Bangladesh at 50: The Rise of a Phoenix from Ashes

Whilst Bangladesh emerged as an independent nation after experiencing the Pakistan Army’s scorched earth strategy in 1971, the country came into headlines, plagued with natural disasters, poverty, famine, a tattered economy, corruption, military coups, and political violence. In its initial years of independence, Bangladesh was often referred to as a ‘basket case’ or test case of development. However, as it stands in the year of the Golden Jubilee of its independence in 2021, Bangladesh’s journey has been perceived as a transition from a ‘basket case’ to a ‘development miracle’ on the global stage. Over the five decades, the country has explored a steady and diligent headway across the development and governance paradigms, which Mark Tully, British Broadcasting Corporation’s (BBC) former Bureau Chief in New Delhi, compared to ‘the rise of a phoenix from ashes’, notwithstanding the inevitable challenges to come. With new challenges and constant changes in the international system, and more precisely, the recent transitions in global politics, Bangladesh, therefore, needs to undergo domestic economic reforms to keep pace with the internal and external dynamics in the coming days to attain its long-harbored dream of Golden Bengal. 

A Land of Enviable Achievements

Bangladesh managed to increase its Gross Domestic Product (GDP) growth at an approximate rate of 7.9 percent on an average from roughly 3 percent in the 1970s. Bangladesh’s completion of the criteria to graduate from Low-Income Country (LIC) to a Lower Middle-Income Country (LMIC) according to the World Bank Criteria, attained in 2015, and the eligibility for graduation from the group of Least Developed Country (LDC) to the Developing Country (DC) status in March 2018 illustrates Bangladesh’s landmark achievements. Moreover, the current status of Bangladesh’s GDP is around 45 percent higher than Pakistan, the country from which it gained independence after a bloody war in 1971. Last year, Bangladesh also surpassed the GDP growth rate and per capita income of India, its closest neighbor in terms of geographical proximity and historical lineage.

Among other achievements, climate issues cannot be ignored as Bangladesh has established its status as an advocate of global environmental concerns and sustainable development. It has been recently appointed as chair of the Asian Disaster Preparedness Center, the Climate Vulnerable Forum, and V20 groups. Bangladesh was also the first South Asian country to develop the Standing Order on Disasters (SoD) in 1997 and Climate Change Trust Fund in 2010. 

In the area of human development indicators, Bangladesh makes significant strides to outpace its neighbors, especially India and Pakistan, on many accounts by reducing its population growth and child mortality rate, while increasing life expectancy and improving literacy rate and health care services over the past half-century. Bangladesh is leading in gender equality in South Asia since 2014, according to the report of the World Economic Forum. Notably, Bangladesh, as per the indices of the Sydney-based Institute for Economics and Peace’s (IEP) 2020 Global Terrorism Index has been crowned the most successful country in 2020 to tackle transnational issues like terrorism in South Asia. However, it ranked 33rd out of 163 countries and it is time to look beyond the South Asian paradigm and ensure high ranks in the global context.

Old Challenges in the New Bottle

Notwithstanding its growth story, the polity of Bangladesh continues to be dominated by its ‘old challenges’ - weak institutions, absence of political accountability and rule of law, socio-political violence, rampant corruption, increasing Islamization, decentralization of power, crippled opposition parties, and patrimonialism. This discussion leads to the notion of the ‘Bangladesh Paradox’ in the development discourse, where tremendous economic achievements have not coincided with robust political openness, democracy, and good governance.

In addition, Bangladesh is set to encounter ‘new challenges’ including the low tax-to-GDP ratio, the loss of International Support Measures (ISMs) and preferential treatments following the LDC graduation, retreat of global trade regimes, dearth of skilled workforce, weak governance and infrastructure deficits, growing disparities and inequality, and environmental vulnerabilities, which needs to be addressed to avoid the possible middle-income trap and to ensure the sustainable graduation from LDC. 

Navigating in the Tumultuous World

In the realm of geopolitics, Bangladesh has gradually shifted from bloc politics towards a more balanced one. Currently, the country has deployed “strategic hedging” as a diplomatic tool to reap benefits from great power rivalries. At this moment, the country’s immediate concern is the Rohingya influx from Myanmar. With more than a million Rohingya refugees from Myanmar, both the economic and political goals of the country will be disrupted. Both bilateral and multilateral efforts are necessary, considering two powerful neighbors—India and China- have respective stakes in Myanmar. It is now imperative for Bangladesh to offer and utilize its own resources vis-á-vis those of Myanmar to juxtapose the security concerns.

As Bangladesh embarks on large-scale investment and economic fortuity, there are lots of opportunities. Megaprojects like the Padma Bridge, Dhaka Metro Rail, Bangabandhu Railway Bridge and Rooppur Nuclear Power Plant, will help the country develop its infrastructure; on the other hand, investments from the neighbors in these projects may open up opportunities to expand the regional reach and use the diplomatic momentum for bargaining over the remaining stakes. At the same time, with the resurgence of geopolitics in global affairs, Dhaka finds itself coveted by the two Asian giants—India and China regionally, as well as the  United States globally—for geopolitical tussles, sphere of influence, investments, aid, and credit lines. Henceforth, Bangladesh needs to keep a cautious eye on the shifting geopolitical alignments in the regional and international levels.

The Long Game

How far has Bangladesh gone to fulfill its long-cherished dream of Golden Bengal? Analysts would say the case of Bangladesh is an archetype of development for developing countries. Understandably, the economy should be one of the primal priorities for any government, but one has to ensure whether the political visions and emancipations have been thoroughly achieved. “Democratic hygiene”, or in other words, bottom-up democratic pinnacles can ensure rule of law, strong governance structure, and positive image. 

Sitting at the 50th year of its independence, the country has elevated its status and the baseline of expectation, and, therefore, it needs to extend its roadmap beyond the national scale and encompass regional and global latitude. 

Policy Recommendations

Bangladesh’s economy is likely to experience a transition shock when it graduates from LDC status as it will roughly lose between 8 percent and 10 percent of its gross export gain. Therefore, reforms in the domestic economic sectors—increased labor productivity, improved tax collection, a lower tax-to-GDP ratio, and more domestic resource collection—are essential to make the transition smooth. To overcome the adverse impacts of the loss of preferential access, Bangladesh also needs to pursue efforts aimed at obtaining new forms of preferential access and free trade area agreements to sustain its burgeoning economy and export-oriented sectors.

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