Labour-intensive exports to make BD 'next China'

[CaPtAiN_pLaNeT]

Labour-intensive exports to make BD 'next China'

Labour-intensive exports to make BD 'next China'

FE Report

Bangladesh has the potential to become the 'next China' with its labour-intensive exports provided it speeds up government decisions, reduce import costs and employs its growing labour force productively, an American economist said.

"The country can create three million jobs annually, double its national income in eight years and largely eliminate poverty if the country acts accordingly," said Prof Gustav F. Papanek who heads Boston Institute for Developing Economies (BIDE).

But he warned if the country fails to act next year or so, others will grab the opportunity China is being forced to jettison.

Prof Papanek's remarks came Tuesday at a conference, organised by Dhaka Chamber of Commerce and Industry (DCCI) in the city.

Finance minister AMA Muhith was the chief guest in the session, moderated by President of International Chamber of Commerce, Bangladesh (ICC,B) Mahbubur Rahman.

Former caretaker adviser Dr Hossain Zillur Rahman delivered the keynoted paper in the session where World Bank (WB) Country Director Ellen Goldstein and Executive Director of Centre for Policy Dialogue Dr Mustafizur Rahman were the panelists.

In his speech, Prof Papanek also said the country has "once-in-a-lifetime opportunity" to provide productive employment for all, reach 9.0 per cent growth, end widespread poverty and achieve the middle income status.

Elaborating on the scopes, the Harvard-trained economist said Chinese wages are rising above US$150 and are continuing to rise.

In the next three to four years, China's exports of labour intensive goods will decline and it would no longer have one-third of the world market in garments, textile, shoes, furniture, toys, electrical goods, car parts, plastic and kitchenware and other consumer goods, he added.

Bangladesh's wage is half India's and less than one-third of China's and Indonesia, Prof Papanek, said, referring to the country's strength.

He said that despite having prospects, Bangladesh is yet to attract foreign investments that are leaving China mostly due to its poor infrastructure, corruption, higher import costs and slow decision making process.

"If Bangladesh could just match Indonesia's record it could almost double its manufactured exports and increase employment by five million workers," said the emeritus professor of Boston University.

The flow of foreign direct investment (FDI) in Bangladesh was much higher than Indonesia during 1999-2003.

But as of annualised figure of 2010, the flow of FDI to Indonesia is around 16 times higher, reaching US$ 16 billion compared to Bangladesh's paltry $1.1 billion.

"In Java there is no electricity outages," said Prof Papanek, citing the strength of Southeast Asian economy.

Finance minister said the government would provide transit facility, not corridor, to the neighbouring India to improve regional connectivity for better economic growth.

He said the government is encouraging investments in Public Private Partnership (PPP) projects and moving fast for digitisation.

Mr Muhith stressed the need for efficient use of land, addressing rapid urbanisation issue while ensuring the country's sustainable economic growth.

The WB chief in Bangladesh stressed for diversification of its export basket to accelerate growth.

She also focussed on the necessity to tap the huge prospects of intra-regional trade.

Ms Goldstein was critical of the country's confrontational politics and political situation during the transition of power.

The country requires up-scaling middle income ambition, targetting to attain a sustainable 8.0 per cent annual growth and maintaining it for the next two decades, said Dr Hossain Zillur Rahman.

To achieve the target, he said the government requires to overcome infrastructure bottlenecks, harness new business sectors and markets, develop skill of labour force, diversify agricultural output, adopt appropriate urban strategy, strengthen regional connectivity and sustainable adaptation to climate change.

The former caretaker adviser said the country requires to deepen penetration of the US and European Union (EU) markets, target new billion-dollar trade partners like China, South Korea, Turkey, India, Japan and the countries in ASEAN (Association of South East Asian Nation).

The country can target ship building, jute and frozen food sectors in the short term and pharmaceuticals, light engineering and leather as future prospects, he said.

The risks like energy and power crisis, political instability, corruption and skill shortage could put the country at risk, derailing its growth prospect, said Dr Zillur.

The CPD executive director said the implementation capacity of the state would be the key to achieving the country's future growth.

The country requires taking important decisions over regional connectivity with the neighbouring countries, ensuring local interest, he said.

Infrastructure development, fight against corruption, debate oriented political culture, decentralisation of power, independence of judiciary are also important for the country's inclusive growth, said Dr Mustafizur Rahman.

"Despite having constraints, the country's target to be a middle income country by 2021 is achievable," said ICC,B President Mahbubur Rahman.

The barriers now the country is facing could be overcome easily when all concerned would act to address those seriously, he said.

