Bangladesh surpasses India, Pakistan in prosperity but lags in freedom

Bangladesh outshone its South Asian neighbours, India and Pakistan, in prosperity in 2023, but faced a setback in the Freedom Index, overshadowing the achievement.

According to the Atlantic Council's Freedom and Prosperity Center's report "Freedom and Prosperity in Bangladesh", the country was labelled as "mostly unprosperous" in the Prosperity Index and "mostly unfree" in the Freedom Index.

The report, released on Tuesday (14 April), pointed out that while Bangladesh outperformed India and Pakistan in overall prosperity, it still lagged behind India in GDP per capita adjusted for purchasing-power parity.

Among 164 countries, Bangladesh ranked 99th in the Prosperity Index, while India and Pakistan ranked 146th and 150th, respectively.

The Freedom Index placed Bangladesh at 141st, with India at 104th and Pakistan at 113th in 2023.

The Prosperity Index considers factors like health, inequality, environment, minority rights, and education, while the Freedom Index measures political, economic, and legal components.

Research from the US-based think tank suggested that enhancing basic freedoms could accelerate long-term economic growth. It recommended critical reforms to support Bangladesh's prosperity despite declines in freedom.

The report highlighted concerns about Bangladesh's shift towards a dominant-party system after parliamentary elections in January. While stability was noted, challenges to good governance were also mentioned.

These findings were discussed at the Prosperity and Good Governance Conference, co-organised by the USAID and the Asia Foundation, where US Ambassador Peter Haas emphasised the link between freedom and prosperity.

"In order to become prosperous, Bangladesh must then take bold steps to expand economic, political, and legal freedoms for its people," he said.

Atlantic Council's Freedom and Prosperity Center Director Joseph Lemoine said countries with greater freedom tend to be more prosperous and attract more foreign investment.

Bangladesh in Prosperity Index

Bangladesh has seen a significant rise of 13 points in the Prosperity Index from 1995 to 2022, according to the think tank's findings.

Despite facing ups and downs, Bangladesh has moved ahead of the South and Central Asian regional average by 3.9 points. It has also closed the gap with the global average, narrowing it from 9.1 points to just 4.8 points.

This advancement signals positive overall prosperity trends, placing Bangladesh ahead of its regional peers.

While Bangladesh exceeds both regional and global averages in components like minority rights, inequality, and health, it falls short in areas such as income, environment, and education, the report reveals.

Describing Bangladesh's progress as "mixed", the report notes notable improvements in health and education.

However, progress has been slower in addressing inequality and environmental sustainability, and there's even regression in minority rights. The report stresses the need for a comprehensive plan to tackle these issues and enhance all aspects of prosperity.

Income improves, inequality remains

The Atlantic Council reports significant income improvement in Bangladesh over the last three decades, boosting the country's ranking from 138th in 1995 to 112th in 2022.

Bangladesh's income score climbed by 19.8 points during this period. Despite this progress, the report notes that Bangladesh's income performance still trails behind global and regional averages for South and Central Asia, suggesting potential gaps in income policies and practices.

To foster fair economic growth and tackle income inequality, the Atlantic Council recommends implementing progressive taxation policies, investing in education and skill development, and creating a supportive environment for small and medium-sized enterprises.

It also stresses the need to address structural barriers to employment and ensure fair wages to build a more inclusive and prosperous economy benefiting all citizens.

The report acknowledges commendable improvements in education in Bangladesh, crediting initiatives like the expansion of compulsory and non-formal education. However, Bangladesh's education performance continues to lag behind global and regional averages for South and Central Asia.

The Atlantic Council calls for a comprehensive approach, emphasising not only enhancing literacy rates and ensuring free access to education but also improving the quality of education provided.

While Bangladesh previously outperformed South and Central Asia in environmental performance, it now falls below the regional average.

The country faced the worst air quality globally in 2023, with pollution levels exceeding recommended limits by sixteen times, attributed to factors like limited access to clean energy and the burning of solid fuels.

Dhaka's severe traffic congestion worsens the problem, ranking the city among the world's worst for traffic.

The report highlights a lack of consistent progress and structured efforts to safeguard minority rights in Bangladesh, suggesting the need to strengthen legal frameworks and institutions for a more inclusive society.

Debapriya Bhattacharya, distinguished fellow at the Centre for Policy Dialogue, warns that political regression in Bangladesh poses a significant challenge to future progress and inclusive development.

He calls for a new political settlement, development bargain, or grand agreement, urging elites from various sectors to come together and propel Bangladesh forward.