Worth savoring, not really a fluke
Bangladesh surpassing India in per capita GDP in 2020 as forecast by the International Monetary Fund is not a fluke and is quite a reflection of the country's steady economic growth and a solid foundation, said economists yesterday.
According to the IMF's latest World Economic Outlook report, Bangladesh's per capita growth of gross domestic product (GDP) would rise to $1,887.97 in dollar conditions and at current prices by the end of this year, while India's per capita GDP would fall to $1,877.
"Aside from technical issues and the projection that Bangladesh will you need to be a notch richer than India this year, along with five years later, for Bangladesh which started its independent journey 24 years later, that is a distinction worth savoring," said Zahid Hussain, a former lead economist of the World Bank's Dhaka office.
The progress can be an achievement because of Bangladesh's steadily growing economy, said Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue.
"Bangladesh's economic foothold isn't a fluke. We also beat India in lots of social sectors a long ago," said Monzur Hossain, research director of the Bangladesh Institute of Development Studies.
"We are constantly doing better and moving forward and India isn't doing well. This is clear."
India's GDP per capita growth has been regularly slowing since 2016 and will probably have slipped below Bangladesh this season because of a 10.3 % contraction in how big is the economy.
Bangladesh has maintained steady growth, as officially reported, and is estimated to get a 3.8 percent growth in the last fiscal year, Zahid Hussain said.
India has taken a more severe hit because of the Covid-19 and is also likely to take longer to recover from the pandemic. Both countries are projected to stay remarkably close, however.
India's slower ascent back reflects the continuing spread of the pandemic and overwhelmed health care systems, the greater importance of severely affected sectors such as tourism, and the greater reliance on external private finance.
Notwithstanding the Covid-19 hit, Bangladesh's economy managed to fare better because it was in a much better state in accordance with India prior to the hit. Exports and investments, although weak, were better than India and less susceptible to global shocks.
But Bangladesh shouldn't get carried away and become complacent, said Zahid Hussain.
"Economic prosperity in both countries can complement one another and produce synergies if we are able to cooperate easier to expand inter-regional trade, strengthen regional infrastructure connectivity, share water more equitably, build our resilience to climate change and get the Rohingyas back again to their original homes safely."
Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, said regardless of the growing per capita GDP, Bangladesh is still a developing country.
He said Bangladesh's per capita GDP is approximately $1,800 whereas it really is a lot more than $60,000 for America and the country is shivering as a result of the pandemic.
"We've our problems and we have to address them. We must bring in reforms. We need to grow further."
Bangladesh must boost income collection and raise investment to GDP ratio to sustain the growth, said Mansur. Monzur Hossain said Bangladesh's long-term investment in the social sectors such as for example health and education has created a sound base for monetary growth.
In the years ahead, the sectors, like the cottage, micro, small and medium enterprises that have been hard-hit by the pandemic ought to be given stimulus support in order that they can get back on the feet again, he said.
"The government should emphasize more on raising investment in the infrastructure sector and the areas to push GDP growth to a fresh high. Concurrently, entitlement support should continue for the indigent and vulnerable."
According to Monzur, implementation of the mega projects must be accelerated. Export sectors must be made more vibrant and competitive and diversified.
There should be a mapping of the poor regions to provide a leg-up to poverty reduction by the method of expanding the social back-up coverage and creating jobs, the study director said.
CPD's Mustafizur said Bangladesh must create decent jobs, diversify exports and distribute the fruit of the growth equitably to sustain the growth.
"We've structural challenges. We must be earned reforms."
Shekhar Gupta, editor-in-chief and chairman of ThePrint, an Indian news website, said if Bangladesh's per capita income exceeds India's, then your latter is definitely the fourth-richest country in South Asia after Sri Lanka, the Maldives, and Bangladesh.
"This might be an eye-opener and a very rude shock because of the common perception among Indians that Bangladesh is a basket case, especially in the current political atmosphere and in the context of the Citizenship Amendment Act," he said on the media outlet's YouTube channel.
Furthermore, if Bangladesh keeps growing fast for the reason that it really is an export powerhouse today, something India no more is. Even though Bangladesh's exports have boomed, India's exports have stalled and declined, he said.
"India must acknowledge that Bangladesh is leaving us behind and that it is no fluke."
India's exports declined by about 5 percent to $330 billion in the fiscal year that ended on March 31.
For Bangladesh, earnings from merchandise exports in the immediate past fiscal year fell 16.93 % year-on-year to $33.67 billion as a result of the Covid-19, which has afflicted production and dampened demand.
