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The Bangladesh success story

Despite dismal initial economic conditions, Bangladesh has unfolded a new and remarkable Cinderella story as its economy has staged a turn-around, leapfrogging over its much more affluent peers

The Bangladesh success story
Better economy, more space for women.

Bangladesh is reportedly on the verge of becoming the next Asian tiger, while Pakistan — arguably its political nemesis — has been chasing that mirage almost ever since the former’s birth. After a brief and abortive flirtation with socialism in the early 1970s, Pakistan seems to cosy up to the ambitions of its old and strident ally, China, which has agreed to invest over $50 billion in a massive infrastructure-building programme that is in consonance with the country’s master-builder Nawaz Sharif’s investment strategy.

Indeed, the Asian tiger’s dream was personified by Nawaz Sharif, the country’s thrice-elected prime minister, who is in the midst of his worst political troubles at the moment. However, both Bhutto’s romance with socialism and Nawaz Sharif’s fascination for making Pakistan an Asian tiger (which he proudly used as an electoral symbol for his political party) have been thwarted by the establishment. The West Pakistani ruling elite — despite belonging to a minority province — treated the people of East Pakistan with contempt and considered its economy as a drag on the country’s overall economic growth. Many in Pakistan celebrated Bangladesh’s separation as “good riddance” and a good omen for resuming West Pakistan’s fast-track growth trajectory which had an abortive run during Gen. Ayub Khan’s regime.

In the initial years of its existence, in the midst of political and economic instability, the Pakistani junta’s prophecy was beginning to prove right and Bangladesh was considered as an economic basket case — devastated by a costly war of liberation, persistent poverty, famine, floods and cyclones — for many years after independence in 1971. The international community rushed to its rescue, flooding it with aid and bringing corruption in tow.

Despite such dismal initial economic conditions, Bangladesh has unfolded a new and remarkable Cinderella story as its economy has staged a turn-around, leapfrogging over its initially much more affluent peers, India and Pakistan, who have been vaingloriously fighting over the dominance of the South Asian region, with callous disregard for the welfare of their own people.

When Bangladesh’s annual GDP growth exceeded Pakistan’s for the first time in2006, most analysts treated it as a mere blip, but the year has proved to be an inflection point, according to Prof. Kaushik Basu, a former Chief Economist of the World Bank. Since then the country’s GDP has consistently exceeded Pakistan’s by roughly 2.5 percentage points per year and in 2018, its growth rate is likely to surpass India’s. Moreover, Bangladesh’s population growth of 1.1 per cent per year is nearly half of Pakistan’s 2 per cent rate, which boosted its annual per GDP growth rate over Pakistan’s by approximately 3.3 percentage points per year.

In a recent article in World Development, Prof. Wahiduddin Mahmud, a distinguished economist of Bangladesh (and a former student of this author at QAU in 1969-70) has carefully analysed the story of Bangladesh’s growth renaissance — which started after its “lost decade” of 1970s — by dividing it into two periods. In the first period, from 1980 until the early 1990s, growth was lackluster, as the foundational structure of its grass-roots-based development strategy and governance reforms were being laid. But it accelerated after 1995 and remained sustained in the new millennium. As a result, it overtook Pakistan’s growth rates in the mid-1990s, and maintained the growth advantage afterward, although it has been well below that of the average Asian developing economy and India. Bangladesh’s growth momentum has not declined and has performed better than the average developing economy, despite the worsening global economic environment since 2007-2008.

Bangladesh now consistently ranks among the top 10 nations in gross domestic product (GDP) growth. Its economy grew 7.28 per cent in the past fiscal year, for example, exceeding the government’s already optimistic projections. Bangladesh’s annual GDP rose from $100 billion in 2009 to $250 billion in 2017, an eye-popping 150 per cent increase. The rapid expansion, coupled with sustained poverty reduction, put it on the fast-track and well within reach of its Asian tiger economy aspirations.

Like all dynamic economies, Bangladesh also continually diversified its economy. Much of its early growth came from the ready-made garment industry, which remains the most dynamic segment of its industrial sector and continues to serve as its engine of growth. More significantly, the sector has proved to be a boon for women’s employment and empowerment, which is the bedrock of Bangladesh’s model of development, epitomized by the (Nobel laureate Dr Yunus-led) Grameen and (Magsaysay award winning Fazle Abed-led) BRAC movements, covering almost all the districts of Bangladesh and almost 80 per cent of the rural population and focused primarily on women. Their efforts have had a transformative effect on Bangladesh’s social indicators summarised by the rise in average life expectancy which has now touched 72 years, surpassing those for India and Pakistan by 4 and 6 years, respectively.

