Bloomberg: ‘Pakistan and India both are poorer than Bangladesh.’ What can we learn from our neighbour?
In 1971, Pakistan was 70% richer than Bangladesh. Today, Bangladesh is 45% richer than Pakistan.
When the eastern half of Pakistan, now Bangladesh, broke away from Pakistan in 1971, it was much poorer compared to the western half of the country.
Nevertheless, according to Bloomberg, Bangladesh is now “destined to be South Asia’s standout success”.
This month, Bangladesh’s GDP per capita had surged by 9% over the past year, growing to $2,227.
India’s per capita income in 2020-21 was slightly less at $1,947.
Meanwhile, Pakistan’s per capita income remained the lowest, comparatively, at $1,543 in the same period.
In 1971, Pakistan was around 70% richer than Bangladesh. Today, Bangladesh is 45% richer than Pakistan.
Economist Abid Hussain has even pointed out that Pakistan might be seeking aid from Bangladesh in 2030.
According to Bloomberg, Bangladesh’s growth is based on three pillars: Exports, Social Progress, and Fiscal Prudence.
Between 2011 and 2019, Bangladesh’s exports rose at 8.6% every year, contrasted to the world average of 0.4%.
The progress is mainly due to the country’s constant focus on products in which it holds a comparative advantage.
Meanwhile, the percentage of Bangladeshi women in the labor force has consistently increased, unlike in Pakistan and India, where it has decreased.
Bangladesh has also maintained a public debt-to-GDP ratio between 30% and 40%.
Meanwhile, both Pakistan and India will both rise from the pandemic with public debt close to 90% of GDP.
It is pertinent to note that fiscal restraint has enabled Bangladesh’s private sector to borrow and finance.
In 1971, Bangladesh’s success seemed well beyond a long shot.
Today, according to Bloomberg, the country “seems destined to be South Asia’s standout success”.
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