There is no dearth of sincerity among the policy makers, the ICC,B chief added.

 

[CaPtAiN_pLaNeT]

My previous assumption is correct... They were calculating 1.2 trillion dollar economy based on 8% GDP grown in terms of PPP.

But I believe bangladesh has the potential to maintain 10-12% GDP growth in the next 20 years if everything goes well, more investment on infrastructure, power and on education can be made.... Lets see what will happen next.... but can any 1 tell me what is the expected per captita and total gdp of both pakistan and india in terms of both ppp and nominal terms by 2030. I just want to compare what will be the bds relative position by that time... with 10% year on year gdp growth up to 2030 bangladesh will have a economy of around 2 trillion dollar and per capita will be around 11000 to 11500 in terms of PPP

 

[TopCat]

My previous assumption is correct... They were calculating 1.2 trillion dollar economy based on 8% GDP grown in terms of PPP.

But I believe bangladesh has the potential to maintain 10-12% GDP growth in the next 20 years if everything goes well, more investment on infrastructure, power and on education can be made.... Lets see what will happen next.... but can any 1 tell me what is the expected per captita and total gdp of both pakistan and india in terms of both ppp and nominal terms by 2030. I just want to compare what will be the bds relative position by that time... with 10% year on year gdp growth up to 2030 bangladesh will have a economy of around 2 trillion dollar and per capita will be around 11000 to 11500 in terms of PPP

Well you cant compare BD economy and Indian economy. Like korea and China. Korea became a developed nation with less growth and in less time than China. China is posting double digit growth rate for the last 3 decades yet still its a 3rd world country.

Moving from a higher middle income country to developed country takes very little time provided you gained enough strength to open up your currency and asset to the world economy. Once you done that your asset will start gaining paper value for instance you will see your per capita jumped from 5000 USD to 30000 USD overnight.
So simple arithmetic equation will not give you where we will be with respect to India in 2030 or in 2050 but when we will reach that threshhold to promote ourselves from higher middle income economy to developed economy. If everything goes right i believe we will reach that targer far ahead of India even with lower growth rate.

 

[Stumper]

Well you cant compare BD economy and Indian economy. Like korea and China. Korea became a developed nation with less growth and in less time than China. China is posting double digit growth rate for the last 3 decades yet still its a 3rd world country.

Moving from a higher middle income country to developed country takes very little time provided you gained enough strength to open up your currency and asset to the world economy. Once you done that your asset will start gaining paper value for instance you will see your per capita jumped from 5000 USD to 30000 USD overnight.
So simple arithmetic equation will not give you where we will be with respect to India in 2030 or in 2050 but when we will reach that threshhold to promote ourselves from higher middle income economy to developed economy. If everything goes right i believe we will reach that targer far ahead of India even with lower growth rate.

Also remember, India and China drive the internal consumption part also apart from being export oriented.

The area's India is lagging behind china is ......investing in Infrastructure and Higher education. And we still have not woken up. India, should work on its skill based education and we need to improve the infrastructure (connectivity, power, etc) in our Tier B and C cities.

And i see similar situation in BD. BD simply does not have the required Infra or skills to attain such growth.

 

[great]

Well you cant compare BD economy and Indian economy. Like korea and China. Korea became a developed nation with less growth and in less time than China. China is posting double digit growth rate for the last 3 decades yet still its a 3rd world country.

Moving from a higher middle income country to developed country takes very little time provided you gained enough strength to open up your currency and asset to the world economy. Once you done that your asset will start gaining paper value for instance you will see your per capita jumped from 5000 USD to 30000 USD overnight.
So simple arithmetic equation will not give you where we will be with respect to India in 2030 or in 2050 but when we will reach that threshhold to promote ourselves from higher middle income economy to developed economy. If everything goes right i believe we will reach that targer far ahead of India even with lower growth rate.

Not really..Here are the most recent projections for both countries.

First Bangladesh

Bangladesh to be 30th biggest world economy by 2030: DCCI
Bangladesh Sangbad Sangstha . Dhaka

Bangladesh is likely to be the 30th largest economy of the world by 2030 when its GDP will be $ 1 trillion and per capita income $ 4,000, projected Dhaka Chamber of Commerce and Industry on Monday.

The DCCI made the projection in a visual presentation titled ‘Strategy for Growth’ at a conference on Bangladesh 2030, inaugurated by prime minister Sheikh Hasina at a city hotel.

The country’s present size of economy (2009 fiscal) is $ 141 billion while the per capita income is $ 925.

