Introduction
Economic development is one dimension of the more inclusive concept of development. Development is both a process and a project. As a process, it refers to changes occurring in countries defined variously as undeveloped, underdeveloped, developing, emerging, and newly industrializing. As a project, it refers to deliberately planned change or, as McMichael puts it, a historically specific organized strategy of national economic growth (McMichael, 2004, 3rd Ed). More recently, there has been a shift to a globalization project under which a globally driven agenda of free trade has resulted in ‘development states’ such as Bangladesh playing a more facilitative than directive role.
Economic development refers to the raising of the productive capacity of a country through the introduction of policies designed to enhance the productivity of land, labor and capital, raise standards of living and reduce or alleviate the poverty of the inhabitants of the country. At a minimum, economic development has a growth and a distributive dimension.
The economy of Bangladesh Is a rapidly developing 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 47th largest economy in the world in 2010 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% p.a. over the past few years. More than half of the GDP belongs to the service sector, a major number of nearly half of Bangladeshis are employed in the agriculture sector, with RMG, textiles, leather, jute, fish, vegetables, leather and leather goods, ceramics, fruits as other important produce.
Remittances from Bangladeshis working overseas, mainly in the Middle East are the major source of foreign exchange earnings; exports of garments and textiles are the other main sources of foreign exchange earning. Ship building and cane cultivation have become a major force of growth. GDP's rapid growth due to sound financial control and regulations has also contributed to its growth. However, foreign direct investment is yet to rise significantly. Bangladesh has made major strides in its human development index.
The land is devoted mainly to rice and jute cultivation as well as fruits and produce, although wheat production has increased in recent years; the country is largely self-sufficient in rice production. Bangladesh's growth of its agro industries is due to its rich deltaic fertile land that depends on its six seasons and multiple harvests.
After its independence from Pakistan, Bangladesh followed a socialist economy by nationalizing all industries, proving to be a critical blunder undertaken by Awami League's Mujib Government following India's policy. Education policies of the British dating back from colonial era deprived education to millions of Bangla's Muslim peoples setting them back by decades. Some of the same factors that had made East Bengal a prosperous region became disadvantages during the nineteenth and twentieth centuries. As life expectancy increased, the limitations of land and the annual floods increasingly became constraints on economic growth. Preponderance on traditional agricultural methods became obstacles to the modernization of agriculture. Geography severely limited the development and maintenance of a modern transportation and communications system.
Macro-economic trend
This is a chart of trend of gross domestic product of Bangladesh at market prices estimated by the International Monetary Fund with figures in millions of Bangladeshi Taka. However, this reflects only the formal sector of the economy.| Year | Gross Domestic Product | US Dollar Exchange | Inflation Index (2000=100) | Per Capita Income (as % of USA) |
| 1980 | 250,300 | 16.10 Taka | 20 | 1.79 |
| 1985 | 597,318 | 31.00 Taka | 36 | 1.19 |
| 1990 | 1,054,234 | 35.79 Taka | 58 | 1.16 |
| 1995 | 1,594,210 | 40.27 Taka | 78 | 1.12 |
| 2000 | 2,453,160 | 52.14 Taka | 100 | 0.97 |
| 2005 | 3,913,334 | 63.92 Taka | 126 | 0.95 |
| 2008 | 5,003,438 | 68.65 Taka | 147 |
Economic outlook
Efforts to achieve Bangladesh's macroeconomic goals have been problematic mostly due to various factors including the country's large population, corruption within the government, power shortages etc. The privatization of public sector industries has proceeded at a slow pace—due in part to worker unrest in affected industries—although on June 30, 2010, the government took a bold step as it closed down the Adamjee Jute Mill, the country's largest and most costly state-owned enterprise. The government also has proven unable to resist demands for wage hikes in government-owned industries. Access to capital is impeded. State-owned banks, which control about three-fourths of deposits and loans, carry classified loan burdens of about 50%.Economic development sectors in Bangladesh
Agriculture:
