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BANGLADESH ECONOMY

GROUP-03
Abdullah-Al-Mamun-03
Sharlin Afrin Nishat-15 Zinna Yasmin Choity-27

Amjad Hossain Shakil-39

Mohima Mehjabin-51 Jaberatul Kobra-63 Faria Naz Lamia-87 Kazi Emdadul Huq-260

BANGLADESH ECONOMY
The economY of Bangladesh is a rapidly developing market-

based economy. Its per capita income in 2010 was est. US$1,700 (adjusted by purchasing power parity ). According to the International Monetary Fund, Bangladesh ranked as the 44rd largest economy in the world in 2011 in PPP terms and 57th largest in nominal terms, among the Next Eleven or N-11 of Goldman Sachs and D-8 economies, with a gross domestic product of US$269.3 billion in PPP terms and US$104.9 billion in nominal terms. The economy has grown at the rate of 6-7% per annum over the past few years. More than half of the GDP is generated by the service sector; while nearly half of Bangladeshis are employed in the agriculture sector. Other goods produced are textiles, jute, fish, vegetables, fruit, leather and leather goods, ceramics, ready-made goods.

Bangladesh economy can be devided into three main sectors.

Primary sector(Agriculture)
Secondary sector(Industry) Tertiary sector(Service)

PRIMARY SECTOR
Primary sector of economic activities involve using natural

resources.This activities include mainly agriculture,fishing,mining.The most basic economic societies are largly involved in primary sector activities as this activities are the most essential for human survival.

AGRICULTURE
Agriculture is the centre to the growth of Bangladesh

Economy. Two third of the labor force of the country involves in Agriculture. It accounts for one third of the countries GDP. Contributes to the Export. It contributes to the rise of Per Capita Income.

Secondary Sector
The secondary consist of activities that process and manufacture

products.These activities include manufacturing and construction of all type. As economic become more productive,the share of the secondary sector in the total value of output produce by the economy increases. If economics are to become richer they have to produce a greater share of manufactured products. At the same time,as incomes increase,the demand for manufactured products also increases. We would expect that as an economy becomes richer ,the value of the output of the secondary sector would increase as a share of the value produced by the total economy.

Manufacturing and Industries

Manufacturing can use natural inputs from the primary sector,but can

also use intermediate manufactured products from other manufacturing sectors as inputs. Economies become more productive due to increase in the total value of outputs produced that is more valuable than the product of primary sector. As countries become richer,they are likely to be producing more manufactured products,and their populations will demand a greater share of manufactured products in their consumption. There are three categories of industries in Bangladesh-Large Scale Industries,Medium Scale Industries and Small and Cottage Industries.

Textile Sector
garments along with specialized textile products,in the nations number one export corner. The industry employs nearly 3.5 million workers.Current export have doubled since 2004. Wages in Bangladeshs textile industry were the lowest in the world as of 2010.As of 2012 wages remained low for the 3 million people employed in the industry,but labor unrest was increasing despite vigorous government action to enforce labor peace. Owners of textile firms and their political allies were a powerful political influence in Bangladesh. The urban garment industry has created more than one million formal sector jobs for women,contributing to the high female labor participation in Bangladesh.

Bangladeshs textile industry,which includes knitwear and ready-made

 Investment
Bangladesh had one of the best performing stock markets in the world

during the recent global recession,due ti relatively low correlation with developed country stock markets. Major investment in real estate by domestic and foreign-resident Bangladeshis has led to a massive building boom in Dhaka and Chittagong. The government has implemented a number of policy reforms designed to create a more open and competitive climate for privet investment both foreign and local. Bangladesh is now trying to establish itself as the next rising star in south Asia for foreign investment. Foreign Direct Investment (FDI) plays a dominant role in the economy of Bangladesh through accelerating Gross Domestic Product (GDP),export and domestic investment followed by overall economic growth.So,it is vital for a developing country.

 Recent trends for investing in Bangladesh

Saudi Arabia trying to secure public and privet investment in oil and

gas,power and transportation projects. United Arab Emirates (UAE) in keen to investment in growing shipbuilding industry in Bangladesh encouraged by comparative cost advantage. Tata,an India-based leading industrial multinational to invest Taka 1500 crore to set up an automobile industry in Bangladesh. The Rwandan entrepreneurs are keen to invest in Bangladeshs pharmaceuticals sector considering its potentiality in international market. Samsung sought to lease 500 industrial plots from the export zones authority to set up an electronics hub in Bangladesh with an investment of US$1.25 billion.

Tertiary sector is the service sector. This sector consists of the soft part of the economy, i.e. activities where people offer their knowledge and time to improve productivity, performance, potential and sustainability.

 The basic characteristic of this sector is the production

of services instead of end products. In the last two decades, Bangladesh has seen incredible growth in this sector. In Bangladesh, the average employment of service sector to total employment is 25.36%. The average contribution of service sector to the GDP is 49.33%. So, the service sectors contribute most of the development of national economy. The average growth rate of service sector is 6.17%. The growth of this sector is more than the agriculture sector but les than the industry sector.