Telescoping the future potentialities of the country, the DCCI said Bangladesh can aspire to become the 30th largest economy by 2030 if it accelerates its development activities by fast-tracking into the higher investment trajectory by grabbing its large low-cost advantages.

It said the recent phenomenal economic development of China has created ‘new opportunities’ as China’s competitiveness in low-cost production base will diminish which will create scopes for investment elsewhere.

Subsequently, investors will be looking for attractive destination with low-cost productive base that will put Bangladesh in an ideal position as the ‘Next Investment Destination’.

According to the DCCI estimates, if average 5.5 per cent growth rate remains at the same level, the GDP by 2030 would be $ 274,098 million with per capita income of $ 1,542, a medium growth rate of 7 per cent may yield GDP of $ 368,692 million and per capita income of $ 2075 while if a medium high growth rate of 8 per cent can be attained, the GDP will be $448,233 million with per capita income of $ 2,517.

Again, if the country can attain a high growth rate of 10 per cent, the GDP will enhance to $ 658,948 with per capita income of $ 3,701. However, if everything goes well and the nation can attain a very ambitious and high growth of 12 per cent, the GDP by 2030 will stand at $ 962,018 with per capita income of $5,403.

As per World Bank estimates, at present Bangladesh ranks as 48th largest economy of the world as per GDP Purchasing Power Parity [PPP] and 77th largest trading nation.

The present government has set ‘Vision 2021’ to move Bangladesh to a middle income country (MIC) by 2021. But DCCI quoting economists’ views observed that the MIC status of Bangladesh may be attained by 2014.

The target set by the DCCI for the country to become the 30th largest economy of the world by 2030 is totally realistic and achievable, the Bangladesh Bank governor Atiur Rahman said.


Now India's Projection

The Standard Chartered report estimates that by 2012 India will overtake China as the world’s most dynamic economy, and will clock average annual growth rates of 9.3 percent (versus China’s 6.9 percent) over the next two decades. By 2030, India is expected to have a $30-trillion economy, the third largest in the world, right behind the United States and with China in the top position. Over this 20-year period, India’s share of global GDP will also increase five-fold, from today’s 2 percent to 10 percent. The country will also experience staggering income growth, with per-capita income projected to rise six-fold from $1,164 today to $7,380 in 2030.

Like the Morgan Stanley and ADB reports, the Standard Chartered forecast assumes that India’s youthful demographic profile and the quickening process of urbanization will be the main drivers of growth. Between 2010-2030, India’s population is expected to increase by an additional 250 million people - 150 million more than will be added in China. As a result, India will contribute more than a quarter of the incremental increase in the global workforce over this period. And within Asia, the country is likely to have the fastest urban growth, with Mumbai and New Delhi, both with huge economies, emerging among the world’s five largest cities by 2030. (For a less optimistic view of India’s demographic potential, see this earlier post.)

Assessments like this give substance to the increasing talk, including by Prime Minister Manmohan Singh, about the ”Indian Century.” But Duvvuri Subbarao, governor of India’s central bank, cautioned this week that the upward trajectory is not assured. In an online forum hosted by the Financial Times, he warned that the country requires a “quantum leap” in investment, including foreign direct investment (FDI), in order to achieve the kind of economic growth that China experienced over the past decade. A lot of foreign money is flowing into India these days, but according to Goldman Sachs short-term funds, rather than more desirable FDI, constitute about 80 percent of these inflows. Foreign portfolio investment has reached record levels over the past year, fueling a stock market boom, and could top $30 billion in the 2010-11 fiscal year. But the level of FDI flows have actually decreased by about a quarter in the fiscal year’s first 10 months.

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Even if India only does half of its expected growth and Bangladesh develops at 12%. India at $15 trillion will still have higher per capita than Bangladesh. Because Bangladesh has a very low base than India.

But comparing India and Bangladesh is not right. Even at the same per capita, the sheer size of India would mean a lot more money is available to spend on better life. Economies of scale any body.

 

[CaPtAiN_pLaNeT]

Also remember, India and China drive the internal consumption part also apart from being export oriented.

The area's India is lagging behind china is ......investing in Infrastructure and Higher education. And we still have not woken up. India, should work on its skill based education and we need to improve the infrastructure (connectivity, power, etc) in our Tier B and C cities.

And i see similar situation in BD. BD simply does not have the required Infra or skills to attain such growth.

