Bangladesh has made dramatic strides forward over the last two decades it has reduced poverty by half a proud nation has made its presence known it's no longer a basket case for sure the country has also left behind pakistan in many u.n development and.
Growth indices in imf's latest economic outlook bangladesh has also overtaken india in projected per capita gdp hi everybody bangladesh is emerged as one of the fastest growing countries in the world and the entire world is stunned to see that a nation that was.
Once considered to be hopeless by the world with an 80 poverty rate today it has emerged as one of the fastest growing nations in the world with a poverty rate of less than 12 and not just that 50 years back bangladesh was in such a pathetic state that let alone industries and resources they were ravaged with wars and.
Massacres that led to 10 million refugees and 6 lakh deaths but in the next 5 decades they have done so well that in 2020 21 bangladesh reported its per capita income more than india itself while bangladesh stood at 2 27 india was at 1 000 947 dollars and lastly with a gdp of more than 400 billion dollars bangladesh is currently.
The 37th largest economy in the world the question is how did bangladesh go from a poverty infected country to becoming one of the fastest growing countries in the world what exactly was their strategy and most importantly what are the lessons that india needs to learn from the economic upliftment of bangladesh this video is brought to you.
By dessert but more on this at the end of the video the story of bangladesh dates back nearly 70 years ago when india and pakistan gained independence in 1947 and as we all know bangladesh was known as east pakistan and was one of the five provinces of pakistan but was separated from its other four provinces by 1800.
Kilometers of indian territory and during the parliamentary elections an overwhelming number of east pakistanis voted for a political party called the awami league this party specifically wanted east pakistan to separate from west pakistan or what we know today as pakistan but when the awami league won the election.
The leader of the party sheikh rahman was ideally to be invited to form a civilian government but you know what guys the generals of pakistan had a different plan for this poor country there have been many reports of massacres in east pakistan march 1971 the year of the killing begins by ship and secret airlift troops are brought to.
Dhaka general tikka khan popularly known as the butcher is sworn in as military governor on the night of march 25th the army moves to crush bengal entire families were wiped out all the women the people say were raped before they were killed.
To those who survived those two hours those who will always remember the screams of women the moans of their unarmed men the whales of babies if they were not marty bihini gorillas before they almost certainly will be now the indian army is in bangladesh.
Your air force has been destroyed you are surrounded on all sides and if you don't surrender you will be killed unmercifully the pakistani army began something called operation searchlight and while the streets of east pakistan were filled with blood the military of pakistan went on and on with their massacres creating.
Rape camps torture camps and killing innocent men women and children and all of this was done just to symbolize their authority on east pakistan and these horrors went on not for one not two but nine long months and resulted into 10 million refugees who crossed the border to india but during this time the pakistani army made one big mistake.
In december 1971 the pakistani air force attacked the airfields in india and when they did it gave india the legal justification to formally enter the war now although india's motors weren't entirely humanitarian or selfless the india army surrounded the pakistani army and put them in such a position that pakistan had to surrender in just two.
Weeks and that is how on 26th of march 1971 a new nation called bangladesh was born now although they were liberated the expectations from bangladesh were very very low to add to this war turmoil the world's deadliest tropical cyclone on record ravaged the nation which again killed three lakh people and put the.
Country in even deeper trouble this is when the country was in its worst possible phase with an 80 percent poverty rate with malnutrition at its peak and the world itself had lost hopes from bangladesh so the question is how did they actually grow well after the terrible phase of the 1970s obviously the youth of bangladesh.
Did not have any opportunities in their home country but if you remember during the 1970s something crazy was going on in the middle east on the 4th of july 1962 an oil tanker called british signal sailed from das island carrying abu dhabi's first ever cargo of oil in 1958 the first offshore well was.
Drilled in the omaha field of abu dhabi and it was from this field that the first shipment of crude oil for the world market was exported on the british signal in 1962. yes it was none other than the oil boom of the 1970s wherein billions of barrels of oil was found in the middle east so millions of bangladeshis started.
Migrating to the middle east and even today millions of workers send money all the way to bangladesh and according to the estimation of the ministry in 2018 nearly 7.1 percent of bangladesh population was still employed overseas but wait isn't this like brain drain because how can people making money overseas help the home country well the.
Simple reason for that is that the people who were employed overseas sent money back to their family's home in the form of foreign currency which is also known as remittance and you know what for a developing nation remittance is an absolute gold mine the question is how let's say we have bijoy who is a migrant worker in saudi and he is survived by.
His wife radha and their two children who live in bangladesh now bijoy who is a skilled laborer in an oil refinery he makes around 1500 riyads per month or approximately 34 000 in bangladeshi taka now after meeting his monthly expenses in saudi he is able to send back 700 reals per month which is approximately 16 000 bangladeshi taka now radha the.
Recipient of this money in bangladesh uses this money sent to her to buy food medicines pay utility bills pay her children's school fees then after meeting all of her expenses she is able to save nearly 3 000 which gets deposited in the bank so if you see this 700 reacts did not just help his family back home but because of their.
Consumption it also supported the local grocer pharmacy school state electricity board and even the water board in bangladesh eventually this money keeps on circulating translating into both value for the economy and taxes to the government so in a country whose population is extremely poor when lacks of bijoy send their money back home to.
Their respective families can you imagine the positive outcome it can bring to the economy it's almost like trading with a nation for a valuable product which in this case is the time and hard work of the workers and you know what guys this amount of money is so much that even as of 2017 bangladesh received an amount of 13 billion us.
Dollars as limitants and by 2020 it was contributing to 6.6 of bangladesh gdp which is absolutely crazy and guess what meanwhile at home there was another extraordinary initiative that was in the making which reduced the poverty of bangladesh by an insane 50 this model was something called the grameen model to understand this you.
