What Is an Economy?

An economy is the large set of inter-related production and consumption activities that aid in
determining how scarce resources are allocated. The production and consumption of goods and
services are used to fulfill the needs of those living and operating within the economy, which is
also referred to as an economic system

Bangladesh Economy
With a continued average economic growth nearly 7% in the last ten years (2008-2018),
Bangladesh now proudly stands as an emerging trade and investment destination. The steady
growth in export business, hard-working labour force and committed entrepreneurs supported by
the pro-business, pro-investment policies of the Government are leading Bangladesh towards the
line of global business competency. The country’s unequivocal position for peace and harmony,
regional stability, cooperation, economic development through international and regional trade
with its trade partners and an increasing flow of remittance by expatriate Bangladeshis living
across the world have helped the country achieve and retain the impressive economic status. In
FY 2017-18, GDP growth was 7.86 % and it is expected to grow around 8.25% in the FY 2018-
19. A strong domestic demand, high export growth and continued expansion of infrastructural
facilities attributed to the accomplishment of accelerated growth.

International Monetary Fund (IMF), in its World Economic Outlook, 2018, has ranked
Bangladesh as the 44th largest economy in the world in terms of nominal GDP in 2017 and 32th
in terms of purchasing power parity. The country registered a gross domestic product of US$ 274
billion in FY 2017-18 while it was only US$72 billion in 2005-2006.

The real per capita income stands at US $ 1,752 in 2018 (in real terms). In Bangladesh, a strong
middle class is close to 18 % of the entire population. Due to emerging middle class and in
general better income level of common people, domestic demand is growing and that becomes
an important driver of economic activity. Bangladesh has now emerged as an important
manufacturing base for textile products, pharmaceuticals, finished leathers, light and medium
industries, IT and shipbuilding. While world trade was severely disrupted by the global recession
in recent past with exports of most countries declining sharply, the export of Bangladesh shows
satisfactory growth. Bangladesh has emerged as the second largest exporter in the world apparel
market and is also doing exceedingly well in the exports of finished leathers and leather goods,
frozen foods, jute and jute goods, pharmaceutical products, light engineering products and small
ocean-going vessels. In 2017-18, Bangladesh posted US$ 40.2 billion export earnings, while at
the corresponding periods the country registered import bills of US$ 44.5 billion. Most of the
items in the import list are petroleum products, capital goods and industrial raw materials.

Bangladesh has also attained a satisfactory foreign currency reserves in recent months which
stands at US$33.41billion in the fiscal year 2017-2018. Remittances sent by Bangladeshi
expatriates totalled US$15 billion in 2017-18 financial year, also forms a very important pillar of
the country’s economy. The Foreign Exchange Reserve was US$ 32.94 billion in FY 2017-18
Bangladesh experienced a satisfactory FDI in last five years. World Investment Report 2017
ranked Bangladesh 16th among 74 FDI-recipient countries with a record US$ 2.34 billion FDI
inflow in 2017. This is the third time Bangladesh’s FDI has exceeded the billion-dollar mark in a
single year. Standard & Poors latest credit rating for Bangladesh stands at BB-. Moody’s rating
for Bangladesh sovereign debt is Ba3. The transfer and convertibility (T&C) assessment remains
‘BB-‘.

Bangladesh Government’s twin policy initiatives--‘Vision 2021’ and ‘Digital Bangladesh’ envisage
Bangladesh becoming Middle-Income country by 2021 and a developed country by 2041. The World
Bank upgraded Bangladesh a Lower Middle-Income country in 2015 and projected to be one of the top
30 economies in the world by 2030.  In the year 2018, the UN Committee on Development Policy (CDP)
declared Bangladesh’s legibility for graduation from LDC to Developing country.

Economy

Bangladesh’s heavy dependence on agriculture has long contributed to seasonal unemployment

among rural farmworkers, as well as to a generally low standard of living in many areas. To
counteract this imbalance, a policy of industrialization was adopted in the mid-20th century.
During the period of Pakistani administration (1947–71), priority was given to industries based
on indigenous raw materials such as jute, cotton, hides, and skins. The principle of free
enterprise in the private sector was accepted, subject to certain conditions, including the national
ownership of public utilities. The industrial policy also aimed to develop the production of
consumer goods as quickly as possible in order to avoid dependence on imports.

