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After 52 years, where do Pakistan and Bangladesh stand in the field of economy?

Tanveer Malik, BBC Urdu |
Update: 2023-12-26 19:56:14
After 52 years, where do Pakistan and Bangladesh stand in the field of economy?

After independence from British rule on 14 August 1947, the western and eastern parts of Pakistan started the journey of independence together. However, in the next 10-12 years, the social and economic gap between the two sections widened.

About this, GW Chaudhry writes in his book Last Days of United Pakistan that 'in 1960, the per capita income of West Pakistan was 32% more than the per capita income of East Pakistan and in the next 10 years this difference went up to 81%. It should be noted that GW Chaudhry was a minister in the government of General Yahya Khan in Pakistan.

On December 16, 1971, when East Pakistan came into existence in the form of Bangladesh, at that time there was a huge difference in the economic indicators of Pakistan and Bangladesh, including the growth rate of the country's economic development, the size of the country's economy, per capita income, Exports etc. were included. At that time, Pakistan had a considerable advantage over Bangladesh.

However, due to the economic development in Bangladesh in the last two decades, the economic indicators of Bangladesh have improved much more than Pakistan after 52 years of independence.

In the past 52 years, Bangladesh has performed better than Pakistan in the economic sector and increased its foreign trade on the one hand, on the other hand, there has also been a decrease in the poverty rate, while the development of women in the economic sector is more than Pakistan.

Due to political instability and terrorism and the bad law and order situation in Pakistan for the past several years, the wheel of industrial development has stopped on the one hand and on the other hand the country has lost its foreign trade, GDP growth, per capita income and poverty sectors. It did not show any special performance.

If the economic situation of Pakistan and Bangladesh is compared after 52 years, then Bangladesh has been far ahead of Pakistan in some sectors, especially in the garment export sector, in which Bangladesh is currently the largest exporter in the world after China. It has become a country. On the other hand, Pakistan is not even among the top five countries of garment exports.

The success of Bangladesh's garment exports is also surprising because it does not produce cotton, but despite being a major cotton-producing country, Pakistan is currently far behind Bangladesh in garment exports.

After 52 years, for the economic development of Pakistan and Bangladesh, the two countries have been compared in terms of GDP, per capita income, foreign trade and poverty on the data released by the government institutions of both the countries and the World Bank.

Growth rate of economic development of Bangladesh and Pakistan

In 1972, the first year after its establishment on December 16, 1971, Bangladesh recorded a negative 13 percent economic growth rate. According to the data on the World Bank website, the economic growth rate of Pakistan in the same year was about one percent.

Due to the war, the economy of both the countries was devastated, but the pace of economic development of Pakistan was seven percent in the next year, while that of Bangladesh was negative.

The fiscal year of Bangladesh and Pakistan begins on July 1 of each year and ends on June 30 of the following year. After 52 years, in the financial year ending on June 30, 2023, according to the Economic Survey, the growth rate of Pakistan's economy was less than one percent i.e. 0.29 percent. On the other hand, in this financial year, according to the Bangladesh Economic Review, the growth rate of the economy of Bangladesh was 6 percent.

However, it should be noted that Bangladesh's economic growth rate has been continuously growing at more than six percent for the last 12-13 years, while on the other hand, Pakistan's economic growth has been between three and four percent in the last 10-12 years. For two years, it was less than one percent.

At present, the size of the economy of Bangladesh is 454 billion dollars, while the size of the economy of Pakistan is 340 billion dollars.

Adeel Malik, a professor of economics at Oxford University in the UK, told the BBC that 'the growth rate of Bangladesh's economy was 0.2% in 1990, after which it started to improve and increased every year until 2022, reached the level of six percent.

Per capita income of Pakistan and Bangladesh

The difference in per capita income between Pakistan and Bangladesh has also been huge in the last 52 years. According to World Bank data, Bangladesh's per capita income was $90 in 1972, compared to Pakistan's per capita income of $150.

The per capita income graph of Bangladesh has been steadily rising while the per capita income graph of Pakistan has been moving up and down during this period.

According to the Economic Survey of Pakistan, the per capita income of Pakistanis at the end of last financial year was 1568 dollars. In comparison, according to the Economic Review of Bangladesh, the per capita income of its citizens was 2687 dollars.

Exports of Pakistan and Bangladesh

The performance of Pakistan and Bangladesh in the fields of foreign trade has also changed a lot in the last 52 years.

According to the World Bank, Bangladesh's exports in 1972 were $350 million, while Pakistan's exports that year were almost double that of Bangladesh, which was $675 million at that time.
However, the growth in Bangladesh's export sector in 52 years has been astonishing. Especially in the last 20 years, its growth has been quite high. Bangladesh's exports in the last financial year stood at $64 billion in goods and services, of which $55 billion in goods and $9 billion in services were exported.

Compared to this, Pakistan's total exports in the last financial year were 35 billion dollars, in which 27 billion dollars of goods and 8 billion dollars of services were exported.

Poverty levels in Pakistan and Bangladesh

If the level of poverty in Pakistan and Bangladesh is compared, a change has been seen in the last 52 years.

According to the World Bank, the poverty level in Bangladesh was 13.47 percent in 2016 and its rate was dropped to 10.44 percent in 2022.

