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Letter of Transmittal

May 28, 2016

Hussain Ahmed Enamul Huda
Department of Finance
Faculty of Business Studies
University of Dhaka
Subject: Letter Regarding Submission of Report on Development Challenges
faced by Bangladesh and upcoming Challenges
Dear Sir,
With due respect, we would like to state that, we are the student of 22 nd batch,
Department of Finance, Faculty of Business Studies, University of Dhaka. It is our
great pleasure to inform you that we have the opportunity to submit a term paper on
Development Challenges faced by Bangladesh and upcoming Challenges
We believe this group effort will help you to have a positive view point upon us. We
feel blessed to deliver you both theoretical based and practical based knowledge.
Sincerely yours,

Sumaiya Siddique
ID: 22-122
Section: B
On behalf of Group no: 9
BBA 22ndBatch
Department of Finance,
Faculty of Business Studies,
University of Dhaka

All the praises to the almighty Allah for his blessing to give the opportunity to
complete the report.
It would be impossible to complete the report without the assistance and instructions
of the course instructor Hussain Ahmed Enamul Huda. We would also like to thank
all the people who have cooperated with us. We also thank all the members who
have helped us to prepare the report.
Without the efforts of these people the report would be difficult to be submitted.

Table of Content

Part I
Part II
Part III

Executive Summary
Scope of Study
Objective of the Study
Data Type
Data Sources
Limitation of the Study
Challenges Faced by Bangladesh
Bangladesh Country Profile
Development Context
Sustainable Development
Upcoming Challenges
Food Shelter Challenge
Environmental Challenge
Natural Gas Reservation
Unemployment Challenge
Rural Women Empowerment

Executive Summary
The sun of 16th December witnessed the emergence of Bangladesh . The new born
country had a lot of challenges and possibilities at that time. The challenges had to
be faced and the possibilities were to be used by this new emerged country. After 4.5
decades it has faced many challenges and many more still left, even new challenges
are also emerging.
In case of sustainable development it had faced the challenges of
Absence of inclusive growth
Poverty and Under Nutrition
Absence of Social Bonding
Absence of Institutional Capacity Building and Good Governance
Unequal Opportunities for Local and Foreign Investors
Imbalance between Local and Foreign Products
Political Instability
Absence of Demand Driven and Profession Oriented Education
Still there are more upcoming challenges that are going to be faced by Bangladesh .
Those challenges are
Food and Shelter Challenges
Environmental Challenge
Natural Gas Reservation
Unemployment Challenge
Rural Women Empowerment
So there is still a long way that Bangladesh has to go. With proper strategy and plan
more success can be gained. The thing which will be needed is contribution of all
and unity of the nation.

Part I

This report is a part of, course: Bangladesh Studies(F-105) which has been assigned
by Hussain Ahmed Enamul Huda, Assistant Professor of Department of Finance of
Faculty of Business Studies of University of Dhaka. The task has been accomplished
by Group 1.

To identify the challenges faced by Bangladesh

To find out the upcoming challenges going to be faced by Bangladesh


We have collected the relevant information/data from the following sources which
helped us to make this report. The sources are divided into two parts:
Primary Source:
The primary data are those which are collected afresh and for the first time, and thus
become original in character. We have used personal interview method of collecting
primary data for this descriptive study. Such personal interview is carried out in a
structured way with both open and close ended questionnaires.
Secondary Source:
Secondary data are those which have already been collected by someone else and
passed through the statistical process. Secondary data may be published or
unpublished. The sources of published data are books, newspaper & internet.

One of the main barriers in writing this report was confidentiality of data.
Large scale research was not possible due to the time constrains.
Lack of addition of value in ourselves.
In many cases, up to date information is not possible.
Inexperience of preparing report.