Bangladesh has achieved significantly higher progress, compared to economies sharing similar levels of income, in terms of a wide range of social indicators: female education, child health, and fertility. Bangladesh has, since the 1970s, managed to reverse its abnormally high record of average total births per woman — and since the 1980s, it has even outperformed countries with similar levels of income. Between 1980 and 2010, Bangladesh’s ranking for fertility data within the developing world improved rapidly while only modest improvements were achieved by Pakistan and India. Between 1980 and 2010, the ratio of women using contraception jumped from 10 per cent to nearly 60 per cent, while the 2005 figures for Pakistan and India were 30 per cent and 53 per cent, respectively. As a result, fertility also declined progressively compared to that in peer countries, with favourable impact on per capita incomes and poverty reduction; it is estimated that by 2010, women in Bangladesh were giving birth to an average of two fewer children than in other economies at the same level of income.

No less impressive was Bangladesh’s performance in the health sector, especially when compared to Pakistan’s dismal and shocking record in recent years. While Pakistan recently hit the headlines for having the worst infant mortality rate in the world — one in 22 new-born babies having a chance of dying within a month of their birth — a figure worse than even that for very poor countries of sub-Saharan Africa. In Bangladesh, high infant and under-five mortality rates became history in the 1990s, well before the country saw a large-scale reduction in poverty. Preventive measures such as immunization have also played a key role in Bangladesh’s phenomenal success in the health sector — the rapid increase in the immunization rate from one per cent in the early 1980s to over 70 per cent within 10 years was a development that UNICEF has called a near miracle.

Similarly, Bangladesh’s gender gap in primary and secondary education disappeared by the mid-1990s. Since the late 1990s, Bangladesh has outperformed other comparator countries in terms of female primary and secondary schooling, although it still lags behind at the tertiary level. Bangladesh was enrolling over 7 per cent more girls in primary education than other economies at the same level of income, while Pakistan has the dubious distinction of standing second in the world ranking of out-of-school children with only Nigeria ahead of it, as revealed by a UNICEF researcher in a Lahore seminar on April, 25.

Overall, the empirical evidence shows an unmistakable trend: that Bangladesh has steadily progressed over the past four decades. In particular, overcoming the gender disadvantage in primary and secondary education by the mid-1990s was path-breaking since Bangladesh “belongs to a regional belt, stretching across North Africa and South Asia, which is characterized by patriarchal family structures along with female exclusion and deprivation”.

What is more surprising about the Bangladesh story is that, unlike in Pakistan, the remarkable achievements in the field of economic growth and human development were not achieved through large public expenditures on mega development projects financed through domestic or international borrowing, but through the mobilisation of resources at the grass roots level involving microfinancing and with the active support of civil society and a committed and concerned intelligentsia. Pakistan, and to a lesser extent India too, relied on a much more traditional, elitist, misogynist and exclusivist model of development, which pays scant attention to the problems – and, even existence – of the poor, the downtrodden and the minorities in general and women in particular. These inherent biases in the social and economic dystopia that afflicts the two relatively more affluent South Asian siblings, have enabled Bangladesh to catch up with the long-run development marathon, the trophy for which is still up for grabs.

No unique factor can be identified for the success of Bangladesh in the current lap of the race. Instead, it seems to be the confluence of several factors — largely institutional in nature — that occurred simultaneously to eventuate what Wahiduddin Mahmud, understatedly, describes as Bangladesh “development surprise”. Whether it would mutate into a “miracle” any time soon, would depend on a number of factors – domestic, regional and international.

S.M. Naseem


  • One has to agree with author, but an important point is missed while Bangladesh shares permanent interest with its neighbour, Pakistan shares enimosity with same neighbour. Let us hope coming holy month will start a rethink, because both India and Pakistan will gain.

  • R S Chakravarti

    One factor which helps the Bangladeshi economy hasn’t been mentioned. People from that country move illegally to India in large numbers and are now working all over the country. Thus, India makes a huge contribution to Bangladesh’s growth, just as it supports Nepal (in the latter case, there is nothing illegal in the emigration; they have the right to live and work in India).

