ISLAMABAD: Bangladesh’s shift from a conventional South Asian economic model to an East Asian–style industrial development path offers critical lessons for Pakistan and the wider region, said renowned Japanese development economist Prof. Yamagata Tatsufumi during a special guest lecture in Islamabad.
Prof. Yamagata, a faculty member at Ritsumeikan Asia Pacific University, Japan, and a former visiting fellow at the Bangladesh Institute of Development Studies (BIDS), was speaking at a lecture titled “Bangladesh as an East Asian Country: Its Pattern of Industrial Development.”
The event was co-hosted by the Sustainable Development Policy Institute (SDPI) and the Embassy of Japan and attended online by policymakers, researchers, and development practitioners.
Opening the session, SDPI Executive Director Dr. Abid Qaiyum Suleri highlighted the relevance of Bangladesh’s development experience for Pakistan, citing similarities in natural resource endowments, labor abundance, and economic structure.
He noted that Bangladesh’s strategic adoption of an East Asian development model has significantly boosted exports and female labor force participation.
Dr. Suleri pointed out that Pakistan and Bangladesh were once competitors in sectors such as bicycle exports, but Bangladesh has since captured a substantial share of the global market. He described Prof.
Yamagata’s analysis as “eye-opening” for South Asian economies and aligned with SDPI’s mission to promote evidence-based policymaking.
In his lecture, Prof. Yamagata argued that although Bangladesh is geographically part of South Asia, its industrial development increasingly resembles that of East Asian economies.
Drawing on his research and experience in Bangladesh, he challenged the “race to the bottom” narrative that attributes the country’s export growth solely to low wages and labor exploitation.
Instead, he described the ready-made garments (RMG) sector as a launchpad for diversification and broader industrialization.
He emphasized that Bangladesh serves as a natural reference point for Pakistan, particularly given complementarities in the textile value chain—where Pakistan is stronger in upstream segments, while Bangladesh has built competitiveness in downstream manufacturing and apparel exports.
According to Prof. Yamagata, Bangladesh is comparable to Pakistan across several economic indicators and is steadily catching up with India, while also narrowing the gap with China in apparel exports to the European Union.
Garments currently account for nearly 80 percent of Bangladesh’s total exports, making it the world’s third-largest apparel exporter to the United States after China and Vietnam.
Addressing labor concerns, he noted that minimum wages in Bangladesh’s apparel sector declined between 1985 and 2005 but have risen consistently since then, with real wages continuing to increase through 2023.
He attributed Bangladesh’s competitiveness to its labor-abundant and land-scarce economy—traits more typical of East Asia than South Asia—which has enabled the country to excel in labor-intensive industries.
Beyond garments, Prof. Yamagata highlighted signs of gradual diversification, including the assembly of electrical appliances, exports of refrigerator and air-conditioner compressors to Europe, and expansion into transport equipment such as bicycles, shipbuilding, and even drone manufacturing. Bangladesh is now the fourth-largest exporter of bicycles to Europe.
He shared data showing that Bangladesh’s exports to the European Union now include garments, jute and other fibers, tea and spices, pharmaceuticals, bicycles, and prepared unrecorded media such as USBs and memory cards. Emerging sectors like pharmaceuticals and electronics, he said, indicate a slow but steady move beyond garment dependence.
During the question-and-answer session, Prof. Yamagata discussed challenges associated with Bangladesh’s upcoming graduation from Least Developed Country (LDC) status, particularly for the pharmaceutical sector, which will face new regulatory and trade conditions.
He also reflected on the 2013 Rana Plaza disaster, noting that global scrutiny following the tragedy led to stronger labor safety, environmental compliance, and governance standards under pressure from international brands.
He added that Bangladesh is actively preparing for LDC graduation and that recent engagements with Japan—including discussions on tariff reductions under a proposed Economic Partnership Agreement—signal confidence in the country’s economic readiness.
Growing foreign investment interest, particularly from China, further reflects this confidence, although he cautioned that exports remain heavily concentrated in textiles, which still account for around 81 percent of total exports.
Speaking at the event, Ambassador of Japan to Pakistan Akamatsu Shuichi said Bangladesh’s industrial development trajectory provides a valuable reference for Pakistan, especially in addressing shared challenges such as labor abundance and limited diversification.
He stressed that South Asian countries must create productive employment opportunities to absorb their growing labor force and convert demographic trends into sustained economic growth.