Most Bangladeshis earn their living from agriculture. Although rice and jute are the primary crops, maize and vegetables are assuming greater importance. Due to the expansion of irrigation networks, some wheat producers have switched to cultivation of maize which is used mostly as poultry feed. Tea is grown in the northeast. Because of Bangladesh's fertile soil and normally ample water supply, rice can be grown and harvested three times a year in many areas. Due to a number of factors, Bangladesh's labor-intensive agriculture has achieved steady increases in food grain production despite the often unfavorable weather conditions. These include better flood control and irrigation, a generally more efficient use of fertilizers, and the establishment of better distribution and rural credit networks. With 28.8 million metric tons produced in 2005-2006 (July–June), rice is Bangladesh's principal crop. By comparison, wheat output in 2005-2006 was 9 million metric tons.Manufacturing & Industry:
Many new jobs - mostly for women - have been created by the country's dynamic private ready-made garment industry, which grew at double-digit rates through most of the 1990s.By the late 1990s, about 1.5 million people, mostly women, were employed in the garments sector as well as Leather products specially Footwear (Shoe manufacturing unit). During 2001-2002, export earnings from ready-made garments reached $3,125 million, representing 52% of Bangladesh's total exports. Bangladesh has overtaken India in apparel exports in 2009, its exports stood at 2.66 billion US dollar, ahead of India's 2.27 billion US dollar.Eastern Bengal was known for its fine muslin and silk fabric before the British period. The dyes, yarn, and cloth were the envy of much of the premodern world. Bengali muslin, silk, and brocade were worn by the aristocracy of Asia and Europe. The introduction of machine-made textiles from England in the late eighteenth century spelled doom for the costly and time-consuming hand loom process. Cotton growing died out in East Bengal, and the textile industry became dependent on imported yarn. Those who had earned their living in the textile industry were forced to rely more completely on farming. Only the smallest vestiges of a once-thriving cottage industry survived.
Other industries which have shown very strong growth include the chemical industry, steel industry, mining industry and the paper and pulp industry.
Textile sector:
Bangladesh's textile industry, which includes knitwear and ready-made garments along with specialized textile products, is the nation's number one export earner, accounting for 80% of Bangladesh's exports of $15.56 billion in 2009.Bangladesh is 3rd in world textile exports behind Turkey, another low volume exporter, and China which exported $120.1 billion worth of textiles in 2009. The industry employs nearly 3.5 million workers. Current exports have doubled since 2004. Wages in Bangladesh's textile industry were the lowest in the world as of 2010. The country was considered the most formidable rival to China where wages were rapidly rising and currency was appreciating.Investment:
The stock market capitalization of the Dhaka Stock Exchange in Bangladesh crossed $10 billion in November 2007 and the $30 billion dollar mark in 2009, and USD 50 billion in August 2010. Bangladesh had one of the best performing stock markets in the world during the recent global recession, due to relatively low correlations 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.
Bangladeshi exports in 2006
The Bangladesh Garments Manufacturers and Exporters Association (BGMEA) has predicted textile exports will rise from US$7.90 billion earned in 2005-06 to US$15 billion by 2011. In part this optimism stems from how well the sector has fared since the end of textile and clothing quotas, under the Multifibre Agreement, in early 2005.According to a United Nations Development Programmed report "Sewing Thoughts: How to Realize Human Development Gains in the Post-Quota World" Bangladesh has been able to offset a decline in European sales by cultivating new markets in the United States.
"[In 2005] we had tremendous growth. The quota-free textile regime has proved to be a big boost for our factories," said BGMEA president S.M. Fazlul Hoque told reporters, after the sector's 24 per cent growth rate was revealed.
Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) president Md Fazlul Hoque has also struck an optimistic tone. In an interview with United News Bangladesh he lauded the blistering growth rate, saying "The quality of our products and its competitiveness in terms of prices helped the sector achieve such... tremendous success."
Knitwear posted the strongest growth of all textile products in 2005-06, surging 35.38 per cent to US$2.82 billion. On the downside however, the sector's strong growth came amid sharp falls in prices for textile products on the world market, with growth subsequently dependent upon large increases in volume.
