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InterviewsDecember 8 2010

Abul Maal Adbul Muhith on Bangladesh's future

Bangladesh's finance minister reveals how the young nation, considered by Goldman Sachs to be a 'Next Eleven' country, can shake off the ills of nationalism, poverty and corruption to realise its much-touted potential. Writer Spencer Anderson
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Abul Maal Adbul Muhith on Bangladesh's futureAbul Maal Adbul Muhith, Finance minister, government of Bangladesh

In 2005, Goldman Sachs included Bangladesh on its list of 'Next Eleven' countries considered to have the potential to be among the largest economies in the 21st century.

Since then, Bangladesh has had mixed fortunes and its finance minister, Abul Maal Abdul Muhith, admits that there has not been sufficient foreign investment into the country over the past few years.

He says: "Bangladesh hasn't attracted much foreign investment, even though for the past seven years it has featured as a country with good prospects. The lack of interest could be [historical], as Bangladesh emerged in 1971 and there was a justified nationalisation drive at the time."

Career History 

Abul Maal Abdul Mahith

  • 2009 - Finance minister, government of Bangladesh
  • 1983 - Various positions at the UN and the World Bank as well as working as an author
  • 1982 - Finance and planning minister, government of Bangladesh

In the past five years, Bangladesh's economy has grown steadily, at a rate of about 5.5% each year, according to the World Bank. Much of this growth is down to the country's thriving garment sector, which has grown to be among the world's largest, with many multinationals outsourcing their production to the country.

While Bangladeshis would bristle at their country being considered 'India lite', the prospect of investing in 'the next India' is something that will attract the attention of many global companies. Although there has hardly been a stampede of foreign investors, Bangladesh is generating interest as a country that shares many of the attractions of India. For a small country, it has a gigantic population of more than 160 million, meaning that it has one of the highest population densities at 1126 people per square kilometre.

Poverty and corruption

Despite its potential and recent growth, Bangladesh has remained desperately poor for decades. This has played a huge part in what could be considered Bangladesh's biggest obstacle to growth: rampant corruption. In 2005, Transparency International listed Bangladesh as the most corrupt country in the world, a distinction it had held for the previous five years.

Mr Muhith acknowledges that corruption is a serious problem, but he insists that the situation is improving and cites more interest and competition for government contracts as evidence that there is more trust and confidence in the government and the tender process. He says: "When we opened bidding for a power supply [contract], we received 21 offers. General Electric, which had previously almost abandoned Bangladesh, is now back [bidding for work in the country].

"Bangladesh is still a land of wants. People need a lot of things and this is good ground for corruption. To get your demands met, you have to get preference over somebody else."

In Mr Muhith's mind, the best way to fight corruption is to give people more opportunities. He does not list specific measures that the Bangladeshi government has taken, but believes that its policies on more rurally focused investment and development are the right way forward. Mr Muhith says: "Most of the population lives in rural areas and now the economy is highly integrated through the transport network. With the new government, rural and agricultural development is happening."

Digital Bangladesh

There is also sizeable activity in Bangladesh's IT and telecoms sectors. Prime minister Sheikh Hasina declared on taking office in 2008 that she wanted a "digital Bangladesh" by 2021. According to Mr Muhith, the country is well on its way to achieving that. He says that while there is still a very low rate of computer and internet use, mobile phone use has grown exponentially.

He says: "Our biggest investment constraint is no longer our reputation; now it is our energy supply. We are victims of dire neglect in this sector. In seven years we hardly had any new drilling for wells and didn't install a megawatt of extra power generation. Power [demand] growth during those years was more than 15%, so we need investment there and hopefully we'll get it."

Career history

Abul Maal Abdul Mahith

2009 - Finance minister, government of Bangladesh

1983 - Various positions at the UN and the World Bank as well as working as an author

1982 - Finance and planning minister, government of Bangladesh

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