. The Pakistani administration established new types of autonomous corporations to deal with industrial
development, electricity, water and sewerage management, the development of forest industries, and
road transportation. In 1972, however, the government of the new, independent Bangladesh
implemented socialist policies, nationalizing these corporations and establishing several new
corporations to manage the nationalized enterprises. Hasty change, coupled with the inexperience of
those placed in charge of the corporations, produced widespread disruptions, and industrial production
nearly came to a halt. In 1973 the government launched a five-year development plan (the first of a
series of such plans that have guided the country’s economy into the 21st century). The policy of
nationalization was gradually revised and was replaced by a 19-point program announced in 1979 that
emphasized greater productivity and efficiency. In an effort to encourage private investment,
Economic history
Ancient Bengal

East Bengal—the eastern segment of Bengal—was a historically prosperous region.[40] The

Ganges Delta provided advantages of a mild, almost tropical climate, fertile soil, ample water,
and an abundance of fish, wildlife, and fruit.[40] The standard of living is believed to have been
higher compared with other parts of South Asia.[40] As early as the thirteenth century, the region
was developing as an agrarian economy.[40] Bengal was the junction of trade routes on the
Southeastern Silk Road.[40]

Bengal Sultanate

See also: Muslin trade in Bengal and History of the taka

Maritime links of the Bengal sultanate

The baghlah was a type of ship widely used by traders in the Indian Ocean, the Arabian Sea, the
Bay of Bengal, the Malacca Straits and the South China Sea

The economy of the Bengal Sultanate inherited earlier aspects of the Delhi Sultanate, including
mint towns, a salaried bureaucracy and the jagirdar system of land ownership. The production of
silver coins inscribed with the name of the Sultan of Bengal was a mark of Bengali sovereignty.
[41]
Bengal was more successful in perpetuating purely silver coinage than Delhi and other
contemporary Asian and European governments. There were three sources of silver. The first
source was the leftover silver reserve of previous kingdoms. The second source was the tribute
payments of subordinate kingdoms which were paid in silver bullion. The third source was
during military campaigns when Bengali forces sacked neighboring states.[42]
The apparent vibrancy of the Bengal economy in the beginning of the 15th-century is attributed
to the end of tribute payments to Delhi, which ceased after Bengali independence and stopped
the outflow of wealth. Ma Huan's testimony of a flourishing shipbuilding industry was part of the
evidence that Bengal enjoyed significant seaborne trade. The expansion of muslin production,
sericulture and the emergence of several other crafts were indicated in Ma Huan's list of items
exported from Bengal to China. Bengali shipping co-existed with Chinese shipping until the
latter withdrew from the Indian Ocean in the mid-15th-century. The testimony of European
travelers such as Ludovico di Varthema, Duarte Barbosa and Tomé Pires attest to the presence of
a large number of wealthy Bengali merchants and shipowners in Malacca.[43] Historian Rila
Mukherjee wrote that ports in Bengal may have been entrepots, importing goods and re-
exporting them to China.[44]

A vigorous riverine shipbuilding tradition existed in Bengal. The shipbuilding tradition is

evidenced in the sultanate's naval campaigns in the Ganges delta. The trade between Bengal and
the Maldives, based on rice and cowry shells, was probably done on Arab-style baghlah ships.
Chinese accounts point to Bengali ships being prominent in Southeast Asian waters. A vessel
from Bengal, probably owned by the Sultan of Bengal, could accommodate three tribute
missions- from Bengal, Brunei and Sumatra- and was evidently the only vessel capable of such a
task. Bengali ships were the largest vessels plying in those decades in Southeast Asian waters.[45]

