Comparing Pakistan’s economy with Bangladesh
SUCCESS is never achieved without sacrifice, dedication and having a focused attitude towards attaining objectives.
When Bangladesh emerged as an independent State in 1971, no one imagined it could survive economically, Henry Kissinger across called her as an international “basket case”! On the contrary it is now proven to be a successful country by developing herself across the Board in Human development Index, exports, social progress, and fiscal prudence.
How can a country so vulnerable to natural calamities, high in poverty rate, low trade and foreign dependent economy, outperform its much larger, better-endowed neighbours — India and Pakistan — in most socio-economic indicators? 80% of its people lived below the poverty line in 1971, Pakistan was 70% richer than the area which now constitutes Bangladesh.
Today, Bangladesh is 45% richer than Pakistan. Bangladesh’s GDP per capita had surged by 9% over the past year, growing to $2,227 and Pakistan’s per capita income is lowest comparatively, at $1,543 during same period.
Presenting an exemplary feat in front of the International community by hosting more than a million Rohingya refugees on one hand, it is today a leading exporter of readymade garments. This transformation did not happen magically but through serious and focused decisions during a long term period.
Almost 60% Bangladesh’s population living in rural areas is mostly poor. Therefore, a rural centric policy was adopted by providing financial services such as micro-credits and digital banking.
Consequently, funds for small and medium businesses were made easy to access. The results first, alleviation in economic inequality by creating employments. Second, its positively impact on purchasing power.
Notably, these financial projects directly linked with those people who were socially, educationally and economically backward so they could polish their skills. NGOs played a leading role to uplift approx. 30 million people from poverty as reported by the Microcredit Regulatory Authority (MRA).
One of the major key factors which led to economic development through quality labor force by paying attention on economic sectors such as secondary, tertiary, and quaternary.
Women empowerment had been started just after 1971, but persistently paid heed on family planning, micro-credit, female education and health facilities by successive democratic governments. NGOs like BRAC, ASA, Grameen played a vital role in promoting female education, micro-loan to women for organizing their businesses.
Further, government provided full support to NGOs for full-filling its targets freely. As per The Economic Times, “Since 2008, a huge number of women came into different professions, many of them left housemaid job and joined garments industry for better income.
Female primary enrolment ratio led Bangladesh to not only reduce its poverty but also extraordinarily curbed dependency on foreign aid.
Historically, in 1972, Bangladesh foreign aid dependency rate was 88%, it’s reduced by 86-percent in 2010 and purchasing power parity per capita is around $4000.
The lesson learnt was that without drawing women into the economic bucket, economic resurgence is not possible. While male “financial inclusion” is required, women’s “financial inclusion” is a necessity. Projects, policies and programmes would not be interrupted in-case-of political instability.
New governments kept continuity in economic policies signed by previous governments in account of macroeconomic stability, fiscal prudence, openness to trade, incentivising the private sector and commitment to social development.
Such collective action developed confidence among private and foreign investors to invest their capital. Such measures created a snow ball effect on the economy.
The same game changing measure taken by Bangladesh for mitigating poverty and enhancing employment has been adopted but a different mode adopting advances in the IT sector by SBP and PTA for uplifting the life of poor people, particularly the women.
The World Bank “financial inclusion” scheme is meant to provide financial services such as easy access to loan, banking sector and financial transactions etc.
Interestingly, these all facilities were to be enjoyed without internet services. The simplest method to open now what is known as an Asaan Mobile Account (AMA) is by dialing *2262# and a list of 13-banks will appear for consideration just select your bank and get financial services.
This service has the ability to provide 80-million people to banking services which they had not before and enable them to access micro-loan for polishing their skills and talent through building small and medium businesses.
Only 18% women who are utilizing financial services through banking sector, AMA is emerging 32%. It is an opportunity for women to be empowered financially through Asaan Mobile Account.
The main reasons were independency, empowered population by providing micro-loan, quality labour and uninterrupted economic policies which led Bangladesh to increase its socio-economic life.
In Pakistan, rural population, which is approximately 65 per cent, can take advantage from AMA by reaching banking sector, getting loans, building small and medium businesses, and consequently play their role in building Pakistan together.
While the banking sector had taken great steps in Small and Medium Enterprises (SME) sector, nothing really innovative had been achieved till the launch of the AMA Scheme regulated jointly by SBP and PTA.
This great scheme formulated for poverty alleviation is a game-changer for the destiny of the poor of Pakistan.
—The writer is a senior executive with a Fintech firm.
