Econonmic Crsis in Bangladesh that may be Failure of its Economy?

The people in Bangladesh are on roads and protesting against government. This is the bitter truth of one of the fatsest growing economies of the world. High Rise in fuel price upto 52 % and expensive electricity prices made people to protest.

For example in its neighbour countries: Sri Lanka  been declared Bankrupt. Pakistan Minister urging people to drink less Tea to help economy because they import $600 million of tea and they don’t have money to pay for it.

And ,Now Bangladesh too has reached IMF for help. In this case study we will learn why there is economic crisis in Bangladesh and what lessons should India learn from its neighbour, So that we can avoid this sitiuation. 

Following are some points from which we able to understand Bangladesh economic crisis:-

1.Progress of Bangladesh

Bangladesh one of the world’s fastest growing economies of the world. Only 6 Months before the whole world countries was praising for his progress. World bank consider him as Model for Poverty Reduction . Some big Economists and Experts believe that “Bangladesh would become a developed country by 2041 avoiding middle -income trap that is not a myth but a reality if country sustains its current growth momentum”.

So ,what happen now, from which petrol prices have increased by 50% in a matter of days. Why are the common people in Bangladesh saying that they will have to beg in coming times. This is from just one year ago when the Bangladesh per capita income was $280 higher than India’s per capita income. All signals are positive than what is a problem . Now Bangladesh has asked for a $4.5 billion bailout package from IMF. Their officials says that ” There is not any problem they we only taking a loan just as a precaution “. But if there was not any problem than why the fuel prices in country would  rise suddenly by 50%. 

2. Lies-Damned Lies -And Stats

People says that there are Lies-Damned Lies- and then there are statistics, because no data or survey gives a complete picture of the country. It only provides an estimate , statistics are not a future prediction just they only gurantees that all will be well .Data can be manipulated . In 2009,Sheikh Haseena became the PM of Bangladesh and she started big infrastructures projects. This includes Padma bridge, the Rooppur Nuclear Power Plant and Dhaka city metro rail and many more costly projects. These projects are for the development and for the benefit of the people. The plan was great but its execution ?

The planned cost of Padma Bridge was $1.16 billion but by the time the project was completed the cost had more than doubled to $3.6 billion .

This same happen with other projects also like example Dhaka metro rail project (estimated cost $2.1 billion ,actual cost $3.3 billion,  rise by $1.2 billion ), Karnaphuli Tunnel (estimated cost $800 million ,actual cost $1.03 billion , rise by $200 million). This is only happens because of  Corruption ,Delays because of this costs keep rising and the ultimate bill has to be paid by the people.

3.Economic Recession(When your strength becomes weakness)

Bangladesh’s economy is an export orienetd economy. An export focus has given them a lot a lot of results. 30.4% of the women in Bangladesh participate in workforce which means these womens are pushing the economy forward. This the biggest achievement of Bangladesh that we need to learn from them. And the industry that employed all these women is Textiles. Bangladesh is a textile powerhouse .

80% of their exports are textile exports in which majority of this is sold to the fashion houses of Europe. But because of Covid and the Russia Ukraine war there are the signs of recessions in Europe. The meaning of recession is this that people reduce spending especially for things like clothes.

4.Lessons For India

We will have to control our Loans.  The RBI has named 5 states whose debt levels can cause alarm for the country these states are Bihar, Kerala, Punjab, Rajasthan and West bengal.  Beacuse the problem is  during elections ,freebies and subsidies are promised and to complete only them the states are taking debt and fail to pay them .

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