Bangladesh, a resilient nation born amidst adversity over five decades ago, has achieved a remarkable economic progress with its economy reaching an impressive $454 billion in FY23, a stark contrast to the meagre $8.75 billion in 1971.
The journey from a 5.48 per cent negative GDP growth in 1971 to a 6.03 per cent growth in FY23 is a testament to the nation's indomitable spirit.
As Bangladesh celebrates its 52nd Victory Day today, reflecting on the past is essential.
Following the victory over the Pakistani occupation forces, the nation faced the monumental challenge of rebuilding an economy characterised by underdeveloped infrastructure, stagnant agriculture, and a burgeoning population.
In 1973, the Father of the Nation Bangabandhu Sheikh Mujibur Rahman laid the groundwork for a self-reliant Bangladesh through the visionary first five-year plan (1973-78). This transformative plan aimed to eradicate poverty, hunger and corruption while fostering rapid income growth and shared prosperity.
Sheikh Mujibur Rahman emphasised the significance of commitment and hard work, stating that no plan, even well-formulated, can be implemented unless there is total commitment on the part of the people of the country.
The first five-year plan is widely acknowledged as the foundation of Bangladesh's economic success, setting the stage for the nation to become a global role model.
Under the leadership of Prime Minister Sheikh Hasina, the daughter of Sheikh Mujibur Rahman, Bangladesh continued its economic and social ascent.
Despite inheriting a fragile economy in 2008, the government through its well-planned strategies has achieved a remarkable GDP growth exceeding 7 per cent within a decade.
Presently, Bangladesh stands as a food-surplus country, with rice production skyrocketing from 10.8 million tonnes in 1971 to 39.1 million tonnes in FY23 with over 3.5 times higher than independence year.
The nation's economy underwent a transformative shift from agricultural dependence to a growth model driven by the industry and service sectors.
Exports, particularly in the readymade garments (RMG) sector, contribute significantly to the economy, with a total of $46.99 billion in FY23, which is roughly 84 per cent of total export earnings in the fiscal year.
Bangladesh's foreign exchange reserves, which were a mere $270 million during liberation, now stand at $19.16 billion (BPM6) as of December 14 this year as per the International Monetary Fund (IMF) methodology, reaching a peak of $48 billion in August 2021.
As Bangladesh aims to graduate to a developing country by 2026, the focus is on implementing the 8th five-year plan, targeting 8.51 per cent GDP growth and reducing the poverty rate to 15.6 per cent.
Corruption, mismatch measures hinder sustainability
Though the country witnesses an upward trend in GDP growth and expansion of macroeconomic stability, corruption in the country and mismatch in the fiscal and monetary measures hinder the country’s sustainability and macroeconomic stability.
Currently, the country is facing forex crunch, witnessing skyrocketing prices of daily essentials, slow credit and export growth in the current fiscal year along with downward trend in remittance earnings.
Besides, there is instability related to the upcoming national polls. Businessmen voiced concern over political unrest in the country, disruption in the supply chain, and delivering ongoing work orders.
Economists stress the need for a corruption-free administration and efficient plan implementation to sustain this positive trajectory.
Zahid Hussain, former lead economist of the World Bank Dhaka Office, underscores the importance of a sustainable system for a long-term macroeconomic stability.
“The government should have to take necessary measures to reform the banking sector and revenue administration after the national election so that forex crunch can be reduced and revenue mobilisation can be increased.”
“There is no scope to wait for global economic strain curtails, and then our external account imbalance will be balanced. Instead, we should take into account the post-election period soon, and huge reforms of every sector including revenue. The financial sector will require reforms with curbing corruption and evasion,” he added.
