Bangladesh as an independent state turns 50 today (Friday).
Once touted as a 'basket case', the country has now become a 'development surprise' in development pundits' parlance trouncing all odds and ills.
With its gross domestic product amounting to $300 billion-plus and per-capita income of over $2,000, Bangladesh is now the world's 41st economy.
The country soon after its independence in 1971 was synonymous with famine and poverty. But the poverty rate has now dropped to 24 per cent from 60 per cent.
In a review last month, Bangladesh qualified for graduating from the least-developed country (LDC) status to a developing nation, satisfying all the UN criteria.
Economists cited robust consumer spending, higher remittance inflow, buoyant manufacturing sector, including apparel that has grabbed the second position after China in the global market, as key reasons.
In the 1980s, Bangladesh denationalised hundreds of textile manufacturing, established export-processing zones and invited foreign investors and advisers, especially from the US.
The result was a flurry of contracts with designers and retailers in the US and Europe, making 'Made in Bangladesh' a common tag on clothes around the world.
Bangladesh's accession to the World Trade Organisation in 1995 solidified its place as a key player in global trade.
More than 50 per cent of its economy is now linked with the global economy and the youth constitute one-third of its 170-million people to tap demographic dividend.
Surprisingly, even during this biggest humanitarian crisis, Bangladesh has been identified as one of the fastest-growing economies in the world.
But it has weak areas like higher inflation, low employment, low investment, lack of good governance, bureaucratic tangles, slow in adopting new technologies and poor investment in research and development.
Bangladesh Institute of Development Studies (BIDS) research director Dr Monzur Hossain said: "Once termed as a development 'basket case', the country has now emerged as a 'development surprise' at its 50 with particular progress in social and development indicators."
The economic growth of Bangladesh over the past two decades has remained stable at an average rate of over 6.0 per cent, the economist told the FE.
"Nonetheless, macroeconomic stability played a strong role behind impressive economic performances, which was the outcome of policy diffusions towards the private sector-led economy with liberalisation, deregulation and denationalisation in the 1980s and 1990s."
Dr Hossain said remittance, mechanisation of agriculture, ready-made garment (RMG) sector's growth are thought to be the key growth drivers.
"Despite the declining share of remittance and RMG export in GDP, higher growth in recent years may be attributed to the enhanced role of technology and productivity in economic activity."
Widespread mobile telephony, digitalisation of services, capital deepening in sectors like RMG and infrastructural improvement have led the economy on a higher growth trajectory, Dr Hossain observed.
Dr Zahid Hossain, an independent economist, told the FE that Bangladesh's development trajectory is a unique story by many metrics, especially since the 1990s when economic reforms took off.
He said national poverty incidence declined from 60 per cent to around 24 per cent in three and a half decades.
"Bangladesh achieved several MDG targets like reducing headcount poverty and poverty gap ratio, reducing prevalence of underweight children, attaining gender parity at primary and secondary education, under-five mortality rate reduction and children under five sleeping under insecticide-treated bed nets."
"These achievements don't exactly fit predictions from standard models of development," Dr Zahid cited.
Explaining achievements, the former lead economist of the World Bank said: "Clearly, growth played a part."
Growth rate has increased by one percentage point every decade in the past four decades, he uttered.
"Investment in rural infrastructure like rural roads and electrification; technological innovations in agriculture like the use of HYV seeds, chemical fertiliser and modern irrigation systems; emergence of labour-intensive, export-based industries, particularly garments, and the boost to earnings provided by labour migration and inward remittances all played major roles in boosting growth and making it more inclusive than it otherwise would have been."
Dr Zahid said, "Policy-making in Bangladesh deserves praise for putting in place the preconditions for private-sector dynamism to fuel economic growth over the past four decades. Structural reforms in the 1980s and 1990s led to broad macroeconomic stability underpinned by stable external balance and low fiscal deficits, thus allowing a significant rise in the investment-to-GDP ratio."
Bangladesh has earned a reputation in the global market for low-cost, high-quality manufacturing, he added.
"This was demonstrated by the fact that ready-made garment exports from Bangladesh rose impressively even after the Rana Plaza disaster in 2013, defying image crisis and political instability."
There were some economies in South Asia having similar or higher rates than Bangladesh in the past 10 to 15 years, but Bangladesh's social development stands out against these countries.
Dr Zahid suggests that Bangladesh invest in strategically important infrastructure, technology and skills, reform policies to keep up with changing times, and improve quality and safety standards.
"Macroeconomic stability must be sustained. Policymakers must acknowledge the damage corruption and onerous regulation is doing to the country's growth and inclusion of all in the development process."
Major challenges are predictability of a policy environment, corruption, bureaucratic red tape, quality of service delivery, chaotic urbanisation, pollution of all sorts and weak accountability of institutions of governance.
One worrying factor is that higher growth accompanies higher inequality, which also has slowed down poverty alleviation efforts, Dr Zahid noted.
Speaking on the achievement, former BIDS research director Dr Zaid Bakht said food grain production has increased fourfold to nearly 40-million tonnes despite 20-30 per cent decline in arable land.
The share of industry in GDP rose from around 10 per cent to nearly 35 per cent, he added.
"Surge in export earnings from less than $1.0 billion to more than $40 billion is a matter for any economy," said Dr Bakht, now the chairman of Agrani Bank.
Life expectancy also increased from around 50 years to 72 years, he uttered.
According to Dr Bakht, challenges ahead are to reduce the cost-of-doing business, improving quality of public expenditure, quality control and diversification of farm produce, better social safety-net target and improve quality of health services.
jasimharoon@yahoo.com