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NORTH SOUTH UNIVERSITY SCHOOL of BUSINESS MGT 372 Mr.

Shahid Hossain (ShH)

Prepared by: Students Name: 1) Mohammad MustafizZian 2) Sikder Mohammad Farhaz 3) Niaz Hossain Saikat Course ID: MGT 372 Section: 4 Journal Writing: #1 Topic: Fall in the economic growth of Bangladesh Submitted to: Course Lecturer: Mr. ShahidHossain (ShH) Submission Date: 06 October, 2013 ID: 112 0153 030 ID: 112 0235 030 ID: 112 0119 030

Summary: According to Asian Development Banks (ADB) forecast of the latest Asian Development Outlook Update; that was released on October 2, 2013 in all the member countries, the economic growth of Bangladesh will decelerate to 5.8 percent in the current fiscal year of 2013-2014 due to political, infrastructural and geographical causes. ADB held political instability as main reason for this deceleration.

Case Analysis: At the ADBs launching ceremony at their Dhaka office, the country director M Teresa Kho of the Manila-based lender pointed out the key culprits which are responsible for the slowing down of Bangladeshs economic Growth. The ensuing parliamentary election is said to create anxiety among people because of which investment rate will fall in the coming months and that will affect the production. The situation may deteriorate to such an extent that it might end up affecting the service sector for which the growth will fall to 5.5 percent from 5.7 percent in the last year. It is also said that the collection of taxes may also suffer significantly due to the political instability. For that there will be a disruption in economic activities. Infrastrutural problems in garment sector are also a reason for the slowdown in economic growth. As it has been reported many times that the garments infrastructures are weak, they lack proper fire exits, the accommodation and the working environment are not healthy. So, the workers feel unsafe in their workplace and due to that there is a lot of unrest among them and riots are becoming a frequent scenario. The incident of Rana Plaza is one of many examples regarding the infrastructural problems. Due to these causes exports will fall down to 7 percent from last years 8 percent and the expansion in the textile sector will face a slowdown. The industrial sector will also bear the impact as its growth is projected to fall to 8.2 percent from 9 percent in the previous year. The geographical problem arises from the unavailability of the sufficient amount of land. As the population of Bangladesh is increasing it is getting hard to divide the land space between accommodation and agriculture. The increasing population requires both accommodation to shelter themselves and agriculture for food to feed themselves. The geographical location of Bangladesh and the increasing global warming are making it difficult for the production of agricultural products. Even though that it is expected that the agricultural growth will rise up to 3.3 percent from 2.2 percent in the last year given the weather stays favorable. But it cannot be overlooked that the scarcity of land is making it problematic for both the expansion of the industrial sector and the agricultural sector. To solve these problems measures should be taken for the economic growth and development of the country. According to ADB such measures can be reformed of regulations, strict law enforcement, political stability, improvement in infrastructure and trade logistics, enhancing the business climate and addressing the shortage of skilled manpower. These are just a few numbers of solutions amongst many. But if they are implied and maintained properly problems and constraints can be lessened and development of the economy is possible.

Conclusion: To conclude, the major constraints that would bring down the economic growth of Bangladesh are political instability, infrastructural problems, geographical problems and weak form of law enforcement and regulations. So, appropriate actions should be implemented to eradicate those problems.

Reference:

1) Topic collected,
http://www.thedailystar.net/beta2/news/economic-growth-will-slow-to-5-8pc-adb/