It is not always on the dot, but the Economist's "The world in numbers" issue for the forthcoming year that is typically published in the folding year's December garners a fair amount of respect for being fairly much in the proper ballpark. This 2019 December, it makes Bangladesh the leading growth-rate country in Asia (give or take the war-savaged Syria), indeed across the world since Asia is the machine churning out more goods and services than any other continent currently. For at least four reasons, that stands out: (a) India is slipping; (b) its competitor RMG (ready-made garment) titan, Vietnam, has not vaulted as much as its RMG export climb suggested, while the two other competitors, Cambodia and Myanmar, are not even listed (they may have good growth rates, but not high enough to be listed); (c) the rest of the world will also be barely hanging on; and (d) it is the crucial year to make its golden birth anniversary in 2021 happen as it wishes.
Bangladeshi policy-makers will not be too ecstatic with the 7.7 per cent predicted, since 8.0 per cent has been postulated as the minimum we must have to become a developed country by 2040. While 2040 is too far to discuss, the 7.7 per cent does not close opportunities of growth subsequently. What it does do is to reaffirm the RMG plants have begun folding up slowly, and with automation knocking ever harder on the country's RMG doors, we cannot ignore that option.
Nonetheless, writing in the World Economic Forum's newsletter, Formative Content's Katherine Rooney sees an 8.0 per cent Bangladeshi growth-rate forthcoming, based on Asian Development Bank (ADB) calculations. Her listings show a more optimistic face than the Economist: India, for example, gets a 7.2 per cent growth blessing, against the 6.7 per cent Economist prediction, Whatever India may record, some factors do need to be streamlined better, though. First, so much has been written lately in the Bangladeshi media that India's economy slippage (and it is really slipping, to realists, more than these two predictions portray), beings bad news for Bangladesh. It is hard to understand why that conclusion and where the evidence is coming from, since India is neither a RMG importer from Bangladesh (which, one might daresay, could help India's RMG become more competitive by turning automated, thus even boosting its own growth-rate: more Bangladeshi sales in India, means we will buy even more from India, given our lavish-minded temperament), nor is India running a trade deficit with Bangladesh. Our two economies may be more non-aligned than any two other connected countries that trade significantly with each other. Bangladesh purchases a lot of dirty coal from India (even as India is ramping up its renewable energy sources), which it will gradually be phasing out as it climbs the 'developed country' ladder. This would put bilateral relations on looser footing, a predicament that can be corrected now by playing the 'comparative advantage' game, beginning with the RMG sector. Our short-term gains will be dwarfed over the long-haul by the higher chain-value purchases from India.
Cambodia, Myanmar, and Vietnam have all the makings for revving up their growth-rates since all three are most receptive to hosting off-shore Chinese companies: many RMG plants would have to exit China simply because it is more costly producing there, and China desperately needs a game-changer. Cambodia faces the problem of where to put its future plans more, the United States or China, a very tough choice right now. China has the edge and proximity, but the United States also has hungry markets. Myanmar might have become its own worst enemy by virtue of the Rohingya genocide trials threatening to herald sanctions. China will come to Myanmar's rescue, but it also has a lot invested in Bangladesh it does not want to let go or undermine. Finally, Vietnam is the other country with lots to gain given China's off-shoring plants. It also faces the dilemma raised by its warm relations with the United States. It is the country most immediately threatened by a China-controlled adjacent sea; but a lot may depend on how the ASEAN (Association of South East Asian Nations) relationship with China evolves from this sensitive moment. Against those offsetting observations, Bangladesh does not have new RMG-related concerns. Its better option of diversifying from the RMG mainstay remains its most rewarding policy move.
The third factor of lacklustre rest-of-the-world performances may not affect the RMG industry: outside the fashion industry, clothes is a low-cost necessity for all consumers, and those who purchase fashion items actually will not be affected by market slowdowns or recessions. It is simply that if those lacklustre figures were substituted by more dynamic counterparts, Bangladeshi exports may even climb higher, pushing the growth-rate to the 8.0 per cent figure (as was originally planned when the present concerns were actually absent).
Together with a more robust global economy, Bangladesh should end 2020 with performances consistent with a resounding half-century birthday bash in 2021. This can only be thwarted by squandering resources in meaningless expenditures and carelessness. Plenty is being spent on infrastructure-building, itself another factor why growth should not recede during 2020, since evidence of infrastructures has a long-term impact upon both foreign investors and foreign buyers. Completing some of those infrastructures particularly the Padma Bridge, would rekindle another cry for India to reconsider its trade policies: accessing Southeast Asian markets and building India's Northeast provinces can only be more efficiently done if accesses go through Bangladesh (as opposed to the Siliguri detour or Bay of Bengal route). There is far more in it for India if it begins to not keep Bangladesh as a 'whipping boy', a term used for the lack of any other more appropriate term, but one that does capture all the society-level pressures upon the Indian government to sort of cut Bangladesh down to size.
Within that context, Bangladesh's relations with many of its neighbouring Indian provinces have been better, particularly Tripura and West Bengal. Through them, the vast border-haat proposal needs revisiting: once it becomes more institutionalised and expanded, the volumes of local exchanges could have enormous impact on bilateral trade. This is clearly one factor capable of boosting growth-rates in both countries.
What may scuttle the above growth pathways is deteriorating China-India relations. Bangladesh apparently has been paying some sort of a price because of such deterioration; and clearly, India is not at all happy with Bangladesh courting China, even at the military level (such as receiving submarines). This external development and internal Indian politics remain the two ghosts haunting the Bangladeshi economy. They may be doing more harm to India than to Bangladesh.
Dr. Imtiaz A. Hussain is Dean (Acting), School of Liberal Arts and Social Sciences (SLASS) and Head, Global Studies & Governance Program Independent University, Bangladesh