Bangladesh, once viewed as ‘hopeless’ economy, will soon leave its larger rival Pakistan behind in prosperity, as social changes and grass root initiatives help the 47-year-old nation move out of poverty, India’s former Chief Economic Advisor Kaushik Basu wrote in a recent post.
Bangladesh is poised to overtake Pakistan in terms of per capita GDP in 2020 as it has shown transformation on the back of social changes and grass root initiatives, economist Kaushik Basu said in a recent post published by The Brookings Institution. Kaushik Basu, a former chief economist with the World Bank, dubbed Bangladesh as “most remarkable and unexpected success stories” in Asia in recent years.
Once crippled by poverty and famine, 47-year-old Bangladesh once viewed “hopeless” has exceeded Pakistan’s GDP growth by roughly 2.5 percentage points per year, the former chief economist of the World Bank wrote.
“…by 2006, conditions seemed so hopeless that when Bangladesh registered faster growth than Pakistan, it was dismissed as a fluke,” Kaushik Basu said, adding that even as there is no certain answer to the country’s success, it can be attributed to social changes starting with women empowerment, grassroots initiatives, and the success of its garment manufacturing industry. In 2016, Bangladesh’s GDP was $221 billion, while that of Pakistan was $283 billion.
“Thanks to efforts by the nongovernmental organizations Grameen Bank and BRAC, along with more recent work by the government, Bangladesh has made significant strides toward educating girls and giving women a greater voice, both in the household and the public sphere,” Kaushik Basu wrote.
In fact, World Bank shared the same views as Kaushik Basu. It also praised Bangladesh’s growth story, saying that the country has “an impressive track record” for growth and development, aspiring to be a middle-income country by its 50th birthday. Bangladesh has made substantial progress in reducing poverty, supported by sustained economic growth. “Bangladesh reduced poverty from 44.2 percent in 1991 to 18.5 percent in 2010,” the World Bank said.
However, Bangladesh faces daunting challenges with about 22 million people still living below the poverty line. The World Bank said that it needs to create more and better jobs for the 2 million youths entering the job market every year. Bangladesh GDP growth is projected to be in the 6.5%-7% range during FY18-20, while Pakistan’s GDP growth is projected to be 5.8% in FY19.