Dark Pasts and Bright Futures: An Economic Analysis of Bangladesh in the Context of the 1971 War and Genocide

“Here in Dacca, we are mute and horrified witnesses to a reign of terror by the Pakistani military”. – Archer Blood, United States Consul General to East Pakistan. (Blood, 1971a)

Introduction

In March 2022, Bangladesh celebrated its 50th independence anniversary. During Bangladesh’s nine-month Liberation War, it is estimated anywhere between 200,000 to 3,000,000 Bengalis were murdered, around 200,000 to 300,000 women were raped, and approximately ten  million Bengalis were displaced as a result of the violence (Kundu, 2023; Boissoneault, 2016; Hossain, 2012; Jahan, 2004; Browne, 1971) . This has been labelled as a genocide against the Bengali people, specifically targeting student leaders, public intellectuals, Bangladeshi nationalists, and Hindus by organisations including the Lemkin Institute for Genocide Prevention and Genocide Watch (Noor, 2022; Pai, 2008; Jahan, 2004; Hindus for Human Rights, n.d.). Yet today, due to reasons including the politicisation of the death toll there have been challenges in obtaining both recognition and justice for the genocide (Bergman, 2016).

A Brief History of Bangladesh

In 1947, Britain partitioned the British Raj into India and Pakistan. Pakistan encompassed West and East Pakistan. The latter became Bangladesh following the 1971 Liberation War. There existed linguistic, social, and religious distinctions between the two regions. West Pakistan considered the East inferior and did not support it adequately (Boissoneault, 2016). In 1970, Bengali leader Sheikh Mujibur Rahman won a victory in the Pakistan election on a campaign for regional Bengali autonomy. Fearing instability, West Pakistan under Yahya Khan refused to hand over power and in March 1971 and launched Operation Searchlight, a military campaign to suppress Bengali insurgency in the East, thereby commencing the Bangladesh Liberation War (Kundu, 2023).

In December 1971, Pakistan was defeated by an Indian-Bangladeshi alliance during Indira Gandhi’s premiership, after she had expressed concern regarding the violence in Bangladesh (Smith & Keefer, 2005). In March 1971, Indira Gandhi used the term genocide to describe the violence occurring during the conflict (Boissoneault, 2016). Furthermore, in April 1971, Archer Blood, the US Consul General in Dhaka stated, “[the] conflict, in which unfortunately the overworked term Genocide is applicable” in a now infamous telegram to the Nixon administration to voice dissent (Blood, 1971b). He also stated, “Our government has failed to denounce the suppression of democracy. Our government has failed to denounce atrocities”.

There is much debate on the extent of violence perpetrated by Pakistan during the Liberation War, particularly regarding the death toll (Rahman, 2011). As of writing this, Pakistan does not recognise the violence as genocide. In 1971, the United States was an ardent supporter of West Pakistan and refused to cut off economic aid to West Pakistan despite the violence (Bass, 2013). However, more recently, in October 2022, former US Congress representative, Steve Chabot, introduced the House Resolution 1430 for the United States’ recognition of the Bangladesh 1971 Genocide, but progress on the Resolution has since stalled (H. Res. 1430, 2022). Regardless of formal recognition, one can undoubtedly assert the violence had an extreme impact on the development and economy of Bangladesh. This article hopes to provide insight into  the impact through four major sections. GDP per capita figures are adjusted for inflation up till 2015.

Pre-War Economics

Within this framework, ‘Pre-War Economics’ refers to the economic data of Bangladesh from the World Bank for 1970 and prior. Prior to independence, Bangladesh was extremely poor and even referred to as a “basket case” by Nixon’s national security advisor, Henry Kissinger (Chaudhury, 2021). From 1960 to 1970, the GDP per capita hovered around US$80-130. Growth fluctuated from -2 to 10 percent. The life expectancy hovered around 44-49 years. During this time, Pakistan saw steadier economic growth of 4.5-11 percent. Furthermore, GDP per capita steadily grew in Pakistan towards 1971, whereas Bangladesh did not enjoy the same trend (World Bank, 2024). 