Listen we are talking about future not present.... we know very well what are the laggings of bangladesh are... n it has been pointed in the article.... but do not forget bangladesh is a small country ... that also has brought some advantage to it...specially in terms if infrastructure and connectivity.... if you compare india with bangladesh ... india will require much higher per capita investment than bangladesh to develop equally standard infrastructure due to its big size...If bangladesh can develop its infrastructure and reduce power crisis definitely it can attract majority of foreign direct investment specially in terms of manufacturing as labor cost of Bangladesh is much smaller.....

 

[CaPtAiN_pLaNeT]

Not really..Here are the most recent projections for both countries.

First Bangladesh

Bangladesh to be 30th biggest world economy by 2030: DCCI
Bangladesh Sangbad Sangstha . Dhaka

Bangladesh is likely to be the 30th largest economy of the world by 2030 when its GDP will be $ 1 trillion and per capita income $ 4,000, projected Dhaka Chamber of Commerce and Industry on Monday.

The DCCI made the projection in a visual presentation titled ‘Strategy for Growth’ at a conference on Bangladesh 2030, inaugurated by prime minister Sheikh Hasina at a city hotel.

The country’s present size of economy (2009 fiscal) is $ 141 billion while the per capita income is $ 925.

Telescoping the future potentialities of the country, the DCCI said Bangladesh can aspire to become the 30th largest economy by 2030 if it accelerates its development activities by fast-tracking into the higher investment trajectory by grabbing its large low-cost advantages.

It said the recent phenomenal economic development of China has created ‘new opportunities’ as China’s competitiveness in low-cost production base will diminish which will create scopes for investment elsewhere.

Subsequently, investors will be looking for attractive destination with low-cost productive base that will put Bangladesh in an ideal position as the ‘Next Investment Destination’.

According to the DCCI estimates, if average 5.5 per cent growth rate remains at the same level, the GDP by 2030 would be $ 274,098 million with per capita income of $ 1,542, a medium growth rate of 7 per cent may yield GDP of $ 368,692 million and per capita income of $ 2075 while if a medium high growth rate of 8 per cent can be attained, the GDP will be $448,233 million with per capita income of $ 2,517.

Again, if the country can attain a high growth rate of 10 per cent, the GDP will enhance to $ 658,948 with per capita income of $ 3,701. However, if everything goes well and the nation can attain a very ambitious and high growth of 12 per cent, the GDP by 2030 will stand at $ 962,018 with per capita income of $5,403.

As per World Bank estimates, at present Bangladesh ranks as 48th largest economy of the world as per GDP Purchasing Power Parity [PPP] and 77th largest trading nation.

The present government has set ‘Vision 2021’ to move Bangladesh to a middle income country (MIC) by 2021. But DCCI quoting economists’ views observed that the MIC status of Bangladesh may be attained by 2014.

The target set by the DCCI for the country to become the 30th largest economy of the world by 2030 is totally realistic and achievable, the Bangladesh Bank governor Atiur Rahman said.


Now India's Projection

The Standard Chartered report estimates that by 2012 India will overtake China as the world’s most dynamic economy, and will clock average annual growth rates of 9.3 percent (versus China’s 6.9 percent) over the next two decades. By 2030, India is expected to have a $30-trillion economy, the third largest in the world, right behind the United States and with China in the top position. Over this 20-year period, India’s share of global GDP will also increase five-fold, from today’s 2 percent to 10 percent. The country will also experience staggering income growth, with per-capita income projected to rise six-fold from $1,164 today to $7,380 in 2030.

Like the Morgan Stanley and ADB reports, the Standard Chartered forecast assumes that India’s youthful demographic profile and the quickening process of urbanization will be the main drivers of growth. Between 2010-2030, India’s population is expected to increase by an additional 250 million people - 150 million more than will be added in China. As a result, India will contribute more than a quarter of the incremental increase in the global workforce over this period. And within Asia, the country is likely to have the fastest urban growth, with Mumbai and New Delhi, both with huge economies, emerging among the world’s five largest cities by 2030. (For a less optimistic view of India’s demographic potential, see this earlier post.)

Assessments like this give substance to the increasing talk, including by Prime Minister Manmohan Singh, about the ”Indian Century.” But Duvvuri Subbarao, governor of India’s central bank, cautioned this week that the upward trajectory is not assured. In an online forum hosted by the Financial Times, he warned that the country requires a “quantum leap” in investment, including foreign direct investment (FDI), in order to achieve the kind of economic growth that China experienced over the past decade. A lot of foreign money is flowing into India these days, but according to Goldman Sachs short-term funds, rather than more desirable FDI, constitute about 80 percent of these inflows. Foreign portfolio investment has reached record levels over the past year, fueling a stock market boom, and could top $30 billion in the 2010-11 fiscal year. But the level of FDI flows have actually decreased by about a quarter in the fiscal year’s first 10 months.

