Dev 360 | India must learn from others, shed its hubris

Can a “Vishwa Guru”, a global leader offering lessons to the world, afford to get riled at the mere suggestion that another country in its neighbourhood may be catching up?

In the middle of the Covid-19 pandemic and an economic crisis, a fracas has broken out over the purely statistical probability that Bangladesh may soon be doing better than us in terms of per capita gross domestic product.

Over the past week, economists, political analysts, lawyers and even cartoonists have waded into the topic triggered by the International Monetary Fund updating its World Economic Outlook.

“I’ve now checked the data. The IMF's estimate shows Bangladesh will cross India in real GDP per capita in 2021. Any emerging economy doing well is good news,” tweeted Kaushik Basu, professor of economics at Cornell University and a former chief economist of the World Bank.

Dr Basu, who is a former chief economic adviser to the Indian government (2009-12), added that it was shocking that India, which had a lead of 25 per cent five years ago, was now trailing and that this calls for bolder fiscal and monetary policies.

The topic is tailor-made for a verbal slugfest of the kind that economists alone are equipped for. Not being an economist, I hesitate to get sucked into it.

But going through what various economists have been saying over the past few days, it is clear that many factors which catapulted Bangladesh, a country of over 165 million people with a turbulent history, to where it is today, are beyond conventional economics.

As analyst N. Chandra Mohan pointed out in a recent commentary piece for South Asia Monitor: “The kerfuffle over a numbers game should not, however, deflect attention from Bangladesh’s superior growth performance in recent years and it’s model of development.”

That is the backstory.

Bangladesh’s export-led model of development, its outward orientation and remittances are indeed key factors behind its growth and altered status from a basket case to an Asian tiger in-the-making, as many experts have pointed out.

But to look at Bangladesh only through the GDP lens is to miss the deeper storyline.

Bangladesh has invested in strengthening its human capital, especially women, and this is paying off also in economic terms.

It has outpaced India in many social indicators, including female labour force participation.

As Bloomberg columnist Andy Mukherjee points out, Bangladesh has two out of five women of working age in the labour force, which is double of India’s 21 per cent participation rate.

Women in Bangladesh not only have a huge presence in the country’s textile and readymade garment sector, they are also employed in the agro-processing, jute mills, poultry and dairy industries.

Having a female political leadership at the top helps. But all these changes did not happen overnight. Since 2006, the Global Gender Gap Index (GGI) has been tracking the extent of gender-based gaps in individual countries through health, education, economy and political parameters. The 2020 GGI report, which shows the progress of 153 countries and provides country rankings that allow for effective comparisons across and within regions, noted that Bangladesh has been the best-performing country in South Asia, having closed 72.6 per cent of its gender gap by 2020. India is fourth in the region, having closed 66.8 per cent of its gender gap.

There are other markers. The Levels & Trends in Child Mortality: Report 2020 by the United Nations indicates that the under-five mortality rate (U5MR) or the number of deaths per 1,000 live births is 31 for Bangladesh and 34 for India. The infant mortality rate (number of infant deaths for every 1,000 live births) is 26 for Bangladesh and 28 for India.

According to the Global Hunger Index 2020, India now ranks 94th among 107 countries in terms of hunger. The corresponding ranks for our neighbours are as follows — Pakistan (88), Nepal (73), Bangladesh (75), Sri Lanka (64) and Myanmar (78). Only Afghanistan fares worse, at 99th place.

It is nobody’s case that Bangladesh is an utopia or that its economy and society have no problems. Nor can anyone seriously argue that India has no advantages. India’s economy and trade mix are a lot more diversified, as experts point out.

But we must not shy away from acknowledging that Bangladesh has indeed made a lot of effort to improve social indicators like female workforce participation, life expectancy, health, nutrition and succeeded significantly. And this has contributed towards Bangladesh’s progressively faster growth rate especially over the past two decades.

This is not to take away from the successes in social indicators in parts of India. But the point is that other countries are not sitting idle either and we must not luxuriate in the comfort of having been the world’s fastest-growing large economy in the pre-Covid-19 period.

The pandemic has hit every economy and society; and it will deepen the challenges, including a decline in exports, lower private investment and job losses.

The countries which have invested more in their people are likely to cope better, be more resilient and bounce back sooner. Another Asian country which has leveraged its demographic dividend through effective investment in its people is Vietnam.

Vietnam’s efforts to promote access to primary education and to ensure its quality through minimum quality standards have paid off. In the 2015 OECD Programme for International Student Assessment (PISA) — which tests high school students in maths, science, and other disciplines — Vietnam ranked eighth out of 72 participating countries, ahead of OECD countries like Germany and Netherlands, says a recent report by Brookings titled “Vietnam’s manufacturing miracle: Lessons for developing countries”.

India has lifted millions of people from abject poverty in recent decades. The World Health Organisation declared this country and the region free of polio in March 2014. The Narendra Modi government’s Swachchh Bharat Abhiyan campaign, despite the flawed implementation in many places and the hoopla, has accelerated access to basic sanitation in this country.

India is probably in no immediate danger of being overtaken by its eastern neighbour. Optimists believe that there will be a mild growth recovery in the coming months and India will eventually bounce back.

But we have to shed our hubris. This is a good moment to take a look at not just Bangladesh but the rest of the Asian region to see what we can learn from whom.