stood at 57% in 1990, had been slashed by two-thirds to 20% in 2019. This is a textbook example of inclusive growth, he further said.

Praising the resilience displayed by Bangladesh during the post-Covid period, he mentioned that In 2022, the Bangladesh economy, like many economies worldwide, faced an acid test of sustainability. While many developing economies experienced debt and balance of payments crises leading to macroeconomic discomfiture, Bangladesh avoided that situation. In sum, Bangladesh's economy faced challenges but did not break.

This, according to him, was a result of three decades of tenacious macroeconomic management. The economy was anchored in a strong foundation that meant it was able to withstand shocks from the outbreak of the Russia-Ukraine war in 2022.

The resilience of the economy had previously been tested during the global financial crisis of 2007 and the Covid-19 pandemic in 2020.

WhiteBoard, a quarterly based on policy, is the first of its kind in Bangladesh. The magazine, edited by CRI Trustee Radwan Mujib, has regular contributions from globally acclaimed researchers, authors, and journalists, opening up a new space for wider policy debate.