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NIKKEI-HASINA-ECONOMY
AL’s victory in the upcoming elections would keep up dev spree: Nikkei
Asian Review
DHAKA, Dec 19, 2018 (BSS) – Japan-based global economic journal Nikkei
Asian Review today came up with an extensive study on Bangladesh saying the
South Asian nation continued to witness “rise and rise” with booming economy
while ruling Awami League’s victory in the upcoming elections would keep up
the development spree.
The journal today carried its cover story titled “The rise and rise of
Bangladesh” with the journal’s Editor-at-large Gwen Robinson being its author
who wrote “with remarkably little international attention, Bangladesh has
also become one of the world’s economic success stories”.
The analysis said after two consecutive five-year terms for the ruling
party, analysts point to a palpable “anti-incumbency” sentiment among some
voters but “from an economic standpoint, many agree that a ruling party
victory would support further development”.
“If the polling passes without too much strife and the status quo is
maintained, then [Bangladesh] would seem an attractive long-term story,” said
Christopher Wood, managing director and chief strategist at Hong Kong-based
brokerage CLSA.
Earlier this year, Bangladesh celebrated a pivotal moment when it met
United Nations criteria for graduating from “least developed country” status
by 2024. To Prime Minister Sheikh Hasina, the elevation to “developing
economy” means a significant boost to the nation’s self-image.
“Exiting LDC status gives us some kind of strength and confidence, which is
very important, not only for political leaders but also for the people,”
Sheikh Hasina told the Nikkei Asian Review in an exclusive interview in
December.
“When you are in a low category, naturally when you discuss terms of
projects and programs, you must depend on others’ mercy. But once you have
graduated, you don’t have to depend on anyone because you have your own
rights,” she said.
Hasina said Bangladesh’s strong economic growth will not just continue, but
accelerate. “In the next five years, we expect annual growth to exceed 9
percent and, we hope, get us to 10 percent by 2021,” she said.
“I always shoot for a higher rate,” she laughs. “Why should I predict
lower?”
The analysis said with remarkably little international attention,
Bangladesh has also become one of the world’s economic success stories. Aided
by a fast-growing manufacturing sector — its garment industry is second only
to China’s — Bangladesh’s economy has averaged above 6 percent annual growth
for nearly a decade, reaching 7.86 percent in the year through June, it
added.
It said the country has achieved near self-sufficiency in food production
for its 166 million-plus population. Per capita income has risen nearly
threefold since 2009, reaching $1,750 this year. And the number of people
living in extreme poverty — classified as under $1.25 per day — has shrunk
from about 19 percent of the population to less than 9 percent over the same
period, according to the World Bank.
On many fronts, the journal said Bangladesh’s economic performance has
indeed exceeded even government targets. With a national strategy focused on
manufacturing — dominated by the garment industry — the country has seen
exports soar by an average annual rate of 15-17 percent in recent years to
reach a record $36.7 billion in the year through June. They are on track to
meet the government’s goal of $39 billion in 2019, and Hasina has urged
industry to hit $50 billion worth by 2021 to mark the 50th anniversary of
what Bangladeshis call their Liberation War, said the journal.
A vast community of about 2.5 million Bangladeshi overseas workers further
buoys the economy with remittances that jumped an annual 18 percent to top
$15 billion in 2018, it said, adding that but Hasina also knows the country
needs to move up the industrial value chain.
“Political and business leaders echo her ambitions to shift from the old
model of operating as a low-cost manufacturing hub partly dependent on
remittances and international aid,” it said.
Hasina launched a “Digital Bangladesh” strategy in 2009 backed by generous
incentives. Now Dhaka, the nation’s capital, is home to a small but growing
technology sector led by CEOs who talk boldly about “leapfrogging”
neighboring India in IT. Pharmaceutical manufacturing — another Indian
staple — is also on the rise.
The government is now implementing an ambitious scheme to build a network
of 100 special economic zones around the country, 11 of which have been
completed while 79 are under construction.
Speaking at her official residence in central Dhaka, the prime minister
rejected local and international criticism of creeping authoritarianism. Her
party, she insisted, is “committed to protecting democracy in Bangladesh.”
Business seems largely on the ruling party’s side — if only for
stability’s sake. In recent interviews in Dhaka, executives and political
analysts dismissed suggestions that political turbulence could derail the
country’s growth trajectory.
“We feel relieved that all political parties are participating in the
elections,” said Faruque Hassan, managing director of Giant Group, a leading
garment manufacturer, and senior vice president of the Bangladesh Garment
Manufacturers and Exporters Association.
“We feel positive that despite political differences we can continue to
keep economic issues separate — although we know that without political
stability you can’t grow, and you could scare international customers,”
Faruque Hassan added.
More successful is Hasina’s digital push. With her son, a U.S.-educated
tech expert, as a key adviser, the program has introduced generous tax breaks
for the information and communications technology sector and a sweeping
scheme to build 12 high-tech parks across the country.
Hasina said the government is taking a more proactive role in the financing
alongside international partners such as China, Japan and international
financial institutions.
“We have undertaken to establish our own sovereign wealth fund, worth $10
billion, to bankroll long-term physical infrastructure development. This is
possible because our foreign exchange reserves stand at more than $32 billion
now, from $7.5 billion 10 years ago,” she said.
Chinese investors also bought 25 percent of the Dhaka Stock Exchange in
2018, and Bangladesh is now the second-largest importer of Chinese military
hardware after Pakistan.
While some may question so much investment from Beijing, Hasina said it is
simply a fact that China is set to play a bigger role in the region.
“Our foreign policy is very clear: friendly relations with everyone,” she
said.
Click here for full-story:
<https://asia.nikkei.com/Spotlight/Cover-Story/The-rise-and-rise-of-
Bangladesh2>
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