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Misleading Comparisons

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An IMF prediction that Bangladesh will overtake India’s per capita GDP is being quoted not so much as how well that country has done, but how shameful for India to be left behind. By Bangladesh, no less! Apart from the fact, of course, that economists – particularly these days – are capable of only pointing out the negatives, while the positives are expected from those with the ‘entrepreneurial spirit’, there is much hidden in the reality.

Many reasons are being given for Bangladesh’s ‘successes’ by the experts. However, many of them have missed India’s massive contribution to it. First, by absorbing the massive overflow of population from that country and, secondly, by the enormous amount of remittances sent home by these people that have boosted the economy. This is, by no means a negative comment, it is just a fact. India, too, has benefited from its Diaspora, though it mostly comprises those who have migrated legally. Bangladesh has also been the ‘sweatshop’ of the world, providing dirt cheap labour to the western garment industry. Of late, public awareness has meant that Bangladesh will need to enter the next stage in its development – better wages and working conditions in the factories. Consequently, the capitalists may or may not choose to remain (most managers are Indian).

Being economists, the experts should also realise the benefits that may accrue to India for ‘being behind’ Bangladesh. Possibly, the economic and illegal refugees will stop coming, at least, slow down. (Even the Rohingyas were moved on into India in significant numbers.) The low birth rate, if it is a reality, will mean – maybe – some Bangladeshis may actually choose to return home!

The truth is that the two economies are in different stages of development. While the thrust in Bangladesh is to rise out of the crippling poverty of the past by whatever means possible, India is attempting to transform itself to achieve developed status. There are many states in India of similar size as Bangladesh whose economies have high per capita growth rates, while others are relative laggards. The challenge for India is to anticipate and adopt the generational shifts in systems and technologies that will meet its future needs. The recent power breakdown in Mumbai, for instance, shows it is not just enough to have sufficient power supply, complex modern systems are needed to keep it going. The transport systems – from trains, buses to aircraft – have to be taken beyond ‘cattle class’ adequacy to pandemic resistant quality. Etc., etc.!
So, enough with the comparisons – each has a different row to hoe!