First have to understand the incredible power of credit you see guys if sema is this poor girl who's in her last year of college with her college fees being 30 000 rupees next year itself when she graduates she'll be making 30 000 rupees every single month so merely by investing in education sima will be worth 12 times more than the loan amount.
Within just one year but if the bank refuses to give sima this loan of 30 000 rupees just because she hasn't taken any loan in the past she will not get a job and even our family will remain in poverty so if you see in the conventional banking system to get a loan you need credit history for which you need past loans for which you again.
Need credit history this is the reason why the poorest people in the country are not able to get loans in spite of having the dire need for it and this is what we call as credit gap in this case millions of girls and women like sema were not able to get loans because of which they could not increase their household income.
Because they were stuck in a vicious cycle of credit gap and by the way this problem even today is haunting india if you remember from our bharathi episode this credit gap in india for the msme sector is 1 trillion but you know what guys here's where in 1983 a man named muhammad yunus starts something called the grameen bank.
This man starts the grameen bank as a specialized bank for microfinance to give out a joint loan to 42 families in the basket weaving business in bangladesh and when he saw a woman working very hard to make money for their family he made three critical observations about microfinance that changed the fate of bangladesh forever.
These three observations were number one lending to women is safe because bangladeshi women tend to repay their loans in time because of their deep rooted culture of integrity number two women invest their money in productive purposes and try to improve the quality of life of their families so while a man would wipe out the savings by drinking.
And gambling a bangladeshi woman is more likely to save that money for the betterment of her family so lending to a woman will have a far greater impact on the society at large and lastly when a sum of money is lent to a group versus a single person the group assumes collective responsibility for the payment thereby it decreases the rate of.
Default and because of this the loan could actually be given without a written contract now the question over here is how do you exactly cultivate trust that too without a written contract well here's how it actually works out let's say there is a chall or a micro colony called chall24 wherein we've got.
Five women from five different families these women are expected to contribute small sums of money say 100 rupees every month to remain in this group now this money is used like an insurance to acquire a loan of 10 000 rupees but the catch over here is that this money is not loaned to a single woman but a group of women in child 24 and this group of.
Women and child 24 will collectively use this money to run their small business now this business could be the grocery business the banana business they could use that money to even pay for their education and then the collection of this money will not happen from each woman but the entire child 24 itself so it becomes the.
Collective responsibility of all the women of child 24 to pay their individual emi so that their child can pay back its emi this way there is an incredible amount of peer pressure for every woman to pay back on time because if she does not the reputation of the entire child will be at stake so if there is someone who.
Frequently doesn't pay back that woman is kicked out of the group automatically to maintain the credibility of the child so this way the system automatically filters out people are not credited worthy and as their deposits keep increasing and they pay back on time their eligibility of loans keep increasing eventually they have a credit.
History by which they can take bigger loans this is how through small small loans the poorest women of bangladesh got empowered and slowly and steadily the superpower of credit was unleashed by which millions of people in bangladesh have come out of poverty and you know what guys by 1994 in just.
11 years grameen had mobilized more than 20 lakh members disbursed more than 1 billion dollars in loan and mobilized 306 million dollars from the poor and about 94 percent of grameen banks members are women and the most astonishing fact of all is that their loan recovery rate has consistently been above 90 percent.
And today not just bangladesh but more than 43 countries have adopted this model and mr eunice even won a nobel peace prize in 2006 for his exemplary work this is how the concept of microfinance has been responsible for elevating poverty in bangladesh by nearly 50 percent.
And this brings me to the third and perhaps the most important driver for bangladesh growth in the recent times which is their government industry bangladesh is second only to china in producing clothing for the world textile is one of the key economic sectors for us in bangladesh because it brings.
Almost 80 percent of our foreign currency it has been one of the primary engines of growth in the nation of 164 million people the industry earns more than 35 billion dollars a year from exports and employs 4 million people a large majority of whom are women.
Now this requires a separate video altogether so if you want me to get into the details of the textile revolution in bangladesh do drop a comment below and i'll try to cover it up in the next month's lineup until then long story short when labor costs in china started rising bangladesh became the alternative to china and along with that the.
Government came out with some game-changing strategies to make business viable in bangladesh starting from labor laws all the way up to taxation and because of that today bangladesh is the second largest exporter of ready-made garments in the world with an export of 28 billion dollars even in 2020. these are three of.
The most important out of the many reasons because of which bangladesh has gone from being a poverty infected country to becoming one of the fastest growing countries in the world and this brings me to the most important part of the episode and that are the lessons that we need to learn from the economic upliftment of bangladesh.
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On to the lessons the first thing we need to learn is that no matter how pathetic our condition is no matter how bloody our history has been if the poorest people in our country are empowered it can lead to incredible benefits to the country in this case we saw how the grameen model reduced the poverty in bangladesh by 50.
Secondly while most of the leaders look at women empowerment as just another social issue what we do not realize is that it has an extraordinary economic impact on the society too and when women are not empowered you are literally degrading the wealth of your own nation and your own family and in spite of all the hype about feminism that we have in.
India you will be shocked to know that only seven percent of the urban women in india actually have paid jobs which means millions of urban women who have the earning capacity are mere consumers and not contributors to the wealth of their family and the wealth of the country now you can imagine what must be the state of rural india so the.
Economics of feminism really needs to be given some importance and lastly i am attaching a ton of study materials in the description especially for the grameen bank so do have a look at it and do study the power of microfinance and this initiative called the bandhan bank as of now i am attaching a ted talk which will teach you about the.
Incredible power of micro finance for women in the lower economic startup that's all for my side for today guys if you learned something valuable please make sure that the like button in order to make youtube bubba happy and for more such insightful business and political case studies please subscribe to our channel thank you so much for watching i.
Will see you in the next one bye bye