By Syed Munir Khasru
Chairman, Institute for Policy, Advocacy and Governance (IPAG)
Macroeconomic Stability
Bangladesh rose from its status as one of the poorest nations at the time of its independence in 1971 and attained lower-middle-income status in 2015. The country is on its way to moving from the Least Developed Category (LDC) list in 2026. Bangladesh’s economy has maintained macroeconomic stability over the past two decades and significantly increased its gross domestic output (GDP). The economy became worth USD 355 billion in 2020 –expanding by over 6% annually for the last 15 years. In 2021, Bangladesh’s GDP growth was 6.9% and in the pandemic year 2020, it stood highest at 3.5%, over the average South Asian GDP growth which was at -6.58%. Between 2010-2018, the industry contributed a significant share of GDP, more than agriculture, and increased from less than a third to more than five times. Manufacturing-based GDP grew 8.6% between 2011-2019. High foreign remittance which stands at USD 22 billion is also a great contributor to the economy.
It is noteworthy how Bangladesh rode the pandemic crisis and withstood fiscal pressures of the pandemic while navigating the Rohingya crisis and revenue shortfalls. Bloomberg ranked Bangladesh 24th out of the 53 world economies worth above USD 200 billion in its COVID-19 resilience ranking.
Export-driven Growth
In the past five decades, Bangladesh’s economy grew 271 times over. Good fiscal and budgetary management has resulted in a budget deficit below 5% of GDP. The growth of Export-Oriented Industrialization (EOI) economic policy is a cornerstone of the economy’s growth. In the financial year 2021-22, Bangladesh’s annual merchandise export was USD 52.08 billion, crossing the USD 50 billion benchmark for the first time, beating its target of USD 43.5 billion by 19.63%. In service export, the figure stood at USD 38.75 billion. Between 2005-06 to 2020-22, Bangladesh’s export earnings quadrupled. Bangladesh’s economic strategy of EOI has made it the second-largest apparel exporter in the world. Affordable skilled and semi-skilled labour is the driving force behind the success of labour-intensive industries like clothing.
Astute Economic Diplomacy
Foreign investment, trade and export diversity, employment at home and abroad, technology transfer, and quality services to the Bangladeshi diaspora are key to Bangladesh’s economic diplomacy. Bangladesh actively seeks foreign investments in agribusiness, the clothing sector, leather goods, light manufacturing, power and energy, ICT, etc. Attracting FDI is crucial for Bangladesh. According to the World Investment Report 2021, Bangladesh was the second most favoured country in the subcontinent, following India. Bangladesh saw an investment hike of 13% from the pandemic year, bagging USD 2.9 billion, according to a UNCTAD44 report. Bangladesh is in the process of developing 100 Special Economic Zones (SEZs) and 28 High-Tech Parks to boost industry, employment, production, and export. Mega Projects have been implemented strategically. ADB has committed USD 143 million in trade facilitation to Bangladesh,46 and the World Bank will provide IDA loans worth USD 18 billion to Bangladesh in the next five years. In addition, IFC will finance private sector development and MIGA in energy and manufacturing. Textile and RMG exports are highly valuable for Bangladesh, and its efforts in attracting foreign buyers have significantly boosted the sector. Further, Bangladesh has been trying to strike bilateral agreements and conducting feasibility studies for the same, to improve its international trade ecosystem.
Socio-economic Indicators
Bangladesh’s inclusive nature of economic growth is reflected in its improved education and healthcare systems. Improving fiscal deficit, trade balance, employment, public debt, etc. are noteworthy and over the years, Bangladesh has curbed illiteracy, hunger, and malnutrition through concerted efforts. Investments in education and empowerment have aided in improving education and reducing cases of early marriage. The introduction of tuition fee waivers and stipends has helped improve the situation of girls’ secondary education from 39% in 1998 to 67% in 2017.51 In 2019, the fertility rate stood at 2.01 children per woman, which is a significant improvement for the country. As highlighted, health systems have improved and brought a change in the infant mortality rate which stands at 22.6 deaths per 1,000 live births, which is a 4.47% decline from 2021.
Women’s Empowerment
The government implemented several education initiatives such as free schoolbooks to be distributed at the primary level, free girls’ education up to college, stipends, food for the education programme, and cash transfer for poor households that were successful in bringing female students into the classroom. Effective family planning programmes, and community and mobile clinics have helped communities understand family and resource allocation within a household which has led to a declining trend in births. Similarly, improved healthcare access and outreach campaigns helped reduce maternal mortality. Expanded immunisation, improved water access and sanitation, and provision of supplements created a conducive and safe ecosystem for rural women. Apart from these, the government has promoted the full participation of women in all walks of life. Various laws were amended to safeguard the interests of women – giving rise to gender sensitive policies. Gender responsiveness has been a key element in long-term national policies. Additionally, the government also worked to appropriate laws to tackle
child marriage, violence against women, trafficking, etc.
The introduction of a quota system in parliament and other constitutional bodies which enabled the reservation of seats for women has generated positive results. The government’s investments in building women-friendly infrastructure, skill-based education, and training, and improving access to information have resulted in the women workforce occupying 35% by 2021. The success of the RMG sector with women occupying 80% of the workforce has resulted in the improved social mobility of women. The World Economic Forum Gender Gap Report 2022, assessed 146 countries and ranked Bangladesh at 71– the top in South Asia.
The NGO Factor
There are effective government-NGO collaborations for women’s development in Bangladesh. The collaboration runs health and nutrition programmes, manages girls’ stipends, social security and micro-credit for poverty reduction with several safety-net programmes like the Vulnerable Group Development Programme, Allowances Programme for Widowed, Community Nutrition Programme, etc. for poor women. Apart from programmes targeting poor rural women as beneficiaries, NGOs have made a significant contribution to the growth of Bangladesh’s economy in many ways, these include; humanitarian work and structural development of the organisation for the rural poor, employment generation, organising groups, and improving participation for empowerment schemes. In addition, provisions of microcredit, creating facilities for the poor to enjoy government owned ‘khas’ fallow land and properties, innovating appropriate technology for small and seasonal farmers, health, nutrition and hygiene, and relief and rehabilitation have brought about notable changes.
The Road Ahead
Bangladesh has achieved substantial social and economic growth over the past decades. While the private sector has gained significantly, it must contribute to the economy. Boosting public sectors, such as education will ensure balanced growth and further aid in developing a healthy workforce. Furthermore, Public Private Partnerships and collaborations are a good approach to Bangladesh’s growth.61 It is crucial to note the contribution of the civil society that acts as a buffer to government action, which has been an integral part of the socio-economic growth. This collaboration continues to foster growth, that reflects significantly on social indicators. Further, sustained growth in areas such as ICT and responsible digitalisation is crucial for Bangladesh’s digital future. Bangladesh is on track to achieve its Vision 2041, and other milestones paved within its provisions under a middle-income status. The nation’s sound economic policies and diplomacy, along with the resilience it has showcased in uncertain times such as climate events, global pandemics, recession, etc. are compelling arguments for why Bangladesh holds a bright future.
