The Economy of Bangladesh is a market-based economy.

The country is classified as a Next

Eleven emerging market and one of the Frontier Five. According to a recent opinion poll, Bangladesh
has the second most pro-capitalist population in the developing world. [14]
Between 2004 and 2014, Bangladesh averaged a GDP growth rate of 6%. The economy is
increasingly led by export-oriented industrialization. The Bangladesh textile industry is the secondlargest in the world. Other key sectors include pharmaceuticals,shipbuilding, ceramics, leather goods
and electronics. Being situated in one of the most fertile regions on Earth, agriculture plays a crucial
role, with the principal cash crops including rice, jute, tea, wheat, cotton and sugarcane. Bangladesh
ranks fifth in the global production of fish and seafood. Remittances from the Bangladeshi
diaspora provide vital foreign exchange.
The Bangladesh telecoms industry has witnessed rapid growth over the years and is dominated by
foreign investors. The government has emphasized the development of software services and hitech industries under the Digital Bangladesh scheme. Bangladesh has substantial reserves
of natural gas and coal; and many international energy companies are involved in production and
exploration activities, including in the Bay of Bengal. Regional neighbours are keen to use
Bangladeshi ports and railways fortranshipment. Located at the crossroads of SAARC, BIMSTEC,
the ASEAN+3 and the Indian Ocean, Bangladesh has the potential to emerge as a regional logistics
hub.
In 2014, per-capita income stood at USD 1,190.[15] While achieving significant macroeconomic
stability, Bangladesh continues to face challenges such as infrastructure deficits and energy
shortages.
Contents
[hide]

1 Economic history

2 Macro-economic trend

3 Economic sectors

3.1 Agriculture

3.2 Manufacturing and industry

3.2.1 Apparel sector

3.2.2 Shipbuilding and ship breaking

4 Investment

4.1 2010-11 market crash

4.2 External trade

5 Bangladeshi women and the economy

6 Overview

7 See also

8 References

9 External links

Economic history[edit]

Scented rice. Bangladesh is the world's 4th largest rice producer

East Bengal - the eastern segment of Bengal - was a historically prosperous region.[16] The Ganges
Deltaprovided advantages of a mild, almost tropical climate, fertile soil, ample water, and an
abundance of fish, wildlife, and fruit.[16] The standard of living is believed to have been higher
compared with other parts of South Asia.[16] As early as the thirteenth century, the region was
developing as an agrarian economy.[16]Bengal was the junction of trade routes on the
Southeastern Silk Road. Under Mughal rule, it was a center of the
worldwide muslin, silk and pearl trade.[16] The British, however, on their arrival in the late eighteenth
century, chose to develop Calcutta, now the capital city of West Bengal, as their commercial and
administrative center in British India.[16] The development of East Bengal was thereafter limited to
agriculture.[16] The administrative infrastructure of the late eighteenth and nineteenth centuries
reinforced East Bengal's function as the primary agricultural producerchiefly
of rice, tea, teak, cotton, sugar caneand jute for processors and traders from around Asia and
beyond.[16]
After its independence from Pakistan, Bangladesh followed a socialist economy by nationalizing all
industries, proving to be a critical blunder undertaken by the Awami League government. Some of

the same factors that had made East Bengal a prosperous region became disadvantages during the
nineteenth and twentieth centuries.[16] As life expectancy increased, the limitations of land and the
annual floods increasingly became constraints on economic growth.[16] Traditional agricultural
methods became obstacles to the modernization of agriculture.[16] Geography severely limited the
development and maintenance of a modern transportation and communications system. [16]

Chittagong harbour, 17th century

Dhaka, 1861.

The partition of British India and the emergence of India and Pakistan in 1947 severely disrupted the
economic system. The united government of Pakistan expanded the cultivated area and some
irrigation facilities, but the rural population generally became poorer between 1947 and 1971
because improvements did not keep pace with rural population increase. [16] Pakistan's five-year plans
opted for a development strategy based on industrialization, but the major share of the development
budget went to West Pakistan, that is, contemporary Pakistan. [16] The lack of natural resources meant
that East Pakistan was heavily dependent on imports, creating a balance of payments problem.
[16]

Without a substantial industrialization program or adequate agrarian expansion, the economy of

East Pakistan steadily declined.[16] Blame was placed by various observers, but especially those in
East Pakistan, on the West Pakistani leaders who not only dominated the government but also most
of the fledgling industries in East Pakistan.[16]
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.[17] There were critical shortages of essential food grains and other
staples because of wartime disruptions.[17] External markets for jute had been lost because of the
instability of supply and the increasing popularity of synthetic substitutes. [17] Foreign exchange

resources were minuscule, and the banking and monetary systems were unreliable. [17] Although
Bangladesh had a large work force, the vast reserves of under trained and underpaid workers were
largely illiterate, unskilled, and underemployed.[17] Commercially exploitable industrial resources,
except for natural gas, were lacking.[17] Inflation, especially for essential consumer goods, ran
between 300 and 400 percent.[17] The war of independence had crippled the transportation system.
[17]

