Misplaced comparison between Bangladesh and Sri Lanka

A rich mix of opposition politicians, members of the civil society and unabashed Islamist radicals — has taken heart at the huge economic crisis that is bedevilling Sri Lanka. I call them the Doomsday Brigade of Bangladesh as they seem to be praying for divine intervention for such a crisis to fall on Bangladesh because they reckon it is their only hope to bring about regime change: the ouster of the Awami League government by fanning extensive social unrest, violent agitations and possible military intervention.

How else can they defeat a ruling party, during whose decade-long tenure Bangladesh has witnessed an amazing economic turnaround!

This Doomsday Brigade has been offering their unsolicited economic expertise in TV talk shows and newspaper columns but more frequently in social media posts – with an utter lack of clarity in arguments emerging from their “pearl of wisdom”. Some of them warn Bangladesh should take enough lessons from the Sri Lankan crisis, and more shameless ones see redeeming similarities between the economic management of the two countries.

These Doomsday clairvoyants got a terse reminder from the Asian Development Bank that they were fuming and fretting on the wrong premises. Bangladesh’s debt management so far is good, and it hardly has any chance to face a crisis like Sri Lanka, said Edimon Ginting, country director of the ADB. “Bangladesh’s debt management is very prudent. But that was not the case for Sri Lanka,” said Ginting, an Indonesian, while launching the Asian Development Outlook (ADO) report recently. He said the Sri Lankan crisis has exposed how important it is for a country to manage its macroeconomy. “The crisis did not come all of a sudden. Policies (in Sri Lanka) were not correct,” Ginting told reporters replying to a query on what Bangladesh can learn from the Si Lankan crisis. The ADB official also said Sri Lanka was doing well in the post-conflict era, but its GDP growth was not as good as in Bangladesh. “If you are not fiscally strong, growth will not be there,” he said about Sri Lanka.

Sri Lanka has been facing a financial crisis for over a year, and the situation has become acute recently as the country cannot pay import bills because of a lack of foreign currency. Just some days ago, all the ministers resigned en masse as people took to the streets against the present government. Much as Bangladesh’s Doomsday forecaster hopes that scenario is repeated in the country, such hopes don’t stand the slimmest chance.

Bangladesh’s forex reserves are again growing after some drop during the COVID months. It is in the vicinity of $45 billion. The country’s readymade garment sector is booming, with exports likely to touch $50 billion fairly soon. Bangladesh’s exports registered a nearly 55 percent year-on-year jump this March as export receipts hit $4.76 billion, which is the highest ever on record for a single month.

One lesson that Bangladesh needs to learn from the Sri Lankan crisis is the urgent need to diversify the economy. Bangladesh’s exports depend on readymade garments; Sri Lanka was too dependent on tourism for foreign income. That collapsed during the COVID-19 crisis and exacerbated the present crisis caused by a lack of fuel and foreign currency, the ripple effects of COVID and the war in Ukraine.

But Bangladesh’s COVID management has been exemplary; deaths were restricted to thousands and not millions (as predicted by the Doomsday clairvoyants). The speedy recovery of the garments sector in both production and export has ensured sufficient foreign exchange to meet import needs.

Bangladesh now has self-sufficiency in food. This food security means a lot for macroeconomic performance and diplomatic confidence. Achieving food security means attempts to fuel social unrest have only limited chances of success.

Like achieving food security, achieving 100 percent electricity coverage is another stellar achievement of the Awami League government. That ensures less and less power cut — in stark contrast to Sri Lanka, whose tourism is now dropping because visitors don’t fancy a 10-hour power cut. Bangladesh is on the right track for growth in power generation, focusing on its first nuclear plant rather than depending only on coal. It has also pushed strongly and successfully for regional power trade, giving it access to cheaper hydroelectricity from Nepal and Bhutan through the grid in eastern India with the focus on meeting future demand.

Bangladesh’s Doomsday Brigade had hoped for a superpower intervention for regime change. Sanctions against the Rapid Action Battalion and its officials buoyed them up, but the Ukrainian crisis drew global attention away from Asia. The effective handling of COVID put paid to plans for social unrest because there were not enough bodybags to whip up passions. So this bunch focused on a fundamentalist agenda of obstructing Pahela Boishakh celebrations, including the Mongol Shobajatra procession. This is how apparent Westernised do-gooders and fundamentalists find their one common agenda — topple the very government that has brought so many achievements to Bangladesh.