Bangladesh stays in the fast lane

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Bangladesh stays in the fast lane

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Read more on - Polity | Economy | Schemes | S&T | Environment

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• Bangladesh PM in top gear: PM Sheikh Hasina is keeping undiluted pressure on top priorities which include building roads and bridges, new railway lines and giving regular power to homes. Now she is embarking on a 30000 acres Mirsarai Special Economic Zone (MSEZ), to attract companies from across the world. The goal is to have 100 SEZs in ten years.
• Indians moving in: Adani group has taken 100 acres in the MSEZ, exclusively for Indian firms. Many others are investing as well. The US diplomat Henry Kissinger had famously derided Bangladesh in 1974 by calling it a "bottomless basket". Hence, in 2020, when the IMF spoke about B'desh's per capita income exceeding India's everyone was shocked.
• Hasina's plan: For 12 years now, the PM has worked on a steady economic gameplan with a focus on infrastructure (roads, bridges, railways, power). The idea was to leverage the low-cost low-skilled labour to build export powerhouses in Bangladesh, esp. in textiles. It has worked out well.
• The figures: From $102 b in 2009, the GDP grew to $302 b in 2019, growing at 7% per annum. FDI tripled to $3.6 b. Even during the pandemic, growth will remain positive, not negative. 
• The strengths: Bangladesh offers low wage labour to global giants. It has resolved its power crisis (long power cuts being the norm) of the 2000-2010 period, by a simple tendering process, but rife with corruption! Today, 93% of the country has uninterrupted power. Indian power companies have played a role in it, including Shapoorji Pallonji (220 MW), Reliance Power (750 MW), NTPC + BPDB (1320 MW), Adani Power (selling from its Indian plants) etc. 
• Attracting others: Companies leaving China to avoid US tariffs are being invited, like the Chinese PSU Kunming Iron and Steel Co. They hope to avoid the US trade sanctions. Today, Bangladesh is the third-largest fish exporter after China and India. It exports vegetables to the middle-east, which is hurt due to Covid-19 (India gained).
• Booming textiles: The entire economy is standing on the pillars of its textile sector success, which is 85% of exports, and the huge remittances coming back from 1 crore Bangladeshis working in the Gulf and other places. India got $83 b in 2019 ($64 b in 2020), and B'desh got $18 b in 2019. This year it may rise due to some govt. policy of rewards.
• Pandemic didn't decimate: Initially, it was feared that the pandemic may hit textile sector hard due to poorly ventilated factories jammed with workers. But it held on without major damage. The Indian economy was hit hard, but Bangladesh somehow managed to escape the worst. It is a mystery, but perhaps it's due to the workers being young.
• Chinese in infra: Most of the giant infrastructure projects were taken by the Chinese, though Indians did try. Some went to the Japanese. Today, India may think of an FTA with B'desh, though they'll first want the dismantling on non-tariff barriers in India. Also, B'desh's textiles will harm Indian manufacturers a lot, so tariffs won't go. But greater engagement must be attempted by India.

Read more on - Polity | Economy | Schemes | S&T | Environment

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