Bangladesh is a country of 159 million people in the Bay of Bengal next to India. Bangladesh struggled with poverty and economic problems after gaining its independence in 1971. However, the country has recently seen economic growth along with a steady decline in poverty. How Bangladesh reduced poverty holds lessons for other countries and one can attribute it to a variety of factors.
Investing in Public Services
In the past six years, Bangladesh has lifted 8 million people out of poverty. The rate of extreme poverty fell from 17 percent to 13 percent, and the overall poverty rate declined from more than 31 percent to 24 percent. Bangladesh has also made great strides in education, health, infrastructure and energy. Primary school enrollment rates have risen from 80 percent in 2000 to more than 90 percent in 2015, and secondary school enrollment has increased from 45 percent in 2000 to 62 percent in 2015. This jump in education heralds a bright future ahead as Bangladesh invests in its youth.
In terms of health care, the country has achieved an amazing 40 percent decrease in maternal mortality rates, as well as ensuring that 63 percent of pregnant women received maternity care from a trained medical professional in 2015, up from 53 percent in 2007. Bangladesh has also improved its infrastructure by building new roads and water pipelines. People now have better access to schools, health facilities and workplaces, and the pipelines have increased access to drinkable water in rural areas. Lastly, Bangladesh has added over 2,000 megawatts of energy to the national grid and provided solar energy capabilities to over four million households in remote areas. These improvements help households go about daily activities and provide more consistent access to the internet for individuals and businesses. All of these improvements help explain how Bangladesh reduced poverty and may serve as an example for other countries.
Implementing Special Economic Zones
Bangladesh reduced poverty and increased its GDP and living standards thanks to the government’s decisions and international aid. The creation of special economic zones that encourage foreign investment was one major factor in Bangladesh’s economic growth. These zones ensure legal protection and fiscal incentives for investors and allow freer movement of goods and services. These policies make these zones in Bangladesh a safe and profitable place for foreign companies to invest.
Currently, garments and textiles are Bangladesh’s biggest industries, but it is expanding into technology as well thanks to these economic zones. For example, Bangladesh exported 12 industrial robots to South Korea in 2018. While Bangladesh currently has 12 special economic zones, there are plans to create 100 special economic zones and technology hubs to foster future growth. This investment creates jobs and brings money into the economy. Bangladesh is currently trying to direct that new money into new businesses and build the country’s service industries.
The International Development Association
In addition to government policy, the World Bank and the International Development Association (IDA) were also crucial to Bangladesh’s improving fortunes. Many of the country’s achievements in infrastructure, health, energy and education have come with the help of IDA financing. The IDA has given Bangladesh over $28 billion in grants and interest-free credit. This funding has been crucial to the country’s recent accomplishments. The combination of IDA funding and special economic zones has given Bangladesh the jobs and infrastructure needed to pull themselves out of poverty. International aid has been a crucial factor in Bangladesh’s development.
Bangladesh has made remarkable strides in both economic growth and quality of life. Economic policies that encourage foreign investment and help from the IDA both help explain how Bangladesh reduced poverty in the last decade.
– Josh Fritzjunker