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Even if India only does half of its expected growth and Bangladesh develops at 12%. India at $15 trillion will still have higher per capita than Bangladesh. Because Bangladesh has a very low base than India.

But comparing India and Bangladesh is not right. Even at the same per capita, the sheer size of India would mean a lot more money is available to spend on better life. Economies of scale any body.

Some correction is needed in your article.. in the 1st part... the economy size that was shown for bangladesh was based on nominal... if you consider 8% year on year gdp growth up to 2030 then bangladesh will have a 1.2 trillion dollar economy in terms of ppp and per capita income will be around 6000... for 10% gdp growth it will be 1.73 trillion economy and per capita income will be around 9000 USD in terms of ppp and for 12% year on year gdp growth bangladesh will have a economy of around 2.4 trillion dollar and per capita income of around 12350 USD... n for india with 9.3 percent year on year gdp growth india will have a economy of around 23 trillion usd not 30 trillion... n if your assumption is correct population of india will increase by 250 million then per capita income of india in terms of ppp will be around 17000 USD... Even though india's per capita gdp will remain higher up to that point... but per capita difference between india and bangladesh will reduce by that time as now india has around 2.5 times higher per capita gdp but at that point it will be reduced to 1.5 to 1.8 times.... But it does not mean that Bangladesh will never be able to cross indias gdp... as even in 2030 bangladesh's labor cost will remain lower compared to china and india... so many of the manufacturing business will still continue to come to bangladesh... and after 2030 india's economy is likely to slow down... but it is unlikely bangladesh's economy will slow down but opposite may happen... as by that time bangladesh is expected to have a better infrastructure, resolving power crisis... will have a educated youth... and will have a much much better position than now... eventually that may help to run the economy at more faster rate..... so in between 2030-2050 its not impossible for bangladesh to cross india's per capita gdp...

N listen here we are comparing about per capita gdp... not whole economy... this is quite obvious if you have 1.5 billion people so your total economy will remain higher... but it will create a lots of burden for the government... to provide, food, water, education, meeting electricity needs, create more infrastructure...etc... n do not forget there is a probability Bangladesh can reduce proverty earlier than india... as with such a bulky population poverty in india is likely to rise... n the comparison of korea and china was done to show that with low population countries like korea has developed a lot with less gdp growth then china... same can also happen here... that was iajdani's main theme... thats the reason he also asked not to compare economy up to 2030 or 2050... I think you got your answer...

 

[TopCat]

Even if India only does half of its expected growth and Bangladesh develops at 12%. India at $15 trillion will still have higher per capita than Bangladesh. Because Bangladesh has a very low base than India.

But comparing India and Bangladesh is not right. Even at the same per capita, the sheer size of India would mean a lot more money is available to spend on better life. Economies of scale any body.

I said these simple arithmetic does not apply for a country changing its phase from higher middle income country to developed country. There are plenty of countries never could promote themselves from middle income to higher income except few. Arithmetic does not apply there.
Dont forget in 30/40 years time when you are dreaming of becoming a developed country you will have 1/2 a billion aging mouth to feed. Your population which is now driving your economy forward will strat dragging you backward when your time will come for the transitionn. This is my own opinion, so you may not need to pay much attention to it.

 

[great]

Some correction is needed in your article.. in the 1st part... the economy size that was shown for bangladesh was based on nominal... if you consider 8% year on year gdp growth up to 2030 then bangladesh will have a 1.2 trillion dollar economy in terms of ppp and per capita income will be around 6000... for 10% gdp growth it will be 1.73 trillion economy and per capita income will be around 9000 USD in terms of ppp and for 12% year on year gdp growth bangladesh will have a economy of around 2.4 trillion dollar and per capita income of around 12350 USD... n for india with 9.3 percent year on year gdp growth india will have a economy of around 23 trillion usd not 30 trillion... n if your assumption is correct population of india will increase by 250 million then per capita income of india in terms of ppp will be around 17000 USD... Even though india's per capita gdp will remain higher up to that point... but per capita difference between india and bangladesh will reduce by that time as now india has around 2.5 times higher per capita gdp but at that point it will be reduced to 1.5 to 1.8 times.... But it does not mean that Bangladesh will never be able to cross indias gdp... as even in 2030 bangladesh's labor cost will remain lower compared to china and india... so many of the manufacturing business will still continue to come to bangladesh... and after 2030 india's economy is likely to slow down... but it is unlikely bangladesh's economy will slow down but opposite may happen... as by that time bangladesh is expected to have a better infrastructure, resolving power crisis... will have a educated youth... and will have a much much better position than now... eventually that may help to run the economy at more faster rate..... so in between 2030-2050 its not impossible for bangladesh to cross india's per capita gdp...

