The continuous success of gross domestic product (GDP) growth of Bangladesh has become a big surprise to the world. Two to three decades ago, it was beyond thinking that the economy of a country, known for hunger, poverty, drought, flood and disasters, would witness such better growth one day.
However, the country’s GDP growth has risen continuously over a decade, surpassing an 8 per cent-mark a year before coronavirus pandemic. Even the GDP growth of Bangladesh stands at 5 per cent amid the pandemic when many countries have witnessed a negative trend.
Analysis of related data shows, the economic growth of Bangladesh was below 5 per cent for about three decades after independence. The growth surpassed 8 per cent in last two decades. Poverty rate has halved because of high growth. Besides, per capita income crossed USD2,000. Situation, in fact, started changing with widespread participation of private sector because of introducing free market economy in the 1990s. Since then, a matured entrepreneur class has created that keeps local markets vibrant and makes export easy.
Discussion on economic potential of Bangladesh first started in the international arena one and a half decade ago. A report of international investment company Goldman Sachs, in particular, created furore internationally in 2005. The report published a list titled ‘Next Eleven’ (N-11) comprising 11 developing countries including Bangladesh with high growth potential. The other countries are Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Turkey, South Korea, Philippines and Vietnam.
In 2014, France finance and insurance company Coface (Compagnie Française d'Assurance pour le Commerce Extérieur) revealed a list of 10 emerging economies including Bangladesh along with Brazil, Russia, India, China, and South Africa (BRICS). World Economic Forum published an article titled “There could be a new 'Asian Tiger'. Here's why” in 2017, identifying Bangladesh as the ‘emerging tiger’. Before that, Hong Kong, Singapore, South Korea and Taiwan were called the emerging tigers of Asia. These countries have gained unprecedented economic success from 1960s to 1990s.
Regarding the high growth of Bangladesh, the member of Planning Commission’s General Economics Division (GED), Shamsul Alam, said private sector contributed only 11 per cent to the country’s economy in the 1970s. The remaining 89 per cent came from the government sector. But, the creation of entrepreneurs started at the private sector because of the government’s policy support at the beginning of the 1990s. As a result, the private sector’s contribution to economy continues to rise. Besides, more new sectors are introduced and employment also increases, he added.
Surprising growth
Since Bangladesh was a war-torn country following the independence, nation building got the priority in the government’s plans. Led by then-vice chairman of Planning Commission, Nurul Islam, the first five-year plan (1973-77) was formulated.
Records of the plan show, GDP growth was 2.4 per cent in 1972-73 fiscal with a size of Tk 42.94 billion (4,294 crore). The first five-year plan set a target of 5 per cent GDP growth and creating 4.1 million new jobs.
The GDP grew by 3 per cent throughout the 1970s. No change happened in the 1980s. With the participation of private sector, the growth started rising in the 1990s. However, it was limited to 4-5 per cent growth. In fact, the growth of GDP neared to 6 per cent after 2000.
The GDP growth crossed 6 per cent (6.46%) for the first time in 2010-11 fiscal. It rose to 7.11 per cent in 2015-16 fiscal and exceeded 8 per cent in next three years. GDP growth stood at 8.13 per cent in 2018-19, but dropped to 5.24 per cent last year because of coronavirus pandemic.
The size of GDP has also increased exponentially. It was Tk 42.94 billion (4,294 crore) in 1972-73 fiscal. At that time, domestic production and service added this amount of vale to the GDP. Last year, the size of GDP was Tk 11,637.39 billion (11,63,739 crore). So, the capacity of the country’s economy has increased by 271 times in 50 years. Currently, Bangladesh is the 35th largest in the world in nominal terms. The Asian Development Bank (ADB) has predicted 6.8 per cent growth of Bangladesh’s GDP for the current 2020-21 fiscal, which is the fourth highest in Asia. Economic development has also reaped the most benefit in poverty alleviation.
Per capital income increases by 301 times
Bangladesh’s per capita income was USD94 equal to Tk 580 in 1972-73 fiscal, the year after the independence. It took 31 years to reach per capita income a USD500 mark. Per capita income stood at USD510 in 2003-04 fiscal. The figure crossed a USD500 mark after 40 years of independence, reaching USD1,054 in 2012-13 fiscal. Per capital income doubled in next seven years, rising to USD2,064 in 2019-20 fiscal. So, per capital income has increased by 301 times since independence.
*This report appeared in the print and online edition of Prothom Alo and has been rewritten in English by Hasanul Banna