OpinionWhy Bangladesh could be last hurrah for Asia’s development model

Bangladesh’s garment industry employs around 4 million workers. Their labour built something larger than an export sector – it built a tax base. The industry generates more than 80 per cent of the country’s export earnings and contributes roughly 11 per cent of its GDP. The taxes paid by workers and the wider economy they sustain fund a meaningful share of Bangladesh’s public schools and basic healthcare.

Over several decades, a country that once ranked among the world’s poorest has turned itself into a lower-middle-income economy that now meets the UN’s criteria for leaving the “least developed” category. The modern model of development worked. The question is whether any other country can replicate it in an era of artificial intelligence (AI).

This model rests on a specific sequence. Countries enter global supply chains by offering cheap labour. Employment generates household income. Income generates a tax base. The tax base funds public investment in health, education and infrastructure, which enables a gradual move up the value chain.

South Korea, Japan and China all followed some version of this path. Bangladesh followed it, too. It remains the most consistently proven path out of poverty for large populations and no other model has worked at anything close to the same scale.

AI is threatening to close that path – not by replacing garment workers with robots but by removing the reason factories moved to low-wage countries in the first place. As technologies such as AI-powered cutting machines and robotic sewing systems get cheaper, the cost gap between a worker in Dhaka and a machine in Guangdong narrows.

At some point, the logic flips. It becomes more rational to automate production close to the consumer market than to ship raw materials to a low-wage country and ship finished goods back. When that happens, the factories do not just shed workers. They stop coming altogether, and a government cannot tax a factory that was never built on its soil.