N listen here we are comparing about per capita gdp... not whole economy... this is quite obvious if you have 1.5 billion people so your total economy will remain higher... but it will create a lots of burden for the government... to provide, food, water, education, meeting electricity needs, create more infrastructure...etc... n do not forget there is a probability Bangladesh can reduce proverty earlier than india... as with such a bulky population poverty in india is likely to rise... n the comparison of korea and china was done to show that with low population countries like korea has developed a lot with less gdp growth then china... same can also happen here... that was iajdani's main theme... thats the reason he also asked not to compare economy up to 2030 or 2050... I think you got your answer...

Okay, whatever makes you happy. We just have to wait until 2030 to see what's gonna happen, don't we? So chillax, have a cup of tea.

But you can always come back when a report from a reputable organisation comes out saying Bangladesh will have a higher per capita income than India. Then we can talk.

 

[TopCat]

Some correction is needed in your article.. in the 1st part... the economy size that was shown for bangladesh was based on nominal... if you consider 8% year on year gdp growth up to 2030 then bangladesh will have a 1.2 trillion dollar economy in terms of ppp and per capita income will be around 6000... for 10% gdp growth it will be 1.73 trillion economy and per capita income will be around 9000 USD in terms of ppp and for 12% year on year gdp growth bangladesh will have a economy of around 2.4 trillion dollar and per capita income of around 12350 USD... n for india with 9.3 percent year on year gdp growth india will have a economy of around 23 trillion usd not 30 trillion... n if your assumption is correct population of india will increase by 250 million then per capita income of india in terms of ppp will be around 17000 USD... Even though india's per capita gdp will remain higher up to that point... but per capita difference between india and bangladesh will reduce by that time as now india has around 2.5 times higher per capita gdp but at that point it will be reduced to 1.5 to 1.8 times.... But it does not mean that Bangladesh will never be able to cross indias gdp... as even in 2030 bangladesh's labor cost will remain lower compared to china and india... so many of the manufacturing business will still continue to come to bangladesh... and after 2030 india's economy is likely to slow down... but it is unlikely bangladesh's economy will slow down but opposite may happen... as by that time bangladesh is expected to have a better infrastructure, resolving power crisis... will have a educated youth... and will have a much much better position than now... eventually that may help to run the economy at more faster rate..... so in between 2030-2050 its not impossible for bangladesh to cross india's per capita gdp...

N listen here we are comparing about per capita gdp... not whole economy... this is quite obvious if you have 1.5 billion people so your total economy will remain higher... but it will create a lots of burden for the government... to provide, food, water, education, meeting electricity needs, create more infrastructure...etc... n do not forget there is a probability Bangladesh can reduce proverty earlier than india... as with such a bulky population poverty in india is likely to rise... n the comparison of korea and china was done to show that with low population countries like korea has developed a lot with less gdp growth then china... same can also happen here... that was iajdani's main theme... thats the reason he also asked not to compare economy up to 2030 or 2050... I think you got your answer...

When you show data with respect to PPP you have to keep in mind that we revised our PPP factoring in 2005 to keep ourselves within the category of LDC. India and BD both had same factoring since 1947. India never revised it. So if you really want to show the comparison then you shoul stick to nominal GDP/capita which is only few hundred more for India.

 

[great]

I said these simple arithmetic does not apply for a country changing its phase from higher middle income country to developed country. There are plenty of countries never could promote themselves from middle income to higher income except few. Arithmetic does not apply there.
Dont forget in 30/40 years time when you are dreaming of becoming a developed country you will have 1/2 a billion aging mouth to feed. Your population which is now driving your economy forward will strat dragging you backward when your time will come for the transitionn. This is my own opinion, so you may not need to pay much attention to it.

You are right. I won't. Because UN reports says otherwise.

Here we go.

http://www.un.org/esa/population/publications/worldageing19502050/pdf/111india.pdf

http://www.un.org/esa/population/publications/worldageing19502050/pdf/042bangl.pdf

In 2050, percentage of senior citizens in India and Bangladesh are 20 and 16 respectively. I don't see much difference.

80% of 1.5 billion will still be working. that's about 1.2 billion working population.

But thank you for your concern.

 

[TopCat]

You are right. I won't. Because UN reports says otherwise.