Part II
(Challenges Faced by Bangladesh)


Country Facts
Gained independence in 1971.
With a population of approximately 159.1 million as of 2014, Bangladesh is among
the most densely populated countries in the world. (Source include: World Bank)
The majority of the population are Muslim (around 88%), with the remaining
percentage a mixture of Christian, Buddhist and Hindu.
Administratively, Bangladesh is divided into 7 Divisions, 64 Districts, 7 City
Corporations, 308 Municipalities, 481 Upazilas, 599 Thanas and 4498 Unions.
Development Context
Since liberation, Bangladesh has made significant economic progress in tandem with
social development, particularly in areas of maternal and child mortality, education,
disaster management, and rice self sufficiency. Despite a challenging environment,
the country attained real GDP growth rate of 6.51 per cent in the 2015 Fiscal Year.
The latest poverty data is not yet available due to the five year interval between the
Household and Income Expenditure Survey, however proxy data points to a
declining poverty headcount. Overall in the last forty years, the poverty rate has
declined by 60 per cent with the countrys real per capita income increasing by more
than 130 percent.
Poverty is deep and widespread, but Bangladesh has in recent years reduced
population growth and improved health and education.
Rice production has more than tripled to 35 million metric tons, despite shrinking
farmland space, with the annual population growth brought down to 1.1 percent.
The economy has experienced significant structural transformation with the $20
billion-plus export readymade garments (RMG) sector.
The major employer is agriculture, but it is unable to meet the demand for jobs. So,
many Bangladeshis - in common with citizens from other countries in the region seek work abroad, sometimes illegally.
In recognition of the long-term development challenges of the country, the
Government has adopted its Vision 2021 and associated Perspective Plan 20102021, where setting development targets to graduate into middle-income status. And
already Bangladesh has entered into lower middle income status in 2014 (source
include: World Bank) .
The implementation of the Vision 2021 is being done through two medium
development plans (the Sixth Five-Year Plan and the Seventh Five-Year Plan).
Vision 2021 focuses on approaches that address income inequality, an intensive
manufacturing sector, investment in human capital for overseas workers, girls and
womens health, education and empowerment, urbanization, social protection
systems, environmental sustainability, and good governance


Forty-five years after independence, Bangladesh has been identified as one of the
next 11 emerging economies. In this financial year alone, its economy is expected to
be 6.13 percent by the end of this quarter.
On independence in 1971, few would have imagined that 45 years later, Bangladesh
would be a US$130 billion economy, producing 35 million tons of food, sufficient to

feed 160 million people. Or that it would have 18 million self-employed women in
rural areas, with a further four million women working in the ready-made garment
(RMG) sector. Bangladesh has, indeed, made considerable progress during the past
four decades.
Bangladesh is a developing economy growing with an annual growth rate of around
6 percent, The per capita income and GDP size of Bangladesh are also growing with
time. The countrys economy is changing from traditionally agro-based to industrybased entity. According to Trading Economics global macro models and analysts
expectations. In the long-term, the Bangladesh GDP Growth Rate is projected to
trend around 6.29 percent in 2020, according to that econometric models.
Yet the development challenges confronting the Bangladesh government remain
formidable. Economic development without challenges is inconceivable. The journey
to development has never been easy for any nation and it is always a long hard
battle to turn promises into achievements.
Any country has to face many development challenges of socio-economic,
environmental, territorial and many other respects. As a developing country,
Bangladesh also already has faced so many challenges in these respects, and so
many pending challenges are still there.
The country is making progress which is more or less visible. At the same time, it is
also visibly clear that the growth is not inclusive. Economists have defined economic
growth as the increase in the market value of the goods and services produced by
an economy over time. It is conventionally measured as the percentage rate of
increase in real gross domestic product, or real GDP. In our case, not all the people
are getting better off, rather it is a group or few groups of people who are getting
richer everyday and amassing wealth beyond measure. An average of the income of
the common people and that of rising wealthy community may rise from time to time,
but that does not indicate a real income growth. Parameters of growth stretch far
beyond and involve series of socio-politico-economic development challenges, some
of which are mentioned below:


Economic growth of a country includes economic development, but does not reflect
every citizens growth. Income inequality among different social class of people has
been rising and has reached an extremely high level, invoking the spectre of
heightened tension and social conflict
For example, if the total size of an economy is $100 billion, with 30 percent people
living below the poverty line, 40 percent belonging to the lower middle class, 25
percent to the upper middle class and the remaining 5 percent to the rich class
owning 60 percent of the countrys wealth, doubling of the economy size will not
necessarily mean that incomes of all the groups have increased equitably. If, for
instance, it is found that 30 percent of the population is still tottering below the
poverty line, the growth is not inclusive. Ensuring inclusive growth has turned out to
be a major challenge for Bangladesh.


