Posts

Economic Growth in Bangladesh

Bangladesh, a diverse and culturally rich nation located in South Asia, is known for its beautiful green scenery and numerous waterways. It is currently the 8th most populous country worldwide. When it first became an independent country in 1971, Bangladesh was incredibly poor with 82 percent of the population living below the extreme poverty line. At the time, the country experienced a negative rate of 14 percent; political tensions were high and the nation was continuously devastated by famine and flood. Today, the situation of is much different with economic growth in Bangladesh on the rise.

Growth on Many Fronts

Bangladesh now has an average economic growth rate of 8 percent, well above the regional average growth rate of 5.5 percent. In the first quarter of 2019, Bangladesh was the 7th fastest growing economy in the world, with a real GDP growth rate of 7.4 percent. Notably, between 2008 and 2017, per capita income in Bangladesh has increased by 149 percent helping to boost human development indicators for the country.

Bangladesh’s remarkable economic growth has raised a significant portion out of the population out of poverty. The poverty rate of Bangladesh fell from 48.9 percent in 2000 to 24.3 percent in 2016 and the proportion of employed workers living in extreme poverty dropped from 73.5 percent in 2010 to 14.8 percent in 2016.

Contributors to Economic Growth in Bangladesh

With a combination of progressive social policies and economic reforms, Bangladesh has been able to attract a large number of foreign investment and find new markets, resulting in a thriving economy despite the world’s stagnating state.

Bangladesh’s economic liberalization, successful adaptation and modernization policies have allowed the country to compete in the global market place and attract foreign investors. Net foreign direct investment rose by 42.9 percent, concentrating on the power, food and textile sectors.

The Garment Industry

The success of the garment industry is one contributor to strong economic growth in Bangladesh, accounting for 84.2 percent of exports in the country. Growth in garment exports increased from 8.8 percent to 11.5 percent in 2018, reflecting strong demand from the U.S. and newer markets like Canada, Japan, India, China and Korea.

Despite continued success in the garment sector, it is risky to rely on a single industry for the majority of exports. Bangladesh is aiming to diversify its export basket, increasing competitiveness in other sectors as well. The Export Competitiveness for Jobs project, supported by World Bank Group, is an example of the effort Bangladesh’s government is taking to increase diversity in exports. 

Empowering Women

Additionally, Bangladesh has taken serious steps to empower women with efforts from non-governmental organizations such as Grameen and BRAC as well as the government to educate girls and give women a greater voice in both households and society. These efforts have helped to improve children’s health and education, which are key indicators of economic development. Additionally, the authority promotes lending to small and medium-sized enterprises as well as women entrepreneurs, introducing policies that promote economic inclusion, creating more active transactions and other economic activities.

Moving Forward with a Vision

Since 1975, Bangladesh has been listed by the U.N. as one of the least developed countries (LDCs) but has recently met the criteria to graduate from that status by 2024, which is a sign indicating the country’s capability to enable sustainable development. The government has its own agenda to become a middle-income country by 2021, celebrating the nation’s 50th birthday.

Thanks to sound economic policies, rapid modernization and progressive demographic development, Bangladesh is now able to build an economy that can successfully thrive in a volatile world. With the right policies and timely actions, Bangladesh is on the trajectory to achieve its “Vision 2021”.

– Minh-Ha La
Photo: Flickr

Top 10 Facts about Poverty in Bangladesh
The small South Asian nation of Bangladesh has undergone economic development and extremely rapid population growth. Despite economic growth in the country, Bangladesh struggles with overwhelming poverty. In order to gain a better understanding of poverty and how it’s changing in the country, below are the top 10 facts about poverty in Bangladesh.

List of Top 10 Facts About Poverty in Bangladesh

  1. Bangladesh’s economy has grown rapidly since developing the industry and service sectors of the economy. This led to increased job opportunities and standard of living. In 1980, Bangladesh had a GDP of $18.14 billion. As of 2016, the country’s economy has risen to a staggering estimated $261.4 billion, ranking as the 43rd highest in the world.
  2. Although Bangladesh’s GDP has always been relatively high due to agriculture, GDP growth in the country has increased exponentially in recent years. This GDP development was catalyzed in the early 1990s, with approximately 5.76 percent average GDP growth. As of 2017, Bangladesh has continued to maintain its growth at 7.3 percent.
  3. Industry and services form a large part of Bangladesh’s economy, with specialized jobs and manufacturing continuing to increase. The service industry accounts for a majority of the GDP in Bangladesh at an estimated 56.5 percent, while industry and agriculture contributions compose 29.2 percent and 14.2 percent of the GDP respectively. Although the service industry contributes the most to Bangladesh’s economy, 63.2 percent of the country’s 163 million people work in industry and agriculture.
  4. The unemployment rate in Bangladesh is low, with an estimated 4 percent unemployment rate. While economic opportunity has been improved for many Bangladeshis, this number is somewhat inaccurate due to underemployment rates. An estimated 40 percent of laborers are underemployed and work only a few hours a week with very low wages.
  5. Poverty rates in Bangladesh have also steadily dropped as the country’s economy improves. In 2010, 31.5 percent of the population was deemed to live below the line of poverty, which is defined as living on $1.90 a day. This number dropped to 24.3 percent by 2016.
  6. In addition to decreasing poverty rates in Bangladesh, the number of those in extreme poverty, living on just $1.90 purchasing power parity a day has also dropped significantly. The rate of employed workers living in extreme poverty was at 73.5 percent in 2010 and has dropped drastically to 14.8 percent in 2016. Poverty and hunger, however, remain serious issues in Bangladesh. According to 2014-2016 estimates from Asian Development Bank, an estimated 15.1 percent of the population suffers from undernourishment.
  7. Life expectancy in Bangladesh has risen drastically, catalyzed by rapid infrastructural and economic expansion. In 1960, the average lifetime of Bangladeshis was approximately 46 years and has more than increased to 72.5 years by 2016.
  8. School enrollment in Bangladesh has increased as development began to increase. In 1980, only 20.5 percent of primary school students completed their full studies, while this number has increased to 66.2 percent by 2016. This increase in academic persistence is likely attributed to more opportunity for skilled laborers and decreased levels in poverty.
  9. Despite increased primary school enrollment in Bangladesh, the adult literacy rate in the country is relatively low at 72.76 percent. In young adults aged 15-24, however, the literacy rate is much higher at 92.24 percent, and the female literacy rates are relatively higher at 93.54 percent than males at 90.91 percent.
  10. In the capital city of Dhaka, issues of population density have arisen, as the city’s population is over 18 million people (in the Greater Dhaka area), nearly an eleventh of the country’s population. This population density is one of the highest in the world.

These top 10 facts about poverty in Bangladesh showcase an improved economy that offers more opportunities for its many citizens. A drastic increase in the service and skilled industries along with manufacturing and agricultural growth, has allowed the country to improve its standard of living.

Although the economy has rapidly developed, poverty for many in Bangladesh still persists. With more development and emphasis on education and diversified economy, poverty will continue to decrease in Bangladesh.

– Matthew Cline
Photo: Flickr