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Reform experiences: Bangladesh and India in the 1990s M S Siddiqui 29 Dec 2021 00:18:01 | Update: 29 Dec 2021 00:18:0 https://businesspostbd.com/post/42456 Thirty years ago, India liberalised its socialist-style economy through reforms in investment and trade. A mammoth trade deficit and plunging foreign exchange reserves necessitated a loan from the IMF. The then Indian Finance Minister Manmohan Singh, an Oxford-trained economist with a doctoral dissertation in trade policy took on the steering wheel of reforms. On July 24, 1991, he announced major steps to cut tariffs and encourage trade, essentially opening up the economy to the outside world. The reform eventually pulled about 300 million out of poverty, fueling one of the biggest wealth creations in history. Following the liberalization, the economy boomed and growth rate crossed 8 per cent. Technology giants like Infosys were born and start-ups worth billions are now mushrooming in Bangalore. A new middle class emerged. Apple iPhone assembling plant has been set up. India has become the world’s biggest supplier of generic medicines and the Serum Institute of India became the world’s biggest vaccine maker. National Stock Exchange India Ltd (NSE) have introduced trading in exchange traded Currency Derivatives based on Euro(EUR)-INR, Pound Sterling(GBP) - INR and Japanese Yen (JPY) - INR exchange rates in addition to the existing USDINR contracts. Within this decade, India was expected to become the world’s most populated nation, taking that mantle from China, which for years drove global growth. But the Indian economy is grappling with big threats due to conservative policy of the Narendra Modi government and also the ongoing Covid-19 pandemic, even as it becomes home to the kind of young, working-age population that drove lengthy booms in other nations. The Bangalore-based Azim Premji University calculates that more than 200 million have gone back to earning less than minimum wage, or $5, a day. The middle class, the engine of the consumer economy, shrank by 32
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Bangladesh and India need further reforms to put the economies on the right tracks. Bangladesh has relatively in a better position because of a dynamic leader like Sheikh Hasina. Both the governments in Bangladesh and India need to recall the experience of 1990s. Both the countries need finance ministers like Shah AMS Kibria and Manmohan Singh.