While Bangladesh halved the proportion of people living on less than a dollar a day,
the UN Development Programme estimates that there are still 47 million people
living below the poverty line and another 28 million people living just above it,
indicating a whole segment of society vulnerable to falling back into extreme poverty
and a ceiling for the extreme poor's economic and social mobility.
There is a difference between accessibility, availability, and affordability of food and
being well-nourished, which is an issue facing many lesser developed countries
(LDCs). Under nutrition remains a major challenge in Bangladesh, and according to
the World Food Program , under nutrition costs more than USD $1 billion in lost
productivity every year. Approximately 40 percent of all children under five are too
short for their age, a condition also referred to as stunting, which may chronically
deprive the body of necessary building blocks to develop the brain, body and
immune system, which has a knock-on effect through the course of an individual's


Mutual bonding among members of the family is fast breaking down in our society
and a tendency to imitate the lifestyles of foreign societies has surfaced. This will not
help us establish social justice, which is an essential prerequisite for balanced
economic growth.


The government of Bangladesh emphasizes on digitisation of public services. But
very little progress has been achieved so far in that direction. None of the public
services, including those relating to healthcare, trade license, electricity, gas-water
connection, passport, land registration, municipal activities, law enforcement
activities, taxation etc., are available on online mode fully. To overcome this situation,
institutional capacity building of the concerned agencies is required. Digitisation at
every step in a transparent process could help improve the situation.


With increasing number of job seekers, Bangladesh needs foreign investment to
create more employment opportunities and foreign investment can only be attracted
through formulation of investment friendly policies. But a level playing field still has
not provided to both local and foreign investors in terms of policy and practices.
There is a clear dearth investment friendly policies and attitudes.


Countries like Bangladesh should provide protection to local products to enable
them to be competitive and thrive. At the same time, there are items that we do not
produce and have to import. Therefore, trade policy of the country has to be moulded

in a manner that allows local products to enjoy a certain level of advantage over
imported products.
At present, there are irrational import tariffs on import of finished products and import
of its raw materials. In some cases, VAT and other local taxes imposed on local
products have made them un-competitive compared to the same kind of imported
products. Therefore it is imperative that local products be given adequate protection
to meet competition from imported products.

Economic development cannot be achieved without political stability. Absence of
political stability is a major challenge to our future economic development. Because
of this political unrest situation Bangladesh has already suffered a lot. A great
number of orders were withdrawn by foreign clients in ready-made garment (RMG)
sector due to strikes declared by rival political party. Other sectors like transport,
telecom, banking, manufacturing, tourism are also greatly affected by the absence of
political stability.
So, political platforms/parties must be transparent and accountable for every action,
from selection of candidates for elections to selecting ministers.


The number of educated unemployed is rising because of the failure of education
system. This system does not provide that much self-employment opportunities to
graduates unfortunately. Which is clearly responsible for unemployment problem.
So the education system has to be reorganized. Profession-oriented and demandbased curriculum have to be introduced. A powerful link is required between the
academia and industry leaders to affect adjustments in the curriculum according to
Apart from the above mentioned issues, there are many other socio-economic
problems facing Bangladesh. Our policy makers, politicians, think-tanks and civil
societies will have to respond to the demand of time. If the issue of economic
development is the uppermost in our minds, every citizen of the country has a stake
in the affairs of the state.

Part III
(Upcoming Challenges)

Food and Shelter Challenges:

Food, in the hierarchy of needs, is the most basic need for sustenance of life and is
the perennial problem issue for healthy and active life of mankind. Food security is
not just an economic problem but also a social and political issue in as much as food
insecurity is a factor to create political instability in the country. Food Shelter is a
basic factor for development of human capital and starter for overall development of
the society. Right to adequate and stable supply of safe food is a constitutional right
of the people in Bangladesh. The Government of Bangladesh is firmly committed to
the progressive realization of the right to food
Ensuring food shelter for all is one of the major challenges that Bangladesh faces
today. Despite significant achievements in food grain production and food availability,
food security at national, household and individual levels remains a matter of major
concern for the country and its Government. Since Independence, Bangladesh has
made significant progress in increasing domestic production of food grains. This, to a
large extent, helped in overcoming the constraints of insufficient national food
availability. Adequate food availability however was not a sufficient condition for
ensuring national food security. Ensuring food security for all reportedly require a
major effort at enhancing access to food and subsequent utilization of food by the
poor and distressed households.
Challenges and Strategies of Food Shelter in Bangladesh:
Though hunger is the number one issue, malnutrition has become emerging problem
for treatment. Along with underweight, overweight including obesity has become
another problem of health related to food intake. In this situation, providing adequate,
stable, safe and nutritious balanced food to all becomes a challenging task in the
way of development ahead, and there is a serious need to develop a road map to
achieve this visionary goal for a healthy society.
The challenge of improving food security involves an interdependent set of factors
involving government policy and institutions, domestic production system,
environment and international trade. The complex of several factors magnifies the
challenge of achieving food security: persistent poverty and undernourishment,
persistent population pressure, low level of investment in agricultural research and
development and changing consumption trends inclined to non-cereal products
without adequate technological preparation.
The challenges can be succinctly outlined as:
1. High Incidence of Malnutrition and Hidden hunger, Increasing population pressure
2. Scarcity of land and Continuous Shrinking of Land and water resources
3. Land use change
4. Land Degradation and Diminishing productivity of land
5. Poor Agricultural Diversification
6. Paradoxical Price setting,
7. Price Volatility of Food items in the domestic and global market,
8. Disruptions in the food supply chain ,
9. Trade Barriers and Uncertainties in international Trade,
10. Labor Shortage and high wage rate of agricultural labor,

11. Climate Change,

12. Agricultural diseases
13. Fossil fuel Dependence
14. Hybridization, genetic engineering and loss of diversity
15. Political Malgovernance, Food Sovereignty
16. Limited Capacity to Import due to narrow based exports and instability in foreign
exchange earnings from remittances
17. Large number of food insecure population including severely insecure
18. Weak governance in food management and weak coordination among agencies
in the way of efficient food management

Environmental Issues:
Although in recent years, the government has taken some appraisable steps towards
protection of the environment, environmentally sound use of natural resources and
pollution control, Adoption of National Environment Policy and formulation of National
Conservation Strategy and the National Environment Management Action Plan are
some of the measures undertaken by the government to integrate environment with
development in a policy framework, still some issues have raised questions about
the safety of the environment.
The power production in Kaptai 1 and Kaptai 2 totaling 128 MWT through the water
flow of Kaptai Lake is a blessing for power production but is it a blessing for
environment? The answer might be in negative since the lake is not natural rather
artificial lake. The creation of this lake has endangered the total ecology. The same
question may arise with Rampal Power Bangladesh Ltd which might jeopardize the
ecology of whole Sundarban.

Natural Gas:

Natural gas is one of the most prominent natural resources of Bangladesh. It is said
that Bangladesh is floating on gas. As of 2015, the natural gas reserve of
Bangladesh is 14.16 trillion cubic feet. The country has an average daily natural gas
production of around 2,700 million cubic feet . If it is continued in next 20-50 year
there will be scarcity of gas thus the government has stopped new connections of
gas from March, 2015. The reservation of gas is going to be a challenge for

Job Opportunity :

Although it is estimated in 2013 that 5% people are unemployed , the real senerio is
totally different since in this 5% , people who work only for few hours in the entire
week is also included. If a deeper view is taken, it might be found that around 40%
people are unemployed . This unemployment creates frustration which eventually
takes the form of different crimes. Moreover providing employment to all is not
possible by government and the private sector rather self employment has to be
encouraged too . The over all situation is going to be a challenge.

Rural Women Empowerment:

Although urban women have moved a long way, the rural women still have a long
way to go. Still many of them are depended on the male members og the family.
Through proper encouragement, training they also can contribute to the income of
the family. The SME foundation, Grameen Bank, TMSS are working for rural
womens empowerment.

Since the emergence Bangladesh has gained many successes and many more to
attain. So there is still a long way that Bangladesh has to go. With proper strategy
and plan more success can be gained. The thing which will be needed is contribution
of all and unity of the nation.