All large business transactions were done in terms of silver taka. Smaller purchases involved
shell currency. One silver coin was worth 10,250 cowry shells. Bengal relied on shiploads of
cowry shell imports from the Maldives. Due to the fertile land, there was an abundance of
agricultural commodities, including bananas, jackfruits, pomegranate, sugarcane, and honey.
Native crops included rice and sesame. Vegetables included ginger, mustard, onions, and garlic
among others. There were four types of wines, including coconut, rice, tarry and kajang. Bengali
streets were well provided with eating establishments, drinking houses and bathhouses. At least
six varieties of fine muslin cloth existed. Silk fabrics were also abundant. Pearls, rugs and ghee
were other important products. The finest variety of paper was made in Bengal from the bark of
mulberry trees. The high quality of paper was compared with the lightweight white muslin cloth.
[46]

Europeans referred to Bengal as "the richest country to trade with".[47] Bengal was the eastern
pole of Islamic India. Like the Gujarat Sultanate in the western coast of India, Bengal in the east
was open to the sea and accumulated profits from trade. Merchants from around the world traded
in the Bay of Bengal.[48] Cotton textile exports were a unique aspect of the Bengali economy.
Marco Polo noted Bengal's prominence in the textile trade.[49] In 1569, Venetian explorer Caesar
Frederick wrote about how merchants from Pegu in Burma traded in silver and gold with
Bengalis.[49] Overland trade routes such as the Grand Trunk Road connected Bengal to northern
India, Central Asia and the Middle East.
Mughal Bengal

Further information: Bengal Subah, Muslin trade in Bengal, and Mughal Empire

A woman in Dhaka clad in fine Bengali muslin, 18th century.

Under Mughal rule, Bengal operated as a centre of the worldwide muslin, silk and pearl trades.[40]
Domestically, much of India depended on Bengali products such as rice, silks and cotton textiles.
Overseas, Europeans depended on Bengali products such as cotton textiles, silks and opium;
Bengal accounted for 40% of Dutch imports from Asia, for example.[50] Bengal shipped saltpeter
to Europe, sold opium in Indonesia, exported raw silk to Japan and the Netherlands, and
produced cotton and silk textiles for export to Europe, Indonesia and Japan.[51] Real wages and
living standards in 18th-century Bengal were comparable to Britain, which in turn had the
highest living standards in Europe.[52]

During the Mughal era, the most important centre of cotton production was Bengal, particularly
around its capital city of Dhaka, leading to muslin being called "daka" in distant markets such as
Central Asia.[53] Bengali agriculturalists rapidly learned techniques of mulberry cultivation and
sericulture, establishing Bengal as a major silk-producing region of the world.[54] Bengal
accounted for more than 50% of textiles and around 80% of silks imported by the Dutch from
Asia, for example.[50]

Bengal also had a large shipbuilding industry. Indrajit Ray estimates shipbuilding output of
Bengal during the sixteenth and seventeenth centuries at 223,250 tons annually, compared with
23,061 tons produced in nineteen colonies in North America from 1769 to 1771.[55] He also
assesses ship repairing as very advanced in Bengal.[55] Bengali shipbuilding was advanced
compared to European shipbuilding at the time. An important innovation in shipbuilding was the
introduction of a flushed deck design in Bengal rice ships, resulting in hulls that were stronger
and less prone to leak than the structurally weak hulls of traditional European ships built with a
stepped deck design. The British East India Company later duplicated the flushed-deck and hull
designs of Bengal rice ships in the 1760s, leading to significant improvements in seaworthiness
and navigation for European ships during the Industrial Revolution.[56]
British Bengal

Further information: Bengal Presidency, Great Bengal famine of 1770, and Bengal famine of
1943

The British East India Company, that took complete control of Bengal in 1793 by abolishing
Nizamat (local rule), chose to develop Calcutta, now the capital city of West Bengal, as their
commercial and administrative center for the Company-held territories in South Asia.[40] The
development of East Bengal was thereafter limited to agriculture.[40] The administrative
infrastructure of the late eighteenth and nineteenth centuries reinforced East Bengal's function as
the primary agricultural producer—chiefly of rice, tea, teak, cotton, sugar cane and jute — for
processors and traders from around Asia and beyond.[40]

Modern Bangladesh

After its independence from Pakistan, Bangladesh followed a socialist economy by nationalising
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.[40] As life expectancy increased, the limitations of
land and the annual floods increasingly became constraints on economic growth.[40] Traditional
agricultural methods became obstacles to the modernisation of agriculture.[40] Geography
severely limited the development and maintenance of a modern transportation and
communications system.[40]

