Between the numbers, there is a deeper storyline

The projection of the International Monetary Fund (IMF) on the 13th this month, indicating Bangladesh was to surpass India in terms of per capita gross domestic product (GDP), in nominal USD terms, stimulated a furious debate in India, led by the country's political leadership.

For India, it is perhaps another piece of evidence that their economy is struggling. For Bangladesh, it is a mark of our resilience on a comparative scale. However, for both countries, this IMF projection should not be an earth-shattering surprise.

The "catch-up" story began around 2010, while the more recent Covid-19 shock aided the pull away from India.

According to IMF statistics, Bangladesh's GDP per capita in nominal USD terms was equivalent to only about 55% of India's in 2010. In 2019, the respective figure climbed to as high as about 87%.

During this decade (the 2010s), according to official statistics, despite all odds, Bangladesh's GDP growth performance improved steadily, while India, to some extent, lost their momentum.

It may be recalled that, during the 2000s, India was globally one of the leading growth performers. The trends in exchange rates of these countries also contributed heavily to the outcome. Over the last decade, Indian Rupee depreciated by about 27% against Bangladeshi Taka.

The IMF predicts a stark difference between the two economies' performances in 2020. While India is expected to experience one of the steepest falls in GDP in 2020, Bangladesh is projected to be one of the very few countries which would be able to remain in the positive growth terrain.

Nevertheless, one will still need to be aware that this so-called surpassing will only be done in nominal USD terms. If one transforms these numbers into purchasing power parity terms, Bangladesh's per capita GDP will remain about 18% lower than that of India.

In advanced countries such as the USA, employment is the most popular economic indicator in political debates. For many developing countries, such as Bangladesh and India, GDP growth performance is the strongest political indicator.

Curiously, in both of these countries, GDP estimates faced considerable scrutiny from independent quarters. Being too obsessed with GDP per capita is also dangerous for policy making. It is a story of "average" – does not tell you how the benefits of economic production have been distributed.

Indeed, the performance of a country should be measured considering various economic, social, environmental, and political indicators. Let us not forget, over the years, Bangladesh outpaced India in terms of many social indicators including life expectancy, neonatal mortality, infant mortality, under-five mortality, literacy rate among women, female labor force participation, the ratio of high school enrolment for boys and girls.

Similarly, Bangladesh will still need to do much better in many areas of development. Most critical among these is perhaps the government revenue-GDP ratio. Bangladesh is progressing with a disappointing pace – one of the lowest performances in the world, let alone in comparison with India. Hence, our government expenditure is also much lower. This is also clearly demonstrated in IMF statistics, which is overshadowed by the overwhelming attention to GDP per capita. As a result, the common citizens of Bangladesh are not receiving the public services they deserved.

Economic statistics will always be used by political quarters for their self-serving agenda, be it the parties in position or opposition. One may recall that at the beginning of the year, there was a big hue and cry among certain Indian political actors that "half of Bangladesh will come to India if citizenship is offered" to a certain section of the population supposed to have emigrated from Bangladesh to India. Surely, the latest IMF projection is a slap to their faces.

Similarly, in Bangladesh, we should not feel too self-satisfied with the latest projection by the IMF. Bangladesh's advancement should be the centre of our attention. We are not in a race with each other per se; India's stumble should not be the occasion of our celebration.

It is critical that the policymakers, analysts, and citizens of both countries remember that stronger neighbours can support each other in the pathways of economic progress.

The central message of the IMF report highlights the fact that the global economy is set for a "long and difficult ascent to pre-pandemic levels of activity remains prone to setbacks". While national policies need to be favorable for "stronger, equitable, and sustainable growth"; greater international collaboration is also critical at this juncture. Our neighborhood should not be an exception.

Towfiqul Islam Khan is a Senior Research Fellow at the Centre for Policy Dialogue (CPD). The views are the author's own. Email: towfiq@cpd.org.bd