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Be Happy Yet Do Worry: Explaining Resilience in Bangladesh's Economy

Zahid Hussain's picture

This is the third in a series of six posts about the recent report, Bangladesh: Towards Accelerated, Inclusive and Sustainable Growth. The last post, The Paradox That Bangladesh Isn’t, explained the sources of GDP growth over the past two decades. Next week's post will look at how the country can achieve its goal of middle income status by 2021.

The World Bank’s report “Bangladesh: Towards Accelerated, Inclusive and Sustainable Growth—Opportunities and Challenges” observes that growth in Bangladesh has been resilient at above 6 percent in recent years, despite several external shocks that slowed exports, remittance and investment growth. Since 2006, Bangladesh has faced political uncertainty (2006-2007); two major floods, the disastrous cyclone Sidr, and Avian Flu (last half of 2007); food and energy price crises (first half of 2008); global financial meltdown and recession (2008-2009); political transition followed by mutiny (first half of 2009); and rapid deterioration of the power and gas supply situation (first half of 2010). Currently, it is braving the impact of Euro area crisis and internal uncertainties surrounding the expected political transition in early 2014. These exogenous shocks resulted in a decline in the efficiency of investment, but the private investment rate itself managed to grow at a rate faster than the growth of GDP while the public investment rate declined. The economy has demonstrated resilience time and again.

The Paradox That Bangladesh Isn’t

Zahid Hussain's picture

This is the second in a series of six posts about the recent report, “Bangladesh: Towards Accelerated, Inclusive and Sustainable Growth”. The first post was Better Jobs Can Outweigh a Secure Life. Next week’s post will look at how Bangladesh’s economy has remained resilient despite global and local shocks over the past few years.

Bangladesh lacks natural resources and good governance. It is beset by natural calamities. Corruption and self-destructive political non-cooperation are common. Yet Bangladesh’s GNI per capita more than tripled in the past two-and-a-half decades, from an average of US$251 in the 1980s to US$851 by 2012. This growth was accompanied by impressive progress in human development. Growth in GNI came almost entirely from growth in GDP in the 1980s and 1990s, but this changed in the last decade due to a surge in remittances from Bangladeshi workers abroad. GDP growth has accelerated by a percentage point and per capita GDP growth has accelerated by 1.7 percentage points in each of the last four decades. A recently published World Bank report, “Bangladesh: Towards Accelerated, Inclusive and Sustainable Growth—Opportunities and Challenges” explains how Bangladesh managed to beat the odds.

Where did GDP growth come from? 

CNBC-TV18 India talks to Kaushik Basu on Growth

LTD Editors's picture

Following is the trancscript of Kaushik Basu's interview with CNBC-TV18, India, which first appeared on

In an interview to CNBC-TV18, Kaushik Basu, chief economist, World Bank said the growth situation has to be taken seriously. "I do believe that, for India, there has to be all focus on growth."

Despite the fact that compared to the rest of the world, India is doing well, he said, it has the potential to get right back to 8.5 percent growth. "We have to put all hands on growth and try to get it back again up as quickly as possible," he added.

Q: You have been appointed as World Bank’s chief economist. So, the view from the inside has now changed to the view from the outside, has not it?

A: A little bit. Three months ago, I moved from the heart of Indian policymaking to seeing it from outside.

For Jobs and Growth, a Focus on Competitiveness

How can we spur competitive industries? Tune in Saturday, October 13 at 10:30 JST to hear from Ngozi Okonjo-Iweala , Minister of Finance, Nigeria; Hideto Nakahara, Senior Executive Vice President, Mitsubishi Corp.; Byron Auguste, Social Sector Practice Global Leader, McKinsey & Co. and others.

With the global economy struggling to rebound from the prolonged financial crisis, the world’s policymakers are now assembling in Tokyo for crucial policy discussions at the annual meetings of the World Bank and the International Monetary Fund. Yet the chronic crisis may lead to new opportunities, if it provokes policymakers to re-think and recalibrate how they approach the challenge of competitiveness, growth and job creation.

Where is India's economy heading?

