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Bangladesh 'surges' past India in per capita GDP: Lessons to learn from Land of River

Bangladeshi garment workers on a strike
By Biswanath Sinha*
Tripura is the only state in Union territory of India with a border in its all four corners with a foreign country – Bangladesh. This is also probably the only state where the indigenous people have been outnumbered in population since Independence by influx happening from across the border.
Much of the recent electoral political history of it has been dominated by the issue of son of soil versus the immigrants into this hilly terrain and its foothills. However, it did not catch much national attention when in 2018 the Chief Whip of the Communist Party of India (Marxist) claimed that about 600 tribals from Tripura went to Bangladesh in search of food and jobs.
Many reports and studies indicate that Bangladesh has been making commendable progress in all social indices over the last decade. In the book “An Uncertain Glory: India and its Contradictions”, development experts Jean Dr├Ęze and Amartya Sen had narrated in 2013 that Bangladesh had been outshining its larger neighbours on indicators such as infant mortality, child immunisation, female literacy, access to improved sanitation, and total fertility rate.
For a country born out of bloody conflict in 1971 having the largest population density (among larger countries) almost three times as dense as India, this is undoubtedly a phenomenal achievement. Over the time, it performed better than India in some other major indicators including hunger index and population growth rate. Only on per capita GDP India was better off. Unfortunately, despite all these, the country was viewed only from the lenses of natural disasters, wrenching poverty, famine and political violence by many so far.
The Bangladesh growth story captured our imagination when in 2019 in its Outlook 2019 Report, Asian Development highlighted how the GDP growth rate outlook for Bangladesh might bypass that for India by 2020.
One year later, the International Monetary Fund’s latest update on the World Economic Outlook released in October 2020, indicated that growth of India’s gross domestic product (GDP) would witness a contraction of over 10 percent. But more importantly it made an observation that in 2020, the per capita income of an average Bangladeshi citizen would be more than the per capita income of an average Indian citizen.
The IMF’s latest report suggests that the gap in per capita GDP between these two countries is set to disappear, and Bangladesh and India are expected to be neck and neck until 2025. The IMF’s projections show that India is likely to grow faster next year and in all likelihood again surge ahead. But, given Bangladesh’s lower population growth and faster economic growth, India and Bangladesh are likely to be neck and neck for the foreseeable future in terms of per capita income.

Social development indicators

While comparing the per capita GDP, there is debate going on to bring into the inflation and the purchasing power parity (PPP) factors. But what is undeniable is that the smaller neighbour has made remarkable strides in human development parameters over a period of time. The following table illustrates it:

How eastern Indian states stand

It is worth mentioning that compared to India, Bangladesh is a smaller country geographical area wise. On impact between the people living across the borders, it will be interesting to see the comparison between Bangladesh and its neighbouring Indian states. Bangladesh has borders with West Bengal, Assam, Meghalaya, Tripura and Mizoram states of India.
Assuming that per capita income of India and Bangladesh is almost at par, then definitely per capita income of all neighbouring Indian states of Bangladesh except Mizoram is lower than the country of the rivers.
While many indicators can be studied for comparison between Bangladesh and its neighbouring Indian states, one interesting point to analyse could be the gap in income of the people there. As per Central Statistical Organisation data, all the states mentioned here except Mizoram have an income level of below the national average.
Considering the fact that Bangladesh has just surpassed India in per capita income, the per capita income in the states of West Bengal, Assam and Meghalaya remain far below the income level of Bangladesh. On this aspect while Tripura is below Bangladesh average, Mizoram could be at par with it. This probably illustrates the reported influx of villagers from Tripura to Bangladesh.
As per the “Human Development Report 2019: Inequalities in Human Development in the 21st Bangladesh” by the UNDP, inequality in income in India is 18.80 percent while in Bangladesh it is 15.70 percent. it is 15.70 percent. This indicates that proportionately more vulnerable people reside on the Indian side and in near future there is possibility of more migration happening from Indian states to Bangladesh unless the situation is arrested there.

NGOs and women: Key drivers for Bangladeshi growth story

Among many factors for success, roles played by women in the economy and by the Non-Government Organisations in Bangladesh stand out. It is remarkable that in Bangladesh two out of five women of working age are in the labour force, almost double India’s 21 percent participation rate. What is more remarkable is that fact that in Bangladesh, female labour participation is 36 percent and rising; whereas in India it’s 23 percent and has fallen by 8 percent in the last decade.
Bangladesh is also far ahead of India in the latest gender parity rankings. This measures differences in the political and economic opportunities as well as the educational attainment and health of men and women. Out of 154 countries mapped for it, Bangladesh is in the top 50 while India languishes at 112.
Second, unlike in India, non-governmental organisations (NGOs) have been encouraged to play a crucial role in Bangladesh’s development. An outstanding example is the multi-faceted development agency Building Resources Across Communities (BRAC). According to “The Economist”, BRAC is now the world’s largest charity
Bangladeshi women working in a garment factory
Its programme provides a monitored pathway out of extreme poverty and has been adopted by NGOs in 45 countries. The roles played by many micro finance institutions like Grameen Bank, ASA, BRAC, PROSHIKA, etc. in lifting many families out of the vicious poverty cycle is also well documented.

What Indian can learn from Bangladesh

Bangladesh is a small country in comparison to India. But the economic strive it has demonstrated in the last few decades should be an eye-opener for its larger neighbour. There are many aspects of the development process which India, especially eastern India can adopt and adapt from Bangladeshi stories. In many ways the region is already replicating the Bangladesh microfinance model.
Bandhan Bank and North East Small Finance Bank (NESFB) are almost modelled on them. It can collaborate and learn in the fields of agriculture, fishery, livestock, health, hygiene and education too. Unlike in India, Bangladesh allows the NGOs to generate its own revenue which in turn gets reinvested in further economic activities.
The regulation on the non-profit sector is much liberal there and despite some drawbacks, now it’s universally acknowledged that the non-profit sector has contributed significantly to the country's agenda and its national progress. Unfortunately, with more restrictions put through The Foreign Contribution (Regulation) Amendment Act, 2020, etc. India seems to walk the opposite path.
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*With Tata Trusts, Mumbai. Views are personal

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