The New York Times reported on 23 April, 2012, that Bangladesh has a huge prospect of becoming one of the emerging economies. The country is running on a strong promise of growth despite various challenges the nation of 160 million people is facing.
Similarly, an economic and insurance institution of France has included the name of Bangladesh in the list of ten emerging nations of the world. This French financial institution called 'French Insurance Company for Foreign Trade' (COFACE) observes that the economic march of the five countries belonging to the BRICS is slowing down. The BRICS is the acronym for an association of five major emerging national economies: Brazil, Russia, India, China and South Africa. The grouping was originally known as the 'BRIC' before the inclusion of South Africa in 2010. The BRICS members are all developing or newly industrialised countries, but they are distinguished by their large, fast-growing economies and significant influence on regional and global affairs; all five are G-20 members. As of 2013, the five BRICS countries represented almost 3 billion i.e. nearly half of the world population, with a combined nominal Gross Domestic Product (GDP) of 16.039 trillion US dollars, and an estimated 4 trillion US dollars in combined foreign reserves. Presently, South Africa holds the chair of the BRICS group, having hosted the group's fifth summit in 2013.
These BRICS countries are now suffering from various sorts of problems that hinder their economic progress. They are gradually losing competing capacity with respect to commodity exports. Apart from this, the domestic demands of the BRICS countries are not sufficient to facilitate the speed of increased productive capacity. As a result, these five economies will experience growth rate on an average not above 3.2 per cent per annum. And the ten emerging countries including Bangladesh will achieve economic growth rate that is set to be more than that. The COFACE maintains that the ten emerging countries listed by it are thus going ahead to capture the place of the economies belonging to the BRICS.
These ten countries have again been divided into two groups. The economies belonging to the first group are PPICS, acronym for an association of five developing economies: Peru, Philippines, Indonesia, Columbia, and Sri Lanka. The PPICS nations are now in the most favourable economic condition for economic advancement. These economies are growing very well since their commerce and trade environments are comparatively better than others. On the other hand, the second group includes four least developed economics: Bangladesh, Kenya, Tanzania, and Ethiopia. The COFACE opines about these economies that as trading and business is difficult in these countries their pace of economic development may be hindered. Nevertheless, the COFACE is hopeful and interested about these countries; since the BRICS countries experienced similar problems in 2001, and they could overcome such problems ultimately.
In explaining the economic possibilities of the ten new emerging countries, the COFACE has compared their economic conditions with those of the countries belonging to the BRICS in 2001; and accordingly it passed opinion based on those observations. It has actually been noticed over the past several years - say a decade or two - the numbers of optimistic people and quarters are gradually on the increase so far as their vision, especially about the future of Bangladesh economy is concerned. Some of them even go to the extent of terming Bangladesh as an economically 'emerging tiger' of Asia. They maintain that such possibility for the advancement of Bangladesh economy has been further opened up and accelerated as the world economy has turned its face towards Asia, and as huge economic activities are now specially centred in South and East Asia. As Bangladesh is lying close to this geographical location, it is obvious that it will be logically and sufficiently influenced by such economic health which is being witnessed by the region.
But it is a great challenge for a backward and the most densely populated economy like Bangladesh with a population of 160 million on 142,776 square kilometres of land area. Its population density (people per sq. km) was last measured at 1174.33 in 2011 according to the World Bank, with the GDP standing at worth 115.61 billion US dollars in 2012. The country's foreign reserves amount to 20 billion US dollars as of 2014. Under such circumstances, it is really a great challenge for Bangladesh to materialise this economic prospect that has been opened up in South and East Asia. The prime and predominant factor to keep the country's economic wheel moving or revolving continually, which is urgent, is political stability and internal peace. But at the present moment no one can guarantee such an economically congenial socio-political environment or order for Bangladesh.
There is an important role of the external sector that comes up in the form of export-imports, foreign remittances, foreign aids and investments in the Bangladesh economy. At the same time, the private sector and small and medium initiatives are performing well in the country. Given these favourable factors, it was possible for Bangladesh to maintain a growth rate of more than 6 per cent per annum for the past years. The Bangladesh economy was moving well forward even in the world recession after 2009; it encouraged the World Bank to identify Bangladesh economy as an "unsettled surprise".
It is mentionable that US organisation J.P. Morgan, a leading financial services firm at global scale, made a forecast in 2007 to the effect that Bangladesh will be one of the five advancing economies in the world in the coming days. These five countries were at that time termed the "Frontier Five".
Another financial institution Goldman Sachs Group and other multinational investment banking firms that engage in global investment banking, securities, investment management and financial services primarily with institutional clients, prepared a list of eleven countries that will economically advance after the BRICS countries. Bangladesh was included in that list of eleven countries. It means the observations of COFACE about the economic possibilities of Bangladesh are nothing new, but an addition to the earlier optimism surrounding the BRICS countries.
The ultimate truth is that Bangladesh is an agricultural country, with some 75 per cent of the population engaged in farming. Jute and tea are principal sources of foreign exchange, apart from RMG exports. Major impediments to growth include frequent cyclones and floods, inefficient state-owned enterprises, inadequate port facilities, a rapidly growing labour force that cannot be absorbed by agriculture, delays in exploiting energy resources like natural gas and other related resources, insufficient power supplies, and slow implementation of economic reforms. Economic reform is stalled in many instances by political infighting and corruption at all levels of government. Apart from this, foreign direct investment in the country has been languishing at about 1 billion US dollars a year - less than what Albania or Belarus each receives, and about one-tenth of foreign investments going to Thailand or Malaysia.
It is often observed in the Third World countries that these countries make exaggerated and inflated estimates about their own economic growth for political reasons. On the other hand, the donor countries and agencies quite often also provide fictitious or ambitious estimates and are eloquent in praise about the poor countries they help in advancing economically to sing about their success stories to win the hearts of their own people at home.
Even after that the economic prospect of Bangladesh cannot be played down. Bangladesh can materialise its immense economic possibilities through dynamic political leadership, enacting necessary reforms in its economic policies, building necessary infrastructure, rejuvenating the industrial sector, eradicating the limitations of electricity and energy supply, wiping out corruption, strengthening the agricultural sector and the like in the shortest possible time. We have to keep in mind that time is running out, and the world is moving ahead fast.
The writer is a retired Professor of Economics, BCS General Education Cadre. sarwarmdskhaled@gmail.com
Int\\\'l focus on Bangladesh economic prospects
Sarwar Md Saifullah Khaled | Published: May 17, 2014 00:00:00 | Updated: November 30, 2024 06:01:00
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