Ulrich Bartsch's picture

The India Economic Update 2012 will be discussed online.Ulrich Bartsch, the World Bank's outgoing senior country economist for India, will lead a 24-hour live chat on the World Bank India Facebook page. He and other experts will be discussing the Bank's latest India Economic Update. The chat will begin Wednesday, Oct. 10, at 4:30 p.m. India Standard Time (7 a.m. Eastern Daylight Time in the United States). Here, he provides a sneak preview.

India’s economic growth has slowed to a pace not seen since the beginning of the 2000s. At the same time, the current account deficit has reached a record high. We project growth in the current fiscal year to reach around 6%, a slowdown from the already low 6.5% growth in the previous year. This growth projection is predicated on an improving domestic and external environment, but the risks for a worse outcome are high.

Longreads: Geography of Poverty, Reporting Poverty, Chinese City Limiting Cars, a FarmVille for Africa

Donna Barne's picture

Find a good longread on development? Tweet it to @worldbank with the hashtag #longreads.

LongreadsThe Economist’s much tweeted-about "Geography of Poverty" highlights a "poverty paradox" – that more of the world’s extremely poor people now live in middle-income countries rather than in the poorest ones. The finding comes from a new paper by Andy Sumner of the Institute of Development Studies. But the situation could change by 2025 if the number of poor people grows in fragile states, say Homi Kharas of the Brookings Institution and Andrew Rogerson of the Overseas Development Institute in the Economist. Veteran journalist Katherine Boo, author of a new book on life in a Mumbai slum, discusses the challenge of portraying poor people as individuals in the media, in an interview with Guernica in "Reporting Poverty." Big Chinese cities are starting to adopt measures with the potential to ease pollution and "improve the long-term quality of Chinese growth," according to a story in the New York Times. "A Chinese City Moves to Limit New Cars" describes, among other things, restrictions in Guangzhou expected to cut the number of cars on city streets in half. And finally, imagine vicariously smashing mosquitoes, riding a motorbike through the streets of Lagos, or remembering life in a rural village. The BBC writes about a Nigerian video game-maker who believes Africans and non-Africans alike may want to tap into the African experience through games.

Keeping India’s Promise Alive

Kalpana Kochhar's picture

India has been a beacon to the world on how a thriving and vibrant democracy can transform itself into an economic powerhouse. The metamorphosis that took place in the Indian economy after the reforms of the early 1990s is nothing short of spectacular. The Indian economy was transformed into a dynamo of innovation and diversification. This fundamental transformation unlocked two decades of explosive growth in which poverty rates fell by nearly 20 percent, exports as a share of GDP increased nearly five-fold, and standards of living increased by a factor of almost four. This trajectory received but a glancing blow from the 2008 global financial crisis—this resilience was a testimonial to the benefits of the economic reforms of the previous 15 years.

Challenges to India’s Growth

But now, India’s economy once again faces formidable challenges and the fear is that it is considerably less well placed to deal with these challenges than at any time over the past two decades. The global economy is facing a new phase of the crisis characterized by an extreme bout of uncertainty, risk aversion and volatility, this time originating in the Euro Area. Some skeptics have recently questioned: Will India weather this storm as well as it did in 2008-09 and will the story of “Incredible India” remain credible?

Inequality of What?

Francisco Ferreira's picture

More than ten years ago Ronald Inglehart, of the University of Michigan, and his team at the World Values Survey asked thousands of respondents around the world to rate their views, on a scale of 1 to 10, on whether they felt inequality in their countries should go up or down.  The way they phrased the question was that 1 corresponded to full agreement with the statement that “incomes should be made more equal”, whereas 10 stood for “we need larger income differences as incentives for individual effort”.

G20 Needs to Focus More on Growth

Zia Qureshi's picture

This is the central message of a report World Bank staff prepared as an input to the G20 Los Cabos summit held from June 18-19. The summit comes at a precarious time for the world economy. The Euro Area is facing a relapse into recession, with potentially large losses of output with global repercussions if current risks to stability and growth are not addressed forcefully. Recovery in other advanced economies is weak and faltering. Growth is also slowing in emerging economies that have been the drivers of global growth in recent years. Against this background, the Bank report, entitled Restoring and Sustaining Growth, conveys the following main messages: