Economy
Bangladesh Surpasses India, Pakistan in Prosperity Despite Freedom Index Setback
Bangladesh outpaced its South Asian neighbors, India and Pakistan, in terms of prosperity in 2023, although a concerning setback in the Freedom Index shadowed the triumph.
According to the report “Freedom and Prosperity in Bangladesh” prepared by the Atlantic Council’s Freedom and Prosperity Center, Bangladesh was categorized as “mostly unprosperous” in the Prosperity Index and “mostly unfree” in the Freedom Index.
Bangladesh fared better on the Prosperity Index than its South Asian counterparts, ranking 99th among 164 countries, while India ranked 146th and Pakistan ranked 150.
However, the freedom index paints a grim picture, placing Bangladesh on the 141st spot, whereas India is on 104 and Pakistan is on 113 in the list made for 2023.
This Prosperity Index considers various factors beyond GDP per capita, including health, inequality, environmental conditions, minority rights, and education. Meanwhile, the Freedom Index measures political, economic, and legal components.
The US-based think tank’s research found that strengthening basic freedom accelerates economic growth over the long term.
The report said, “January parliamentary elections solidified a shift toward a dominant-party system. The Awami League capitalized on an opposition boycott to extend its fifteen-year rule, with prime minister Sheikh Hasina poised to become the world’s longest-serving female head of government. While this signifies stability, dominant-party systems often face challenges that can undermine good governance. Ensuring healthy competition across politics, government, and the economy is crucial to mitigate these risks.”
These findings were revealed at the Prosperity and Good Governance Conference, jointly organized by the United States Agency for International Development (USAID) and The Asia Foundation on Monday (15 April).
Speaking at the event, US Ambassador Peter Haas said, “Out of the 164 countries the Atlantic Council has looked at, not a single country ranked ‘mostly unfree’ is also ranked ‘prosperous.’ This suggests that, in order to become prosperous, Bangladesh must then take bold steps to expand economic, political, and legal freedoms for its people.”
“Every country grapples with issues like corruption and securing economic and political rights. The key lies not in avoiding problems but in actively acknowledging and tackling them,” he added.
The keynote speaker, Director of the Atlantic Council’s Freedom and Prosperity Center Joseph Lemoine, highlighted the key findings from the report, which measures a nation’s economic well-being based on their democratic and governance indicators considered for its Freedom Index and Prosperity Index.
“The data shows that countries with greater freedom tend to enjoy higher levels of prosperity, while those with less freedom tend to have lower levels of prosperity. Countries that promote political and economic freedoms, along with strong legal systems, create an environment that’s more welcoming to foreign Investors,” said Mr. Lemoine during his keynote presentation.
“Freer countries receive significantly more foreign direct investment than those with less freedom. Overall, the Freedom Index suggests that a strong commitment to freedom is key to attracting foreign investment,” he added.
The conference brought together stakeholders from various sectors, including government, civil society, business, donors, academia, and think tanks.
The Atlantic Council, a nonpartisan nonprofit organization, aims to promote constructive US leadership in international affairs. Its Freedom and Prosperity Center conducts unbiased, data-based research on the relationship between prosperity and economic, political, and legal freedoms to support sound policy choices.
The Freedom and Prosperity Indexes are two separate indexes that rank 164 countries worldwide according to their levels of freedom and prosperity.
During the eleventh month of the current fiscal year, the country’s foreign currency reserves have fallen below $19 billion for the first time. After paying off some import bills, the reserves have now stood at $18.26 billion on Sunday.
According to the International Monetary Fund (IMF), as of May 8, the total foreign currency reserves of the country were $19.82 billion.
Mohammad Mezbauul Haque, the spokesperson of Bangladesh Bank, informed that through the Asian Clearing Union (ACU), the central bank has paid off import bills totaling $1.63 billion over the past two months.
However, Bangladesh Bank maintains that after paying off the import bills, the foreign currency reserves now stand at $23.71 billion.
According to the Central Bank’s accounts, the reserves were $25.27 billion on May 8.
The Dhaka Stock Exchange (DSE) and the DSE Brokers Association (DBA) have expressed gratitude towards Prime Minister Sheikh Hasina for her directive to list government companies in the capital market, a move hailed as timely and positive.
The directive was issued during the recent meeting of the Executive Committee of the National Economic Council (Ecnec) last Thursday.
Dr. Hafiz Muhammad Hasan Babu, Chairman of DSE, described the directive as a significant step towards enhancing the dynamics of the capital market. He emphasized that besides invigorating the capital market, this move would also attract foreign investment and promote sustainable development.
Despite previous efforts, government institutions had not been listed in the stock exchange, according to a notification issued by the DSE. The Prime Minister’s directive is seen as a pivotal step towards revitalizing and expanding the economy.
Dr. Babu further remarked, “The listing of reputable companies in the capital market, as directed by the Prime Minister, will greatly benefit the country’s economy. It will also enhance investor confidence.”
Similarly, the DBA released a notification applauding the Prime Minister’s directive, terming it as positive and timely for the capital market.
Saiful Islam, President of DBA, expressed optimism about the directive’s potential to accelerate the country’s capital market and overall economy. He pledged support to relevant government departments and regulatory bodies in implementing the directive, ensuring its positive impact on the economy, including the capital market.
India has expressed interest in financing Bangladesh’s Teesta project, announced Foreign Minister Hasan Mahmud. Speaking to reporters after a meeting with Indian Foreign Secretary Vinay Mohan Kwatra, Mahmud stressed the importance of aligning the project with Bangladesh’s needs. He confirmed discussions on the Teesta issue during the meeting. Mahmud also affirmed Prime Minister Sheikh Hasina’s upcoming visit to New Delhi, indicating that the finalization of the date would depend on the formation of the new Indian government following ongoing elections.
Meanwhile, the IMF has approved a $1.15 billion staff-level loan for Bangladesh in its third tranche. Mahmud noted the ongoing elections in India and the subsequent formation of the new government as factors influencing the scheduling of PM Hasina’s visit.
When asked about the sequence of visits to India and China, Mahmud suggested Delhi’s geographical proximity to Bangladesh. Diplomatic sources suggest PM Hasina’s visit to India is planned for early July, following India’s elections.
Pre-election surveys indicate strong prospects for Indian Prime Minister Narendra Modi’s re-election. Modi previously congratulated PM Hasina on her electoral victory in January, expressing optimism about strengthening ties between the two nations.
The last bilateral engagement between the prime ministers occurred during the G-20 Leaders Summit in September 2023. Modi is expected to invite South Asian and BIMSTEC leaders to his swearing-in ceremony, fostering regional cooperation.
Addressing border killings, Mahmud emphasized the government’s commitment to ending such incidents and promoting the use of non-lethal weapons by border forces. Discussions also covered enhancing physical and people-to-people connectivity, including cooperation with India to import hydropower from Nepal and Bhutan through India. Mahmud highlighted the need to further ease visa restrictions to strengthen people-to-people relations.
