The article examines the key driving factors of Bangladesh’s stellar economic progress and draws lessons for India.

Overview of Bangladesh’s economic achievements

• Bangladesh’s GDP growth in 2019 was an enviable 8.4 per cent — twice that of India’s during that year.
• It is one of the few countries to have maintained a positive growth rate during the COVID-19 pandemic.
• Its GDP per capita is just under $2,000 — almost the same as India’s.
• In five years, by 2026, Bangladesh will drop its least developed country tag, and move into the league of developing countries — on a par with India.

Parallels between Vietnam and Bangladesh’s progress

• Vietnam instituted market and economic reforms in 1986, which enabled it to achieve rapid economic growth and industrialisation.
• It began with the manufacturing of textiles and garments and moved into making mobiles and electronics.
• As supply chains diversify from China, Vietnam is a beneficiary.
• It is now the “+1” in the “China +1” strategy of multinationals.
• Vietnam has signed trade agreements and inserting itself into global supply chains.
• Bangladesh has followed a similar strategy.
• Its rise is directly connected with the textiles and garments industry, which accounts for 80 per cent of the country’s exports.
• Bangladesh also enjoys preferential trade treatments with the European Union, Canada, Australia, and Japan with negligible or zero tax.
• With India too, Dhaka has a zero-export duty on key products like readymade garments.
• Like Vietnam, its foreign investment regime is investor-friendly.
• For instance, Bangladesh’s liberal FDI policy allows 100 per cent equity in local companies and no limits on repatriation of profits in most sectors. 
• Indian companies are increasingly present in Bangladesh, and Indian products are popular — an outcome of a strong cultural affinity.

Women in workforce and microfinance

• The world’s most successful and pioneering microfinance organisations like Grameen and BRAC have aided small businesses in the country, and regionally.
• Many of these schemes, over the years, were directed at women.
• This has paid dividends not just in financial independence, but also in encouraging them to work outside the home.
• Consequently, Bangladesh’s workforce in its textiles sector is almost all women — 95 per cent women in an industry which is 80 per cent of Bangladesh’s exports.

Role of government schemes

• This, along with government schemes like Pushti Apas (Nutrition Sisters) and community health clinics has helped Bangladesh in the development indices.
• Bangladesh fares better on infant mortality, sanitation, hunger and gender equality than many countries including India.

Key lessons for India

• Increasing women in the workforce, liberalising internal and external trade, and making micro lending accessible, are some of the lessons.
• But so is the goal of being a global hub for the sub region, building special economic zones which requires infrastructure, connectivity and a welcoming environment for investors both domestic and foreign.
• both countries have suffered since 1947, without connectivity, at huge cost.
• It is time to integrate our power systems, think about free trade, liberalise the visa regime.

Conclusion

India need not always carry the burden of South Asia’s development alone. It now has a partner with whom to collaborate effectively towards achieving that goal.

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