Bangladesh on track to success, India surprised
Published: 05:40 PM, 19 October 2020 Updated: 05:48 PM, 24 October 2020
Bangladesh on track to success, India surprised
Bangladesh had already surpassed Pakistan in Gross Domestic Product (GDP). Now it is set to overtake neighboring India in 2020-21, said International Monetary Fund (IMF).
India is naturally disappointed with such news. Indian media is discussing the huge change in Bangladesh, Not only the GDP but also other sectors.
Former World Bank chief economist Kaushik Basu tweeted about it after a report from IMF. He said that if India wants to beat China, they must first overcome Bangladesh. "It's not good news at all for India whose economy was 25 percent ahead five years ago," he said.
A recent report by the IMF has highlighted important data on Bangladesh's economic growth. According to the report, Bangladesh's potential per capita GDP could increase by four percent to 1,888 by 2020. On the other, India's potential per capita GDP could fall by 10.5 percent to 1877. In other words, this is the first time that Bangladesh can surpass India in per capita by $11.
India is now one of the largest economies in the world. India is one of the top 5 countries in the world in terms of total GDP. In terms of total GDP in the world economy, India's share is 3.28 percent, and Bangladesh's share is 0.34 percent. In other words, India's economy is 10 times bigger than that of Bangladesh. So the news of a country with such a large economy being left behind in terms of per capita income may have given rise to much discussion. As a result, the Indian government now has to explain in various ways.
India's economy was largely open in the 90s. Since then, the country's dream has been to compete with China's rapid growth economy. After three decades of efforts, India is lagging behind Bangladesh. This has hurt India's image in the world. The Western nations expect a meaningful counter-attack against China. But that partnership does not mean that India will fall into the lower-middle-income trap. However, experts believe that this could erode India's influence in South Asia and the Indian Ocean region.
The way Bangladesh is advancing and why India is lagging behind? Indian media has cited three reasons for this. These are-
* Since 2004, India's economy has grown faster than that of Bangladesh. And this trend was maintained until 2016. As a result, the gap between Bangladesh and India has not narrowed. But the situation started to change in 2017. Since then, India's economy has been slowing down. On the other hand, Bangladesh is moving faster than before. And it has an impact on GDP.
* In the last 15 years, the population growth rate in Bangladesh was lower compared to India. For example, India's population has grown by 21 percent in 15 years, and Bangladesh's population has grown by 18 percent during the same period. We know that GDP per capita is calculated by dividing GDP by population. The gap between the two countries was narrowing due to differences in population growth. In 2004, India's per capita GDP was 70 percent higher than Bangladesh's. And in 2006 it was halved. Bangladesh has been able to reduce this gap very fast. And Bangladesh went ahead due to the epidemic coronavirus.
* The impact of the epidemic was not equal for the two countries. India is one of the most economically affected countries in the world due to the coronavirus epidemic. On the other hand, Bangladesh is doing relatively well. According to the IMF, India's economy will shrink drastically in 2020, affecting per capita GDP.
Born in 1971, small Bangladesh had to fight a long battle for rapid development. The first report of the World Bank on the economy of Bangladesh was published on 25 September 1972. It is said that the development problem of Bangladesh is very complicated even in the best situation. The people here are very poor. Per capita income is between 50-70. This income has not increased in the last 20 years.
Bangladesh is still very much dependent on industry and services. This sector is now creating employment, which the agricultural sector is not able to do. On the other hand, India is struggling to boost the industrial sector. However, the higher participation of women in the labor force is playing a big role in the progress of Bangladesh. And this is where India lags far behind. The main driving force behind women's participation in the labor force is the ready-made garment sector. Bangladesh has taken a good place in the world market with this garment sector. The participation rate of women in this sector in Bangladesh is 32 percent, while in India it is only 20.3 percent.
The analysis further said that the economic structure of Bangladesh is taking the country forward. For example, in terms of GDP, Bangladesh is now much more dependent on industry and services. This sector is now creating employment, the agricultural sector is not able to do so. On the other hand, India is struggling to revive the industrial sector and people are still much more dependent on agriculture. Apart from this, some other social indicators are also taking Bangladesh forward. Such as health, sanitation, financial inclusion, and women's participation in politics. For example, Bangladesh lags behind India in terms of sanitation. However, the death rate due to unsafe water and sanitation is higher in India than in Bangladesh.
India is expecting to turn around and surpass Bangladesh next year. However, in the last few years, Bangladesh has narrowed the gap with India in per capita GDP growth. Even if it lags behind again, Bangladesh will continue to challenge India in the coming years.