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.[40] Pakistan's five-year
plans opted for a development strategy based on industrialisation, but the major share of the
development budget went to West Pakistan, that is, contemporary Pakistan.[40] The lack of natural
resources meant that East Pakistan was heavily dependent on imports, creating a balance of
payments problem.[40] Without a substantial industrialisation programme or adequate agrarian
expansion, the economy of East Pakistan steadily declined.[40] 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.[40]

Since Bangladesh followed a socialist economy by nationalising all industries after its
independence, it underwent a slow growth of producing experienced entrepreneurs, managers,
administrators, engineers, and technicians.[57] There were critical shortages of essential food
grains and other staples because of wartime disruptions.[57] External markets for jute had been
lost because of the instability of supply and the increasing popularity of synthetic substitutes.[57]
Foreign exchange resources were minuscule, and the banking and monetary systems were
unreliable.[57] Although Bangladesh had a large work force, the vast reserves of under trained and
underpaid workers were largely illiterate, unskilled, and underemployed.[57] Commercially
exploitable industrial resources, except for natural gas, were lacking.[57] Inflation, especially for
essential consumer goods, ran between 300 and 400 percent.[57] The war of independence had
crippled the transportation system.[57] Hundreds of road and railroad bridges had been destroyed
or damaged, and rolling stock was inadequate and in poor repair.[57] The new country was still
recovering from a severe cyclone that hit the area in 1970 and caused 250,000 deaths.[57] India
came forward immediately with critically measured economic assistance in the first months after
Bangladesh achieved independence from Pakistan.[57] Between December 1971 and January
1972, India committed US$232 million in aid to Bangladesh from the politico-economic aid
India received from the US and USSR. Official amount of disbursement yet undisclosed.[57]

After 1975, Bangladeshi leaders began to turn their attention to developing new industrial
capacity and rehabilitating its economy.[58] The static economic model adopted by these early
leaders, however—including the nationalisation of much of the industrial sector—resulted in
inefficiency and economic stagnation.[58] Beginning in late 1975, the government gradually gave
greater scope to private sector participation in the economy, a pattern that has continued.[58]
Many state-owned enterprises have been privatised, like banking, telecommunication, aviation,
media, and jute.[58] 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.[58]

In the mid-1980s, there were encouraging signs of progress.[58] Economic policies aimed at
encouraging private enterprise and investment, privatising public industries, reinstating
budgetary discipline, and liberalising the import regime were accelerated.[58] 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.[58] In the late 1990s
the government's economic policies became more entrenched, and some gains were lost, which
was highlighted by a precipitous drop in foreign direct investment in 2000 and 2001.[58] 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
programme up to 2006.[58] Seventy million dollars was made available immediately.[58] In the
same vein the World Bank approved $536 million in interest-free loans.[58] The economy saw
continuous real GDP growth of at least 5% since 2003. In 2010, Government of India extended a
line of credit worth $1 billion to counterbalance China's close relationship with Bangladesh.

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
 G UI P
r S n
o f
s D l
s o a
l t
D l i
o a o
mr n
e
s EI
t x n
i c d
c h e
a x
P n
r g (
o e 2
0
d
0
u
0
c
=
t
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( 0
M ) Mean wages were $0.58 per man-hour in 2020.
i
l The following table shows the main economic indicators in 1980–2019. Inflation
l below 5% is in green.
i
o
n

