Bangladesh edges Pakistan, India in per capita GDP

People in Bangladesh earn more on average than people in India and Pakistan. This is the calculation of earning within the country. Two decades ago, people of both countries would earn much more than people of Bangladesh.

After independence, Bangladesh was termed as a 'basket case'. But within 50 years of independence, Bangladesh surpassed two of the biggest powers in South Asia in GDP per capita. Bangladesh has been ahead of India and Pakistan in many economic and social indicators including average life expectancy, literacy rate, women empowerment and so on for the last two decades.

As per International Monetary Fund (IMF), Bangladesh has been ahead of India for four years at a stretch in terms of per capita GDP. The country has had a higher per capita GDP than Pakistan for eight years now. Bangladesh’s per capita GDP is USD 2621 while India has USD 2,612 and Pakistan has USD 1,471.

Former state minister for planning Shamsul Alam told Prothom Alo that the economy of Bangladesh has benefited from the progress of one and a half decades. The economy had progressed steadily until Covid. Not only in per capita GDP, Bangladesh surpassed India and Pakistan in education, health, women empowerment and so on. Pakistan’s per capita GDP is now slightly more than half of Bangladesh’s. Bangladesh edged India during the Covid.

He said Bangladesh is reaping the benefit of preparing the budget in a planned way for the last 15 years. Everything including growth rate, investment and infrastructural development had been done in a planned way which contributed to the current situation.

Per capita GDP is calculated by dividing equally among the people of a country the cumulative amount of production and services created within the country. This income does not count income from outside the country including expatriate income. When expatriate income and income outside the country are added, it is called per capita income rather than per capita GDP.

As per Bangladesh Bureau of Statistics (BBS), 96 per cent of the average per capita income of the people of Bangladesh comes from within the country.

Bangladesh’s per capita income has doubled in a decade. According to the latest calculation, Bangladesh’s per capita income is USD 2,765 now. Bangladesh has seen the fastest growth of per capita income among the South Asian countries over the past decade.

Bangladesh has been leading India in per capita GDP for four years now. According to the IMF, Bangladesh’s per capita GDP is USD 2621 while India has USD 2,612.

Bangladesh outshined India for the first time ever in 2020.  Bangladesh's per capita GDP was USD 1,888 that time while India had USD 1,877. Bangladesh took the lead as the economy of India had contracted mainly to strict Covid lockdown.

Economy of Bangladesh and India had seen fast progress in the last two decades. But India’s economy could not keep its progress up at one point while Bangladesh continues to surge ahead. Bangladesh saw GDP growth of 8 per cent in 2018-19 fiscal year.

Meanwhile, India’s population has increased by 21 per cent in the last 15 years while Bangladesh has seen 18 per cent increase. This also impacted the per capita income. Bangladesh had half the per capita GDP of India even in 2007. India’s per capita GDP was more than 70 per cent of Bangladesh’s in 2004.

Bangladesh overtook Pakistan in terms of GDP per capita for the first time in 2016. The per capita GDP of Bangladesh increased to USD 1,659 that year surpassing Pakistan’s USD 1,468. Since then, Bangladesh has been maintaining the lead over Pakistan consistently. Amid fluctuation, Pakistan's per capita GDP stood at USD 1,471 in 2023.

Purchasing power of people of a country is taken into consideration to understand how wealthy the people are. It is seen what goods a person can buy with his own income. GDP and GDP per capita are determined on the basis of Purchasing Power Parity (PPP) to compare the economies of different countries. Bangladesh is ahead of Pakistan but behind India in terms of GDP at purchasing power parity (PPP) per capita.

According to the IMF, Bangladesh’s GDP per capita in PPP is USD 8,670 in 2023 while India’s USD 9,180 and Pakistan’s USD 6770.

South Asian Network on Economic Modeling’s (SANEM) executive director Selim Raihan told Prothom Alo, “It is obviously good news that our per capita GDP is more than India’s.  It is an important economic indicator, but not the only one. You have to consider if per capita income is being distributed equally or not and how much is disparity. We are lagging behind India considering these factors.”

Selim Raihan thinks, “We are still lagging behind India in other economic aspects such as reserve, inflation, export, infrastructure and investment. We still have a long way to go.”

Bangladesh is ahead of Pakistan and India in terms of women empowerment. One in every three women in Bangladesh is working while one in every five women is doing a job in India and Pakistan.

Of the total working population of the country, 35 per cent are women. More than 25 million women are currently in the workforce. Women make up 23 per cent and 20 per cent of the workforce in India and Pakistan, respectively.

Not only in economic indicators, Bangladesh is also doing well in social aspects. Average life expectancy of people in Bangladesh is 72.4 years. Life expectancy is 72 years in India and around 69 years in Pakistan.

Bangladesh is also marching forward in basic education. Literacy rate in both Bangladesh and India are 77 per cent while 59 per cent in Pakistan.

Bangladesh is also doing well in maternal mortality, child mortality and birth rate.