Economy of Bangladesh

Despite continuous domestic and international efforts to improve economic and demographic prospects, Bangladesh remains a developing nation. Its per capita income in 2006 was US$2300 (adjusted by purchasing power parity) compared to the world average of $10,200.Jute was once the economic engine of the country. Its share of the world export market peaked in the Second World War and the late 1940s at 80%and even in the early 1970s accounted for 70% of its export earnings. However, polypropylene products began to substitute for jute products worldwide and the jute industry started to decline. Bangladesh grows very significant quantities of rice(chal), tea (Cha) and mustard. Although two-thirds of Bangladeshis are farmers, more than three quarters of Bangladesh’s export earnings come from the garment industry, which began attracting foreign investors in the 1980s due to cheap labour and low conversion cost. In 2002, the industry exported US$5 billion worth of products. The industry now employs more than 3 million workers, 90% of whom are women. A large part of foreign currency earnings also comes from the remittances sent by expatriates living in other countries.Worker in a paddy field - a common scene throughout Bangladesh. Two thirds of the population works in the agricultural sector.Obstacles to growth include frequent cyclones and floods, inefficient state-owned enterprises, mismanaged port facilities, a growth in the labour force that has outpaced jobs, inefficient use of energy resources (such as natural gas), insufficient power supplies, slow implementation of economic reforms, political infighting and corruption. According to the World Bank, "among Bangladesh’s most significant obstacles to growth are poor governance and weak public institutions."Bashundhara City, the largest shopping mall in South Asia.Despite these hurdles, the country has achieved an average annual growth rate of 5% since 1990, according to the World Bank. Bangladesh has seen expansion of its middle class, and its consumer industry has also grown. In December 2005, four years after its report on the emerging "BRIC" economies (Brazil, Russia, India, and China), Goldman Sachs named Bangladesh one of the "Next Eleven,"along with Egypt, Indonesia, Pakistan and seven other countries. Bangladesh has seen a dramatic increase in foreign direct investment. A number of multinational corporations and local big business houses such as Beximco, Square, Ispahani, Navana Group, Habib Group, KDS Group and multinationals such as Unocal Corporation and Chevron, have made major investments, with the natural gas sector being a priority. In December 2005, the Central Bank of Bangladesh projected GDP growth around 6.5%.One significant contributor to the development of the economy has been the widespread propagation of microcredit by Muhammad Yunus (awarded the Nobel peace prize in 2006) through the Grameen Bank. By the late 1990s, Grameen Bank had 2.3 million members, along with 2.5 million members of other similar organisations.In order to enhance economic growth, the government set up several export processing zones to attract foreign investment. These are managed by the Bangladesh Export Processing Zone Authority.