Bangladesh beats India – It’s not cricket
Bangladesh, the tiny nation that India helped carve out from Pakistan in 1971 was seen as the de facto loser in every economic, social and sporting endeavour amongst countries in the subcontinent. It has been the favourite laggard that everyone depended on to be true to its label.
However, a recent visit to the country and a few discussions with a few individuals there opened my eyes. Having always assumed that the INR would get me a ton of Bangladeshi taka, I was taken aback when the difference in rate came out to be just 15 paise, actually less accounting for trading markups.
Upon talking to some business people there, some more eye openers came my way. The sheer bravado, the confidence oozing out of the common people and their business aggression was evident of the animal spirit that perhaps was evident for us here in India at the turn of the century.
So was it the animal spirit only or was there factual pointers to this. Analyzing for the period 2014-18 between the two countries threw up a lot of revealing facts.
Whereas the population growth between the two countries, Bangladesh had grown by a full two percent more, the GDP growth differential was nearly double. Versus Bangladeshâ€™s near 60% GDP growth, India was a mere 33%. This lead to a major differential in the per cap GDP.
The growth in the per cap GDP was less than 30% for India whereas the same for Bangladesh was a colossal 50% plus. But not only are we talking about current figures. Even the data from Bloomberg suggests that going forward to 2030, the differential is going to increase in BANGLADESHs favour.
The projected value, per cap GDP in 2030 is 5700 USD versus 5400 for India.
The population growth, although slightly higher in Bangladesh is becoming a bane for India. The country has for the time being managed the herculean task of managing its work force and succeeded in providing meaningful employment to its citizens. So much so, that employment has fallen by 2%. India on the other hand has the very serious problem of sharply rising unemployment.
Not only is the per cap doing so much better, The macro financial indicators are also overwhelmingly in Bangladeshâ€™s favour. The difference is not small, its over whelming so.
Compared to Indiaâ€™s very meager 40% growth is forex assets, valued in USD Bangladesh has grown by a mind boggling 600%. Although on a much smaller base of 4 billion USD (India 305 billion USD), the growth differential is an eye opener.
All the other factors has led the Indian Rupee, not only falling against the USD but also against the Bangladesh Taka. Against the USD as the base value, the dollar has risen a full 12% while the Taka has done twice as much by checking the dollar growth by just 7%.
The day is perhaps not far when the Indian rupee will be valued lesser than the Taka. If things continue the way it is, itâ€™s a certainty. The expensive handwoven cotton kurta or the silk sarees will then be worth their weight in gold.