Hundreds of road and railroad bridges had been destroyed or damaged, and rolling stock was

inadequate and in poor repair.[17] The new country was still recovering from a severe cyclone that hit
the area in 1970 and cause 250,000 deaths.[17] India came forward immediately with critically
measured economic assistance in the first months after Bangladesh achieved independence
from Pakistan.[17] Between December 1971 and January 1972, India committed US$232 million in aid
to Bangladesh from the politco-economic aid India received from the USA and USSR. Official
amount of disbursement yet undisclosed.[17]
After 1975, Bangladeshi leaders began to turn their attention to developing new industrial capacity
and rehabilitating its economy.[18]The static economic model adopted by these early leaders, however
including the nationalization of much of the industrial sectorresulted in inefficiency and economic
stagnation.[18] Beginning in late 1975, the government gradually gave greater scope to private sector
participation in the economy, a pattern that has continued. [18] Many state-owned enterprises have
been privatized, like banking, telecommunication, aviation, media, and jute. [18] Inefficiency in the
public sector has been rising however at a gradual pace; external resistance to developing the
country's richest natural resources is mounting; and power sectors including infrastructure have all
contributed to slowing economic growth.[18]

The Jamuna Multipurpose Bridgewas opened in 1998.

In the mid-1980s, there were encouraging signs of progress.[18] Economic policies aimed at
encouraging private enterprise and investment, privatizing public industries, reinstating budgetary
discipline, and liberalizing the import regime were accelerated.[18] From 1991 to 1993, the
government successfully followed an enhanced structural adjustment facility (ESAF) with the
International Monetary Fund (IMF) but failed to follow through on reforms in large part because of
preoccupation with the government's domestic political troubles.[18] In the late 1990s the
government's economic policies became more entrenched, and some of the early gains were lost,

which was highlighted by a precipitous drop in foreign direct investment in 2000 and 2001. [18] In June
2003 the IMF approved 3-year, $490-million plan as part of the Poverty Reduction and Growth
Facility (PRGF) for Bangladesh that aimed to support the government's economic reform program up
to 2006.[18] Seventy million dollars was made available immediately.[18] In the same vein the World
Bank approved $536 million in interest-free loans. [18] In the year 2010 Government of India extended
a line of credit worth $1 billion to counterbalance China's close relationship with Bangladesh.
Bangladesh historically has run a large trade deficit, financed largely through aid receipts and
remittances from workers overseas.[18]Foreign reserves dropped markedly in 2001 but stabilized in
the USD3 to USD4 billion range (or about 3 months' import cover).[18] In January 2007, reserves
stood at $3.74 billion, and then increased to $5.8 billion by January 2008, in November 2009 it
surpassed $10.0 billion, and as of April 2011 it surpassed the US $12 billion according to the Bank of
Bangladesh, the central bank.[18] The dependence on foreign aid and imports has also decreased
gradually since the early 1990s.[19]

Macro-economic trend[edit]
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

Per Capita Income

(2000=100)

(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

2008 5,003,438

68.65 Taka

147

2010

70.20 Taka

2014

76.20 Taka.

0.95

Mean wages were $0.58 per manhour in 2009.

Economic sectors[edit]
Agriculture[edit]

Map showing the growing areas of major agricultural products.

Main article: Agriculture of Bangladesh

Most Bangladeshis earn their living from agriculture.[18] Although rice and jute are the primary crops,
maize and vegetables are assuming greater importance. [18] Due to the expansion of irrigation
networks, some wheat producers have switched to cultivation of maize which is used mostly as
poultry feed.[18] Tea is grown in the northeast.[18] Because of Bangladesh's fertile soil and normally
ample water supply, rice can be grown and harvested three times a year in many areas. [18] 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. [18] These include better flood
control and irrigation, a generally more efficient use of fertilizers, and the establishment of better
distribution and rural credit networks.[18] With 28.8 million metric tons produced in 2005-2006 (July
June), rice is Bangladesh's principal crop.[18] By comparison, wheat output in 2005-2006 was 9 million
metric tons.[18] Population pressure continues to place a severe burden on productive capacity,
creating a food deficit, especially of wheat.[18] Foreign assistance and commercial imports fill the gap,
[18]

but seasonal hunger ("monga") remains a problem.[20]Underemployment remains a serious

problem, and a growing concern for Bangladesh's agricultural sector will be its ability to absorb
additional manpower.[18] Finding alternative sources of employment will continue to be a daunting
problem for future governments, particularly with the increasing numbers of landless peasants who
already account for about half the rural labor force.[18] Due to farmers' vulnerability to various risks,
Bangladesh's poorest face numerous potential limitations on their ability to enhance agriculture
production and their livelihoods. These include an actual and perceived risk to investing in new
agricultural technologies and activities (despite their potential to increase income), a vulnerability to
shocks and stresses and a limited ability to mitigate or cope with these and limited access to market
information.[20]

