OPINION: Why Bangladesh may overtake the West by 2050?

Dhaka (The Daily Star/ANN) - Prediction is a dangerous business. It can literally put you out of business. But last week, when the influential UK daily, The Guardian, predicted in a report that Bangladesh along with eleven others called the "new wave countries" could be overtaking the West by 2050, it sounded much like an old wives' tale. Bangladesh is still one of the Least Developed Countries. Certain green shoots are, of course, sprouting. But the country is very much mired in its own mess and shall remain so for very many years. Yet there are voices that have joined The Guardian and they feel that the prediction is based on certain solid prognostications.

In 1968, Swedish Nobel Laureate economist Gunnar Myrdal published his three volume magnus opus entitled Asian drama: An enquiry into the poverty of nations. In it he said that Asia was poor and most likely to remain poor. Poverty and Asia were therefore synonymous. So, till the 1970's, the West never contemplated investments outside the West. East and South Asia were of course given a wide berth.

Look at how things changed dramatically in 40 years. Not only North East Asia including China, Japan and South Korea rose swiftly but also several countries of South East Asia developed very fast. First, they introduced market reforms with all the institutional underpinnings. Then they wizened to the development of their human capital. Finally, they exploited the benefits that came from globalisation. Very soon, the West found itself ensnared in their credit lines, innovations and their advanced system of economic governance.

Western countries are now in a quandary. Their economies are struggling against huge debts. Unemployment is very high. They are reluctant to welcome cheap labour from Africa and Asia because of their latent fear of being overwhelmed. Europe has built fortress-like walls to regulate movement of foreign labour into the region. Costs of production therefore have gone up and domestic consumption has tapered off. Poor economic governance has impoverished further the people and institutions there.

Kishore Mahbubani, the diplomat turned intellectual from Singapore, writes that the West now suffers from "myopia, complacency and self-centredness." Europe has "failed to engage properly with neighbours. Neither the Balkans nor North Africa benefited from their proximity to the European Union." Nor did the European Union develop constructive relationship with Turkey. As Europe aspires to be a global power it fails quite miserably in global responsibility and indeed in global interest.

In its place, the East has emerged as a shining global star. Till the 15th Century, the GDP of China and India [including Bangladesh] had accounted for three-fourths of the world GDP. During the period of colonisation these two major civilisations lost their ability to produce income and wealth. But they are resuscitating their past economic glory. The OECD [the club of rich western countries] predicts that China would outstrip the USA in GDP per capita by 2030 and India would do the same by 2050.

The rise of the West, according to US intellectual Niall Ferguson, had been due to use of the following six "killer applications":

-Competition: Europe was fragmented till the 18th Century. Fragmentation encouraged competition among states;

-Scientific revolution European innovation, especially in weapons, gave Europe and the USA military dominance;

-Property rights: A grounding in democracy and property ownership led to economic growth;

-Modern medicine: Vaccination for smallpox and yellow fever doubled life expectancies;

-Consumer society: From the 19th Century to the present, the Western countries are spending societies;

-Work ethics: Protestantism brought in the attributes of hard work, savings and reading to Western societies.

However, the East has now used all these as well as the free market to accelerate economic growth. This has uplifted the human spirit. It has "liberated the minds of hundreds of millions in the East, who now feel that they can finally take charge of their destinies." India, China and the non-Arab Muslim countries have become the main foci of the West's challenge. Each of these nations has large populations or/and is big in size. Most of them have invested heavily in infrastructure and education. So they have long term growth potential. They, however, need periodic calibration of their macro-economic policies so that inflation and budget deficits can be kept under control. Bangladesh is one such non-Arab Muslim country that has become a focus of interest to the West. Over the past decade it has grown in spite of several major challenges.

Bangladesh has maintained macro economic stability for more than a decade. During this time, with an average annual growth rate of 6 per cent, inflation remained mostly below double digits. The country has a sound fiscal policy. It has also been able to maintain export competitiveness. By adopting a floating exchange rate it has been able to eliminate exchange rate volatility. It has therefore being able to accumulate over US$12.5 billion foreign exchange reserves, which is still growing. Three major development indicators, such as M2 to GDP, private credit to GDP and bank deposits to GDP, have improved significantly. Its financial system is now market based and is deepening each day.

The 2013 World Development Report has therefore stated that some countries have done well and shown healthy human development indicators, other countries have done well in economic growth. But Bangladesh belongs to a select group of countries that have done well on both fronts. Yet, Bangladesh faces several major challenges. One of them is confrontational politics, which often paralyses the urban economy. Vested trade union groups disrupt industries and ports. Corruption delays high impact infrastructure development.

