Bangladesh stays in the fast lane
The country that was once dismissed as an 'international basketcase' is flourishing even during Covid times
When it's complete, it will be Bangladesh's longest road bridge. The 10-km bridge stretching across the River Padma will link Bangladesh's southwest corner with the rest of the country, cut travel times and boost trade and commerce. It's a shining example of Bangladesh Prime Minister Sheikh Hasina's drive to keep the economy rolling by building roads, bridges, railways and supplying uninterrupted power to every home.
For a glimpse of an even more ambitious project, head to the Mirsarai Special Economic Zone outside Chittagong. Here, on 30,000 acres of reclaimed land, Bangladesh is building its flagship industrial zone in hopes of enticing companies from around the globe. Bangladesh aims to put up 100 special economic zones by 2030.
Leading the way from India into Mirsarai is the Adani Group which is planning to build a 100-acre zone only for Indian companies looking to set up shop in Bangladesh. Already, there is a $20-million Asian Paints factory slated to launch early next year and a $29-million Berger Paints plant. Other Indian companies in Bangladesh include power generation firms and auto industry stars like Ashok Leyland and the Hero Group.
It was Henry Kissinger who visited newly formed Bangladesh in 1974 and famously declared it to be a 'bottomless basket'. The image has stuck in our minds, so it was a shock jolt when the IMF announced last month Bangladesh's per capita income would overtake India's in 2020. (In 2015, India's per capita GDP was 40 per cent higher than Bangladesh's.)
The fact is Hasina, in power now for 12 years, has worked out an economic gameplan to take her country to the next level. She's steered a steady course, keeping the focus firmly on infrastructure sectors like roads, bridges, railways and power and also leveraged Bangladesh's low-skilled labour to develop industrial export powerhouses, chiefly textiles.
That's paid off and it shows in the GDP figures. Bangladesh's GDP was $102 billion in 2009 soon after Hasina took office. After a decade of over 7 per cent annual growth, it tripled to $302 billion in 2019. Foreign direct investment also tripled in the decade to $3.6 billion. In this Covid year, the IMF projects Bangladesh's growth will tumble to 3.8 per cent but accelerate to 9.5 per cent in 2021. (India's growth is set to contract this year by over 10 per cent.)
What's the USP that would bring global giants to Bangladesh? First and foremost, there's low wages. "If an Indian will do a job for $300, a Bangladeshi will do it for $250," jokes a Bangladeshi economic analyst.
Besides that, Bangladesh is a country that's got its economic act together in more ways than one. Look at the power sector. Step back to the 2000-2010 decade and Bangladesh was a land of long urban power cuts and non-existent rural power. Hasina ended that by simplifying the tendering process, even though it's said to have led to considerable corruption. Today, 93 per cent of the country has electricity and power cuts are a bad memory in Dhaka. The government's looking to get power to the entire country in the next two years.
The booming power sector's one that's attracted Indian companies to our neighbour. Mumbai-based Shapoorji Pallonji's 220MW gas-fuelled Bhola plant is nearing completion, though it may sell the facility to cut debt.
-The Hindu Business Line