India isn’t too happy about being surpassed by Bangladesh in GDP per capita numbers
The full extent of India’s notably prickly paternalism towards Bangladesh erupted after the International Monetary Fund published its biannual World Economic Output report last week.
The IMF projected that India’s economy would contract by at least 10% this year, which is the most entrenched trough of any emerging country. At the same time, Bangladesh’s economy will grow by 4% and, for the first time, its real capita GDP will surpass that of its giant neighbour. This means that, in just under five decades, Bangladesh has leapfrogged from poorest country in the world right ahead to the South Asian standings.
India’s immediate response to this news has been an emotional outburst of handwringing and ostentatious shamefacedness. From Kolkata, the Trinamool Congress leader Abhishek Banerjee (he is the nephew of West Bengal Chief Minister Mamata Banerjee) tweeted: “It’s not their resurgence, but our colossal downfall, in pursuit of @narendramodi Ji’s $5 trillion dream!”
The Congress Party’s national spokesperson, Dr Shama Mohamed was equally doleful in her reaction: “India has always been the undisputed economic leader of the sub-continent. Now for the first time, Bangladesh’s economy is set to overtake ours. PM Modi’s actions have brought about the biggest economic humiliation in India’s history!”
Meanwhile, the Cornell University professor of economics and former Chief Economist of the World Bank, Kaushik Basu, shared this assessment: “I’ve now checked the data. IMF’s estimate shows Bangladesh will cross India in real GDP per capita in 2021. Any emerging economy doing well is good news. But it’s shocking that India, which had a lead of 25% 5 years ago, is now trailing. This calls for bold fiscal/monetary policy.”
Following the tumult via social media from my home in Goa, I was especially struck by the comments of Kapil Komireddi (who is the author of Malevolent Republic: A Short History of the New India, and has previously written extensively about Bangladesh, and is based in Hyderabad and London).
He tweeted: “Maharashtra’s economy is larger than Bangladesh’s. Bangladesh’s population is smaller than Uttar Pradesh. These disparities partly explain the growing difference in per capita GDP on paper. But the outrage over this yet again reveals a deep flaw in Indian society. Per capita GDP is a meaningless measure because it’s premised on the illusion of equal distribution. In reality, 74% of India’s wealth is concentrated in the hands of just 10% of the population.”
Komireddi concluded: “Yet there’s no sustained outrage against this grotesque inequality, which predates Modi. India’s per capita GDP will again overtake Bangladesh’s in months. That achievement will not alter the fact that Bangladesh is and has been for some time a more equal society than India.”
These struck me as eminently reasonable points, so I emailed Komireddi and asked him to elaborate. He responded promptly: “This is one example of what Naipaul called our flaw -- the ability to look but not see. [In my tweets] I was alluding to the tendency to equate numbers with progress [just as, in] the UPA years, newspapers would publish splashes on the number of Indians in the Forbes Rich List as evidence of India’s emergence as a great power.”
He told me, that “the slowdown of India’s economy is the result of many factors -- but chiefly the mismanagement of this government.” On the other hand, however, “the achievements of Bangladesh are due almost entirely to the efforts of its government and civil society. From the inclusion of women in the workforce to the warm hospitality it gives to refugees, there’s a lot we could learn from our eastern neighbour.”
To get an additional perspective, I also emailed Mihir Sharma, the veteran journalist on economic affairs who is now Senior Fellow at the Observer Research Foundation in New Delhi. He wrote back to say the GDP news was actually “at least a decade or more in coming. Amartya Sen pointed out in the context of India versus Bangladesh that a solid human development foundation allows for a more productive workforce and more sustainable growth.”
Sharma explained: “The crucial difference dates to before 2014, but has been amplified since. Bangladesh has been able to successfully focus on export-oriented growth. India has often been misled by the size of its domestic market into thinking that servicing that alone will be enough for jobs and growth. The current government’s ‘aatma-nirbhar’ or inward-focused strategy is only making that worse.”
I asked Sharma how this “Asian Tiger” paradigm for Bangladesh aligns with Amit Shah’s 2019 comments about Bangladeshi “infiltrators” and “termites.” He said: “It has been long understood that migration from Bangladesh to India is not an ongoing problem and has not been for at least a decade. As one Bangladeshi official pointed out recently, why would anyone cross the border to India? They would rather try to swim to Italy!”
Vivek Menezes is a writer based in Goa, India.