While the COVID-19 pandemic has proved to be a major setback for economies around the world, Bangladesh is no exception. However, according to the International Monetary Fund’s IMF’s latest World Economic Outlook report Bangladesh’s per capita GDP in dollar terms is expected to grow by 4 per cent this year to $1,888- a figure which surpassed other South Asian countries. While other nations are still recovering from the economic slowdown due to the pandemic, the economy in Bangladesh is rebounding to its former days of strong growth. It has been projected that the developing country is one of the fastest growing economies in the world. Mumeninaz Zaman reports.
All about the numbers
In the first quarter of 2019, Bangladesh’s was the world’s seventh fastest growing economy with a rate of 7.3% real gross domestic product GDP annual growth. Along with the IMF, the World Bank and Asian Development Bank (ADB) consider that Bangladesh’s economy will continue its high growth in 2020.
As per reports, the ADB has projected a strong economic recovery for Bangladesh in the 2020-21 fiscal year, when the GDP is expected to grow at 6.8 per cent.
Bangladesh may see remarkable growth in the Asia-Pacific region in 2021 “following only the Maldives, India and China” when neighbouring economies recover from their historic lows, Manmohan Parkash, country director of the ADB in Dhaka, said in a statement.
Reportedly, until September 2020, Bangladesh has been the best-performing economy among 46 countries in the region, including many economies that posted negative growth.
The forecast has come from an update of the ADB’s flagship report, “Asian Development Outlook (ADO) 2020”.
Finance Minister A.H.M. Mustafa Kamal has expressed satisfaction over the ADB’s growth forecast, saying that the growth has been propelled by the people’s working spirit.
The report forecast a 0.7 per cent negative growth for economies across a developing Asia in 2020, which has not happened since the early 1960s, and projected a rapid recovery with 6.8 per cent positive growth in 2021.
The report projected a 1.8 per cent growth for China’s economy in 2020 and a 9 per cent negative growth for India. China will recover with 7.7 per cent growth next year, while India will recover with 8 per cent growth, said the report.
Due to a drastic fall in the performance of the Indian economy, the South Asian sub-region is expected to shrink by 6.8 per cent in 2020, but is expected to rebound by 7.1 per cent in 2021.
The multinational development agency forecasts a 6.8 per cent growth in GDP for Bangladesh for fiscal 2020-21, which is significantly lower than its previous growth projections of 8 per cent in April, which did not consider the impact of Covid-19, and 7.5 per cent in June.
What fuelled the growth of Economy during the pandemic?
The growth in the economy of the small South Asian nation did not happen overnight, strategic efforts and well executed plan were responsible for the steady growth of its economy.
The transition from a co-existing country to an established country has not been an easy ride. Throughout the transformation from an agrarian economy to industrialization, Bangladesh has shown remarkable growth in all aspects.
The strategic location of the country, between South, Southeast, and East Asia makes it an important promoter of cooperation and regional connectivity. Apart from remittances from migrant workers the country has pursued export oriented industrialization with its key export sectors which include- textiles, yarn, jute, leather, seafood, frozen fish and tea. While the main export destinations are the United States and the EU, Bangladesh mostly imports fuel, capital goods and foodstuff originating in China, India, the EU and Kuwait.
Exports of Bangladesh have only increased and diversified. According to a report published in the Dhaka Tribune Bangladesh has recorded an impressive 5.24% GDP growth (provisional) in FY2019-20, despite the devastating impact of the Covid-19 pandemic. Bangladesh’s exports rose by 0.6% to $3.91 billion in July, after suffering an 83% decline to $520 million in April. Imports are also showing signs of improvement, with a 36% rise from May to June. In addition, remittance hit record highs of $18.20 billion in FY20 and Foreign Exchange reserves hit an all-time high of $37.1 billion in July. Agricultural production, a crucial engine of growth, performed better in the pandemic, even though crops suffered due to supply chain disruptions.
Garment sector is the backbone of the country’s economy. As per reports, the sector rose by 2.7% in 2018 to 11.5% in 2019. During the pandemic, this sector initially faced a setback. However, unlike other South Asian it has rolled back in no time.
Inclusion of women has played an impressive role in the economic growth of the country. Female labour participation and growth of the labour intensive garment sector is worth emulating by other South Asian giants. At a time when people were loosing their jobs during the pandemic, Bangladesh was hiring more people in its industries.
The other factors that the country is doing phenomenal work are better educational facilities, development in the IT sector, a tremendous boost in the agrarian economy of the country and remittances.
In addition to the economic growth, the country stepped up its efforts on the health ground to tame the coronavirus, while in many countries the death toll is still on the rise.
In a webinar titled ‘Encountering Coronavirus situation in Bangladesh under the leadership of the premier Sheikh Hasina’, Education Minister Dipu Moni said, “Bangladesh has, to this date, demonstrated an incredible instance of success in dealing with the coronavirus. While different countries are still counting the accelerating death toll, Bangladesh has navigated itself from the corona storm towards a fairly safe ground. While many countries have their economy rolling downward, the Bangladesh’s economy, like before, is going forward. All these are because of the timely decisions of the PM.”
Bangladesh has been struggling with many other aspects. Moreover, COVID is still there, and when the global economy suffers, Bangladesh will also be impacted. Nevertheless, the consistent feat of reviving the economy that the small country has been able to maintain is worth emulating.
Despite the country is categorised as a Least Developed Country (LDC), in the last few decades the country has achieved a significant economic growth and poverty reduction. In recent times the rate of growth has been hovering around 7-8 per cent per annum, which has propelled Bangladesh to be eligible to become a developing country by next year (2021). Now the economic slowdown caused by the Covid-19 pandemic is likely to put that aspiration on hold.