Here we go.

http://www.un.org/esa/population/publications/worldageing19502050/pdf/111india.pdf

http://www.un.org/esa/population/publications/worldageing19502050/pdf/042bangl.pdf

In 2050, percentage of senior citizens in India and Bangladesh are 20 and 16 respectively. I don't see much difference.

80% of 1.5 billion will still be working. that's about 1.2 billion working population.

But thank you for your concern.

Here you go, you missed the point again. Even though I dont put my baggage on those data, yet what about 2050 and beyond? Will the number of senior citizen going to decrease or increase? Can India be quick enough to get promoted to developed nation before that time come? Dont forget India or China does not have resouces like USA/Russia and Canada except man power which will be a burden by 2050. Time is ticking my friend.
For BD we will face the same problem but being a small country we do have some advantages.

 

[great]

When you show data with respect to PPP you have to keep in mind that we revised our PPP factoring in 2005 to keep ourselves within the category of LDC. India and BD both had same factoring since 1947. India never revised it. So if you really want to show the comparison then you shoul stick to nominal GDP/capita which is only few hundred more for India.

I don't think Standard chartered was talking Indian economy becoming $30 trillion in PPP terms but rather in Nominal terms.

Read the bold part carefully from economic times.

MUMBAI: India is expected to grow faster than China over the next couple of years and will be a $30-trillion economy by 2030, according to a report by Standard Chartered Bank . India is going to be the third-largest economy in the world after the US and China.

The super-cycle report prepared by Standard Chartered’s global research team, which is based on several assumptions, says while China is likely to grow at a 6.9% rate over the next two decades, India is likely to grow at a pace of an average 9.3% over the same period and trail the US as the third-largest economy by 2030. China may also overtake the US to become the world’s economic superpower within a decade.

It sees the world economy reaching $308 trillion by 2030. Within this, China will be a $73-trillion economy and India will be a $30-trillion economy, based on its growth and inflation forecast. At present, India is slightly over a trillion-dollar economy. It has assumed that the Chinese yuan will have appreciated from 6.64 this year to 4.39, and the rupee from 45.5 this year to 35 in 2030.

The report has forecast that living standards, as measured by real per capita income, will have increased nine-fold in China and India between 2000 and 2030. Rising personal incomes will push billions of people into the middle class and drive consumption, which will spur domestic economic growth.

Stanchart defines a super-cycle as “a period of historically high global growth, lasting a generation or more, driven by increasing trade, high rates of investment, urbanisation and technological innovation and characterised by the emergence of large, new economies, first seen in high catchup growth rates across the emerging world.”

There have been two such super-cycles before. The first ran from 1870 until 1913, on the eve of the First World War. The second began with the end of the Second World War and lasted until the oil crisis in 1973. The current super-cycle, according to the report, started at the turn of the 21st century and is likely to extend at least until 2030.

As you can see from the image, its the nominal GDP not PPP.

 

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Here you go, you missed the point again. Even though I dont put my baggage on those data, yet what about 2050 and beyond? Will the number of senior citizen going to decrease or increase? Can India be quick enough to get promoted to developed nation before that time come? Dont forget India or China does not have resouces like USA/Russia and Canada except man power which will be a burden by 2050. Time is ticking my friend.
For BD we will face the same problem but being a small country we do have some advantages.

At 2050, the median age of India would be 38, close to what China is now. I am pretty sure we are good for another 100 years. Also, I am pretty sure we'll be more developed than you ever could be in those 100 years. But like I said, thank you for your concern.

Even with a conservative prediction, by 2050 India would be $38 trillion dollar economy with a per capita income of $21000 and a median age of 38. Oh, I think we'll be way developed before we get old. That's only conservative estimate.

 

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Labour-intensive exports to make BD 'next China'

Labour-intensive exports to make BD 'next China'

FE Report

Bangladesh has the potential to become the 'next China' with its labour-intensive exports provided it speeds up government decisions, reduce import costs and employs its growing labour force productively, an American economist said.

"The country can create three million jobs annually, double its national income in eight years and largely eliminate poverty if the country acts accordingly," said Prof Gustav F. Papanek who heads Boston Institute for Developing Economies (BIDE).

But he warned if the country fails to act next year or so, others will grab the opportunity China is being forced to jettison.

Prof Papanek's remarks came Tuesday at a conference, organised by Dhaka Chamber of Commerce and Industry (DCCI) in the city.

Finance minister AMA Muhith was the chief guest in the session, moderated by President of International Chamber of Commerce, Bangladesh (ICC,B) Mahbubur Rahman.

