Dr. Mamunur Rashid
For the past 15 years, anti-national forces—who are now in power—have consistently spread false narratives against Sheikh Hasina, her party the Awami League, and her government. One of their main claims is that Sheikh Hasina has plunged the country into hundreds of billions of takas in debt and fled the country.
But is that really true? Let’s examine the data.
The chart below compares the debt-to-GDP ratio of four countries—Bangladesh, Pakistan, Vietnam, and Malaysia—from 2014 to 2023. The data reflects the loans taken by governments from financial systems and is presented in percentages (%). These figures have been matched with Bangladesh Bank data and verified as accurate.
First, let’s understand government debt and GDP. GDP (Gross Domestic Product) is the total value of goods and services produced in a country within a year. More production means higher GDP. To boost production, investment is needed, and for investment, capital is essential. No one invests billions from their own pocket; that’s why governments and businesses borrow money from financial systems such as banks and stock markets.
Governments borrow money for slightly different reasons. There are three main purposes for government borrowing:
- Infrastructure development
- Providing social safety nets and public services
- Covering the operational costs of the government
The primary source of government income is tax. In almost every country, government expenditure exceeds income. As a result, governments around the world borrow heavily from financial institutions—sometimes over 50% of GDP. This borrowed money is used for the above-mentioned purposes.
However, high levels of government borrowing can have three potential negative impacts:
- Reduction in loans available for individuals and industries
- Increased interest rates and inflation due to reduced liquidity
- Higher risk of government default
But there is no fixed limit on how much a government can borrow. For example, the debt-to-GDP ratio in the USA is 122%, meaning for every $100 in GDP, the U.S. government has borrowed $122. In India, it’s 82%, in China 81%, in Singapore 173%, and in Japan a staggering 263%.
Have you seen any of these countries collapse under their debt? Only the U.S. regularly announces its debt ceiling adjustments, which the entire world becomes aware of. For other nations, this level of scrutiny doesn’t usually happen, and their development examples are often used to pressure other governments, like Bangladesh’s.
So what about Bangladesh? The data shows that from 2014 to 2023, Bangladesh consistently had the lowest debt-to-GDP ratio compared to the other three countries. Only in 2023 did Bangladesh’s ratio (37.1%) exceed that of Vietnam (33.5%).
What has been the benefit of this? Since the Bangladeshi government borrowed relatively little, more capital remained available for private and commercial loans. As a result, Bangladesh’s GDP grew significantly, reaching nearly $500 billion during this period.
The sparkling roads, metro rails, bridges, and flyovers you see today are the results of that disciplined borrowing strategy.
So the narrative you’ve heard over the past 15 years is false. Certain malicious actors have taken advantage of your lack of access to facts to spread deceit and manipulate the fate of 180 million people. Despite creating such a strong economic foundation, Sheikh Hasina is being labeled as corrupt, while those currently exploiting the public are being praised as patriots.
Writer : Researcher and Economist