T
Yeara GDP GDP GDP Inflation Unemployment Government Total
k (in bn. per growth rate Rate debt Investment
a US$ capita (real) (in (in % of GDP)
) PPP) (in US$ Percent) (in Percent) (in % of GDP)
2 3 6 1 0 PPP)
198
0 , 3 41.2
2 500 3.1 % 15.4 % n/a n/a 14.44 %
0 9 . 6
198
5 1 9 47.4 560 5.6 % 14.5 % n/a n/a 17.16 %
1 3 2
198 , 52.0 597 3.2 % 12.9 % n/a n/a 17.36 %
2 3 T
198 3 a 56.5 633 4.6 % 9.5 % n/a n/a 16.56 %
3 4 k
198 a 61.0 664 4.2 % 10.4 % n/a n/a 16.48 %
42 5 6 1
198
0 , 8 65.3
4 693 3.7 % 10.5 % n/a n/a 15.83 %
50 0 . 7
198
8 0 6 69.3 715 4.0 % 10.2 % n/a n/a 16.18 %
6 3 5
,
4 T
3 a
8 k
a
198 73.1 735 2.9 % 10.8 % n/a n/a 15.47 %
7
198 77.5 759 2.4 % 9.7 % n/a n/a 15.74 %
8
198 84.0 801 4.3 % 8.7 % n/a n/a 16.12 %
9
199 91.1 848 4.6 % 10.5 % n/a n/a 16.46 %
0
199 98.1 892 4.2 % 8.3 % 2.20 % n/a 16.90 %
1
199 105.1 935 4.8 % 3.6 % 2.25 % n/a 17.31 %
2
201 391.7 2,592 6.0 % 9.4 % 3.37 % 35.5 % 26.25 %
0
201 425.8 2,785 6.5 % 11.5 % 3.71 % 36.6 % 27.42 %
1
201 460.8 2,979 6.3 % 6.2 % 4.04 % 36.2 % 28.26 %
2
201 496.5 3,171 6.0 % 7.5 % 4.43 % 35.8 % 28.39 %
3
201 537.3 3,396 6.3 % 7.0 % 4.41 % 35.3 % 28.58 %
4
201 581.6 3,638 6.8 % 6.2 % 4.42 % 33.6 % 28.89 %
5
201 629.9 3,900 7.2 % 5.7 % 4.35 % 33.3 % 29.65 %
6
201 690.5 4,231 7.6 % 5.6 % 4.37 % 32.6 % 30.51 %
7
201 763.4 4,630 7.9 % 5.6 % 4.30 % 34.0 % 31.23 %
8
201 817.6 5,028 8.1% 5.5% 4.29 % 33.5% 31.60 %
9

Economic sectors:
 Sectoral Shares of Gross Domestic Product (GDP) of 2015- 2016- 2017- 2018-
Bangladesh 16 17 18 19
A)Agriculture 14.77 14.17 13.82 13.32
AGRICULTURE AND FORESTRY 11.55 10.98 10.68 10.25
Crops & horticulture 8.15 7.69 7.48 7.12
Animal Farmings 2.01 1.93 1.86 1.79
Forest and related services 1.39 1.37 1.34 1.35
FISHING 3.22 3.19 3.14 3.07
B) Industry 28.77 29.32 30.17 31.15
MINING AND QUARRYING 1.73 1.83 1.83 1.82
Natural gas and crude petroleum 0.65 0.64 0.62 0.58
Other mining & coal 1.08 1.18 1.2 1.24
MANUFACTURING 17.91 18.28 18.99 19.89
Large & medium scale 14.58 14.93 15.63 16.37
Small scale 3.34 3.35 3.36 3.52
ELECTRICITY, GAS AND WATER SUPPLY 1.45 1.4 1.38 1.33
Electricity 1.12 1.09 1.07 1.04
Gas 0.26 0.24 0.24 0.22
Water 0.07 0.07 0.07 0.07
CONSTRUCTION 7.67 7.81 7.98 8.12
C. Service 56.46 56.5 56 55.53
WHOLESALE AND RETAIL TRADE; REPAIR OF 13.01 13.05 13.15 13.34

