BANGLADESH AMONG 10 COUNTRIES SET TO BECOME NEW DRIVERS OF GLOBAL GROWTH
Bangladesh’s export-oriented industrial sector already accounts for more than a quarter of GDP and will continue to develop as a global manufacturing hub in the coming years
Bangladesh has been named one of 10 emerging markets that are set become new drivers of global economic growth over the next 10 years.
BMI Research report says the economy is heading for impressive growth, lifted by the apparel and construction sectors.
The report released last month by the US-based research firm of the Fitch Group has identified Bangladesh, Philippines, Indonesia, Myanmar, Vietnam, Egypt, Ethiopia, Kenya, Nigeria and Pakistan as “10 emerging markets of the future.”
The countries will add about $4.3tn to the global gross domestic product by 2025, providing significant opportunities for investors and roughly the equivalent of Japan’s current economy, the report said.
“Bangladesh’s export-oriented industrial sector already accounts for more than a quarter of GDP and will continue to develop as a global manufacturing hub in the coming years,” according to the report.
In general, manufacturing and construction are the sectors that will drive the economies.
BMI reports that new manufacturing hubs are set to emerge in Bangladesh, Myanmar, and Pakistan, and that these countries will see particularly strong growth in exporting manufacturing industries.
And construction growth is going to be widespread throughout all the countries — partly to facilitate increases in urban populations and partly to help develop the manufacturing sector, it said.
On the other hand, extractive industries — like mining, oil, and gas — are going to play a far smaller role in driving growth than they have in the past 15 years.
While it might provide bright spots for some countries, the report stated: “The ubiquitous commodity-driven growth model that was derailed by the 2012-15 collapse in commodity prices is not coming back.”
“In order to shortlist the countries, we considered those with per capita income of about $3,500 and below, that enjoy strong enough economic and political institutions to enact reforms, are set to enjoy rapid economic growth, boast a potentially large domestic market and have an infrastructure deficit that will lead to productivity-enhancing investment,” it explained.
BMI said a large domestic market implies strong growth opportunities for consumer industries.
“Moreover, large populations will provide significant opportunities for infrastructure and construction as urbanization rates rise,” it said.
Stronger institutions are typically associated with better policymaking, the protection of property rights and reform, which help to underpin growth, it added.
The think tank said the countries that experience strong economic growth will provide strong investment opportunities and returns.
JULY 14, 2016