Manufacturing and industry[edit]

A Danish ferry built in a Bangladeshi shipyard. The country has a rapidly growing shipbuilding industry

Many new jobs - mostly for women - have been created by the country's dynamic private readymade garment industry, which grew at double-digit rates through most of the 1990s. [18] 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 and in 2014 the export rose to $3.12 billion every
month.
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. [21]
Other industries which have shown very strong growth include the pharmaceutical industry,
[22]

shipbuilding industry,[23] information technology,[24] leather industry,[25] steel industry,[26] electronics

industry[27] and light engineering industry.[28][29]

Apparel sector[edit]
Main article: Bangladesh textile industry

A Bangladeshi textile fabric plant

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 $21.5 billion in
2013 80% of Bangladesh's total exports of $27 billion.[30] Bangladesh is 2nd in world textile exports,
behind 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. [31][32] 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.[33]

A ready-made garments factory

The urban garment industry has created more than one million formal sector jobs for women,
contributing to the high female labor participation in Bangladesh. [34] While it can be argued that
women working in the garment industry are subjected to unsafe labor conditions and low wages,
Dina M. Siddiqi argues that even though conditions in Bangladesh garment factories are by no
means ideal," they still give women in Bangladesh the opportunity to earn their own wages. [35] As
evidence she points to the fear created by the passage of the 1993 Harkins Bill (Child Labor
Deterrence Bill), which caused factory owners to dismiss an estimated 50,000 children, many of
whom helped support their families, forcing them into a completely unregulated informal sector, in
lower-paying and much less secure occupations such as brick-breaking, domestic service and
rickshaw pulling.[36]
Even though the working conditions in garment factories are not ideal, they tend to financially be
more reliable than other occupations and, enhance womens economic capabilities to spend, save
and invest their incomes."[37] Both married and unmarried women send money back to their families
as remittances, but these earned wages have more than just economic benefits. Many women in the
garment industry are marrying later, have lower fertility rates, and attain higher levels of education,
then women employed elsewhere.[38]
After massive labor unrest in 2006[39] the government formed a Minimum Wage Board including
business and worker representatives which in 2006 set a minimum wage equivalent to
1,662.50 taka, $24 a month, up from Tk950. In 2010, following widespread labor protests involving
100,000 workers in June, 2010,[40][41] a controversial proposal was being considered by the Board
which would raise the monthly minimum to the equivalent of $50 a month, still far below worker
demands of 5,000 taka, $72, for entry level wages, but unacceptably high according to textile
manufacturers who are asking for a wage below $30.[32][42] On July 28, 2010 it was announced that the
minimum entry level wage would be increased to 3,000 taka, about $43. [43]
The government also seems to believe some change is necessary. On September 21, 2006 then exPrime Minister Khaleda Zia called on textile firms to ensure the safety of workers by complying with
international labor law at a speech inaugurating the Bangladesh Apparel & Textile Exposition
(BATEXPO).
Shipbuilding and ship breaking[edit]
Main article: Shipbuilding in Bangladesh
Shipbuilding is a growing industry in Bangladesh with great potentials.[44][45] The potentials of
shipbuilding in Bangladesh has made the country to be compared with countries
likeChina, Japan and South Korea.[46] Referring to the growing amount of export deals secured by the
shipbuilding companies as well as the low cost labor available in the country, experts suggest that
Bangladesh could emerge as a major competitor in the global market of small to medium oceangoing vessels.[47]

Bangladesh also has the world's largest ship breaking industry which employs over 200,000
Bangladeshis and accounts for half of all the steel in Bangladesh.[48] Chittagong Ship Breaking
Yard is world's second-largest ship breaking area.

Investment[edit]

Headquarters of Grameenphone, the country's largest telecoms operator.

The stock market capitalization of the Dhaka Stock Exchange in Bangladesh crossed $10 billion in
November 2007 and the $30 billion mark in 2009, and USD 50 billion in August 2010. [49] Bangladesh
had the best performing stock market in Asia during the recent global recession between 2007 and
2010, due to relatively low correlations with developed country stock markets. [50]
Major investment in real estate by domestic and foreign-resident Bangladeshis has led to a massive
building boom in Dhaka and Chittagong.
Recent (2011) trends for investing in Bangladesh as Saudi Arabia trying to secure public and private
investment in oil and gas, power and transportation projects, United Arab Emirates (UAE) is keen to
invest 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, World Bank to invest in rural roads improving quality of live, the
Rwandan entrepreneurs are keen to invest in Bangladesh's 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,
National Board of Revenue (NBR) is set to withdraw tax rebate facilities on investment in the capital
market by individual taxpayers from the fiscal 2011-12.[51] In 2011, Japan Bank for International
Cooperation ranked Bangladesh as the 15th best investment destination for foreign investors. [52]

2010-11 market crash[edit]

Main article: 2011 Bangladesh share market scam
The bullish capital market turned bearish during 2010, with the exchange losing 1,800 points
between December 2010 and January 2011.[53] Millions of investors have been rendered bankrupt as
a result of the market crash. The crash is believed to be caused artificially to benefit a handful of
players at the expense of the big players.[53]

External trade[edit]
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 Programme 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.[54]
"[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.[55]
The 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.
Bangladesh's quest to boost the quantity of textile trade was also helped by US and EU caps on
Chinese textiles. The US cap restricts growth in imports of Chinese textiles to 12.5 per cent next
year and between 15 and 16 per cent in 2008. The EU deal similarly manages import growth until
2008.
Bangladesh may continue to benefit from these restrictions over the next two years, however a
climate of falling global textile prices forces wage rates the centre of the nation's efforts to increase
market share.
They offer a range of incentives to potential investors including 10-year tax holidays, duty-free import
of capital goods, raw materials and building materials, exemptions on income tax on salaries paid to
foreign nationals for three years and dividend tax exemptions for the period of the tax holiday.
All goods produced in the zones are able to be exported duty-free, in addition to which Bangladesh
benefits from the Generalised System of Preferences in US, European and Japanese markets and is
also endowed with Most Favoured Nation status from the United States.
Furthermore, Bangladesh imposes no ceiling on investment in the EPZs and allows full repatriation
of profits.

The formation of labour unions within the EPZs is prohibited as are strikes. [56]

A Square Pharmaceuticals plant inGazipur. Bangladesh's pharmaceuticals industry exports to over 50

countries

Bangladesh has been a world leader in its efforts to end the use of child labor in garment factories.
On July 4, 1995, the Bangladesh Garment Manufacturers and Exporters Association, International
Labour Organization, and UNICEF signed a memorandum of understanding on the elimination of
child labor in the garment sector. Implementation of this pioneering agreement began in fall 1995,
and by the end of 1999, child labor in the garment trade virtually had been eliminated. [57] The laborintensive process of ship breaking for scrap has developed to the point where it now meets most of
Bangladesh's domestic steel needs. Other industries include sugar, tea, leather goods, newsprint,
pharmaceutical, and fertilizer production.
The Bangladesh government continues to court foreign investment, something it has done fairly
successfully in private power generation and gas exploration and production, as well as in other
sectors such as cellular telephony, textiles, and pharmaceuticals. In 1989, the same year it signed a
bilateral investment treaty with the United States, it established a Board of Investment to simplify
approval and start-up procedures for foreign investors, although in practice the board has done little
to increase investment. The government created theBangladesh Export Processing Zone
Authority to manage the various export processing zones. The agency currently manages EPZs in
Adamjee, Chittagong, Comilla, Dhaka, Ishwardi, Karnaphuli, Mongla, and Uttara. An EPZ has also
been proposed for Sylhet.[58] The government has given the private sector permission to build and
operate competing EPZs-initial construction on a Korean EPZ started in 1999. In June 1999,
the AFL-CIO petitioned the U.S. Government to deny Bangladesh access to U.S. markets under
the Generalized System of Preferences (GSP), citing the country's failure to meet promises made in
1992 to allow freedom of association in EPZs.

Bangladeshi women and the economy[edit]

Bangladesh is a highly patriarchal society (as are many countries in the region) with gender being a
key factor in defining social roles, responsibilities and power relationships within the family and
workplace.[59] Male workforce participation is significantly higher than female participation, with men

participating at 83 percent and women at 59 percent; however, male workforce participation has
decreased by 4 percent, while female participation has increased by 4 percent from the year 2000.
[60]

It should be noted that a 59 percent female participation rate is high in comparison to a lot of

countries like Iran, which has a 16.5 female labor participation rate (World Bank 2010), and
Lebanon, which has a 22.5 female labor participation rate. [61]
A 2007 World Bank report stated that the areas in which womens work force participation have
increased the most are in the fields of agriculture, education and health and social work. [61] Over
three-quarters of women in the labor force work in the agricultural sector. On the other hand, the
International Labour Organization reports that women's workforce participation has only increased in
the professional and administrative areas between 2000 and 2005, demonstrating women's
increased participation in sectors that require higher education. Employment and labor force
participation data from the World Bank, the UN, and the ILO vary and often under report on women's
work due to unpaid labor and informal sector jobs.[62] Though these fields are mostly paid, women
experience very different work conditions than men, including wage differences and work benefits.
Womens wages are significantly lower than mens wages for the same job with women being paid
as much as 60-75 percent less than what men make.[63]
One example of action that is being taken to improve female conditions in the work force is NonGovernmental Organizations. These NGOs encourage women to rely on their own self-savings,
rather than external funds provide women with increased decision-making and participation within
the family and society.[64] However, some NGOs that address microeconomic issues among individual
families fail to deal with broader macroeconomic issues that prevent women's complete autonomy
and advancement.[64]

Overview[edit]

Karwan Bazar is home to many of Bangladesh's important offices

Bazaars in Bangladesh are popular trading places for everyday household necessities.

Bashundhara City is one of the most luxurious shopping mall in Asia.

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 state-owned enterprises, a rapidly growing labor force that cannot be absorbed by agriculture,
inadequate power supplies,[65] 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.[66] Foreign aid has seen a gradual decline
over the last few decades but economists see this as a good sign for self-reliance. [67] There has been
a dramatic growth in exports and remittance inflow which has helped the economy to expand at a
steady rate.[68][69]
Fiscal Year

Total Export

Total Import

Foreign Remittance Earnings

20072008

$14.11b

$25.205b

$8.9b

20082009

$15.56b

$22.00b+

$9.68b

20092010

$16.7b

~$24b

$10.87b

20102011

$22.93b

$32b

$11.65b

20112012

$24.30b

$35.92b

$12.85b

20132014

$30.10b

$29.37b

$14.00b

Page last updated on June 23, 2014

Economy - overview:
Bangladesh's economy has grown roughly 6% per year since 1996 despite
political instability, poor infrastructure, corruption, insufficient power supplies,
slow implementation of economic reforms, and the 2008-09 global financial
crisis and recession. Although more than half of GDP is generated through the
service sector, almost half of Bangladeshis are employed in the agriculture
sector with rice as the single-most-important product. Garment exports, the
backbone of Bangladesh?"s industrial sector and 80% of total exports,
surpassed $21 billion last year, 18% of GDP. The sector has remained
resilient in recent years amidst a series of factory accidents that have killed
over 1,000 workers and crippling strikes that shut down virtually all economic
activity. Steady garment export growth combined with remittances from
overseas Bangladeshis, which totaled almost $15 billion and 13% of GDP IN
2013, are the largest contributors to Bangladesh?"s current account surplus
and record foreign exchange holdings.
GDP (purchasing power parity):
$324.6 billion (2013 est.)
country comparison to the world: 44
$307 billion (2012 est.)
$289.2 billion (2011 est.)
note: data are in 2013 US dollars
[see also: GDP country ranks ]
GDP (official exchange rate):
$140.2 billion (2013 est.)
[see also: GDP (official exchange rate) country ranks ]

GDP - real growth rate:

5.8% (2013 est.)
country comparison to the world: 42
6.1% (2012 est.)
6.5% (2011 est.)
[see also: GDP - real growth rate country ranks ]
GDP - per capita:
$2,100 (2013 est.)
country comparison to the world: 194
$2,000 (2012 est.)
$1,900 (2011 est.)
note: data are in 2013 US dollars
[see also: GDP - per capita country ranks ]
Gross national saving:
28.3% of GDP (2013 est.)
country comparison to the world: 34
27% of GDP (2012 est.)
25% of GDP (2011 est.)
[see also: Gross national saving country ranks ]
GDP - composition, by end use:
household consumption: 75.3%
government consumption: 5.7%
investment in fixed capital: 25.6%
investment in inventories: 3.6%
exports of goods and services: 24.5%
imports of goods and services: -34.7%
(2013 est.)
GDP - composition, by sector of origin:
agriculture: 17.2%
industry: 28.9%
services: 53.9% (2013 est.)

Agriculture - products:
rice, jute, tea, wheat, sugarcane, potatoes, tobacco, pulses, oilseeds, spices,
fruit; beef, milk, poultry
Industries:
jute, cotton, garments, paper, leather, fertilizer, iron and steel, cement,
petroleum products, tobacco, pharmaceuticals, ceramics, tea, salt, sugar,
edible oils, soap and detergent, fabricated metal products, electricity, natural
gas
Industrial production growth rate:
9% (2013 est.)
country comparison to the world: 20
[see also: Industrial production growth rate country ranks ]
Labor force:
78.62 million
country comparison to the world: 7
note: extensive export of labor to Saudi Arabia, Kuwait, UAE, Oman, Qatar,
and Malaysia; workers' remittances were $10.9 billion in FY09/10 (2013 est.)
[see also: Labor force country ranks ]
Labor force - by occupation:
agriculture: 47%
industry: 13%
services: 40% (2010 est.)
Unemployment rate:
5% (2013 est.)
country comparison to the world: 48
5% (2012 est.)
note: about 40% of the population is underemployed; many persons counted
as employed work only a few hours a week and at low wages
[see also: Unemployment rate country ranks ]
Population below poverty line:
31.5% (2010 est.)
[see also: Population below poverty line country ranks ]

Household income or consumption by percentage share:

lowest 10%: 4%
highest 10%: 27% (2010 est.)
Distribution of family income - Gini index:
32.1 (2010)
country comparison to the world: 106
33.6 (1996)
[see also: Distribution of family income - Gini index country ranks ]
Budget:
revenues: $17.19 billion
expenditures: $24.02 billion (2013 est.)
Taxes and other revenues:
12.3% of GDP (2013 est.)
country comparison to the world: 203
[see also: Taxes and other revenues country ranks ]
Budget surplus (+) or deficit (-):
-4.9% of GDP (2013 est.)
country comparison to the world: 164
[see also: Budget surplus (+) or deficit (-) country ranks ]
Public debt:
30.9% of GDP (2013 est.)
country comparison to the world: 118
32.2% of GDP (2012 est.)
[see also: Public debt country ranks ]
Fiscal year:
1 July - 30 June
Inflation rate (consumer prices):
7.6% (2013 est.)
country comparison to the world: 191
6.6% (2012 est.)
[see also: Inflation rate (consumer prices) country ranks ]

Central bank discount rate:

5% (31 December 2010 est.)
country comparison to the world: 69
5% (31 December 2009 est.)
[see also: Central bank discount rate country ranks ]
Commercial bank prime lending rate:
13% (31 December 2013 est.)
country comparison to the world: 58
13% (31 December 2012 est.)
[see also: Commercial bank prime lending rate country ranks ]
Stock of narrow money:
$17.11 billion (31 December 2013 est.)
country comparison to the world: 67
$14.85 billion (31 December 2012 est.)
[see also: Stock of narrow money country ranks ]
Stock of broad money:
$85.61 billion (31 December 2013 est.)
country comparison to the world: 58
$70.87 billion (31 December 2012 est.)
[see also: Stock of broad money country ranks ]
Stock of domestic credit:
$93.38 billion (31 December 2013 est.)
country comparison to the world: 53
$79.32 billion (31 December 2012 est.)
[see also: Stock of domestic credit country ranks ]
Market value of publicly traded shares:
$NA (February 2014 est.)
country comparison to the world: 60
$17.48 billion (31 December 2012)
$23.55 billion (31 December 2011 est.)
[see also: Market value of publicly traded shares country ranks ]

Current account balance:

$3.541 billion (2013 est.)
country comparison to the world: 32
$1.754 billion (2012 est.)
[see also: Current account balance country ranks ]
Exports:
$26.91 billion (2013 est.)
country comparison to the world: 68
$24.92 billion (2012 est.)
[see also: Exports country ranks ]
Exports - commodities:
garments, knitwear, agricultural products, frozen food (fish and seafood), jute
and jute goods, leather
Exports - partners:
US 18.7%, Germany 15.8%, UK 10.2%, France 6.2%, Spain 4.6%, Canada
4.3%, Italy 4% (2013 est.)
Imports:
$32.94 billion (2013 est.)
country comparison to the world: 64
$32.29 billion (2012 est.)
[see also: Imports country ranks ]
Imports - commodities:
machinery and equipment, chemicals, iron and steel, textiles, foodstuffs,
petroleum products, cement
Imports - partners:
China 21.7%, India 16.3%, Malaysia 5.2%, Republic of Korea 4.5%, Japan
4.1% (2013 est.)
Reserves of foreign exchange and gold:
$15.74 billion (31 December 2013 est.)
country comparison to the world: 68

$12.75 billion (31 December 2012 est.)

[see also: Reserves of foreign exchange and gold country ranks ]
Debt - external:
$30.69 billion (31 December 2013 est.)
country comparison to the world: 72
$29.53 billion (31 December 2012 est.)
[see also: Debt - external country ranks ]
Stock of direct foreign investment - at home:
$7.04 billion (31 December 2013 est.)
country comparison to the world: 88
$6.64 billion (31 December 2012 est.)
[see also: Stock of direct foreign investment - at home country ranks ]
Stock of direct foreign investment - abroad:
$110.1 million (31 December 2013 est.)
country comparison to the world: 85
$108.1 million (31 December 2012 est.)
[see also: Stock of direct foreign investment - abroad country ranks ]
Exchange rates:
taka (BDT) per US dollar 78.19 (2013 est.)
81.863 (2012 est.)
69.649 (2010 est.)
69.04 (2009)
68.554 (2008)