    • I do the research in South Asian studies and since INdia has elected new government there has been myth that Bangladesh ppl are in thousands in India, when it fact many are indians Muslims with no paper. This lie jhas been proapgated tiem and again,. Bd spends 1 billion on health care in India every year and there are lots of indans workign in Bd sending largest outbound remmitance form Bd to India. Stop this nonsense with no documented proofs

      • R S Chakravarti

        The present BJP govt in India is there for the last 4 years. Reports of millions of Bangladeshis in India have been coming for a much longer time (decades). As you say, after the economy of Bangladesh picked up there may be a large number of Indians working there. But that doesn’t make the reports about Bangladeshis in India false. As far as I know there is plenty of documentation.

    • All of your views are imagined meant to berate Bangladesh’s success. Bangladesh Govt. has requested the Indian Govt to hand over those illegal immigrants,and we will take them back. So far, the Indian Gove has failed to move on this issue. The muslim population of west bengal is 29%, and that of Assam is 33% since partition. These are The poor muslims. who are compelled to work at minimum wages in India.

      • I don’t have any motive to berate Bangladesh as you claim. I simply read the article and commented, based on information available to me which you can also get through Google. You seem to have the same attitude as the Bangladesh govt which makes the publication of criticism an offence. I am not a govt representative; in fact I don’t support the present administration. I don’t know about you. But I would advise you to be rational rather than emotional.

  • I think commentators especially from India who feel some sense of paternalism towards Bangladesh are obviously deluded. A minute illegal immigrant community or Bangladeshi expats in India will only contribute minimally to the overall official GDP figures. Do remember that illegal immigrants can only contribute to the black economy which does not figure in the overall pciture of official GDP.

    Bangladesh has come in leaps and bounds to where it is now and in fact has benefitted more so from Chinese investment in comparison go that of India.

    Modern India likes to take credit for everything, do remember the Greater Bengal region was historically the economic engine of India and the buffer zone between colonial anihilation and autonomy until Plassey.

    When Bengal fell, India fell.

    As Bengal rises, India will also continue to do so.

    West and East together.

    Less patronising Indian commentary and more cooperation is the way.

    • R S Chakravarti

      Paternalism? Deluded? Patronising? It is estimated that there are 20 million or more illegal Bangladeshis in India. Is that minute? I am not an economist but it seems to me that when a poor family gets money even illegally, it has to spend a lot of it in a legal way, which contributes to GDP figures.
      The Greater Bengal region was historically the economic engine of India. It is not so any more. Why not? Because of Partition, and now, the existence of Bangladesh.

      • What nonsense? In other words according this dumb Indian – 15% of the entire Bangladeshi population lives in India? What a bunch of dirty twisted delusional lies! Since this guy is spreading bogus fake lies- let’s all join in! India has only benefitted economically in the last 40 years because 200 million Indians live and work illegally in the US, EU, Middle East and Bangladesh! Over 1 million Indians actually do live and work illegally in Bangladesh and send their money back to their beggary country- India! The $5BB in remittance they send back to India is the highest of any country and singlehandedly helps propel the Indian economy!


          Thank you for pointing out that the estimate may be exaggerated. Anyway the number is quite large even if it is less than 20 million. That is the number I read in the newspapers. You owe me an apology for accusing me of lying.


  • Pakistan’s misery started with the great loss of East Bengal (East Pakistan) with the majority of united Pakistan. Bengali people were more politically and economically conscious than the people of West Pakistan. They are always creative, hard working and welcoming. The so called martial race dominated by Punjab never recognised the contribution of Bengali prior and post 1947. Pakistan is the only unfortunate nation in the world where majority people broke away from the minority people (eg. West Pakistan). With ruined economy, infrastructure and meager educational institutions since 1971 bloody war, Bangladesh has made unimaginable progress in all areas. I fully agree with the writer that the benefits of economic and social development are equally distributed throughout Bangladesh (not city centred as it is in India and Pakistan). And this will lead Bangladesh to prosper more. Pakistan can learn a lot from Bangladesh.

  • At present Indians working in Bangadesh both legally and ilegally send remittances worth US$ 5 billion every year which is one-third of total remittances that Bangladesh receive from its migrant workers. That is to say neighbor also share the prosperirty of Bangladesh.

