Compared to its neighbours in South Asia, Bangladesh enjoys the highest growth rates in GDP and GDP per capita in 2019 which have been recorded as 8.1% and 6.7% respectively. Economic growth in Bangladesh has been maintained despite the 1.1 per cent fall in the projected economic growth in the region over the past six months, thanks to the country’s adaptability to the rapidly changing landscape. The Asian Development Bank commended the strategies implemented by the government to enhance economic growth and reported that Bangladesh has the fastest-growing economy in the Asia-Pacific region.
Bangladesh has the fastest-growing economy in the Asia-Pacific region. Between 2009 and 2019, its economy has grown 188%
The main strategy followed by Bangladesh to sustain advanced economic growth has been its openness, and the incentives offered, to foreign investors whose money is being pumped into a number of infrastructural and modernisation projects. In addition, Bangladeshi exporters are continuously finding new markets for their goods and services. For the period between 2009 and 2019, the ambitious economy of Bangladesh grew by 188 per cent and a recent report by HSBC Bank predicted that Bangladesh would be the 26th-largest economy in the world by 2030.
For ten years, since 2018, Bangladesh was ranked the second-highest in terms of export growth globally, and the highest among South Asian nations. Bangladesh is world’s secondbiggest apparel exporter after China, where garments including knitwear and hosiery account for 80 per cent of export revenues. Others products include jute goods, home textile, footwear and frozen shrimps and fish. The country’s exports grew by 4.5 per cent last year and are expected to increase by about 10 per cent this year. The World Trade Organisation ranks Bangladesh as the 42nd largest exporter and 30th largest importer in the world.
“In general, what we see in highfrequency data is that Bangladesh is doing better than the rest of the region, especially India, Sri Lanka and Pakistan. We see that in industrial production and we see that in exports.” - Hans Timmer
Image:Hans Timmer, World Bank Chief Economist for the Europe and Central Asia Region
Despite that most of Bangladesh’s exports are apparel and clothing, its economy is quickly moving to a high-value, knowledgeintensive structure. In 2018, it exported 12 industrial robots to South Korea and four ships to India. Recently, the Indian multinational conglomerate (Reliance Industries Limited) purchased a large number of refrigerators made in Bangladesh. Furthermore, Bangladesh exports its human resources to almost every part of the world, whether professional experts or industrial workers. There are 600,000 IT freelancers offering a wide range of services.
The rise of non-apparel industries attracted more investors to Bangladesh. Over the past two years, the net foreign direct investment has increased by 42.9 per cent, most of which was directed towards the production of electricity, food items, and textiles. Top investors have been coming from China, the UK, the Netherlands, and South Korea. In the meantime, the government has been focusing on bringing in investors from a number of Islamic countries, and some of them have started to show interest in several Bangladeshi industries including Saudi Arabia and the UAE.
Bangladesh offers the most liberal investment policy in South Asia. Investors may invest in readymade garments, infrastructure building, constructions, communication, energy, IT, shipbuilding, tourism infrastructure, light engineering, industrial park and logistics hub.
In 2019, Prime Minister Sheikh Hasina visited the UAE twice: in February and in November. During both visits, a number of agreements were signed between the two countries to collaborate in several projects including between the two countries the establishment of a port and industrial park in addition to setting up of power plants and LNG terminal which will facilitate the supply of LNG and investment in economic zones. Bangladesh’s Prime Minister also discussed the issue of suspended manpower export from Bangladesh to the UAE for over five years.
International organisations have applauded the economic development in Bangladesh. For example, Hans Timmer, World Bank Chief Economist for South Asia said: “in general, what we see in high-frequency data is that Bangladesh is doing better than the rest of the region, especially than India, Sri Lanka and Pakistan. We see that in industrial production and we see that in exports.” However, the World Bank Country Director, Mercy Tembon, stressed that it is “important for Bangladesh to build on the recent achievement and further accelerate regulatory reform efforts to continue to improve the business climate.”
“It would be important for Bangladesh to build on the recent achievement and further accelerate regulatory reform efforts to continue to improve the business climate.” - Mercy Tembon
Image: Mercy Tembon, the World Bank’s regional director for the South Caucasus Europe and Central
Although the rank of Bangladesh on the ease of doing business index is not in an advanced position, the country has made notable progress. Setting up a new business became less expensive with the reduction of registration and name clearance fees and removal of the certifying fee for digital certificates. Obtaining an electrical connection was made more efficient as the city invested in digitisation and human capital. At the same time, the country reduced the amount of the security deposit required for a new connection. More reforms are expected to be enforced in the coming years.