In recent months the critics of the Indian government have spoken much about the achievements of the neighbour Bangladesh more than India. The point that Bangladesh economy may be recording faster growth rate than India has been emphasized to highlight the underperformance of Indian government. I am not sure if this criticism is valid, given the differences in the size and diversity of Indian and Bangladesh economies. Besides, on purchasing power parity India is presently much better Nonetheless, rising beyond politics, I must say that the performance of Bangladesh is impressive. The country has focused on its strengths (primarily agriculture and abundance of cheap labour) and evolved a sustainable economic model that suits it best. It has followed a conventional labour intensive manufacturing led growth model to fully exploit its demographic dividend
As per the latest IMF data
Bangladesh has a per capita income of US$2,227, a growth of 9% over previous
year. This compares with India’s per capital income of US$1,947 at the end of
FY21. However, if we consider on like to like basis, Bangladesh economy
resembles more the economy of Uttar Pradesh, Bihar and West Bengal. The per
capita income in these states is materially lower as compared the Bangladesh,
even if we consider purchasing power parity. In FY20 Bihar has a per capita
income of US$659; Uttar Pradesh US$1,043, and West Bengal US$1,634. These three
states are home to one third of Indian population, numbering more than 2.5x of
Bangladesh population.
Bangladesh population
growth rate is now close to 1% down from ~3% at the time of independence in
1971. The median age of population is ~27years, up from 17years in 1971. Given
that the fertility rate is stable at the ideal replacement rate of 2.1% for
15years now, the demographics shall remain supportive of growth in mid-term.
Of course, illegal
migration helps Bangladesh growth materially. As per the World Bank estimates, every
year about 5,00,000 uneducated and unemployed youth illegally migrate from
Bangladesh to other countries, ensuring a steady stream of remittances for the
economy. Given that the high growth of the economy is sustaining and foreign
investment is accelerating, this trend in migration may reverse in next decade.
On social parameters,
Bangladesh is faring better than India, and significantly better than the
comparable states like UP, Bihar and West Bengal. It
has lower infant mortality rates, higher life expectancy and better youth
literacy. The urbanization is close to 40%.
The best feature of
Bangladesh economy is higher female labour force participation. The Bangladesh
labour force comprises 30% female workers; while in India it is only 20%. In
India this ratio has deteriorated from 30% in 1990 to 20% in 2020; while in
Bangladesh it has improved from 20% in 1990 to 30% in 2020.
The low female
participation in workforce is not only an impediment to higher growth. Rather,
it reflects poorly on the culture, traditions, and law & order situation in
India. Even in the capital city of Delhi, common women are scared to venture
out alone after 8PM.
My fear is that if it
continues the way it is, in 15yrs “illegal Bangladeshi immigrant” will be part
of history. Many of our small businesses and households would have lost a
cheaper source of labour; and Bangladesh and Sri Lanka would be implementing
their own versions of NRC to prevent “illegal Indian migrants” from entering
their land. It might sound seditious paranoia to some, but the point still
remains – do we need a national mission on women development or not.