MOTOR VEHICLES, MOTORCYCLES AND

PERSONAL AND HOUSEHOLD GOODS
HOTEL AND RESTAURANTS 1.04 1.03 1.04 1.04
TRANSPORT, STORAGE & COMMUNICATION 10.27 10 9.61 9.34
Land Transport 7.76 7.64 7.38 7.22
Water transport 0.62 0.59 0.55 0.51
Air transport 0.08 0.07 0.07 0.07
Support transport services, storage 0.49 0.47 0.46 0.44
Post and Tele communications 1.32 1.24 1.16 1.1
FINANCIAL INTERMEDIATIONS 3.86 3.91 3.93 3.89
Monetary intermediation (Banks) 3.27 3.34 3.37 3.35
Insurance 0.38 0.36 0.34 0.34
Other financial auxilliaries 0.21 0.21 0.22 0.21
REAL ESTATE, RENTING AND BUSINESS 7.51 7.73 7.82 7.87
ACTIVITIES
PUBLIC ADMINISTRATION AND DEFENCE 4.05 4.19 4.24 4.09
EDUCATION 2.82 3.04 3.03 3.02
HEALTH AND SOCIAL WORKS 2.11 2.08 2.07 2.15
COMMUNITY, SOCIAL AND PERSONAL 11.79 11.46 11.11 10.78
SERVICES
Agriculture:
Map showing the growing areas of major agricultural products.
Main article: Agriculture of Bangladesh

Most Bangladeshis earn their living from agriculture.[58] Although rice and jute are the primary
crops, maize and vegetables are assuming greater importance.[58] Due to the expansion of
irrigation networks, some wheat producers have switched to cultivation of maize which is used
mostly as poultry feed.[58] Tea is grown in the northeast.[58] Because of Bangladesh's fertile soil
and normally ample water supply, rice can be grown and harvested three times a year in many
areas.[58] Due to a number of factors, Bangladesh's labour-intensive agriculture has achieved
steady increases in food grain production despite the often unfavourable weather conditions.[58]
These include better flood control and irrigation, a generally more efficient use of fertilisers, and
the establishment of better distribution and rural credit networks.[58] With 28.8 million metric
tons produced in 2005–2006 (July–June), rice is Bangladesh's principal crop.[58] By comparison,
wheat output in 2005–2006 was 9 million metric tons.[58] Population pressure continues to place a
severe burden on productive capacity, creating a food deficit, especially of wheat.[58] Foreign
assistance and commercial imports fill the gap,[58] but seasonal hunger ("monga") remains a
problem.[64] Underemployment remains a serious problem, and a growing concern for
Bangladesh's agricultural sector will be its ability to absorb additional manpower.[58] 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 labour force.[58] 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.[64]
Manufacturing and 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.[58] 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. At the fiscal year 2018, Bangladesh has been able to
garner US$36.67 billion export earnings by exporting manufactured goods, of which, 83.49
percent has come from the apparel manufacturing sector.[65]

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.[66]

Other industries which have shown very strong growth include the pharmaceutical industry,[67]
shipbuilding industry,[68] information technology,[69] leather industry,[70] steel industry,[71][72] and
light engineering industry.[73][74]

Main articles: Bangladesh textile industry and Leather industry in Bangladesh

A Bangladeshi textile fabric plant

Bangladesh's textile industry, which includes knitwear and ready-made garments (RMG) along
with specialised 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.[75] 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.[76][77] As of 2012 wages remained low for the 3 million people employed in the
industry, but labour unrest was increasing despite vigorous government action to enforce labour
peace. Owners of textile firms and their political allies were a powerful political influence in
Bangladesh.[78] The urban garment industry has created more than one million formal sector jobs
for women, contributing to the high female labour participation in Bangladesh.[79] While it can be
argued that women working in the garment industry are subjected to unsafe labour 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.[80] 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."[80]

Even though the working conditions in garment factories are not ideal, they tend to financially be
more reliable than other occupations and, "enhance women’s economic capabilities to spend,
save and invest their incomes."[81] 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.[81]

After massive labour unrest in 2006[82] the government formed a Minimum Wage Board
including business[83] 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 labour protests
involving 60,000 workers in June 2010,[84][85][86] 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.[77][87] On 28 July 2010 it
was announced that the minimum entry level wage would be increased to 3,000 taka, about $43.
[88]

The government also seems to believe some change is necessary. On 21 September 2006 then
ex-Prime Minister Khaleda Zia called on textile firms to ensure the safety of workers by
complying with international labour law at a speech inaugurating the Bangladesh Apparel &
Textile Exposition (BATEXPO).

