21st October – Bangladesh’s economic rise

Bangladesh’s economic rise is an opportunity for India

The International Monetary Fund’s latest World Economic Outlook has triggered much outrage in India. The provocation was the IMF’s prediction that Bangladesh’s per capita GDP will overtake that of India this year. The projected difference is rather small — $1,888 to $1,877 — and unlikely to last beyond this year.

How Bangladesh’s economic rise is significant?

India is missing the bigger story about the strategic consequences of Bangladesh’s economic rise.

  • First, rapid and sustained economic growth in Bangladesh has begun to alter the world’s mental maps of the subcontinent. Over the last five decades and more, South Asia, for most purposes, has meant India and Pakistan. The other countries were generally described as the “smaller” states of the region. Bangladesh was never really small; its population today stands at about 160 million. It is demographically the eighth-largest nation in the world. But it did not seem to matter. The global interest, of course, was riveted on Pakistan — its nuclear weapons, claims on Kashmir, wars with India, role in Afghanistan and its cosy relationship with international terrorism. The economic rise of Bangladesh is changing some of that. If there is no end to bad news from Pakistan, Bangladesh provides a positive narrative about the subcontinent’s prospects.
  • The second implication is about the changing economic weights of Bangladesh and Pakistan in South Asia. This year, Bangladesh’s GDP is expected to reach about $320 billion; the IMF did not have the 2020 numbers from Pakistan to report but in 2019, Pakistan’s economy was at $275 billion. Even more consequently, while Bangladesh continues to grow, the IMF suggests that Pakistan’s economy will contract further this year. A decade ago, Pakistan’s economy was $60 billion larger than Bangladesh. Today, Bangladesh’s weight is bigger than Pakistan by the same margin. There is no question that Pakistan’s negative geopolitical weight in the world will endure, thanks to its muscular foreign policies driven by the army. Bangladesh does not have an atomic arsenal like Pakistan nor does it weaponise violent religious extremism; but its growing economic muscle will help Dhaka steadily accumulate geopolitical salience in the years ahead.
  • Third, Bangladesh’s economic growth can accelerate regional integration in the eastern subcontinent. Whether one likes it or not, the region’s prospects for a collective economic advance are rather dim. Thanks to Pakistan’s opposition to economic cooperation with India and its support for cross-border terror, the main regional forum for the subcontinent, the South Asian Association for Regional Cooperation (SAARC), is in a coma. Instead of merely praying for the revival of SAARC, Delhi could usefully focus on promoting regionalism among Bangladesh, Bhutan, India and Nepal. The BBIN sub-regional forum — involving the four, activated in the middle of last decade — has not advanced fast enough. It is time for Delhi and Dhaka to take a fresh look at the forum and find ways to widen the scope and pace of BBIN activity. Meanwhile, there is growing interest in Bhutan and Nepal for economic integration with Bangladesh.
  • Fourth, the economic success of Bangladesh is drawing attention from a range of countries in East Asia, including China, Japan, South Korea, and Singapore. The US, which traditionally focused on India and Pakistan, has woken up to the possibilities in Bangladesh. That the US Deputy Secretary of State, Stephen Biegun, travelled recently from Delhi to Dhaka rather than Rawalpindi, says something about Washington’s changing South Asian perspective. Bangladesh does not want to get into the fight between Beijing and Washington, but the great power wooing of Dhaka is bound to intensify in the new geopolitics of the Indo-Pacific.
  • Finally, the economic rise of Bangladesh could boost India’s national plans to accelerate the development of its eastern and northeastern states. Consider this: Bangladesh’s economy is now one-and-a-half times as large as that of West Bengal; better integration between the two would provide a huge boost for eastern India. So would connectivity between India’s landlocked Northeast and Bangladesh.

Conclusion –

Bangladesh is getting ready to celebrate the golden jubilee of its liberation from Pakistan in March next year. PM Modi, who plans to join the celebrations, must use the special occasion to jointly develop and pursue with Dhaka an ambitious framework for shared prosperity. That would help India consolidate the golden chapter in India-Bangla relations that Modi has sought to script with Prime Minister Sheikh Hasina.

SourceThe India Express

QUESTION – The economic rise of Bangladesh presents a range of formidable opportunities for not just India, but the South-Asian region as whole, extending up to the Indo-Pacific region. How? Discuss.

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