Forty years is a long time for any country, more so if it is forty years in the 21st Century. Bangladesh has several things going in its favour. First, the demographic dividend. As years pass, the average age of its citizens will be lower, but the total size of the population will be larger. The number of people by 2050 would be around 220 million. But these large numbers would not make it a dependent population. Instead, young, educated and dynamic people would be steering the country forward.

Next, Bangladesh is relatively small in size. It would be able to develop a world class physical infrastructure with a reasonable outlay. Not more than US$200 billion at today's prices would do the job. This would include cost of protection against climate change. Once infrastructure is built and businesses flourish, domestic demand for consumer goods would fuel growth. There would also be added earnings from exports, which would be increasingly diversified and sophisticated. Our regional market is also huge as it includes India, China and the Asean countries. Increased remittances from our nationals abroad as well as agricultural surplus would pave the way to greater prosperity.

The West would of course not be sitting idle. But unless it is able to integrate closely with the rest of the world their economic growth could remain anemic.

As Winston Churchill had so aptly said: "The empires of the future are the empires of the mind." Let us prepare our minds for this singular endeavour. We are bound to revisit this proposition in 40 years time.

The writer is a former Ambassador and a regular commentator on contemporary affairs.

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Lupita Nyong'o's $150,000 Oscars dress stolen from hotel
    Lupita Nyong'o's $150,000 Oscars dress stolen from hotel

    The $150,000 pearl-studded, custom-made Calvin Klein dress worn by Oscar-winning actress Lupita Nyong'o at this year's Academy Awards has been stolen, police said on Thursday. The gown, embellished with 6,000 natural white pearls, was stolen from Nyong'o's room at the London Hotel in West Hollywood, during the day on Wednesday, a spokesman for the Los Angeles County Sheriff's Department in West Hollywood said. "Ms Nyong'o was not in the room at the time of the theft," Deputy John Mitchell …

  • US-led strikes on IS after group seizes 220 Christians
    US-led strikes on IS after group seizes 220 Christians

    The US-led coalition has carried out air strikes against the Islamic State group in northeastern Syria, where the jihadists have launched a new offensive and kidnapped 220 Assyrian Christians. The raids on Thursday struck areas around the town of Tal Tamr in Hasakeh province, the Syrian Observatory for Human Rights said, without giving information on possible casualties. The town remains under the control of Kurdish forces, but at least 10 surrounding villages have been seized by IS, along …

  • Militants abduct more Christians, smash ancient artifacts
    Militants abduct more Christians, smash ancient artifacts

    BEIRUT (AP) — Islamic State militants seized more Christians from their homes in northeastern Syria in the past three days, bringing the total number abducted by the extremist group to over 220, activists said Thursday. …

  • 13 of 15 SAF survivors to leave PNP hospital
    13 of 15 SAF survivors to leave PNP hospital

    Thirteen of the 15 Special Action Force (SAF) policemen who survived the bloody firefight with Muslim rebels in Mamasapano last month are ready to go home after a month of medical treatment, a police official said yesterday. Philippine National Police (PNP) spokesman Chief Superintendent Generoso Cerbo Jr. said the two remaining survivors will have to stay in hospital for further treatment, one of whom has shrapnel embedded near his spine. One of the two SAF commando survivors is still …

  • 3 Pinays on Forbes power women list
    3 Pinays on Forbes power women list

    Three Filipina executives, who are all daughters of known business tycoons in the country, made it to Forbes’ list of the 50 most powerful businesswomen in Asia. Teresita Sy-Coson, vice chairman of SM Investments and chairman of BDO Universal Bank, was included in the list for the fourth year in a row since its inception. “Under her (Sy-Coson) lead SMIC became the largest listed company on the Philippine Stock Exchange by market cap. Also in the 2015 list is 70-year-old Helen Yuchengco-Dee, …

  • Review: SKK Mobile V2, a P3,999 watered-down LG G2
    Review: SKK Mobile V2, a P3,999 watered-down LG G2

    How well does this P3,999 offering from an underdog in the local mobile industry stack up against the competition? Let's find out. …

  • US sends spy plane to patrol disputed sea
    US sends spy plane to patrol disputed sea

    The United States has deployed its newest and most advanced surveillance aircraft for patrols over the West Philippine Sea and South China Sea. The P-8A Poseidon aircraft completed more than 180 flight hours from Feb. 1 to 21 from Clark Air Base, according to the US Navy’s 7th Fleet. …

  • U.S. flies most advanced surveillance plane from Philippines

    By Manuel Mogato MANILA (Reuters) - The United States has begun flying its most advanced surveillance aircraft, the P-8A Poseidon, out of the Philippines for patrols over the South China Sea, the U.S. Navy said on Thursday, acknowledging the flights for the first time. The United States, the Philippines' oldest and closest ally, has promised to share "real time" information on what is happening in Philippine waters as China steps up its activities in the South China Sea. China claims most of …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options