Bangladesh has become eligible to move out of the list of Least Developed Countries (LDCs) to a developing nation. With time and good governance, the country might be the new Asian tiger.
Hong Kong, Singapore, South Korea, and Taiwan are known as “Asian tigers” because of their rapid growth between the 1960s and 1990s. Bangladesh might be the fifth Asian tiger, as the country is experiencing rapid economic growth (more than 6%) over the past decade.
The growth pattern of Bangladesh is similar to the four Asian tigers during the industrialization of their economies. Amongst the four Asian tiger economies, manufacturing sector has had a significant contribution to the gross domestic product (GDP).
Likewise, Bangladesh's manufacturing sector contributes almost 18% to the GDP. According to World Bank, ready-made garments (RMG) industry is an example of manufacturing success and our RMG industry is very competitive in the global market. The RMG industry contributes almost 80% of the total exports.
There’s no stopping
In FY2015-2016 and FY2016-2017, the country’s GDP growth was 7.11% and 7.28% respectively, which is remarkable, but to achieve higher growth, Bangladesh has to diversify the export sector. It should move up the value chain in manufacturing sector, where there is more scope to add value.
Moreover, Global Financial Integrity 2017 reported that from 2005 to 2014, about 17% money outflows occurred illegally. The government should take strong initiatives to stop the illicit financial flows and encourage people to invest in the country.
However, the government has already taken steps to improve the investment climate to attract more investment, both local and foreign. Gareth Leather and Krystal Tan of Capital Economics said the government is taking many initiatives, such as reducing the time it takes for a company to be connected to the national grid from 404 days to 28 days, removing red tape to seven days instead of 19.5 days to expedite the process of starting a business, and companies will be able to get construction permits within 60 days instead of 278 days.
Moreover, the government has also taken initiatives to improve contract implementation, simplify property registration, digitize tax payments, and rationalize cross-border trade procedures. These initiatives will improve the country’s Doing Business Index (DBI) in the near future and Bangladesh will also appeal as an investment destination. According to the World Bank’s DBI, Bangladesh ranks seventhin South Asia, and 177th in the world.
New horizons ahead
GDP per capita of Bangladesh has also increased more than twofold from 2000 to 2017 -- in 2017 itself, it was $1,358.78. Bangladesh has reduced poverty and extreme poverty significantly along with an increase in GDP and GDP per capita. The World Bank reported that Bangladesh has declined poverty from 48.9% to 24.3% and extreme poverty from 34.3% to 12.9% from 2000 to 2016.
Another success story of Bangladesh is that Bangladesh ranked 34th as an emerging economy of the world and sixthin Asia, whereas other South Asian countries such as India and Pakistan ranked 62nd and 47th respectively.
Another big achievement of our country is becoming eligible to move out from LDCs to a developing nation, and this achievement is working as a motivation factor for Bangladesh to become the new Asian tiger.
By 2023, Bangladesh will achieve the developing nation status and might just become a new Asian tiger.
Md Khaled Saifullah, Department of Economics, University of Malaya, Kuala Lumpur, Malaysia