South Asia's Other Giants
In recent years, South Asia has gone from what was considered to be an over-looked sub-region to one of the most important economic and geopolitical centers in the world. With a population of more than 1.7 billion that is both younger and faster-growing than that of nearly any other region in the world, South Asia’s vast size and tremendous economic potential make it a crucial region for the world’s economic development and security in the 21st century.
Of course, one country, India, dominates this region, both politically and economically. As it is home to 75% of South Asia’s population and nearly 80% of its economic output, all other countries in this region find themselves drawn into their giant neighbor’s orbit. Nevertheless, there are two other countries in South Asia, Pakistan and Bangladesh, that as a result of their own large populations and their significant potential for economic growth, are attracting the attention of the rest of the world.
Pakistan's Political Clout: While Pakistan recently became the sixth country in the world to have its population surpass the 200 million level, it usually finds itself in the headlines around the world for all the wrong reasons. Thanks to its ethnically- and religiously-diverse population, and the fact that its borders were drawn in a manner that ignored these ethnic and religious differences, Pakistan is one of the most politically unstable countries in the world. Furthermore, as Pakistan’s population has grown dramatically in recent decades and now stands at 205 million, land, resources and jobs have all become relatively scarce, adding to the level of unrest that has plagued the country since its birth in 1947.
Of course, Pakistan’s political weight has grown as the country has developed a large-scale nuclear weapons program, has found itself heavily involved in the never-ending conflict in Afghanistan, and as it remains locked in a dangerous standoff with its much-larger Indian neighbor. In fact, Pakistan is now playing a very vital role in the region, as evidenced by efforts from the world’s two leading powers, the United States and China, to court Islamabad in recent decades. However, while Pakistan is a political power, its economic power has been held down by relatively low rates of growth (3.5% GDP growth per year since 2009) and the high rate of poverty in Pakistan. While Pakistan’s economic potential is significant, particularly as a low-cost manufacturing center, it will struggle to improve its economic position as long as the political and security situation inside and outside of Pakistan’s borders remains so unstable.
Bangladesh's Surprising Economy: In addition to India and Pakistan, South Asia is home to another regional giant, Bangladesh. With a population of 158 million, Bangladesh is the world’s eighth-most-populous country in the world, despite the fact that 91 countries in the world have a larger land area. Unfortunately, for much of the world, Bangladesh is best known for its widespread poverty, constant flooding and its incredibly-high level of population density.
However, unlike Pakistan, Bangladesh’s economy has performed relatively well in recent years, with economic growth rates averaging 6.3% over the past 15 years. In comparison, the Indian economy has averaged annual economic growth of 7.6% per year during this 15-year period, while few other economies in the world have managed to grow as fast as Bangladesh for such a prolonged period of time. This growth has taken place despite the fact that the level of political and religious tension in Bangladesh has risen in recent years, even if it remains below the level of risk in Pakistan. Should these tensions decline, Bangladesh’s economy could really take off in the coming years, given the country’s potential as a lost-cost manufacturing and service center.
Stability is the Key: For both Pakistan and Bangladesh, stability will be the key to their future success. At present, neither country enjoys much stability, particularly Pakistan, where political and economic instability have thwarted that country’s economic development and its overall level of security. For now, the higher degree of stability in Bangladesh gives it the opportunity to make major strides in terms of attracting foreign investment and raising its level of economic growth. However, both countries face the threat posed by their worsening internal divisions and the proliferation of radicalized religious and militant groups within their borders.
If Pakistan and Bangladesh can raise their rates of economic growth, particularly Pakistan, these internal tensions could be reduced. However, both countries need a higher degree of stability in order to achieve higher rates of sustainable economic growth, and this stability is likely to prove to be difficult to achieve in the years ahead. As both countries have rates of population growth that are among the highest in the world, and as both countries face worsening shortages of key natural resources, including water and arable land, time is running out for each of them to achieve a higher degree of political and economic stability. Should this stability prove elusive, the impact on South Asia and the rest of the world could be profound, and these two South Asian countries will no longer find themselves being overlooked by the rest of the world.