As Sabir Shah in the dispatch points out, Bangladesh has become preferred destination for Pakistani textile units interested in relocation because after winning its freedom from Pakistan, it has gained tax-free access to 37 countries including the European Union, Canada and Australia.
Yes, this duty free access makes Bangladesh a privileged country and hence a magnet for Pakistan textile barons. This doesn’t in any minimise the reality that Pakistan is a failed state even in industry, and manufacturing terms. Power and water shortages have become so endemic that the government itself is forced to shut down its offices for two extra days every week. Bangladesh, on the other hand, doesn’t have electricity, gas outages and unbearably high power tariffs like in Pakistan. More over, the government in Dhaka is spreading the red carpet for the textiles sector.
For Bangladesh, as the Harvard International Review (Jan 12, 2012) said, the crucial driver of growth its thriving textiles industry that relies on the country’s vast amount of cheap, unskilled labour. Garment exports accounted for $12.3 billion, nearly 12 percent of GDP. Furthermore, the rate of textile exports accelerated in 2009, despite the world economy floundering in the throes of a deep recession, as textile exports to the United States increased by 10 percent.
Over the last 15 years, the B’desh government has made the country a Sonar Bangla creating investment opportunities for MNCs and foreign banks. The Export Processing Zones’ have become a big draw in Dhaka, Comilla, Mongla, Iswardi, Uttara, and Karnafully. Added incentive is are tax holidays that last up to five years.
No surprise therefore that more than 40 percent of the Pakistani textile industry has moved to Bangladesh in the last five years. Around 200,000 power looms have been shifted to what was East Pakistan till 1971. This story has its flip-side. The shift has affected 200,000 families directly or indirectly in the prosperous Punjab province alone. In Sindh, particularly Karachi, also the shift has affected the local job market.
Bangladeshi economy has grown between five and six percent every year since 1996 despite political instability, poor infrastructure, corruption, insufficient power and slow pace of economic reforms. Its growth was resilient during the 2008-09 global financial crisis and recession. Garment exports, totalling $12.3 billion in FY09and remittances from overseas Bangladeshis, totalling $11 billion in FY10, accounted for almost 25 percent of GDP”.
With a GDP per capita of $1,700, exports of $23.86 billion, imports of $31.75 billion, a labour force of 75.42 million, an unemployment rate of just five percent, budget revenues of $12.67 billion, inflation rate of 10.7 percent and an industrial production growth rate of 7.4 percent, Bangladesh today puts Pakistan to shame. Its gold and forex reserves stand at a staggering $10.98 billion, while Pakistan is sinking deep into debt trap and is looking towards the IMF for a periodical bail-out.
Bangladesh has done exceedingly well in respect of human development index, according to the World Bank. The national poverty headcount rate has declined to 31.5 percent in 2010 from 40 percent in 2005. Rural poverty has declined to 35.2 percent from 43.8 percent, and urban poverty to 21.3 percent from 28.4 percent in the same period.
Good food for thought for Pakistan mandarins and political masters, whose unidimensional religion centric policy has made Pakistan a failed state.
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The survey shows a marked improvement in nutrition levels across the country, primarily because of the more diversified food basket that people are now consuming. Other indicators of welfare related to human development, access to services, and coverage of social welfare schemes also saw tremendous progress”.
—Yamaaraar
