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One of the many characteristics authoritarian rulers tend to project is that they are larger than life. So, they are in the habit of installing high-rise buildings, bridges, highways, mausoleums, grand religious edifices and so on. Of course, more than as part of doing any public good, they build those structures to serve their ego -- to look great. There are instances among such dictators who could take their countries out of poverty and turn those into the world's leading economies.
Lee Kuan Yew of Singapore was one such leader. However, the Singaporeans would like to call theirs a democracy of a different kind. Some Western economists including William Easterly of New York University would like to call them as benevolent dictators. But most others are not benevolent ones, though they might do a lot of development work to show the world how dedicated they are to the cause of public welfare. But the countries these dictators rule, economically backward and poor as they are in majority of the cases, need foreign aid and investment to carry out development work. That is why, to impress the donor governments and aid agencies, the dictators use various agencies of their government to produce fictitious economic indicators to present the state of the economies as well-performing ones. But international donors have often to depend on the figures so manufactured on economic performance such as GDP, household income, revenue income, export earning, rate of inflation, etc., as provided by the government supposed to receive the financial support or investment.
Reports are coming out on how the erstwhile dictatorial government of Bangladesh that was ousted on August 5 last year used to manufacture false economic indicators and present Bangladesh as one of the fastest-growing economy in the region before the world. The 'White Paper on the State of the Economy' submitted to the Chief Adviser on December 1 has already provided some information on how the deposed government created an illusion of high economic growth and trumpeted it as its success story, though there was no reflection of the so-called growth in the lives of the people. As unemployment was on the rise with no new industries being established, some called it jobless growth. Even so, international community including multilateral donors were seen endorsing the narrative of the government's growth story. As mentioned in the foregoing, the development partners had to depend on government-supplied data on the economic growth. Recently, stating the size of Bangladesh's Gross Domestic Product (GDP) as provided by the former regime at US$459 billion as highly inflated, some economists and experts suggested that the actual figure should be far lower.
If that is true, then whatever the previous dictatorial regime had been saying about the country's economic growth and the entire edifice of positive narrative built on it, which was even acclaimed as phenomenal by some international quarters, would now crumble like a card house. It is now quite plain that the autocratic regime inflated the GDP figure to qualify for foreign loans and investment to carry on with building big projects. Another objective of producing these fictitious figures about GDP, high per capita income, etc., was to justify Bangladesh's claim to the status of a developing country through LDC graduation. To this end, the UN Committee on Development Policy is already working so the country could transition from being a member of the Least Development Countries (LDCs) to the category of a developing nation by 2026. So, many are seriously questioning the issue of Bangladesh's LDC graduation based on false data on its economic growth. Reference might be made here of a World Bank report published in 2022 styled, 'Bangladesh--Country Economic Memorandum: Change of Fabric'. At that time, the report observed that the then-growth structure of the economy was not sustainable and that its growth would fall below 4.0 per cent between 2035 and 2039 unless reform was carried out. Notably, the GDP growth rate during the decade between 2009 and 2019 was shown to be at 7.0 per cent, which was higher by close to 3.0 percentage points than the actual rate of the economy's growth. Evidently, the falsely projected higher growth rate over a decade resulted in the present GDP figure of US$459 billion. By excluding the exaggerated growth figures accumulated over a decade, the real GDP figure would come to a figure that is at least US$100 billion less than what was being flaunted as our GDP size over the years, some economists argue.
In that case, those economists' task would now be to come up with the correct estimate of the country's GDP and apprise the development partners of it to project a cleaner picture of the state of the economy before them. But the fallout from it might prove to be unavailing seeing that in that case the nation's liabilities vis-à-vis its development partners' might in some cases rise. As for instance, the foreign debt to GDP ratio which is at present 22.6 per cent would rise to 29.65 per cent. Similarly, the total national debt for the previous fiscal year (2023-2024) in relation to the GDP would shoot up from what it is now (at 36.30) by more than 8.0 percentage points. In a similar vein, the per capita GDP would come down to US$2040 from what is now at US$2675. In other words, Bangladesh will have now to present itself before the development partners with the real picture of its economy based on accurate facts and figures, not with fake ones. Though the economic indicators, now less impressive but credible in nature, may put the nation in a poorer light before the international community, in the long term an authentic presentation of data would yield better outcome.