On the 3rd of October 2019 on the World Economic Forum website, an article and video were published by an adviser close to Hasina[1]. It elaborated on the successes of the Bangladesh economy and the Hasina factor. The article and video spread like wildfire on social media and was shared by many. Putting aside the article which was written by someone close to the Hasina regime let’s look into the claims.
No one can deny that Bangladesh as a country has developed and progressed economically over the last ten years. The country has taken huge strides economically. Bangladesh is the world’s second-largest readymade garment (RMG) exporter, just behind China. 81% of its exports come from the RMG sector and the textile and apparel sector contributes around 20% to Bangladesh’s GDP. It employs around 20 million people in the country and is the major driving force of the country’s economy[2].
According to the Global Location Service Index, a market analysis tool offered by AT Karney, Bangladesh ranks 21st in IT outsourcing, business process outsourcing and software development. The country also has the second-largest number of freelancers worldwide, according to the Oxford Internet Institute, and more than 40,000 people work in the outsourcing industry, earning more than $300m (€267m) every year, according to the Bangladesh Association of Call Centre and Outsourcing (BACCO)[3]. A vast community of about 2.5 million Bangladeshi overseas workers further buoys the economy with remittances that jumped an annual 18% to top $15b in 2018[4]. Yet millions more of the talented youth each year leave the country and go abroad looking for jobs and opportunities creating a brain drain.
Bangladesh on the surface is doing very well, but is it the Hasina factor that is alone in driving this success? When you open up the country to private investors and organisations giving them tax breaks, and industrial zones, naturally they would want to move their factories to Bangladesh.
It seems not only is Bangladesh doing well, but key Western clothing firms on the high streets of America and Britain are doing better by paying peanuts and getting high dividends for their investors[5].
When workers strike over pay and conditions they have been killed, tortured, and sacked and made to fall in line. [6]
No-one is talking about the clear and obvious elephant in the room, foreign debt. Bangladesh’s total external debt at the end of 2018 stood at around $33.1b [7]. It owes millions to countries like China, UK, America, India, Japan and Russia and on top of the debt is the interest.
In recent times the flow of money for infrastructure projects has seen the Chinese, Indian, Japanese and Russians build rail, roads, bridges, and power infrastructure on a huge scale in Bangladesh. If Bangladesh struggles to repay this debt it may become like Sri Lanka, who lost its port as collateral. [8]
In the short term, Bangladesh will continue to do well and improve like China if it follows the capitalist model of economics, but unlike China these loans will come to bite at some point. The capitalist system focuses on economic growth instead of the distribution of wealth to the extent that growth is taken as something sacred and as a magical solution to economic problems. Bernard Shaw, the European philosopher and critic, who was bald and had a thick beard, said, “Capitalism is like this head of mine and this beard of mine: high in production and unjust in distribution.”
Under an Islamic governance, Bangladesh could excel even further economically without the heavy reliance and interference of foreign investors and countries. Under Islam, instead of serving the interests of the few capitalists it would seek to serve the interests of this noble Ummah. Currently, the government is funding these mega projects by imposing exploitative income tax and VAT and increasing the price of gas and electricity for the common person. The Khilafah Rashidah (rightly guided Caliphate), which is going to be established soon by the leave of Allah (swt), will not only abolish all sorts of exploitative capitalist apparatuses, but will also transform the debt-based production culture into a culture of equitable ownership-based participation in economic activities. Only then will the default problem be solved from the root and optimum circulation of wealth will be ensured among people. Allah (swt) says:
كَيْ لَا يَكُونَ دُولَةً بَيْنَ الْأَغْنِيَاء مِنكُمْ
“so that it will not be a perpetual distribution among the rich from among you” [Al-Hashr: 7].
Bangladesh has the manpower, it has the resources, it has the youthful and innovative population, and it has a resilient and adaptable population to become a shining beacon, not only in Bangladesh but to the world.
Countries like Bangladesh need to think outside the capitalist model as it’s not the only system of success out there.
Indeed the economic system of Islam under the Khilafah state is the only system that provides a secure and prosperous economic life, free from calamities and crises for the people. This is the system revealed and mandated by Allah (swt), who is the Creator and knows what is best for His creatures. He (swt) says:
أَلَا يَعْلَمُ مَنْ خَلَقَ وَهُوَ اللَّطِيفُ الْخَبِيرُ
“Should not He Who has created know? And He is the Most Kind and Courteous” [Al-Mulk: 14].
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[1] https://www.weforum.org/agenda/2019/10/the-secret-to-bangladesh-s-economic-success-the-sheikh-hasina-factor/
[2] https://medium.com/@stitchdiary/what-makes-bangladesh-a-hub-of-garment-manufacturing-ce83aa37edfc
[3] https://www.dw.com/en/bangladesh-emerging-as-a-new-it-hub-in-south-asia/a-48728439
[4] https://asia.nikkei.com/Spotlight/Cover-Story/The-rise-and-rise-of-Bangladesh
[5] https://www.theguardian.com/business/2019/jan/21/low-wages-garment-workers-bangladesh-analysis
[6] https://www.hrw.org/news/2019/03/05/bangladesh-investigate-dismissals-protesting-workers
[7] https://www.dw.com/en/is-bangladesh-falling-into-a-chinese-debt-trap/a-49556829
[8] https://www.nytimes.com/2018/06/25/world/asia/china-sri-lanka-port.html
