Last week, a news report made the rounds in India and the world about Bangladesh topping the gross domestic product (GDP) growth rate in the past 10 years. The Indian media, online and offline, did express surprise about this development and did not know how to react to projections by the Standard Chartered Bank that Bangladesh's per capita in 2030 would be higher than that of India. The Bangladeshi growth story is something that is being discussed, and there are lessons to be learnt from it.
Bangladesh’s GDP has crossed the $300 billion mark (10 times that of Nepal) putting it among the top 40 economies of the world. By 2030, it is estimated that it will make it to the top 25 economies of the world. A lot of these numbers have come about with increases in exports and a stable exchange rate. Bangladeshi exports will cross $50 billion this year, and its trade with India is increasing. Readymade garments, which make up a big portion of the exports to India, are expected to cross $1 billion this year. These export-oriented manufacturing industries have created jobs that are important to fuel growth.
The other big thing that one can notice is that the Bangladesh taka has remained strong. The taka and the Nepali rupee used to be on par around 2012, with the exchange rate of both being around 1.6 to the Indian rupee. Now, the taka has remained strong at 82 to the US dollar and around 1.2 to the Indian rupee while the Nepali rupee has depreciated. I have continued to question economists who talk about exchange rate devaluation being a necessary tool for boosting exports and continue to talk about how the Nepali rupee is overvalued. However, Bangladesh has increased its exports, especially to India, despite its currency rising in value. What I have understood, and what Bangladesh's rise has proven, is that a stable exchange rate that is strong reduces import bills and increases real income. That helps the economy.
The current government led by Prime Minister Sheikh Hasina has been in power for 10 years, and analysts in Dhaka told me she functions more like a Southeast Asian leader than a South Asian one, with an emphasis on pushing projects, especially infrastructure development, and accepting the challenges that it brings around governance and dissident voices. The infrastructure projects are visible, and the common person on the street is happy about the jobs and earnings that they bring.
This government has been able to keep the China and India balance in a way that Nepal has never been able to understand. While more Indian companies are investing, and imports to India are rising, the Chinese presence is becoming more visible, especially on construction projects. With the Rohingya crisis, Bangladesh has been reaching out to China to manage Myanmar. The current government has the backing of India, and bilateral relationships are at their best with more agreements in transit. My driver in Dhaka told me he would be visiting Darjeeling soon with his family because now it is effortless to get visas to India. Similarly, projects in the Indian state of Tripura are being built by transporting goods across Bangladesh from Kolkata. The way bilateral relations between Bangladesh and India are moving, the entire Bangladesh, Bhutan, India and Nepal (BBIN) platform needs to be revisited to create a futuristic multi-modal platform.
At Dhaka airport, when we landed, 200 Chinese visitors were crowding at the Visa on Arrival counter as we waited an hour for queue-agnostic folks to clear up. I was chatting with the officials, and they did share that this had become a common sight and more Chinese restaurants and hotels catering to them were opening up. The readymade garment industry relies on China for raw materials and machinery. The geopolitics narrative has transformed where key policymakers, business people and especially young people think Bangladesh is at the centre of the growth triangle of China, India and Southeast Asia.
One of the biggest transformations one notices on the streets of Dhaka, apart from the new buildings, restaurants, coffee shops and shopping centres, is the fact that there are more women on the streets than ever before. They are working, and they are leading the societal transformation. Because of ride-hailing apps like Pathao, a woman sitting on the pillion seat of a stranger's motorcycle has become acceptable, and people do not comment on how girls are dressing up or what they are eating and drinking. Many new hubs have emerged, and I enjoyed being at Jatra, a melting pot of art, culture and culinary delights. My young driver in Dhaka was very confident that Islamic fundamentalism had been silenced by the women working in the garment industry and others who have now found their identity as workers, and have the money to buy sarees with their own money. They will not allow any religious fundamentalism to come in the way of progress. He talked about tolerance towards other religions, and how Saraswati Puja and Durga Puja were celebrated in his village with much vigour and masti, because people would get bogged down meeting relatives during the Eid festivals. Many people I interacted with echoed similar feelings.
For Nepal—that is lost in its myopia of repeating the history of rudderless authoritarianism, stifling liberal values and practices, and closing down investments and markets for the outside world with increases in privileges and perks for people in power—there is a lot to learn from Bangladesh. There are similarities in our journey, and there are interests in both countries. Perhaps we can see more movement of people between the two countries, followed by investments.
What do you think?
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