Context: The IMF’s latest World Economic Outlook published last week has triggered much outrage in India. The provocation was the IMF’s prediction that Bangladesh’s per capita GDP will overtake that of India this year.
More on the news:
- The projected difference is rather small — $1,888 to $1,877 — and unlikely to last beyond this year.
- There are many reasons for India’s economic slowdown in recent years. But in using Bangladesh’s impressive economic performance to attack India’s, India is missing the bigger story about the strategic consequences of Bangladesh’s economic rise.
Regional implications of Bangladesh’s economic success
- Altering the world’s mental maps of the subcontinent
- Over the last five decades and more, South Asia, for most purposes, has meant India and Pakistan.
- The global interest was riveted on Pakistan its nuclear weapons, claims on Kashmir, wars with India, role in Afghanistan and its cosy relationship with international terrorism.
- The other countries in the region were generally described as the “smaller” states of the region.
- The economic rise of Bangladesh is changing some of that.
- If there is no end to bad news from Pakistan, Bangladesh provides a positive narrative about the subcontinent’s prospects.
- Changing economic weights of Bangladesh and Pakistan in South Asia
- In 2020, Bangladesh’s GDP is expected to reach about $320 billion.
- A decade ago, Pakistan’s economy was $60 billion larger than Bangladesh. Currently, Bangladesh’s weight is bigger than Pakistan by the same margin.
- A US dollar today gets you 85 Bangladeshi taka and 162 Pakistani rupees.
- The growing economic muscle will help Bangladesh steadily accumulate geopolitical salience in the years ahead.
- Could boost India’s national plans to accelerate the development of its eastern and northeastern states
- Bangladesh’s economy is now one-and-a-half times as large as that of West Bengal; better integration between the two would provide a huge boost for eastern India.
- So would connectivity between India’s landlocked Northeast and Bangladesh.
- Probable acceleration in regional integration in the eastern subcontinent
- The region’s prospects for a collective economic advance are rather dim because of Pakistan’s opposition to economic cooperation with India and its support for cross-border terror.
- The main regional forum of the region the South Asian Association for Regional Cooperation (SAARC),is not functioning properly.
- Instead of hoping for the revival of SAARC, India could usefully focus on promoting regionalism among Bangladesh, Bhutan, India and Nepal.
- The BBIN sub-regional forum involving the four, activated in the middle of last decade — has not advanced fast enough.
- It is time for India and Bangladesh to take a fresh look at the forum and find ways to widen the scope and pace of BBIN activity.
- Coarse correction in bilateral relationship:
- There has been a negative tone acquired amidst the poisonous rhetoric in India around the Citizenship Amendment Act.
- Therefore, there is much room for course correction in Delhi and to shift the focus from legacy issues to future possibilities.
- Developing an ambitious framework for shared prosperity
- Bangladesh is getting ready to celebrate the golden jubilee of its liberation from Pakistan next year.
- Indian PM, who plans to join the celebrations, must use the special occasion to jointly develop and pursue with Dhaka an ambitious framework for shared prosperity.
The International Monetary Fund (IMF) is an organization of 189 member countries, each of which has representation on the IMF's executive board in proportion to its financial importance, so that the most powerful countries in the global economy have the most voting power.
- Foster global monetary cooperation
- Secure financial stability
- Facilitate international trade
- Promote high employment and sustainable economic growth
- Reduce poverty around the world
- As part of its World Economic and Financial Surveys, the IMF publishes flagship reports on multilateral surveillance twice a year:
- World Economic Outlook (WEO), Global Financial Stability Report (GFSR), and Fiscal Monitor (FM).
Image Source: Financial Express
After reading this article, answer the following question for Mains answer writing practice. Also you can get your answer checked free of cost by clicking on the following link.
Q.In the light of The IMF’s latest World Economic Outlook, discuss the strategic consequences of Bangladesh’s economic rise on India’s neighbourhood.