LAHORE: Having a Gross Domestic Product (GDP) of $282.5 billion in Purchasing Power Parity terms and having experienced a growth rate of 6.3 percent during 2011, Bangladesh has been given tax-free access to 37 countries including the European Union, Canada and Australia, which is one of the key reasons why a large number of Pakistani textile units have relocated in recent times to this one of the largest deltas of the world with a population of over 142.32 million.
Not only does Textile Minister Makhdoom Shahabuddin believe that the main reasons behind the shifting of textile industry to Bangladesh were not electricity, gas outages and power tariffs in Pakistan, but the preferential treatment of Dhaka in the European Union and the United States, however numerous textile magnates have also endorsed this viewpoint quite regularly.
In January 2012, Shahabuddin was widely quoted in national media outlets as saying: “Bangladesh is a privileged country as it has been counted among least developed nations by the EU and US.
It has been given facilities and its textile sector has been sponsored and supported financially by the big economic powers. More than 40 percent of the Pakistani textile industry and around 200,000 power looms have been shifted to Bangladesh in the last five years, causing employment problems. In the whole Punjab, 200,000 families have thus been directly or indirectly affected”.
The incumbent Pakistan People’s Party (PPP) government, by the way, is seemingly more interested in fighting with courts and covering the misdeeds of its stalwarts, instead of paying a little attention towards the grievances of the ailing textile sector that continues to set sails for Bangladesh.
And when textile tycoons show lackadaisical attitude and disinterest, we all know that the whole economy suffers, the national bourses turn bearish, the domestic investment suffers, the exports plunge, the budgetary revenues nosedive and the unemployment surges.
According to the CIA World Fact Book, the Bangladeshi economy has grown between five and six percent every year since 1996 despite political instability, poor infrastructure, corruption, insufficient power supplies and slow implementation of economic reforms.
The latest March 2012 edition of CIA World Fact Book states: “Bangladesh’s growth was resilient during the 2008-09 global financial crisis and recession. Garment exports, totalling $12.3 billion in FY09and remittances from overseas Bangladeshis, totalling $11 billion in FY10, accounted for almost 25 percent of GDP”.
With a GDP per capita of $1,700, exports of $23.86 billion, imports of $31.75 billion, a labour force of 75.42 million, an unemployment rate of just five percent, budget revenues of $12.67 billion, inflation rate of 10.7 percent and an industrial production growth rate of 7.4 percent, Bangladesh today possesses gold and Forex reserves to the tune of $10.98 billion.
The Harvard International Review had noted on January 12, 2012: “The crucial driver of Bangladeshi growth has been a thriving textiles industry that relies on the country’s vast amount of cheap, unskilled labour. Garment exports accounted for $12.3 billion, nearly 12 percent of GDP. Furthermore, the rate of textile exports accelerated in 2009, despite the world economy floundering in the throes of a deep recession, as textile exports to the United States increased by 10 percent. Over the last 15 years, the government has taken steps to make itself an enticing investment opportunity for foreign firms and banks. For example, ‘export processing zones’ have been established in Dhaka, Comilla, Mongla, Iswardi, Uttara, and Karnafully. Among the incentives intended to attract foreign firms are tax holidays that last up to five years”.
This is how a World Bank report of June 22, 2011 has described the Bangladeshi economy: “Bangladesh has reduced poverty levels and improved living standards significantly in recent years despite global economic shocks and natural calamities. The national poverty headcount rate in Bangladesh has declined to 31.5 percent in 2010 from 40 percent in 2005, according to the 2010 Household Income and Expenditure Survey. Rural poverty has declined to 35.2 percent in 2010 from 43.8 percent in 2005, while urban poverty has fallen to 21.3 percent from 28.4 percent in the same period. The survey shows a marked improvement in nutrition levels across the country, primarily because of the more diversified food basket that people are now consuming. Other indicators of welfare related to human development, access to services, and coverage of social welfare schemes also saw tremendous progress”.
