Editors note: This is no surprise. Amartya Sen has been excitedly speaking about Bangladesh’s investment and progress in health and education during the last 25 years. The result of grassroots level investment in healthcare and education is fundamental. It results in progress. A healthy, educated population will surge ahead to progress economically. It is not rocket science. It is a simple formula.
The most important take away here is that Bangladesh’s financial investment was not high, but they put whatever they had into health and education. A country does not have to be rich to make this investment. But this is the one and only thing that can make the nation rich.
According to IMF, with catastrophic economic collapse India will slide to 3rd poorest in South Asia with only Pakistan and Nepal reporting lower per capita GDP.Even Bangladesh would move ahead of India with $1888per capita as against India’s $1877 in 2020. Total policy failure!
Troubling IMF GDP growth forecast for 2020:
Bangladesh: +3.8
China: +1.9
Pakistan: -0.4
India: -10.3
Source: World Economic Outlook, October 2020
What makes this tragicomic that there was serious writing around India benefiting from this by attracting industry that was supposedly leaving China.
From Superpower 2020 to Lockdown, Indians are Monty Python’s Black Night when it comes to development over-optimism.
According to Business Standard,
Till five years ago, India’s per capita GDP was nearly 40 per cent higher than Bangladesh’s.
In the last five years, Bangladesh’s per capita GDP has grown at a compound annual growth rate of 9.1 per cent, against 3.2 per cent growth reported by India during the period.
Bangladesh is set to beat India in terms of per capita gross domestic product (GDP) this calendar year, thanks to a sharp contraction in the Indian economy due to Covid-19 and the economic lockdown.
Bangladesh’s per capita GDP in dollar terms is expected to grow 4 per cent in 2020 to $1,888.
India’s per capita GDP, on the other hand, is expected to decline 10.5 per cent to $1,877 – the lowest in the last four years.
This makes India the third poorest country in South Asia, with only Pakistan and Nepal reporting lower per capita GDP, while Bangladesh, Bhutan, Sri Lanka, and Maldives would be ahead of India. [1]
Female Literacy rate
India: 65.8 %
Bangladesh: 70.2 %
Total fertility rate (TFR)
India: 2.3 births per woman.
Bangladesh: 2.1 births per woman.
It’s not just GDP, Bangladesh has a higher female literacy rate and a low TFR than India. And this nation suffered a war in 1970’s.
The present politics of India revolve around dividing the society on communal/caste lines and spread hatred and distrust within different communities. The more is the polarization in society, the stronger are the politicians whose business is to divide and rule the people.
Reference: India set to slip below Bangladesh in 2020 per capita GDP, says IMF
Why are manufacturers not rushing into India?
Let’s put it this way… Why should they? What does a manufacturer look for when they set up a shop?
1st the basics.
A high school economic book tells us that factors of production include
LAND: This is where the problem begins. Despite several govt. “Policies” Land acquisition is still a difficult task. Remember how Tata had to move out of West Bengal. ? Even if you get hold of an industrial plot, getting clearances from a hundred departments is a nothing short of a nightmare. Babus have no incentive to work if there isn’t sufficient “greasing” of the hands.
LABOUR: Here the problem gets magnified. Despite having the largest number of youth in the world, we do not have an adequate employable workforce. They have degrees, which is not even worth the paper it is printed on. The curriculum is outdated and there is an absolute lack of Industry interface. Hence People lack basic skills, and at times even motivation. There is a mad race for a comfortable “sarkari Naukri”, not for skill development. To make matters worse, the labor laws are suited for 19th century. No political party has shown the will to reform this. And of course, one should not forget the politicization angle of trade unions.
CAPITAL: The problem now gets ballooned. While Nirav modis and and Mallya’s can rip apart the banking system, a common man will find it extremely difficult to get a loan on favorable terms. This seriously indicates that corruption exists in the banking system, which is often exploited by the political class.
Entrepreneurship: Well the odds are stacked against you in this field… why you ask?
- Unstable tax regime: GST implementation has been a mockery of sorts for example. Further history has shown that there were signs of rampant corruption when it came to allotment of resources such as spectrum, etc. Does it motivate you to begin your entrepreneurial journey?
- Infrastructure: This is one area, which hitherto was in terrible shape, but is improving. Areas like transportation, electricity etc are still not at desirable levels.
- Red tapism and corruption. Getting a work done in a government department is a nightmare nobody wants to deal with.
- Law and order: the enforceability of contract laws is in terrible shape. For example, if there is a dispute, you may have to wait for a lifetime to get a verdict in our courts.
Foreign companies don’t invest in slogans, but in the ground realities. We don’t offer a good deal in that area.
AUTHOR: Ānanda Bashu, You can reach him at: anandabashu@gmail.com