Former caretaker adviser Dr Hossain Zillur Rahman delivered the keynoted paper in the session where World Bank (WB) Country Director Ellen Goldstein and Executive Director of Centre for Policy Dialogue Dr Mustafizur Rahman were the panelists.

In his speech, Prof Papanek also said the country has "once-in-a-lifetime opportunity" to provide productive employment for all, reach 9.0 per cent growth, end widespread poverty and achieve the middle income status.

Elaborating on the scopes, the Harvard-trained economist said Chinese wages are rising above US$150 and are continuing to rise.

In the next three to four years, China's exports of labour intensive goods will decline and it would no longer have one-third of the world market in garments, textile, shoes, furniture, toys, electrical goods, car parts, plastic and kitchenware and other consumer goods, he added.

Bangladesh's wage is half India's and less than one-third of China's and Indonesia, Prof Papanek, said, referring to the country's strength.

He said that despite having prospects, Bangladesh is yet to attract foreign investments that are leaving China mostly due to its poor infrastructure, corruption, higher import costs and slow decision making process.

"If Bangladesh could just match Indonesia's record it could almost double its manufactured exports and increase employment by five million workers," said the emeritus professor of Boston University.

The flow of foreign direct investment (FDI) in Bangladesh was much higher than Indonesia during 1999-2003.

But as of annualised figure of 2010, the flow of FDI to Indonesia is around 16 times higher, reaching US$ 16 billion compared to Bangladesh's paltry $1.1 billion.

"In Java there is no electricity outages," said Prof Papanek, citing the strength of Southeast Asian economy.

Finance minister said the government would provide transit facility, not corridor, to the neighbouring India to improve regional connectivity for better economic growth.

He said the government is encouraging investments in Public Private Partnership (PPP) projects and moving fast for digitisation.

Mr Muhith stressed the need for efficient use of land, addressing rapid urbanisation issue while ensuring the country's sustainable economic growth.

The WB chief in Bangladesh stressed for diversification of its export basket to accelerate growth.

She also focussed on the necessity to tap the huge prospects of intra-regional trade.

Ms Goldstein was critical of the country's confrontational politics and political situation during the transition of power.

The country requires up-scaling middle income ambition, targetting to attain a sustainable 8.0 per cent annual growth and maintaining it for the next two decades, said Dr Hossain Zillur Rahman.

To achieve the target, he said the government requires to overcome infrastructure bottlenecks, harness new business sectors and markets, develop skill of labour force, diversify agricultural output, adopt appropriate urban strategy, strengthen regional connectivity and sustainable adaptation to climate change.

The former caretaker adviser said the country requires to deepen penetration of the US and European Union (EU) markets, target new billion-dollar trade partners like China, South Korea, Turkey, India, Japan and the countries in ASEAN (Association of South East Asian Nation).

The country can target ship building, jute and frozen food sectors in the short term and pharmaceuticals, light engineering and leather as future prospects, he said.

The risks like energy and power crisis, political instability, corruption and skill shortage could put the country at risk, derailing its growth prospect, said Dr Zillur.

The CPD executive director said the implementation capacity of the state would be the key to achieving the country's future growth.

The country requires taking important decisions over regional connectivity with the neighbouring countries, ensuring local interest, he said.

Infrastructure development, fight against corruption, debate oriented political culture, decentralisation of power, independence of judiciary are also important for the country's inclusive growth, said Dr Mustafizur Rahman.

"Despite having constraints, the country's target to be a middle income country by 2021 is achievable," said ICC,B President Mahbubur Rahman.

The barriers now the country is facing could be overcome easily when all concerned would act to address those seriously, he said.

There is no dearth of sincerity among the policy makers, the ICC,B chief added.

I'm not sure your leaders understand what made China develop. If it was labor intensive industry, then Africa, with the lowest wages, India and Vietnam, with wages 1/3 that of China, and even Bangladesh right now, would all be as successful as us. That is not the case. Why? Why do you think our textiles dominate (despite it being a tiny part of our overall exports, see wikipedia)? Is it the labor? The average wages in china for textiles is 2000-3000 RMB/month, or around 3500 USD per year. the average wages in bangladesh are how much? the secret is easy, and hard: one of the best petrochemical industries in the world. clothes today are made mostly from chemical fiber. when you control the whole line of production from the oil that comes out of the ground, to the fiber, to the sewing of clothes, to the manufacture of all the machines that do this, you have an advantage. that is why every other country that does textiles is STILL DIRT POOR - they are forced to buy chemical fiber from the West and that destroys their profits. that's the easy part. the hard part is having enough qualified chemists, chemical engineers, and managers to operate a billion dollar petrochemical plant.