IMF’s prediction of Bangladesh Overtaking India in GDP per capita Triggers Blame Game
Under Prime Minister Sheikh Hasina’s tenure, Bangladesh has achieved remarkable economic growth over the past decade. (Wikimedia Commons).
The International Monetary Fund (IMF) predicted that Bangladesh’s GDP per capita would overtake India’s this year, triggering anger within India. Many blame Indian Prime Minister Narendra Modi’s government for its handling of the coronavirus pandemic and the ensuing economic fallout.
According to the World Economic Outlook (WEO), a yearly report published by the IMF in mid-October, Bangladesh’s GDP per capita should grow by 4 percent in 2020 to $1,488 while India’s will decline by 10 percent to $1,877, making it the country’s lowest measurement in four years.
With Bangladesh long considered a much poorer neighbor to rising power India, this development caused critics to take aim at Modi and the ruling Bharatiya Janata Party (BJP) for their economic policy. Modi had previously received criticism for the lockdown that began in early March and lasted for more than two months. Although the restrictive policy likely saved thousands of lives, some claim it failed to adequately take into account migrant workers from villages, many of whom had no choice but to hastily leave large cities when lockdown began.
While the pandemic has hit India hard, Bangladesh has fared relatively well, having reported about 390,000 cases and 5,600 deaths compared with India’s 7.6 million cases and 115,000 deaths. At the same time, Bangladesh has achieved remarkable growth over the past decade under the steady rule of Bangladeshi Prime Minister Sheikh Hasina, South Asia’s only woman head of government.
“Solid achievement of 6 years of BJP’s hate-filled cultural nationalism: Bangladesh set to overtake India,” tweeted Rahul Gandhi, former leader of India’s main opposition party, the Indian National Congress. Other opposition politicians, such as member of parliament Abhishek Banerjee, called the news a “colossal downfall” for the Modi administration..
Some contested the IMF data, however.
“The India-vs.-Bangladesh GDP per capita comparison has sparked anxiety & acrimony,” tweeted former chief economic advisor Arvind Subramanian. “But wrong numbers being compared. NO, on more appropriate metric, India has not been surpassed and, according to IMF, unlikely to be in near future.”
Subramanian underlined that if economists evaluated India’s GDP per capita on a purchasing power parity basis (PPP), it would come out with a number of $6,284—well above Bangladesh’s $5,139.
Even disregarding the PPP’s adjustments, the WEO still predicts that India will undergo a sharp economic recovery in 2021 and once again overtake Bangladesh’s GDP per capita. Therefore, this instance does not really represent Bangladesh surpassing India economically, but India temporarily falling behind Bangladesh.
Ultimately, even though this aberration may not indicate a larger trend, Bangladesh should receive praise. The prediction is a significant sign of progress for a country long regarded as one of the poorest in the world, and an eye-opening example of the effects a pandemic can have on a country like India, the country with the second-largest population in the world.