Bangladesh Economy Facts
Bangladesh has had a strong economic development since the 1990s and in July 2015, the World Bank upgraded the country from one of the world’s “least developed countries” to “middle-income countries”. Yet many Bangladeshi people still live in deep poverty. Traditionally, agriculture has dominated the economy, but the manufacturing industry – mainly clothing manufacturing – has been the engine of growth in recent years.
Since the 1990s, growth has averaged around 6 percent per year. Even during the global financial crisis of 2008–2009, growth was sustained despite falling sharply in the outside world. But according to the UN’s development program UNDP, annual growth of almost 10 per cent is required for poverty reduction to be seriously reduced.
- Countryaah.com: Major imports by Bangladesh, covering a full list of top products imported by the country and trade value for each product category.
Corruption, inefficiencies, energy shortages and bad communications hamper development. Although the pace of population growth has slowed down, the population is growing rapidly and there is a lack of employment. In order to attract foreign investors, it is especially important to stabilize the political situation; constant confrontations with politically motivated strikes and protests have seemed daunting.
- Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including BGD which represents the country of Bangladesh. Check findjobdescriptions to learn more about Bangladesh.
Investment in infrastructure
Nonetheless, foreign direct investment has increased during the 2010s, not least from China. The investments go mainly to the energy sector, including dozens of new electric power plants and two nuclear power plants (see Natural Resources and Energy), as well as planned infrastructure projects such as highways, a metro in Dhaka and a deep water port in Sonadia on the Bay of Bengal.
The dependency on aid is large but has decreased. One reason is that the country can better handle its own food supply.
Money that millions of foreign-working Bangladeshi send home is an important factor in the country’s economy and poverty alleviation. The so-called remittances correspond to about a tenth of GDP (2013) and constitute the country’s most important source of foreign currency. Most Bangladeshi overseas work in the Middle East, especially in the Gulf States.
The fertile soil is the country’s most important natural resource. Yet, it was until the turn of the millennium before Bangladesh became reasonably self-sufficient with food. However, malnutrition is still a major problem among the population. Severe natural disasters often have devastating consequences for agriculture and contribute to widespread poverty (see also Agriculture and Fisheries and Social Conditions).
Low wages are driving growth
Another important part of the economy is the clothing industry, which provides about 80 percent of export earnings. The sector has grown rapidly since the 1990s and has created many new jobs, not least for women. But the conditions are tough; Bangladesh’s competitive advantage is the extremely low wages that make manufacturing move here not only from the western world but also from China, for example. The raw materials for the textile industry are imported. From the mid-2010s, growth in the clothing industry has slowed down. The reasons are several, not least a series of strikes for higher wages and better working conditions, and falling demand for the factory disaster outside Dhaka in 2013 (see Industry and Labor Market).
After independence in 1971, large parts of the industry were nationalized, but by the end of the same decade, cautious liberalization had begun. The country has since pursued a predominantly market economy policy, which has contributed to falling inflation and increased growth. However, the privatization of state property is slow. Bangladesh’s loan and aid providers have threatened to reduce aid unless market economy reforms are accelerated.
The poor residents’ problems with raising capital are a major obstacle to the country’s development. Voluntary organizations, such as Grameen Bank, have therefore created lending systems for homeless people. Small loans are given without collateral at a reasonable interest rate. More than 90 percent of the borrowers are women. Grameen Bank and its founder Muhammad Yunus were awarded the 2006 Nobel Peace Prize for their work for “bottom-up development”.
FACTS – FINANCE
GDP per person
US $ 1 698 (2018)
US $ 274,025 million (2018)
7.9 percent (2018)
Agriculture’s share of GDP
13.1 percent (2018)
Manufacturing industry’s share of GDP
18.0 percent (2018)
The service sector’s share of GDP
53.0 percent (2018)
5.5 percent (2019)
Government debt’s share of GDP
34.0 percent (2018)
US $ 47 155 million (2017)
US $ 38,687 million (2018)
US $ 55,600 million (2018)
– US $ 7 593 million (2018)
Commodity trade’s share of GDP
37 percent (2018)
Main export goods
clothing, jute and jute goods, fish and shrimp
Largest trading partner
Exporting countries: USA, Germany, UK. Importing countries: China, India, Singapore, Japan. (2016)
BNP politicians are accused of war crimes
For the first time, a BNP politician is accused of war crimes. High-ranking leader Salahuddin Quader Chowdhury is arrested, charged with committing violence earlier in 2010 and for war crimes in connection with the 1971 liberation war (see March 2010).
New protests among textile workers
Factory workers in the textile industry go on strike in protest against employers not paying the minimum wage recently promised by the government. Production stops in a number of factories and the stock market plunges. Violent clashes on the streets require several lives.
Big protests when Zia is evicted
Khaleda Zia, the leader of the opposition GDP, is evicted from her home in Dhaka where she has lived for almost 40 years. This is done by order of the Supreme Court. The eviction triggers several weeks of violent demonstrations and nationwide strikes that cripple schools, trade and textile exports.
Factories are forced to close
During the summer, hundreds of factories are temporarily forced to close in connection with violent protests against low wages.
Basic supplements are deleted
The Supreme Court has ruled that a number of constitutional supplements, including one that legitimizes military rule in the 1970s, are deleted.
Peaks within Islamist party are seized
Several of the Islamist party Jamaat-e-Islami’s highest leader is arrested on orders by ICT (see March 2009). Among them are party leader Motiur Rahman Nizami and general secretary Ali Ahsan Mohammad Mojahid.
The fight against militant Islamists is stepping up
The police make a large seizure of weapons and explosives in Dhaka. According to the authorities, these are preparations for a major terrorist act in the capital. Efforts against militant Islamists are stepping up.
Prosecution of Hasina is closed
The last corruption charges against Prime Minister Sheikh Hasina are closed. A total of 15 corruption charges were brought against her between 2001 and 2008.
Grameen Bank’s founder is fired as CEO
The founder of Grameen Bank, Muhammad Yunus, is dismissed from the post of the bank’s CEO following a decision by the Central Bank of Bangladesh (see Finance). A technicality is cited as a cause, but Yunu’s supporters claim he is being fired for political reasons after getting into conflict with Prime Minister Hasina.
Disputed tribunal set up
The Bangladeshi ICT ICTY (the International Crimes Tribunal) formally established, after a decision by 2009. It has the task to examine suspected of human rights violations during the war of liberation in 1971 (see also Political system).
Five are executed for Sheikh Mujib’s murder
Five men are executed for the murder of Sheikh Mujib in 1975. The death sentences were already sentenced during Sheikh Hasina’s first term as prime minister in 1996–2001.