ADB HOPEFUL ON BANGLADESH’S GROWTH
According to Asian Development Bank Bangladesh is doing well. The ADB report states that exports, remittances, and domestic consumption buoyed Bangladesh’s economy in fiscal year (FY) 2022, which ended on 30 June 2022. Gross domestic product growth was at 7.1%, up from 6.9% in FY 2021. Growth, however, was dampened by the global economic slowdown caused by the Russian invasion of Ukraine, which affected Bangladesh’s economy through a widening external balance and rising inflation.
The Asian Development Bank (ADB) is a key source of external assistance for Bangladesh, providing $2 billion on average every year since 2016. ADB’s assistance is aligned with the country’s Eighth Five-Year Plan, 2021–2025, and the Perspective Plan, 2021–2041. To date, ADB has committed 701 public sector loans, grants, and technical assistance totaling $28.3 billion to Bangladesh. Cumulative loan and grant disbursements to Bangladesh amount to $21.19 billion.
These were financed by regular and concessional ordinary capital resources, the Asian Development Fund, and other special funds. ADB’s ongoing sovereign portfolio in Bangladesh includes 70 loans and 4 grants worth $11.31 billion.1 ADB committed $1.6 billion in public sector loans and grants to Bangladesh in 2022. This included $250 million for social protection and $200 million in microenterprise financing for job creation to support recovery from the coronavirus disease (COVID-19) pandemic. The report is encouraging.
DEFINITION OF POVERTY BY IZVESTOPEDIA AND ENCYCLOPEDIA BRITANNICA
But then the question that arises is the definition of poverty. Laura Porter in Investopedia has defined poverty as the state or condition in which people or communities lack the financial resources and essentials for a minimum standard of living. As such, their basic human needs cannot be met. People and families who live in poverty may go without proper housing, clean water, healthy food, and medical attention. Each nation may have its own criteria for determining the poverty line and counting how many of its people live in poverty.
Poverty is a socioeconomic condition that is the result of multiple factors—not just income. These factors include race, sexual identity, sexual orientation, and little to no access to education, among others. The countries with the highest poverty rates include South Sudan (82.30%), Equatorial Guinea (76.80%), Madagascar (70.70%), Guinea Bissau (69.30%), and Eritrea (69.00%). Among the developed countries the US is the poorest in the Western bloc. It is therefore obvious that the definition of poverty is different in South Asia and in the West.
Laura Porter goes on to define poverty as Poverty is defined as the state or condition where people and communities cannot meet a minimum standard of living because they lack, of the proper resources. These include (but aren’t limited to) financial resources, basic healthcare and education, clean drinking water, and infrastructure. Living in the socioeconomic condition of poverty is a result of multiple factors not simply including race, sexual identity, sexual orientation, and access to education, among others.
Organizations like the United Nations and the World Bank, which say that poverty will continue to grow well beyond 2030, urge nations to fight poverty by implementing policies and regulations that can drastically improve the quality of living for all communities. Encyclopedia Britannica defines poverty as the state of one who lacks a usual or socially acceptable amount of money or material possessions. Poverty is said to exist when people lack the means to satisfy their basic needs.
In this context, the identification of poor people first requires a determination of what constitutes basic needs. These may be defined as narrowly as “those necessary for survival” or as broadly as “those reflecting the prevailing standard of living in the community.” The first criterion would cover only those people near the borderline of starvation or death from exposure; the second would extend to people whose nutrition, housing, and clothing, though adequate to preserve life, do not measure up to those of the population as a whole. The problem of definition is further compounded by the noneconomic connotations that the word poverty has acquired. This foray into the definition of poverty is needed to emphasize that poor people in the US are different from the poor people in South Asia. The next question would be the causes of growth that propels countries to bring themselves from the clutches of poverty.
Several factors are believed to contribute to the growth of an economy. Generally, it is believed that education is a prominent factor. But then since education is a broad term it has been argued that education that promotes production is a better input than one which does not promote GDP. It is also believed that foreign trade plays an important role in the growth of an economy. Greater exports provide an economy to have more money at its disposal to tend to other needs of the people as well as more money at its disposal to buy cheaper imports.
“CHINESE DEBT TRAP” WARNS MIKE PENCE
The example of the rise of China, baring its muscle flexing for a seat at the high table to set the rules for the world to abide by would be appropriate in this context. Coming back to Bangladesh, despite the Russian invasion of Ukraine that has introduced a twist in global politics for the first time since the Second World War coupled with the Chinese claim of Sino-Russian entente with a friendship having “ no limits” and superiority of autocratic regime over the democratic system in reaching essential goods to the needy faster than democrats the warning of Donald Trump’s Vice President Mike Pence’s warning of ‘Chinese Debt Trap” can be ignored at one’s peril.
Bangladesh has become a close partner of China’s Belt and Road Initiative because Bangladesh does not have the resources to finance its infrastructure which is badly needed. In this context, Bangladesh has to consider Indian sensitivity resulting from the Sino-Indian border dispute coupled with the eternal enmity that Pakistan poses towards India since the partition of British India into two countries. South Asia is the region that is made up of India, Bangladesh, Sri Lanka, Nepal, Bhutan, Afghanistan, Pakistan, and the Maldives.
SAARC AND ROLE OF SOUTH ASIAN COUNTRIES
The South Asian Association for Regional Cooperation (SAARC) is the primary economic bloc covering the region that was established in 1985. All eight countries of the region are members. According to the global competitiveness report 2016-2017, most countries in South Asia have significantly improved their competitiveness in the last few years in the region and is now the fastest-growing part in the world. Over the last few years, the region has aimed on improving the overall health and education levels besides upgrading their infrastructure.
According to World Bank GDP per capita (current US dollars) in Bangladesh in 2022 $2688.3; in Bhutan 2021 $3266.4; India 2022 $ 2388.6; in Maldives 2022 $ 11817.5; Nepal 2022 $ 1336.5; Pakistan 2022 $ 1596.7; and Sri Lanka 2022 $ 3354.4. One hopes that given the information cited above Bangladesh would remain a beacon light for other South Asian countries to forge ahead in a complicated world.