According to the data of the World Bank, in the year 2000, the poverty level in Bangladesh was 49%, but in two decades, it recorded a significant reduction in its rate.

According to the World Bank, the poverty rate in Pakistan has reached 39.4% in the last financial year. While in 2018, the poverty rate in Pakistan was 22 percent.

What is the reason for Bangladesh's economic superiority over Pakistan?

When economists were asked about the reasons for Bangladesh's superiority over Pakistan in the economic field since the beginning of the current century, Adeel Malik, a professor of economics at Oxford University, said, "If the development of Bangladesh in the current century and if we examine the reasons for Pakistan's backwardness, the biggest reason is the difference in the thinking and vision of the current leadership/elites in both countries.

Explaining this, he said that "Bangladesh has elites, whether they have political parties and businessmen, they agree on one point that we have to increase exports by promoting industry in the country."

He said, "Everyone in this regard, from the Prime Minister to the person working in the factory, is consistent." On the other hand, the political, military and civil elites in Pakistan are all focused on the real estate sector and everyone is working in it.

He said that during the time of former President and Army Chief Pervez Musharraf, immense foreign money came to Pakistan, but all the real estate became visible and at the same time, Bangladesh focused on the production sector and went ahead of us.

Adeel Malik said that the interest of the elite in Bangladesh is related to the industry and the interest of the elite in Pakistan is related to the real estate and this is the biggest difference that created the different economic situation in the two countries in the last 20 years. '

He said that 'Another reason that makes Bangladesh stand out compared to Pakistan and India is that on the one hand, the jamindar system was abolished there through land reforms and on the other hand, there is no caste system like India. There are opportunities if any worker develops and sets up a factory tomorrow."

According to Adeel, the education system in Bangladesh has been universalized so that everyone has access to education.

Therefore, the situation today is that twenty-two million (2.2 crore) children do not go to school in Pakistan, while the number of such children in Bangladesh is only around 72,000.

Adeel said, "Above all, there is a better situation of political stability and law and order in Bangladesh, due to which the growth of the economy was possible there, while on the other hand, Pakistan has been suffering from political instability, terrorism and law and order situation for past three to four decades, which has badly affected the economy and this caused lack of continuation of policies in Pakistan.

Dr. Hafsa Hina, an economist at the Pakistan Institute of Development Economics, told the BBC that "Pakistan has had many challenges, the biggest problem of which is the exchange rate, which has always been tried to be controlled and which has Pakistan's export sector has suffered badly.'

Similarly, the tariffs were kept very high to protect the industry in the country, which resulted in the fact that Pakistan's industry could not be prepared for international competition. Depended on local consumption due to which the export sector could not develop. On the other hand, the energy prices in Pakistan had a huge negative impact on the industry, based on which it was not able to move forward in the competitive race in the world.

How did Bangladesh gain an edge over Pakistan in the field of garment exports?

In the past two decades, Bangladesh has surprised everyone with its tremendous growth in its garment sector. Bangladesh exported $42 billion worth of garments to the world last year, compared to Pakistan's garment exports of $10 billion.

Bangladesh is the second largest country in the world after China in the garment sector. According to Professor Adeel, three and a half billion dollars were invested in Bangladesh in the garment sector alone.

Apart from other countries of the world, investments were also made in Bangladesh from Pakistan. Farrukh Iqbal, an industrialist in the garment sector from Punjab province in Pakistan, also has work in Bangladesh and one of his offices is working there.

While sharing his experiences with BBC, he said that the main reason is the better law and order situation there that they don't even give the license of pistol to anyone. Secondly, the level of tolerance is very high, an example of which is that if a foreign investor comes there, it is taken care of very much.

Based on his experiences, he said that 'the workforce there is very cheap and their quality of product is very good and the supply of gas and electricity is continuous and cheap.'
Adnan Zafar, who invested in the garment sector from Sindh in Bangladesh, said that the facilitation of the industry in Bangladesh can be estimated from the fact that electricity, gas and water connections are available there in two days, while in Pakistan, first of all, gas connection is not available at this time and it takes two years to get electricity connection.

He said that he is sitting in Pakistan and watching the work of his factory in Bangladesh through online and he has not faced any problem so far.

Ijaz Khokhar, the former chairman of the Exporters Association of the Garment Sector in Pakistan, said that one of the reasons for Bangladesh's advancement in the garment sector is its product line. "They are making a lot of products in this sector while we have only been able to export four or five products so far. He said that in Pakistan, shirts, especially ladies' shirts, are made very rarely, while Bangladesh has gone a long way in ladies' undergarments.

He said, 'the biggest difference is their work force. In Bangladesh, 80 percent of the workforce in the garment sector is women, while men make up 20 percent. He said that "women work seven and a half hours in an eight-hour shift, while on the other hand, this rate is between five and six hours in men."

He said that women are only 10 percent of the workforce of the garment sector in Pakistan. In addition, Bangladesh has a large number of large garment factories and it is between 30 and 40 percent, while Pakistan has only seven percent.

About women working in the industrial sector in Pakistan, Dr. Hafsa said, "Bangladesh's story is very impressive, but in Pakistan, it is the opposite."

"Instead of providing any technical education to women by the government, they are given a few thousand rupees which every government gives through various government schemes. In such a situation, how can women become a part of the production system?"

BDST: 1956 HRS, DEC 26, 2023

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