Only a few years ago, the names of Bangladesh and Vietnam were uttered in the same breath during discussions on emerging economies in South and Southeast Asia.
Driven by apparel exports, rapid economic growth, poverty reduction, and various developmental indicators, Bangladesh was widely spotlighted as a highly promising economy.
In recent years, however, that narrative has begun to shift.
Amid global uncertainties, high inflation, foreign exchange pressures, and slowing investment momentum, countries like Vietnam, the Philippines, and Sri Lanka have accelerated ahead.
The World Bank’s latest income-based classifications provide fresh evidence of this shifting dynamic.
In the World Bank's updated 2026 classification, Vietnam, the Philippines, Sri Lanka, Jordan, and Micronesia have transitioned from lower-middle-income to upper-middle-income status.
Meanwhile, Togo has moved from low-income to lower-middle-income status. Bangladesh, however, remains stuck in the lower-middle-income bracket.
Every year, the World Bank classifies global economies into four income groups based on the previous calendar year's Gross National Income (GNI) per capita.
This year's data reveals that several countries competing directly with Bangladesh have already climbed to the next income tier.
Vietnam surpasses Bangladesh
Vietnam stands out as the most prominent example. Once merely Bangladesh's primary competitor in apparel exports, Vietnam has evolved into a global manufacturing hub for electronics, semiconductors, mobile phones, components, and high-tech goods.
According to World Bank data, Vietnam’s GNI per capita rose to $4,970 in 2025, comfortably surpassing the $4,636 threshold required for upper-middle-income classification.
The World Bank reports that Vietnam's exports grew by over 15% across 2024 and 2025, with GDP growth hitting 7% and 8% respectively.
From 2021 to 2025, its GNI grew at an average annual rate of 10%, marking some of the most robust and consistent growth in Asia.
Vietnam is not alone. The Philippines reached upper-middle-income status through broad-based expansion across nearly all economic sectors.
More remarkably, Sri Lanka rebounded from an unprecedented economic crisis in 2022 to join the same tier in just three years.
Elsewhere, Jordan achieved its new classification through a rebasing of national accounts, while Micronesia progressed on the back of steady economic growth.
According to analysts, the progress of these nations shares a common blueprint: policy consistency, export diversification, aggressive attraction of foreign direct investment (FDI), infrastructure development, and productivity gains.
Bangladesh, by contrast, remains overwhelmingly reliant on its ready-made garment (RMG) sector.
Since the country has failed to achieve anticipated breakthroughs in electronics, tech goods, and high-value-added industries, its export basket remains heavily constrained.
Speaking to Dhaka Tribune, Mohiuddin Rubel, former director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), noted that Vietnam’s elevation to an upper-middle-income country serves as a wake-up call for Bangladesh.
It demonstrates that substantial economic progress is achievable in a relatively short timeframe through sustained economic reforms, export diversification, skilled human resources, infrastructure development, and an investor-friendly environment.
Rubel emphasized that Vietnam did not rely solely on garment exports. Instead, it invested heavily in electronics, technology, and high-value-added industries. Concurrently, it executed long-term blueprints to attract FDI, upgrade port and power infrastructure, foster tech education, and build a highly skilled workforce.