  • Pakistan Army is a mega-surrendered army, Pakistan is a mega-defeated country —– Bangladesh is a Victorious nation.

  • A lucid account of the current development situation in the three major successor countries of the subcontinent after the end of the British colonial era.
    May we note, that land reform has been an important factor (although not often explicitly discussed) behind the current development differentials between Pakistan and Bangladesh. The two significant land reforms in East Bengal/Bangladesh have been: First, the East Bengal State Acquisition and Tenancy Act, 1950, that abolished the feudal Zamindari system (ie. the British feudal system of land ownership, introduced in Bengal in the 18th century, through the Permanent Settlement Act, 1793) with an upper limit of agricultural land ownership to 33.3 acres. Second, The Land Reform Ordinance, 1984, that established the right of a sharecropper (or, Bargadar) with respected to the tilling contract and the product of his labour: 1/3 to the land owner, 1/3 to the Bargadar, and 1/3 for the non-labour costs of the production. They created a relatively congenial rural background in Bangladesh in which the development measures, invented and/or undertaken, like, microcredits by Grameen Bank or, by BRAC, and many other related rural development efforts, could flourish. In contrast, several halfhearted measures were undertaken to reform the feudal land ownership (or, Jagirdari) system in West Pakistan/Pakistan (the first was the land reform during the Ayub Khan regime and then twice during the Bhutto regime). Two major factors for their ineffectiveness were the absence of an appropriate upper limit due to a near-absurd definition of a owning ‘family’ (involving living and dead members of several generations etc!), and the apparent absence of a formal or a clear legal right for an equitable contract and share of the production of a sharecropper. In our view, completing the land reform measures in Pakistan, at least to the extent it has been done in Bangladesh, can help to create a sound socio-economic background in the countryside in Pakistan, and that, in its turn, can stimulate the rural component of the national economy and enhance the economic development pace of the country.

  • The write has been able to unearth the real factors why Bangladesh has achieved the economic and social successes at the current time. In any meaningful economic development of a country many factors are involved. But for Bangladesh, the most important factor is the unleashing the hitherto hidden energy of vast number of women in productive works in garment industries & millions in villages who never earn cash in their life and didn’t have any say in the running of the family matters. The most innovative economic and social philosophy with simple easily understandable and practical implementation initially by Grameen Bank but subsequently BRAC and some other NGOs in the micro-credit programs make all the major differences. Grameen micro-credit has been a doable program from the start because it needs small amount of capital and can mobilize funds locally. Billions of dollars are being spend year after year only in the villages; most of the govt. monies are being spent in the cities. Grameen initiated at the initial stage of the bank some social programs inter-twinned with the micro-credit loans; compulsory children enrolment in primary and secondary schools of every loanee-children, primary health program, hygiene related program like pure drinking program, covered latrine, immunization of children, contraceptive use, dowry- less marriage etc and many others. A woman who earns money and involved in the above social programs becomes a new human beings; confident, assertive, opinionated. These were and are the poorest population of Bangladesh, at the least 15 million families currently (Grameen has 7.6 million & other NGOs the rest); 75-80 million people of Bangladesh (average 5 member families). Most of these people are no longer dirt poor; they are above ‘Poverty –Line’ in different stages. This is the significant differences than other countries. In Bangladesh the economic development has started from the bottom and ordinary people oriented. It is stable, created locally and as a result sustainable and not dependent on outside factors that much. That’s why during world’s economic meltdown in 2008, Bangladesh was unscathed. Women employment and earning have changes the HDI (human development Indices) that we see today. Another most significant matter is mostly hidden at the moment and most Bangladeshis are not aware of; the number of Post-HSC education of children of GB members. More than 80% of Grameen children passed SSC level and about 50% of SSC students went to HSC or higher uni-level courses. In the next 6-7 yrs may be about 2 millions of these highly qualified young people will enter work-force and many of them create their own jobs. They will be slightly different qualified people than the young people of well off families coming out of the universities as they are used to survive with little necessities of life. This is a big factor why Bangladesh will continue to do better in economic and social development in the future and as well will have better than any other country in evenly distribution of wealth among the population. At the moment the only problem lies in the sphere of politics but that will also change unless there is an unknown upheaval.

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