Economic history of Bangladesh

Bangladesh has been historically an important center

of trade and commerce since at least the first millennium BCE. Historically its has run a large trade deficit,financed largely through aid receipts and remittanced from workers overseas. Economic history of Bangladesh has divided into two parts 1.Before Independence 2.After Independence

Before Independence
In 1947 the partition of South Asia emerged to India and

Pakistan. Between 1947 and 1971 the government of Pakistan expanded the cultivated area and some irrigation facilities and opted for a development strategy based on industrialization, but the major share of the development budget went to West Pakistan. The lack of natural resources meant that East Pakistan was heavily dependent on imports, creating a balance of payments problem. Without a substantial industrialization program or adequate agrarian expansion, the economy of East Pakistan steadily declined. on the West Pakistani leaders not only dominated the government but also most of the fledgling industries in East Pakistan.

AFTER INDERENDENCE
Since Bangladesh followed a socialist economy by nationalizing all

industries after its independence, it underwent a slow growth of producing experienced entrepreneurs, managers, administrators, engineers, and technicians. There were critical shortages of essential food grains because of wartime disruptions. External markets for jute had been lost because of the instability of supply. Foreign exchange resources were minuscule, banking and monetary systems were unreliable. Hundreds of road and railroad bridges had been destroyed because of war. After 1975 the government began to turn their attention to developing new industrial capacity and rehabilitating including the nationalization of the industrial sector,gave greater scope to private sector participation in the economy like banking, telecommunication, aviation, media, and jute. In the mid-1980s, there were encouraging signs of progress by encouraging private enterprise and investment, privatizing public industries. Between 2000 to 2010 Bangladesh received more aid from various organization. The world Bank approved $536 million in interest free loans.

Present Economic situation of Bangladesh:

# Bangladesh grew by 6 percent in FY11 and on average by 6 percent a year during the past decade. Over the same period, external trade increased by almost four-fold in U.S. dollar terms and more than doubled as a share of GDP. # Bangladesh has made significant strides in its economic sector performance since independence in 1971. Although the economy has improved vastly in the 1990s, Bangladesh still suffers in the area of foreign trade in South Asian region. Despite major impediments to growth like the inefficiency of stateowned enterprises, a rapidly growing labor force that cannot be absorbed by agriculture, inadequate power supplies and slow implementation of economic reforms, Bangladesh has made some headway improving the climate for foreign investors and liberalizing the capital markets; for example, it has negotiated with foreign firms for oil and gas exploration, better countrywide distribution of cooking gas, and the construction of natural gas pipelines and power stations. # Progress on other economic reforms has been halting because of opposition from the bureaucracy, public sector unions, and other vested interest groups. The especially severe floods of 1998 increased the flow of international aid. So far the global financial crisis has not had a major impact on the economy. # The World Bank predicted economic growth of 6.5% for current year. Foreign aid has seen a decline of 10% over the last few months but economists see this as a good sign for self-reliance. There has been 18% growth in exports over the last 9 months and remittance inflow has increased at a remarkable 25% rate.

DEFINITION OF EXPORT
In national accounts exports consist of transactions in

goods and services (sales, barter, gifts or grants) from residents to non-residents. The exact definition of exports includes and excludes specific borderline cases.

GROWH RATE OF EXPORT OF BANGLADESH

DEFINITION OF IMPORT
In national accounts imports consist of transaction in

goods and services (sales, barter, gifts or grants) from non-residents to residents. The exact definition of imports includes and excludes specific borderline cases .

IMPORTS OF GOODS AND SERVICES(ANNUAL % OF GROWTH) IN BANGLADESH

BANGLADESH GDP GROWTH RATE

BANGLADESH GROSS NATIONAL PRODUCT

PER CAPITA INCOME

Bangladeshs per capita income rises to $848
Bangladeshs per capita income went up to $848 in the

current fiscal year from $816 last year, but is still way short of the $1,006 needed to pull the country up to the middleincome bracket. The nation aims to reach the middle income country category by 2021, according to governments perspective plan. The required per capita income at that time would be $1,300, meaning a growth rate of 7-5 percent to 8 percent is needed every fiscal year, said Zahid Hussain, senior economist of the World Bank.

CONTRIBUTION OF REMITTANCE ON THE ECONOMY

Positive current account Balance
Overtime trade deficit problem Significant declines in poverty

Healthy foreign exchange reserve

Create markets for domestic products Economic development

CONSTRAINTS AND CHALLENGES OF SMOOTH REMITTANCE INFLOWS

Unfavorable inter country relationship
Specific category of job Negotiations power of Government

High Transfer Fees

Higher recruiting fee. Steady growth in manpower export specially in the

middle east.

The Problems of Bangladesh Economy

Political Instability
Bureaucratic Corruption Insufficient power Energy

Slow Implementation of Economic Reforms.

Serious Overpopulation Widespread Poverty Frequent Cyclones and Floods Poor Infrastructure Share market scam

PROBABLE SOLUTION FOR THE PROBLEMS BANGLADESH ECONOMY.

Reducing political instability By developing power energy plant Taking steps for bureaucratic corruption Encourage Foreign Direct Investment Develop indigenous technology Taking steps for reducing poverty and economic reforms.

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