One major event that could be argued to have increased demand for Bangladeshi autonomy was the 1970 cyclone Bhola. On November 12th, 1970 cyclone Bhola hit southern Bangladesh. It killed approximately 500,000 people and made many destitute through the destruction of homes, villages, farms, and islands. This was labelled the deadliest cyclone ever recorded by the US National Oceanic and Atmospheric Administration (NOAA), having caused US$86 million in damages in 1970 value (AOML, n.d.). The response to the disaster from the central government based in the West was slow (AOML, n.d.). The Liberation War, commencing in four months, continued to have adverse effects on the Bangladesh people and economy.

Wartime Economics

Within this framework, ‘Wartime Economics’ refers to economic data for Bangladesh from the World Bank for 1971. The Liberation War had a drastic impact on Bangladesh’s economy . It is hard to know the exact figures due to limitations in data collection (Choudhry and Basher, 2002). In 1971, Bangladesh had a GDP per capita of US$128. The GDP growth rate was -6 percent. Life expectancy at birth was 26 years. At this time, West Pakistan had a 0.47 percent GDP growth rate, US$178 GDP per capita, and a life expectancy at birth of 50 years (World Bank, 2024).

According to Choudhry & Basher (2002), the losses can be summarised into two broad categories: direct and indirect costs. The first broad category of  direct costs includes the value of destroyed human and physical capital. Though exact data is hard to find, there was estimated to be US$9.53 billion in total direct cost damage. The destruction of physical capital was measured by comparing the pre-war (1970) value of physical capital with  that of 1973. Even the most modest projections put the destruction of physical capital at US$8.67 billion. Subsequently, Choudhry and Basher explored the human capital loss, placing death estimates around 300,000 to 1.3 million. Human capital refers to “the skills, knowledge, and qualifications of a person, group, or workforce considered as economic assets” (Merriam-Webster, n.d.). The cost of this human capital loss was estimated to be around US$0.86 billion to US$3.57 billion. The lower bound of this projection alone would have been around 13.2 percent of the pre-war Bangladeshi GDP.

The second broad category is the indirect cost of the war which is estimated to be around US$14.08 billion total. The indirect cost in this context refers to the difference between how the Bangladeshi wartime economy functioned and how it could have potentially functioned if the war had not taken place (Choudhry & Basher, 2002).

Post-War Economics

Within this framework, ‘Post-War Economics’ refers to the economic data from Bangladesh per the World Bank from 1972 to 2008. In 2008, Sheikh Hasina assumed the office of Prime Minister and remained in power till being ousted in August, 2024 (Al Jazeera, 2024). The economic figures of Bangladesh from immediately after the war painted a grim portrait of  the country. 

In 1972, the life expectancy at birth was 50 years. The GDP per capita was US$91, and the GDP growth rate was -13 percent, with the urban population at 8 percent. The situation, though aided by the United Nations Relief for Bangladesh, worsened due to the smuggling of Bangladeshi materials to India by administrators of the newly nationalised industries of Bangladesh appointed by the newly liberated government, and a flood in 1974, causing a famine (Maniruzzaman, 1975). This famine intensified when US President Richard Nixon cut off aid to Bangladesh on the grounds that Bangladesh had been trading with Cuba (Sobhan, 1979). Bengali economist Kafiludden Mahmood stated in 1972 that it would take US$3 billion and two years of work to recover (Butterfield, 1972). Yet, by the end of this era, in 2008, Bangladesh was virtually outperforming Pakistan by almost all indicators. Bangladesh had a higher life expectancy, GDP growth rate, urban population rate, and lower inflation. The sole metric Pakistan was outperforming was GDP per capita, but Bangladesh was swiftly gaining ground.

Regarding post-war economic development, Columbia University economics professor Ahmad Ahsan asserted the liberation war had four impacts on the long-term economic growth of Bangladesh. These are:

1. Mobilisation of energy and ambition of the people to create a just society – Following a Bangladeshi victory, Bangladeshi experienced renewed morale to rebuild their society;
2. Freeing the people from a feudal, oligarchic, and military-bureaucratic rule – Autonomy from Pakistan led to a flatter society in Bangladesh, creating more equitable conditions;
3. Subsequent women’s empowerment – Following the war, women’s school enrollment and entrepreneurial endeavours increased, paving the way for women’s empowerment; and
4. Creating a small farmer-based green revolution and a dynamic, modern private sector – After the war, farmers tripled cereal production and the ready-made garment sector boomed.

