Aalizae Anwar Yazdani

20U00132, Section A
Development Economics
Case Study 2: Comparative Economic Development: Pakistan and Bangladesh

(a)Analysts such as William Easterly have declared Pakistan as a leading example of

“growth without development,”. Do you agree with this view? Give reasons for your
answer.
(b)What has been Bangladesh’s performance on social development relative to Pakistan?
What factors have been responsible for this?

Ans: (a) In any situation, economic growth does not necessarily mean there is economic
development as well. Economic Development has a much broader meaning and for growth
sometimes development is necessary and sometimes it is not. According to the world bank,
Pkaistan has been experiencing economic growth form 2000 - 2011 where GDP averaged 4.9%.
However, with low social indicators for income and growth, Pakistan has been dubbed as an
economy where there is “growth without development” by analyst William Easterly.

One of these indicators is the health levels in Pakistan. According to The World Bank 2013 WDI
reports that 23% of the population lives below the $1.25 per-day poverty line in Pakistan. A
statistic that used to be 54 years for Pakistan and 44 for Bangladesh, has become 65 years for
Pakistan and 69 years for Bangladesh. Thus, health in Bangladesh became better than Pakistan as
evident from the case. Another indicator includes the literacy rates in Pakistan. According to The
World Bank 2013, Bangladesh had a 52% enrollment in secondary school, compared with just
35% in Pakistan.

In conclusion, i agree with William Easterly when he said that Pakistan is an economy where
there is “growth without development”. Pakistan failed to provide for social development, and
even though economic growth was achieved, social indicators provide evidence that
development however was not.

(b) After gaining independence, Bangladesh was behind Pakistan in terms of being drained of tax
revenues in order to benefit West Pakistan. In Pakistan, per capita income tripled as it grew at
about 2.2% per year in the half-century from 1950 to 2000. However, the growth rate declined
decade by decade which may be a result of the poor performance on social indicators. From 2000
to 2011, GDP growth in Pakistan averaged 4.9% (World Bank); with a population growth of
1.8%, per capita GDP growth was about 3.1%. Today, decades later although Pakistan still has
44% higher income than Bangladesh according to UNDP estimates, the two countries
nonetheless received an identical New HDI ranking for 2013, with Bangladesh 9 places higher
on NHDI than predicted for its income level, while Pakistan is 9 places below what would be
pre- dictated by income alone. From these estimates, we can see that Bangladesh has made
relatively better progress than Pakistan, particularly on social development indicators. Even
though Bangladesh started at a much lower level of social development and still has a lower
income. But in terms of growth and development, Bangladesh is now equipped with the
conditions for improving economic progress in the coming years.

Examples of these social indicators include: Life expectancy which in Bangladesh is now 69
years, compared with only 65 in Pakistan (2012 Population Reference Bureau); but in 1970 life
expectancy was 54 in Pakistan and only 44 in Bangladesh. In terms of fertility rates, shortly after
independence in 1971, both countries had an extremely high level of over 6 births per woman. In
Bangladesh, fertility fell to 2.2 by 2011. But for Pakistan, fertility has fallen only to 3.3 (2013
WDI data). Bangladesh also had a gender equity index ranking of 0.55, which was higher than
Pakistan’s ranking of 0.29.

Other factors which might have led towards Bangladesh performing better than Pakistan in terms
of social development include inefficient resource allocation of aids. Pakistan did not use the aid
granted by the US to greater use, which should have been to develop and improve facilities for
the poor. Similarly, Civil society is another factor. In Bangladesh, a lot of NGOs and charitable
organisations have done ample amounts of work.