Taiwan, Singapore, Hong Kong and South Korea – these were the four Asian tigers. Four Economies in East Asia which underwent rapid industrialisation and saw incredibly GDP growth rates between the 1950s and the 1990s. Economists and investors are oft touting which country they see following in their footsteps. Recently many eyes have turned to Bangladesh. After years of suffering from unflattering comparisons to India it seems Bangladesh may finally be coming into its own
The country, formerly East Pakistan, which gained its independence in 1971 boats a population of 161 million. The last few years have seen its GDP rise to 7% a year and has had a current account surplus for nine of the last ten years. Countries are also lining up to invest, indeed in a recent trip Chinese leader Xi Jinping involved the promise of $40bn worth of loans to be ploughed into improving the countries’ still primitive infrastructure. Japan, Russia and India along with the Asian development Bank hand the World Bank have also promised more in investment, loans and co-operation.
So, should we all be looking to Bangladesh for potential investment and business opportunities. Well perhaps not quite yet. GDP figures belie a country with a long way to go to representing a modern, diversified economy. Consider that 13m homes are still unconnected to the electricity grid, and needs are expected to triple come 2030. Furthermore whilst only second to China in garment exports they currently make up 80% of Bangladesh’s exports, a figure they must change if they hope to experience continued growth.
The political situation is also perhaps to be considered with some concern. The Prime Minister Sheikh Hasina who has been in power since 2009 and is essentially governing with no effective opposition given all other major parties boycotted the last election in 2014. Indeed, many fear things are moving towards a collapse in the Rule of Law with the leader of Bangladeshi National Party, Fakhrul Islam Alanrgir, saying “The media is controlled, the judiciary is controlled and the police are even more enthusiastic than their masters.”
While this may sound less than ideal it shouldn’t be forgotten that the other Asian tigers have seen periods of autocratic rule and continued to flourish before later heading on a path towards liberal democracy.
So whilst not without problems, Bangladesh certainly has the potential to be a future powerhouse of East Asia. Only time will tell whether with investment and diversification the country fulfils a potential that many of its neighbours have realised to stunning effect.