The partition of British India in 1947 resulted in the creation of two nations: India and Pakistan. Pakistan was subsequently split into two geographically and culturally distinct wings: East Pakistan and West Pakistan. The events of 1971, which resulted in the secession of East Pakistan and the emergence of Bangladesh, have cast a long shadow over the relations between the two states. In recent years, however, diplomatic exchanges between Bangladesh and Pakistan have attempted to bridge these divides, revisiting the thorny issues such as resource transfers, the 1971 genocide, and the economic legacy of the two countries’ intertwined pasts.
As reported in the Dhaka Tribune, a recent discussion between Bangladesh and Pakistan officials once again brought up the issues of 1971 grievances, such as Pakistan’s formal apology for the genocide and the issue of the assets that were looted to West Pakistan. While these matters continue to remain central to political debate, it is notable that West Pakistan made significant investments and contributions to the economic development of East Pakistan, especially in the areas of infrastructure, industry, and institutional support.
Economic Foundations and Institutional Support
East Pakistan (now Bangladesh) inherited a largely agrarian economy at the time of partition. Before 1947, the area of East Bengal relied mainly on the export of jute and rice, and roughly 85-90% of the population was employed in agriculture. Its industrial base was almost non-existent, and of the 106 jute mills in undivided Bengal, only 3 were situated in East Bengal. Similarly, out of 300 industrial units in undivided Bengal, East Bengal inherited only 34. This was in sharp contrast to the relatively industrialized West Pakistan that had better access to infrastructure, education, and industrial resources.
Despite this initial difference, the West Pakistani government made serious efforts to industrialize East Pakistan after partition. One of the initial measures was the formation of the East Pakistan Industrial Development Corporation (EPIDC), whose responsibility was to foster industry in the region. By the 1960s, West Pakistan was investing heavily in the textile industry, leading to rapid industrialization in East Pakistan.
Industrial Expansion in the 1960s
The 1960s marked a period of accelerated industrialization in East Pakistan, financed by investments from West Pakistan. Major industrial developments included the establishment of large textile mills such as Karnaphuli Textiles in Chattogram and Rajshahi Textile Mills. The industrialization of Tejgaon (Dhaka) and Kalurghat (Chattogram) was equally significant in the development of the region’s industrial infrastructure. These areas created employment opportunities, supported local economies, and played a significant role in overall industrial growth of East Pakistan.
In addition to this, favorable trade policies helped sustain this industrialization. The duty on imported machinery and spare parts was fixed at 7.5% for East Pakistan, considerably lower than the fixed 12.5% rate for West Pakistan. This policy enabled East Pakistan to import essential machinery at a lower cost, thereby accelerating the pace of industrial development in the province.
Key Industries and Infrastructure Projects
The most important industrial projects in East Pakistan was Adamjee Jute Mills, established in 1951 in Naryanganj. It became the largest jute mill in the world and played an important role in the local economy. The Karnafuli Paper Mills, established in 1953 at Chittagong, became the largest paper mill in Asia at that time, further strengthening the region’s industrial base. These industrial projects were complemented by the establishment of other vital facilities, including the Chittagong Steel Mills, the Ghorashal Fertilizer Factory, and the Kaptai Hydroelectric Project in 1962. These industries laid the foundation for the economic growth of East Pakistan, even as political frictions deepened.
Alongside the industrial growth, infrastructure development was another major area of investment for West Pakistan. The Chittagong Port was constructed as an alternative to the Calcutta Port, providing East Pakistan with direct access to the global trade routes. By the late 1960s, the railways had been extended to 2,800 km, giving improved access within East Pakistan and to West Pakistan. Transport and logistics infrastructure expanded rapidly, playing a vital role in both the agricultural and industrial sectors by enabling the goods produced in East Pakistan to reach the domestic and international markets.
Economic Outcomes by 1970
By 1970, the fruits of the investment by West Pakistan were ripening. The number of medium-to-large industries in East Pakistan had increased from only 34 in 1949 to 720 in 1970, representing the expanding industrial base of the region. The contribution of industry to the GDP in East Pakistan doubled (from 3% to 12%) during this time period. This boost in industrial production helped in diversifying East Pakistan’s otherwise agriculture-dependent economy.
The investment in the industrialization of East Pakistan was not just about creating wealth, but also about developing the institutions of the region and creating the foundations for sustainable development. The establishment of the East Pakistan Stock Exchange in 1954 marked an important step in the development of the region’s financial markets. Furthermore, the natural gas exploration by Burmah Oil & Petroleum between 1955 and 1969 provided an important energy source to the industrial sector of East Pakistan, which expanded the availability of energy, both for domestic and industrial use.
Building Future Relations
Despite these developmental gains, the leadership of Bangladesh continues to raise long-standing issues, particularly the disputes over the transfer of resources to West Pakistan and the consequences of the 1971 war. The call for a formal apology and acknowledgement of resources taken from East Pakistan during the colonial and early post-colonial periods remains a constant point in diplomatic negotiations. However, it is equally important to recognize the substantial efforts made by West Pakistan for the development of East Pakistan.
Most critics who argue that East Pakistan was neglected in terms of industrialization often ignore the significant contributions made by West Pakistan, particularly during the 1950s and 1960s. The narrative that West Pakistan invested little is a partial one, rather than reflecting the developmental record fully. For both Bangladesh and Pakistan, it is important to understand the region’s economic and developmental history as complex and multifaceted, with contributions from both sides.
In recent years, Pakistan has made consistent efforts to mend its relationship with Bangladesh. Diplomatic initiatives to fortify its ties reveal the willingness to set aside past grievances and move towards a more collaborative future. By emphasizing shared history and development, rather than division and animosity, both countries can rebuild based on economic cooperation that once existed between them.
As Bangladesh and Pakistan continue to navigate their complex historical relationship, it is important to recognize the full spectrum of their shared past, including the economic cooperation that helped shape East Pakistan’s development. Such an approach can help both nations start to heal the wounds of the past and create a future built on mutual respect, cooperation, and shared prosperity.
The Author, Muhammad Wasama Khalid is pursuing a Bachelor's degree in International Relations at the National Defense University (NDU). He has a profound interest in history, politics, and current affairs.
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