He further claimed that the influential development institutions, such as the Bangladesh Rehabilitation Assistance Committee (BRAC) and Grameen Bank, were both a result of the war (Ahsan, 2018). BRAC was founded in 1972 by Sir Fazle Hasan Abed, in the immediate aftermath of the war. A key objective of BRAC was microfinancing and lending to poor farmers in rural Bangladesh. This Committee has since established itself within the international development sector, having impacted the lives of more than 100 million people across 11 countries in South Asia and sub-Saharan Africa (BRAC USA, n.d.).

Grameen Bank, also referred to as the “Bank for the Poor”, was founded by Dr. Muhammad Yunus during the 1974 famine and still remains today a pioneer in the realm of microfinance. Grameen Bank operates in 94 percent of the villages in Bangladesh, serving nearly 45 million people. Grameen Bank’s microcredit programme is being implemented in poverty alleviation schemes throughout the world (Grameen Bank, n.d.). In 2006, Dr. Yunus received the Nobel Prize for his work and is currently the Chief Advisor to the Bangladesh interim government following Sheikh Hasina’s ousting (Grameen Foundation, n.d.). Though the period following the war marked a treacherous path for Bangladesh, this chapter was key to the nation’s transformation due to such sentiments and developments. 

Contemporary Bangladesh

Within this framework, ‘Contemporary Bangladesh’ refers to the economic data of Bangladesh from the World Bank from 2008 to 2023. Under Sheikh Hasina, Bangladesh experienced unprecedented economic growth. However, there was significant democratic backsliding (Vignesh, 2024).

Annual GDP growth of Bangladesh, India and Pakistan showing steady and improving growth of Bangladesh (World Bank, 2019 as cited in Rahman, 2021).

From 2008 to 2023, Bangladesh consistently grew and outperformed Pakistan by many key economic indicators. In 2008, Bangladesh had a GDP growth rate of 6 percent whereas Pakistan had 2 percent. In 2022, Bangladesh displayed 7 percent GDP growth, US$2700 in GDP per capita, a 40 percent urban population, 5 percent unemployment, 75 percent literacy rate, and 8 percent inflation, outperforming Pakistan in every single one of these categories (World Bank, 2024). Furthermore, Bangladesh currently has a human development index of 0.670, which places it in the upper-medium class range from low to very high (United Nations Development Programme, 2024). From 2000 to 2016, extreme poverty dropped from 34 percent to 13 percent (Trotsenburg, 2023). Bangladesh is one of the top ready-made garment exporters in the world, with a considerable rate of women employment (Tripathi, 2021). Bangladesh is set to graduate from “Least Developed” status in 2026 (Bajpaee & Schröder, 2024). 

Conclusion

The war and genocide of 1971 have  had a long-lasting impact on Bangladesh as a nation, society, and economy. Beyond the struggle for independence, the war and genocide severely impacted the economy and standard of living for Bangladeshis, especially in the short-term, through destruction of infrastructure and institutions, loss of life, and displacement of millions. However, despite the challenges, Bangladesh has displayed a resounding resilience and shown remarkable growth in its development, especially compared to its peers in the region. While the fight for justice and recognition of the genocide persists and debates on the violence continue, Bangladesh’s economic triumph is undoubtedly a display of resilience for the young nation.

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Illustrations

Illustration 1 – Illustration 1 – April 1971: People fleeing to India through Laksham, Comilla. Bangladesh. © Rashid Talukder/Drik/Majority World. https://www.towerhamlets.gov.uk/lgnl/leisure_and_culture/Bangladesh-at-50/Liberation-Through-the-Lens.aspx.

Illustration 2 – Rahman, S. (October, 2021). Development without governance and authoritarization of government in Bangladesh; two pieces of the same puzzle. University of Oregon. https://www.researchgate.net/publication/355154571_Development_without_governance_and_authoritarization_of_government_in_Bangladesh_two_pieces_of_the_same_puzzle.