Bangladesh has renovated itself into an economic success story just 50 years after gaining independence. However, in the last 14 years, progress has significantly accelerated.
Bangladesh's per capita income increased by 9% year on year to $2,824 in 2021-22, owing to a demographic dividend, robust ready-made garment (RMG) exports, remittances, and stable macroeconomic circumstances. Following the Covid-19 pandemic, the country also had a notable economic recovery.
Women are encouraged to enter the labour field, and as part of the NGO-government cooperation, the aim is to improve socio-economic factors such as newborn and maternal mortality, health, sanitation and drinking water, and education.
But the government is well aware of the fact that NGOs will not offer the economic prosperity that aspiring Bangladeshis desire.
A stable regime, savvy policies, and a robust business community make the country a great investment destination. So, during the last 14 years, Bangladesh has opened its doors to all types of help and investment. It has learned the lesson of Sri Lanka, which originally aspired to court just China, and has diversified the granting of contracts to several nations.
Foreign aid is essential for any developing or least developed country. It may have a significant impact on their development by offering much-needed programs that give jobs, better healthcare, and sustainability to the world's most impoverished places.
This assistance may take the shape of loans, grants, or investments. It may be utilized as humanitarian aid to battle illnesses and poverty; it can help with economic growth, market expansion, and basic infrastructure; and it can encourage agricultural advances and political links.
Bangladesh is slated to graduate from LDCs in the next couple of years and is now focusing on meeting all of the graduation requirements, which mostly include an economic boost. Foreign aid and investment are critical in this vital era for Bangladesh.
In the 2017-2018 fiscal year, significant stakeholders such as the International Growth Association contributed over $1.5 billion to this country's development. Japan provided more than $1.3bn in assistance to Bangladesh. Other nations and organizations were included on this list, however, the International Development Association and Japan stood out in terms of large sums.
Aid is supplied at a rate of 63.45% to the construction and management of economic infrastructure and services. This enabled Bangladesh to begin two significant/remarkable projects -- the Padma Bridge and the Moghbazar flyover -- which effectively eased traffic congestion in Dhaka's commercial hub.
However, Bangladesh occasionally required food help, commodities aid, and agricultural support in the form of grants and loans. Most notably, Bangladesh invested and borrowed heavily in infrastructure projects. Bangladesh thinks that improved connection leads to increased financial and commercial opportunities.
The Padma Bridge was built by a Chinese company; the Russians are building the Rooppur nuclear power plant for $12bn; the Maitree thermal project at Rampal is a 50:50 joint venture with India's NTPC; the Dhaka metro is being built with significant aid from Japan; a Chinese company is constructing the tunnel under the Karnaphuli river in Chittagong to connect with the Asian Highway; the Japanese are funding Dhaka's new airport; a Chinese business is helping to develop the Payra sea port, and a Belgian company is dredging the 75-kilometre-long Payra canal.
Geographical balance
Countries send foreign aid in order to improve their own security. Thus, economic support can be used to keep friendly countries from succumbing to the sway of hostile governments, or as payment for the ability to create or utilize military bases on foreign land.
Bangladesh frequently finds itself caught between two powerful neighbours vying for regional dominance: India and China. Whereas China dazzles with enticing foreign investment initiatives, India has a long and crucial historical relationship with Bangladesh. Bangladesh avoids taking either bull by the horns and trades cautiously while embarking on any investing scheme.
On the one hand, Bangladesh inked agreements with China, allowing China to utilize the ports of Chittagong and Mongla, but quietly rejected the Chinese plan to create a deep-sea port on Sonadia Island and the Dhaka-Chittagong railway project with Chinese funding. Bangladesh was well aware that too much Chinese influence may take it down the same path as Sri Lanka.
Furthermore, Dhaka is not said to have taken well to China advising it not to join the Quad (no request has been made so far) or participate in “bloc politics.”
Bangladesh has offered India the use of the Chittagong port, launched many connectivity projects, and is on the verge of concluding an FTA with India. However, Bangladesh never interferes in Indian domestic affairs, nor does it allow India to do so.
Bangladesh may still require assistance in some areas, but it is a country that has identified some key goals and has achieved them. However, it never allows a single nation to dominate its assistance and investment programs.
Compared with other neighbouring countries, the economy of Bangladesh is a progressive one and it is considered to be among the next 11 emerging economies in the world. Bangladesh has opened its doors to any countries to bring help and investment, as long as they are economically feasible.
Benedict B George is a PhD fellow at the University of Texas, having a master's degree in Strategic Studies. His area of interest is South Asian Foreign Politics.