Food security:
Bangladesh has made great strides since 1974 to achieve food self-sufficiency. It has achieved near self-sufficiency in rice but productivity remains low. However, it has been less successful with pulses and other crops. Those most affected are the poor and landless as they are least able to afford to buy. This is compounded by location, seasonality, intra-household food distribution etc. There is decreasing land availability requiring better use of existing cultivable land through improved management, use of HYVs, extended multiple cropping schemes, and improved infrastructure and better extension services. A greater investment in inland pond aquaculture is an important pro-poor strategy to enhance the nutritional intake of the rural population
Labor market:
Real agricultural wage rates increased during the 1990s and 2000s (2003). But there has been a decline in national informal sector incomes (50% of total work force) in early 2000s. The formal sector unemployment rate stands at 4% but is higher among young people and the young educated.
Infrastructure:
Transport and ports continue to be affected by physical, economic and political obstacles to change and reform. In the energy supply sector, businesses and residential users have continuing low access to network power, particularly in rural areas. This access is lower than in India, Pakistan and Sri Lanka. The problem is compounded by corrupt energy provision practices and high subsidies.
Merchandise exports:
GDP ratio increased to 18% in 2006 from 6% in 1990. The ready-made garments sector is the main source of forex. The manufacturing sector is dominated by garments, textiles, pharmaceuticals, food and leather/footwear and now contributes 16% to national GDP, up from 5% in the 1980s. The sector is largely urban-driven, something that is likely to continue. Both farmers and workers are increasingly reliant on domestic and international markets for income.
OPTIONS FOR BANGLADESH
As an independent nation Bangladesh has crossed thirty seven years without significant development. From the analogy in earlier paragraphs, it can be stated that, a fresh beginning is possible. Selection of some specific objectives and their strong implementation will pave the way for development and stability. The options opened for Bangladesh may be as follows:
a. Bangladesh needs visionary leadership. A leader, with his pragmatic vision will implement the policies focusing towards the development.
b. For economic development foreign investors should be attracted to invest in Bangladesh. Terms and conditions for the investments should be clear and competitive. A secure environment must be ensured so that investors feel safe to invest in long term projects. This intern will benefit the country.
c. Multinational companies and the government can jointly arrange the training of manpower on cost sharing basis. Long term goal should be set to train the manpower in specific sectors which in tern will contribute to economic development.
Bangladesh has progressed significantly in the past decade. It has achieved self-sufficiency in rice production, lowered infant and child mortality rates, virtually eradicated polio, increased girls' enrollment in schools; and annual GDP growth has averaged about 5% for ten years. With progress in many areas, Bangladesh is no longer the hopeless case that it seemed to be 30 years ago. Yet Bangladesh, one of the worlds most densely populated and underdeveloped countries, is still considered highly corrupt, and its people remain among the most malnourished and impoverished in the world.
Nearly half of Bangladesh's 133 million people live below the national poverty level of $1 per day. The Government of Bangladesh (GOB) has increased its investments in education, health, food security, and other social services, thus helping reduce poverty by 1% per year, and plans to reduce the incidence of poverty by 50% by 2015. However, poverty reduction on this scale will require achieving annual growth rates of at least 7%. Whereas economic reforms introduced by the GOB have been promising, further progress will require bolder structural reforms that are certain to disrupt the uneasy status quo of cronyism and patronage politics that determines social benefits and power relations. Without a firm commitment to improve governance and rule of law, the growth of the private sector and foreign investment will continue to be seriously constrained, and there will be little hope of achieving these poverty reduction goals. Bangladesh has a window of opportunity on several fronts--to keep HIV/AIDS prevalence at low levels; to continue to make needed investments in health and education; to safeguard press freedom and a vital, non-politicized civil society; to strengthen its democracy in ways that will make government more accountable and transparent; to protect its remaining natural resources; and to diversify and improve the quality of exports, including the potential export of natural gas. USAID is poised to assist Bangladesh to take advantage of this opportunity to improve the country's future prospects and raise the living standards of its people.
Conclusion
Since independence in 1971, Bangladesh has moved from ‘a basket case’, a country trapped in a neo-Malthusian quagmire, to one of the best performers among Least Developed Countries. Despite the considerable negative criticism of the country’s system of governance and the current political crisis, it has much better economic and social prospects than it did in its early years. Whether the gains of the past 35 years can be sustained remains to be seen.
objectiv koi
ReplyDelete