By Aziz Patwary
Even a decade ago, Bangladesh’s political and economic significance was minimally regarded compared to its other South Asian neighbors. However, the last decade has been a critical departure from such stereotyped ideas as powerful countries nonchalantly often entertained. Bangladesh is now considered to be a new ‘Asian Tiger’ or ‘Fifth Asian Tiger’. Boston Consulting Group, a US-based business consulting firm, says in their recent report Bangladesh is on its way to move towards the club of trillion-dollar economy by 2040.
In terms of economy, the previous decade has been a golden one for the Bangladesh. The country is already on the way to its graduation from the Least Developed Countries (LDC) category by 2026. The country progressed from Low-Income to LMIC status in 2015, and now also targets to become an Upper-Middle-Income Country by 2031. The country made average GDP growth at a very consistent level of 6.4% between 2016 and 2021. Even in the COVID-19 pandemic when all of South Asian neighbors were struggling to manage or turn over their negative growth rate, Bangladesh was blessed to manage its growth rate even at 3.4% thanks to the continuous remittance support and booming RMG sector undamaged by the lockdown. In regards to BCG, Bangladesh is proving itself as the Fastest-Growing Economy than all of its major peers including Vietnam, India and Philippines.
The firm identifies a growing consumption sector, young workforce generation, resilient economy and rising digital adaption are empowering an already booming economic showdown of the country. Added to this, huge participation in the gig economy, increased government expenditure and a fast growing private sector have enabled the economy to spread out its investment and output insurance. The consumer market has globally become the ninth-largest driven by surging affluent and middle class society. The digital movement has enabled a faster growing connectivity in a domestic level concurrent with accelerated digital transactions worth over USD 3.5 billion in 2022. More importantly, the only way of this fast-track economic pursuit has been achieved by the solid optimism provided by the Bangladeshi citizens who continuously believe that their next generation would be much better off than them.
For Bangladesh, this sheer optimism is nothing new. As a nation of rebels and war-fighters, this solid optimism has made the country’s people immune to any setbacks. BCG attributes this attitude as an essential characteristic of the emerging champions as they possess a challenger mindset which demonstrates in their willingness to take out opportunities in challenging economic environments. Adopting this bold attitude, local business firms are growing fast in the national market as well as stepping their foot into the foreign markets.
Alongside expanding business operations country-wide, Bangladeshi companies also proclaim to produce society goods which posits larger social impact on a micro-level. BRAC, one of the leading development organizations in the world, operates as a social ecosystem comprising its social development programmes, education entrepreneurship, banking solutions etc. bKash, BRAC bank, Pathao, ShopUp all of the local companies are providing not only useful services for the society but also helping stream the service-sector operations. Companies like Walton (E&E industry), PRAN (consumer goods), and Summit Group (energy economy) are refining their game not only in Bangladesh but also in Middle East, African and North American markets.
Importantly, these industries are not playing their game alone. In their business operations, to maintain the challenge of daily distribution supply chain, companies are increasingly doing vertical or horizontally integrated operations for a maximized level of production. The companies have invested heavily in different new industries, for example Square Group in in-house power plants, Walton in manufacturing factories, Renata Ltd. partnering with foreign firms for product development capabilities. Now, these companies are also leveraging their data-driven business operations to maintain a more customized, optimized and personalized service to their customers.
Calling these companies as Emerging Champions, the report says what led to this economic drive was essentially an integrated strategic plan to drive short-term decisions into long-term standardized business class governance. Significant private capital funding, synergistic international partnerships, concentrations on product innovation, data analytics and increasing young digital workforce have altogether shaped this contour. Bangladesh has become the second-largest freelancer provider country in the global market with approximately 150,000 to 200,00 active freelance workers. This sector provides hundred million dollar input to the national economy leading to several government incentives to accelerate this digital workforce. Aside from the business sector contribution, mass people’s contribution to the fast-track economic growth has been also possible due to the rapid digitalization of communication, transportation and finance.
However, for a smooth transition to a trillion-dollar economy, Bangladesh needs to heavily focus on the R & D sector for more product innovation which would be especially tricky with respect to its LDC graduation by 2026. The country also needs to focus on attracting more capital funds, foreign direct investments and Corporate Venture Capitals for more partnerships and cooperative engagement in global competition. The Sheikh Hasina government has been very friendly to the private sector’s rise in this regard as expecting future cooperation would enable the private sector to act in a more green-friendly way in Bangladesh. Bangladesh is also leading the way to green factories, as currently hosting almost 183 Leed-certified factories.
Bangladesh’s trillion-dollar economy growth has been only possible for its safeguarding private factories, providing incentives to infant industries, and also supporting mass-population young generation workforce. The incredible growth-story is only proving that if private firms are given more freedom and incentives to perform on their own, they can possibly have more inputs to a country’s economic growth. The case of Bangladesh is a good proof of this fact.
Aziz Patwary is a Bangladeshi-British Citizen and a former employee of the World Bank