Many Western multinationals use labour in Bangladesh, which is one of the cheapest in the
world: 30 euros per month compared to 150 or 200 in China. Four days is enough for the CEO of
one of the top five global textile brands to earn what a Bangladeshi garment worker will earn in
her lifetime. In April 2013, at least 1,135 textile workers died in the collapse of their factory.
Other fatal accidents due to unsanitary factories have affected Bangladesh: in 2005 a factory
collapsed and caused the death of 64 people. In 2006, a series of fires killed 85 people and
injured 207 others. In 2010, some 30 people died of asphyxiation and burns in two serious fires.
[89]

In 2006, tens of thousands of workers mobilized in one of the country's largest strike movements,
affecting almost all of the 4,000 factories. The Bangladesh Garment Manufacturers and
Exporters Association (BGMEA) uses police forces to crack down. Three workers were killed,
hundreds more were wounded by bullets, or imprisoned. In 2010, after a new strike movement,
nearly 1,000 people were injured among workers as a result of the repression.[89]

Shipbuilding and ship breaking

BNS Durgam has been built in Bangladesh

Main article: Shipbuilding in Bangladesh

Shipbuilding is a growing industry in Bangladesh with great potential.[90][91] Due to the potential
of shipbuilding in Bangladesh, the country has been compared to countries like China, Japan and
South Korea.[92] Referring to the growing amount of export deals secured by the shipbuilding
companies as well as the low cost labour available in the country, experts suggest that
Bangladesh could emerge as a major competitor in the global market of small to medium ocean-
going vessels.[93]

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.[94] Chittagong Ship Breaking
Yard is the world's second-largest ship breaking area.

Khulna Shipyard Limited (KSY) with over five decades of reputation has been leading the
Bangladesh Shipbuilding industry and had built a wide spectrum of ships for domestic and
international clients. KSY built ships for Bangladesh Navy, Bangladesh Army and Bangladesh
Coast Guard under the contract of ministry of defence.

Finance

Until 1980s, the financial sector of Bangladesh was dominated by state-owned banks.[95] With the
grand-scale reform made in finance, private commercial banks were established through
privatisation. The next finance sector reform programme was launched from 2000 to 2006 with
focus on the development of financial institutions and adoption of risk-based regulations and
supervision by Bangladesh Bank. As of date, the banking sector consisted of 4 SCBs, 4
government-owned specialized banks dealing in development financing, 39 private commercial
banks, and 9 foreign commercial banks.

Tourism
  Tourism in Bangladesh

Information and Communication Technology

Bangladesh's information technology sector is growing example of what can be achieved after
the current government's relentless effort to create a skilled workforce in ICT sector. The ICT
workforce consisted of private sector and freelance skilled ICT workforce. The ICT sector also
contributed to Bangladesh's economic growth. The ICT adviser to the prime minister, Sajeeb
Wazed Joy is hopeful that Bangladesh will become a major player in the ICT sector in the future.
[96]
In the last 3 years, Bangladesh has seen a tremendous growth in the ICT sector. Bangladesh is
a market of 160 million people with vast consumer spending around mobile phones, telco and
internet. Bangladesh has 80 million[97] internet users, an estimated 9% growth in internet use by
June 2017 powered by mobile internet. Bangladesh currently has an active 23 million[98]
Facebook users. Bangladesh currently has 143.1 million mobile phone customers.[97] Bangladesh
has exported $800 million[99] worth of software, games, outsourcing and services to European
countries, the United States, Canada, Russia and India by 30 June 2017. The Junior Minister for
ICT division of the Ministry of Post, Telecommunications and Information Technology said that
Bangladesh aims to raise its export earnings from the information and communications
technology (ICT) sector to $5 billion by 2021.[100]

Investment
The stock market capitalisation of the Dhaka Stock Exchange in Bangladesh crossed $10 billion
in November 2007 and the $30 billion mark in 2009, and US$50 billion in August 2010.[101]
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.
[102]

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.[103] In 2011, Japan Bank for International Cooperation ranked Bangladesh as
the 15th best investment destination for foreign investors.[104]
2010–11 market crash

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.[105] 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.[105]

Companies

Main article: List of companies of Bangladesh

The list includes ten largest Bangladeshi companies by trading value (millions in BDT) in 2018.
[106][107]

