The International Monetary Fund’s latest World Economic Outlook published last week has triggered much outrage in India. The provocation was the IMF’s prediction that Bangladesh’s per capita GDP will overtake that of India this year. The projected difference is rather small —$1,888 to $1,877— and unlikely to last beyond this year. But it offered enough ammunition for a political attack on the NDA government’s economic record.
“There are many reasons for anxiety about India’s economic slowdown in recent years,” writes C Raja Mohan in an opinion column in The Indian Express, “but in using Dhaka’s impressive economic performance to attack Delhi’s government, India is missing the bigger story about the strategic consequences of Bangladesh’s economic rise”.
Mohan points out five key implications of Bangladesh’s economic success.
First, rapid and sustained economic growth in Bangladesh has begun to alter the world’s mental maps of the subcontinent. Over the last five decades and more, South Asia, for most purposes, has meant India and Pakistan. The economic rise of Bangladesh is changing some of that.
The second implication is about the changing economic weights of Bangladesh and Pakistan in South Asia. A decade ago, Pakistan’s economy was $60 billion larger than Bangladesh. Today, Bangladesh’s weight is bigger than Pakistan by the same margin. A US dollar today gets you 85 Bangladeshi taka and 162 Pakistani rupees.
“The trend line is unlikely to change in the near future — for Bangladesh has controlled its population growth and Pakistan has not. Dhaka has a grip over its inflation and Islamabad does not,” states Mohan.
Third, Bangladesh’s economic growth can accelerate regional integration in the eastern subcontinent. Instead of merely praying for the revival of Saarc, Delhi could usefully focus on promoting regionalism among Bangladesh, Bhutan, India and Nepal.
Fourth, the economic success of Bangladesh is drawing attention from a range of countries in East Asia, including China, Japan, South Korea, and Singapore. The US, which traditionally focused on India and Pakistan, has woken up to the possibilities in Bangladesh.
Finally, the economic rise of Bangladesh could boost India’s national plans to accelerate the development of its eastern and north-eastern states. Consider this: Bangladesh’s economy is now one-and-a-half times as large as that of West Bengal; better integration between the two would provide a huge boost for eastern India. So would connectivity between India’s landlocked Northeast and Bangladesh.
Source: The Indian Express
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