Bangladesh is the new Asian Tiger

I find most people’s thinking about global growth to be remarkably parochial, status-quo biased, and stereotype-driven. By now it’s generally taken as given that countries in East Asia are able to ascend rapidly to developed-country status, using a more-or-less traditional approach of export-oriented manufacturing and climbing up the value chain. After all, we’ve seen Japan do it, then Korea and Taiwan, then China, so few doubt Vietnam’s ability to do the same.

But when it comes to developing countries outside East Asia or the periphery of Europe, I find that discussions of their growth prospects suddenly turn gloomy. Top economists like Joe Stiglitz and Dani Rodrik express deep skepticism about the ability of countries outside East Asia to get rich using the manufacturing-centric model. Stiglitz glumly encourages non-East-Asian developing countries to find some entirely new and different path.

The official reason for pessimism is “premature deindustrialization”, and there’s some concern that labor-intensive manufacturing will be automated away. But really I think the reason is much simpler and more intuitive — we haven’t seen many countries outside of Europe or East Asia industrialize yet (the main exceptions being Malaysia, Turkey, and Israel), so it’s just not a thing people expect to happen.

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