Written by: Sharar Mubarrat Chowdhury
Every significant destination is reached through a journey full of challenges. The economic superpowers of today have overcome several obstacles in order to reach where they are today. While these journeys share a common trajectory, they are also significantly unique on their own accord. Bangladesh’s economy is going through that very adventurous path. We have a magnificent opportunity to change what Bangladeshis of the past have suffered from, as well as establish what the people of this country will have the privilege to enjoy in the future. Whether it be personal development or the uprising of an economy, there are values and traits which are very important to acquire. One of those traits is to be able to excel at identification, analysis of advantages and shortcomings and then ultimately, improvement. It is not only important to analyze ourselves, but also to study the achievements and shortcomings of others. This analysis will allow us to have informed perspectives along with ideas for growth, progress and solutions. Thus, making us better equipped to move ahead.
There are always several factors which influence economic growth and progress. Although a multivariate phenomenon, both the public and private sectors have notable and substantial contributions towards today’s developed world. Several nations might have had additional advantages that Bangladesh may not avail, for practical reasons. To begin with, many western countries have become developed nations, centuries earlier. Time in itself turns out to be a massive factor, as a lot changes with it. A nation of immigrants like the USA, has been able to take full advantage of migration, which has taken place over centuries. Along with appropriate policy application, the US economy has had the benefit of imported merit from all over the world. Similarly, several European nations have not only utilized their own assets, but have also availed resources from their colonies worldwide. Middle Eastern countries have been blessed with natural resources, such as oil, which they have used to change their fate. Most of these factors, perhaps along with others, are not among the things that we as a nation can utilize.
Malaysia gained independence in 1963, a few short years before our own. Like Bangladesh, they too faced several challenges as a developing nation. They did not have the merit or access to resources globally. Neither were they blessed with natural resources, which could turn things around for them on its own. Since context is very important when it comes to picking an example, knowing their story may be very beneficial to our story.
WHAT WENT RIGHT?
According to World Bank, Malaysia’s GDP per capita in 1980 had been USD $1,775, which has risen to USD $11,500 in a span of just 40 years. Among all the things that Malaysia and Bangladesh have in common. One word that defines both these economies is “export”. While Bangladesh is the second largest RMG exporter in the world right after China, Malaysia has been a significant exporter of Semi-conducting and Electronic products. While Bangladesh is known for exporting Jute, Malaysia has been exporting materials such as Tin, Rubber, etc. since as early as the late 19th century. Industrialization and export has been the driving force behind their economy over the decades, rather like us. Their positives and negatives when it comes to industrialization can be analyzed and studied, while implementing policies in our case. In fact, almost 50% of Malaysia’s GDP is linked to its manufacturing industry, according to “Academia.edu”.
Another achievement for the Malaysian manufacturing industry, is the fact that they have been able to produce relatively advanced materials with the aid of modern technology. Electronic consumable products and semi-conductive products, which have been exported all over the world, is a significant reason for their industrial advancement. This has been a gateway to new markets and customer bases for them. Even though Bangladesh is said to be lagging behind in terms of technology, there are quite a few companies who have been coming up with innovative products, especially over the last decade. Promoting and investing in these types of products, as well as reducing taxes on required raw materials, can lead to another evolving industry, as their success will inspire others to come up with ideas of their own.
However, above all these mentioned advantages, the greatest strength of the Malaysian economy is the fact that their unemployment rate is one of the lowest in Asia. This is due to multiple macroeconomic and geopolitical factors utilized by the government through effective policies. Not only does this benefit their economy, but also symbolizes the fact that the common people of the nation have been able to avail the joys of a prospering economy. This is a significant achievement, as in many cases, the working class fall behind, causing only a specific demographic to benefit from the economic advancement. It is something that we as a nation must avoid, as our decisions today dictate what a more advanced Bangladeshi economy will look like in the future. Since the efficient utilization of Human resources is one of the many significant factors that stimulate economic advancement, inclusion of the masses becomes crucial, both socially and economically. Providing sufficient economic opportunities at the grass roots level through initiatives of economic decentralization not only ensures social justice, but also aids in accelerating economic progress by making the most of available human resources.
As we gradually transition into a more digitalized economy, technology and innovation has the ability to play a significant role in our development. Especially if there is an adaptation towards more digital alternatives, among the industries that account for significant percentages of our GDP. It is yet another area where Malaysia has set an example. Technology based adaptations can also aid in evolving new industries and creating new jobs, thus decreasing our reliability on RMG.
THE NEW ECONOMIC POLICY (NEP)
In order to tackle the nation’s economic and social inequality, the Malaysian government introduced the New Economic policy in 1970, according to “SpringerLink.com”. This was an intentional effort on behalf of the government to eradicate poverty, as well as provide more economic opportunities to minorities. Such an initiative ensured that everyone was able to avail the rewards of economic advancement, instead of a small percentage of people with certain privileges and opportunities.
The NEP attempted to ensure economic growth, along with wealth redistribution, by integrating with the world market. This was done by appropriate taxation on the wealthiest Malaysians as well as discouraging capital flight. A key factor the NEP emphasized on was the decentralization of Education. This was a good move, because in many cases, the best academic institutions are located in major towns or cities. Academic quotas were also applied, in favor of the minorities. All of this gave more economic opportunities to rural and marginalized communities, in the long run. Economic regulations such as restrictive licensing was implemented to restrict manipulation of the markets and reduce economic injustice. All these policies were crafted with clear long term goals in mind.
Policies such as the NEP, intending to reduce income inequality, has made Malaysia the country with one of the lowest unemployment rates in Asia. On the other hand, it has also induced a sense of national unity, by providing opportunities for all the ethnicities to prosper. These significant steps are somewhat appropriate for today’s Bangladeshi Economic context as well. While we move forward as an economy and nation, this has to be a victory for all of our people. Since Bangladesh’s economic progress is primarily attributed to entrepreneurship and the free market, policy and intervention supporting the underprivileged becomes crucial for an uprising nation such as ours. Bangladesh is primarily a homogenous country, where one ethnicity (Bengalis) comprise of 95% of the population. Therefore, it becomes a greater priority and more of a challenge to provide equal opportunity. Therefore, this is another issue where effective government policy could be a good solution, if properly dealt with. Initiatives such as the NEP ensures that economic growth can be converted to good all round development, in various aspects. One where we are all provided equal opportunities and are equal benefiters of the progress. It takes progress far beyond just facts, figures and numbers.
CAN OUR PROGRESS END UP BEING WELL AROUND?
The analysis of another nation’s economy can be fruitful in various ways. Learning from someone else’s mistakes means that we can gain awareness in advance, without facing those severe consequences. On the other hand, the positive aspects not only provide insights and ideas, along with inspiration, motivation and hope as well. Bangladesh has historically had a rich heritage of Art, Culture, Music, Literature, etc. Consequently, we also have a more politically informed, enthusiastic and involved population. However, many Bangladeshis simply lack the platform, connections and opportunities to express their opinion on governance, state affairs and policy application. If Bangladesh is able to keep up its economic progress by excelling in analysis. In that case, effective policy research, crafting and application, will mean that the prosperous Bangladesh of tomorrow will surely be a force to be reckoned with.
About the author: Sharar Mubarrat Chowdhury is a member of the “Reform and Innovation” Core Team and the Economic Core Policy Network at Youth Policy Forum. He has recently graduated high-school from DPS STS School, Dhaka.