Home / FT View Editorial/ Learning from change

Learning from change


Comments / {{hitsCtrl.values.hits}} Views / Wednesday, 29 August 2018 00:00

Facebook

Efforts by the Bangladesh Government recently to improve relations with Sri Lanka, especially in economic engagement, have highlighted the strong policy initiatives of the Bangladeshi Government to push forward with greater integration in the South Asian region to foster stronger growth.    

Bangladesh spearheading integration in South Asia is all the more impressive given its start and the focus of policymakers in using the 160 million strong population to maximise economic returns by focusing on demographic dividends.   

Bangladesh has become one of Asia’s most remarkable and unexpected success stories in recent years. Once one of the poorest regions of Pakistan, Bangladesh remained an economic basket case—wracked by poverty and famine—for many years after independence in 1971. In fact, by 2006 conditions seemed so hopeless that when Bangladesh registered faster growth than Pakistan, it was dismissed as a fluke.

Yet that year would turn out to be an inflection point. 

Since then, Bangladesh’s annual gross domestic product (GDP) growth has exceeded Pakistan’s by roughly 2.5% points per year. And this year its growth rate is likely to surpass India’s. Bangladesh has emerged on the global stage as one of the fastest growing economies in Asia, marking its presence next to powerhouses such as China, India and Indonesia. 

Moreover, at 1.1% per year, Bangladesh’s population growth is well below Pakistan’s 2% rate, which means that its per capita income is growing faster than Pakistan’s by approximately 3.3 percentage points per year. By extrapolation, Bangladesh will overtake Pakistan in terms of per capita GDP in 2020, even with a correction for purchasing power parity. All this has happened with relatively little notice from other countries in South Asia but a few years ago several Sri Lankan companies spotted opportunities in Bangladesh and moved with commendable speed to invest. At a recent event to encourage more local businesses to follow suit, Bangladesh High Commissioner Riaz Hamidullah spoke enthusiastically about how well Sri Lankan companies are doing in his country. According to the diplomat, Kumarika has become the most popular hair oil in Bangladesh, Hayleys is growing pickles to be processed for Pizza Hut, LTL Holdings has set up two power plants and has applied to list on the Dhaka stock exchange while top Sri Lankan apparel companies are working to create new jute products.  The potential in sectors such as apparel, education, tourism, IT, pharmaceuticals and financial services to name but a few is mindboggling. To top it all Bangladesh is bullish about a Free Trade Agreement (FTA) with Sri Lanka and wants to begin negotiations as early as next month. Bangladesh government officials are already complaining of the high trade tariffs prohibiting trade between South Asian countries and want to connect Sri Lanka and Bangladesh through better air, road and shipping networks. Testimonials from local companies doing business in Bangladesh have been so positive as to be almost gushing and the stage appears to be set for growing engagement. Prime Minister Ranil Wickremesinghe was invited for a state visit to Bangladesh this week and the prognosis for deeper relations appears rosy. 

Bangladesh’s enthusiasm for integration, complete with trade deals, comes at a time when Sri Lanka is struggling with low growth and facing criticism from many local professional organisations fighting against integration. Bangladesh’s story shows clearly how growth does not happen in isolation but requires concentrated efforts to work with other growing economies to synergise complementary traits. Bangladesh opening its economy and actively seeking investment through FTAs is a lesson Sri Lanka would do well to learn from if it wants to create its own magical growth story.       


Share This Article

Facebook Twitter


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

“Sri Lanka’s future lies in producing exportable manufactured goods”: Dr. Howard Nicholas

Monday, 22 July 2019

Drawing lessons from Vietnam’s experiences The Sri Lanka-born economist attached to The Hague based Institute of Social Studies – Dr. Howard Nicholas – addressing a packed audience consisting of the alumni of the Postgraduate Institute of Manag


We should sell our water

Monday, 22 July 2019

When you read the title of this article, you will probably feel disgusted with me as selling our water has been a controversial topic since a long time ago. By the way, I am talking about virtual water trade and you would be surprised to know that we


A voice of compassion amid howls of zealotry

Monday, 22 July 2019

The unrestrained freedom extended by the current regime to a bunch of saffron-clad street vendors of Sinhala Buddhist zealotry is pushing Sri Lanka once again into a cauldron of ethnic and religious convulsion. The nationwide spread and virulence of


Roger Beteille: The man who reinvented the commercial airliner

Monday, 22 July 2019

The visionary engineer, pilot and manager who led Airbus to some its most significant decisions, passed away last month. Beteille, who was the head of French aircraft manufacturer Sud Aviation’s flight testing section, was made technical director


Columnists More