Ran Company Trading name at Headquarters Industry Trading

k Dhaka Stock Value
Exchange
1 Square SQURPHARMA Dhaka Pharmaceuticals 449.8880
Pharmaceuticals
Limited
2 Dragon Sweater DSSL Dhaka Apparel 129.4030
and Spinning
Limited
3 Ifad Autos IFADAUTOS Dhaka Automotive 117.5370
Limited
4 Grameenphone GP Dhaka Telecommunications 106.8660
Private Limited
5 Bangladesh Thai BDTHAI Dhaka Manufacturing 99.7690
Aluminium Ltd
6 City Bank CITYBANK Dhaka Banking 78.6010
Limited
7 Golden Harvest GHAIL Dhaka Agriculture 76.6710
8 IPDC Finance IPDC Dhaka Financial Services 67.0430
Limited
9 Olympic OLYMPIC Dhaka Manufacturing 60.5570
industries limited
10 Shahjalal Islami SHAHJABANK Dhaka Banking 53.1710
Bank Limited

Composition of economic sectors

A Square Pharmaceuticals plant in Gazipur.

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.[108]

"[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.[109]

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.[110]

Bangladesh has been a world leader in its efforts to end the use of child labour in garment
factories. On 4 July 1995, the Bangladesh Garment Manufacturers and Exporters Association,
International Labour Organization, and UNICEF signed a memorandum of understanding on the
elimination of child labour in the garment sector. Implementation of this pioneering agreement
began in fall 1995, and by the end of 1999, child labour in the garment trade virtually had been
eliminated.[111] The labour-intensive 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 the Bangladesh 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.[112] 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.

International trade
Treemap of Bangladesh Exports (2016)

In 2015, the top exports of Bangladesh are Non-Knit Men's Suits ($5.6B), Knit T-shirts
($5.28B), Knit Sweaters ($4.12B), Non-Knit Women's Suits ($3.66B) and Non-Knit Men's Shirts
($2.52B).[113] In 2015, the top imports of Bangladesh are Heavy Pure Woven Cotton ($1.33B),
Refined Petroleum ($1.25B), Light Pure Woven Cotton ($1.12B), Raw Cotton ($1.01B) and
Wheat ($900M).[113]

In 2015, the top export destinations of Bangladesh are the United States ($6.19B), Germany
($5.17B), the United Kingdom ($3.53B), France ($2.37B) and Spain ($2.29B).[113] In 2015, the
top import origins are China ($13.9B), India ($5.51B), Singapore ($2.22B), Hong Kong ($1.47B)
and Japan ($1.36B).[113]

Bangladeshi women and the economy

Male and female labour participation rates

As of 2014, female participation in the labour force is 58% as per World Bank data,[114] and male
participation at 82%.
A 2007 World Bank report stated that the areas in which women's work force participation have
increased the most are in the fields of agriculture, education and health and social work.[79] Over
three-quarters of women in the labour 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 labour
force participation data from the World Bank, the UN, and the ILO vary and often under report
on women's work due to unpaid labour and informal sector jobs.[115] Though these fields are
mostly paid, women experience very different work conditions than men, including wage
differences and work benefits. Women's wages are significantly lower than men's wages for the
same job with women being paid as much as 60–75 percent less than what men make.[116]

One example of action that is being taken to improve female conditions in the work force is Non-
Governmental Organisations. 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.[117] 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.[117]

Historical statistics

Bazaars are popular trading places for everyday household necessities.

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 labour force that cannot be absorbed
by agriculture, inadequate power supplies,[118] and slow implementation of economic reforms,
Bangladesh has made some headway improving the climate for foreign investors and liberalising
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.[119] Foreign aid has seen a gradual
decline over the last few decades but economists see this as a good sign for self-reliance.[120]
There has been a dramatic growth in exports and remittance inflow which has helped the
economy to expand at a steady rate.

Bangladesh has been on the list of UN Least Developed Countries (LDC) since 1975.
Bangladesh met the requirements to be recognised as a developing country in March, 2018.[123]
Bangladesh's Gross National Income (GNI) $1,724 per capita, the Human Assets Index (HAI) 72
and the Economic Vulnerability (EVI) Index 25.2.