Bangladesh Overview

CONTEXT

STRATEGY
RESULTS

Bangladesh has maintained an impressive track record on growth and development. In the past
decade, the economy has grown at nearly 6 percent per year, and human development went hand-inhand with economic growth. Poverty dropped by nearly a third,coupled with increased life expectancy,
literacy, and per capita food intake. More than 15 million Bangladeshis have moved out of poverty since
1992.
While poverty reduction in both urban and rural areas has been remarkable, the absolute number
of people living below the poverty line remains significant. Despite the strong track record, around 47
million people are still below the poverty line, and improving access to quality services for this vulnerable
group is a priority. There are also many people who could fall back into poverty if they lose their jobs or
are affected by natural disasters.
With nearly 150 million inhabitants on a landmass of 147,570 square kilometers, Bangladesh is
among the most densely populated countries in the world.Sustained growth in recent years has
generated higher demand for electricity, transport, and telecommunication services, and contributed to
widening infrastructure deficits. While the population growth rate has declined, the labor force is growing
rapidly. This can be turned into a significant demographic dividend in the coming years, if more and better
jobs can be created for the growing number of job-seekers. Moreover, improving labor force participation
and productivity will help to release the potential of the economy. Exploiting the potential of regional
cooperation and making trade policy more conducive to a deepening and diversification of exports will
also play a vital role in the growth process.
Bangladesh aspires to be a middle-income country by 2021. This will require increasing GDP growth
to 7.5 to 8 percent per year based on accelerated export and remittance growth. Both public and private
investment will need to increase as well. Growth will also need to be more inclusive through creation of
productive employment opportunities in the domestic economy. To sustain accelerated and inclusive
growth, Bangladesh will need to manage the urbanization process more effectively, as well as prepare for
adaptation to climate change impacts.
Becoming a middle-income country will require substantial efforts on many fronts. These include
maintaining macroeconomic stability; strengthening revenue mobilization; tackling energy and
infrastructure deficits; deepening financial-sector and external trade reforms; improving labor skills,
economic governance, and urban management; and adapting to climate change. Bangladesh can
become an export powerhouse, with its labor-intensive manufactured and service exports growing at
double digits on a sustained basis, if it speeds up government decision-making. Without timely action,
other countries (such as Vietnam and Myanmar) will take the markets being vacated by China.

he Vision 2021 and Sixth Five-Year Plan have set solid development targets for Bangladesh.
Recognizing that development is a long-term process, the Five-Year Plan is cast in the context of a longterm development vision defined by the governments Vision 2021 and the Perspective Plan (2010-2021).
Those targets, if achieved, will transform the socioeconomic environment. Along with higher per
capita income, the governments Vision 2021 presents a development scenario where citizens will have a
higher standard of living, be better-educated, face better social justice, and have a more equitable
socioeconomic environment, and the sustainability of development will be ensured through better
protection from climate change and natural disasters.
IDA commitments to Bangladesh have grown rapidly in the past five years, topping $1 billion for
the first time in FY 2009. The current IDA portfolio consists of 32 projects, with a total commitment of
$7.5 billion.
The World Banks Country Assistance Strategy for FY11-14 is supporting the governments vision
of rapid poverty reduction through accelerated, sustainable, and inclusive growth, underpinned
by stronger governance at central and local levels. To ensure better outcomes, the World Banks
strategy seeks to scale up ongoing operations with demonstrable results, engage in strategic
interventions with a transformative impact, and innovate through small pilots with high country ownership.
Key areas of intervention are:
Accelerated Growth: Infrastructure investment and a more conducive business environment are needed
to sustain and increase recent levels of private sector growth. The World Bank Group will support reforms
to strengthen sector governance, financial sustainability, and private-sector participation in infrastructure
provision and maintenance. It will also support efforts to enhance regional cooperation as a means to
accelerate exports and increase foreign direct investment.
Sustainable Growth: Bangladesh is among the most densely populated countries in the world, already
vulnerable to natural disasters and increasingly affected by climate change. Water resource management,
agricultural adaptation, environmental protection, and disaster preparedness will be critical areas for
intervention.
Inclusive Growth: With around 47 million people below the poverty line, improving social service delivery
is a priority. The Bank plans to provide second-generation support for sector-wide approaches with other
partners in primary education and health, population, and nutrition services, as well as expand support for
targeted social assistance.
Stronger Governance: Bangladesh has made gradual progress in many areas of governance in the past
five to 10 years. The International Finance Corporation will focus on governance issues related to the

private sector (such as how to strengthen the investment climate), while IDA will focus on decentralized
service delivery, strengthening social accountability, and supporting transparency through the Right to

The International Development Association (IDA) has been supporting Bangladesh since 1972,
just after the countrys independence. Since then, IDA has provided more than $19 billion support to
advance Bangladeshs development priorities.
The World Bank support has helped Bangladesh to reduce poverty and improve human development.
Key elements of that support have been the Banks long-term commitment to health and education, its
support for rural infrastructure, and its engagement in policy dialogues that have created conditions for
broad-based economic growth. IDAs support has also included a substantial body of analytical work and
knowledge products that have contributed to the policy debate, IDA-supported operations, and, ultimately,
development outcomes. Forty years of partnership have built a solid foundation for improvements in
growth, empowerment, and social mobility.
Highlights of IDAs engagement in Bangladesh include:

Rural Infrastructure: IDA has been a major partner in the development of Bangladesh's rural
infrastructure, having funded three rural road improvement projects. A recently completed rural road
project has helped to improve and maintain more than 2,500 km of rural roads in 21 districts. These
roads have improved access to schools and health clinics, reduced transport costs, and helped
increase rural non-farm incomes. They also led to the creation of over 47,000 person-years of
employment in the project area, with female employment increasing by 50 percent. The overall poverty
effect of road improvement was significant, with poverty falling by about 1% and the poverty reduction
rate almost doubling in project areas.

Agriculture: Bangladesh has made impressive achievements over the last 30 years in narrowing
the gap between food crop production and the needs of the population, in large part due to expansion
of irrigation. The country is nearly self-sufficient in rice (the main staple food) with production reaching
more than 35 million metric tons per year. IDA is an active partner in the agriculture sector in
Bangladesh, focusing support on technology and research and on rehabilitation of infrastructure
forflood control, irrigation and drainage. Bangladesh is one of the first countries to receive a grant from
the Global Agriculture and Food Security Program, with project results focused on
enhancing agricultural productivity and livelihoods in two of the most agro-ecologically constrained
areas of the country.

Energy: Bangladesh suffers from shortages of reliable electricity and natural gas service
compared to demand. Total installed capacity is 8,050 MW, and IDA has contributed to more than
1,515 MW of that capacity, with another 335 MW under construction. IDA has supported public-private
partnerships to build small power plants as well as large-scale independent power plants, such as the
Haripur and the Meghnaghat plants. In addition, access to electricity is being provided in rural areas
through off-grid technologies, and consumption of energy is being reduced through distribution of
energy-efficient CFLs with IDA support. For example, more than 850,000 solar home systemshave
been installed through May 2012 in remote villages, and every month about 50,000 new homes and
shops in rural areas are being connected toelectricity through the installation of these systems.

Education: Bangladesh has made impressive gains in improving access to education, reaching
the Millennium Development Goal of gender parity at school enrollment well ahead of time. Today, the
female primary school enrollment rate of 98% in Bangladesh is higher than those in Pakistan, Nepal
and Bhutan and about the same as in India. Six million girls attend secondary school in Bangladesh
today, rising from just 1 million two decades ago. IDA has contributed to these achievements by
supporting both formal and informal education service delivery programs, including innovative models
to improve performance and involve difficult-to-reach groups. Currently, IDA supports active projects in
the primary, secondary, and tertiarysectors, including an initiative to bring out-of-school children back
to school and a skill-building project to help develop a more competitive labor force.

Health: IDA has been a close partner of the government of Bangladesh to improve health, HIV
and nutrition outcomes since 1975. The World Bank currently supports implementation of the
governments Health, Nutrition, and Population Sector Development Program in partnership with other
development partners to strengthen health systems and improve health services, particularly for the
poor. With World Bank support, assisted deliveries have helped reduce maternal mortality rates by
40% in the past decade. Today, nearly 90% of Bangladeshi children receive vitamin A supplements
and more than 80% are vaccinated, contributing to an impressive reduction in infant and child mortality
by more than two-thirds since 1990. The country is on track to meet the Millennium Development Goal
targets for health, and received the 2010 United Nations Award for MDG 4 achievements. Nutrition,
however, remains a challenge, as more than 40% of under-5 children are either moderately
underweight or moderately stunted or both.

Livelihoods: IDA has been supporting community-driven development plans aimed at improving
livelihoods; quality of life; and resilience to climate variability, natural hazards, and other shocks for the
rural poor. Around 3.5 million people in about 1,000 villages have benefited from improvements in

community infrastructure, such as access to drinking water; roads and bridges; and credit, markets,
and opportunities for income generation.

Local governance: With IDA support, all 4,504Union Parishads of Bangladesh have been
provided with increased resources and delegated responsibility to deliver local services. For the first
time, female Union Parishad members are managing 30% of the funds and plans. More than 35,000
community plans generating employment for poor people have been implemented so far, including
construction or rehabilitation of roads, culverts, drainage and embankment systems; water and
sanitation facilities; and schools and clinics. Current program innovations include performance-based
grants to expand resources available to local governments.

Water supply and sanitation: In partnership with the government, IDA has contributed to
providing access to safe and arsenic/pathogen-free water and improved sanitation services to 1.25
million people in rural areas and small towns. IDA is also supporting improvements in water supply
and sanitation in Dhaka and Chittagong, two of the largest cities in the country.