The economy of Bangladesh (1972 - 2022) Focus Writing/Essay
The economy of Bangladesh has undergone significant changes since 1972 when the country gained independence from Pakistan. In the early years following independence, the economy was primarily based on agriculture, and the country struggled with widespread poverty and unemployment. However, in the 1980s and 1990s, the government implemented economic reforms and the country began to experience steady economic growth.
In the 2000s, Bangladesh's economy continued to grow, driven by the country's large and growing population, a growing middle class, and an increase in exports, particularly in the garment industry.
In the 2010s, Bangladesh's economy continued to grow, with a GDP growth rate of around 6% per year. The country's main drivers of growth were the ready-made garment (RMG) sector, remittances, and the service sector. The country has also made progress in developing its manufacturing and small- and medium-sized enterprises (SMEs) sectors.
In 2022, Bangladesh's economy is expected to continue to grow as the country continues to develop its manufacturing and services sectors and attract foreign investment. Per capita income crosses $2,800.
Economic Development History in the last 50Y with Data
Bangladesh has made significant progress in economic development over the last 50 years. Since the early 1970s, the country has undergone a transformation from a low-income, agrarian economy to a lower-middle-income developing country with a diversified economy.
In the early 1970s, Bangladesh's GDP per capita was around $100 and the country was one of the poorest in the world, with a large proportion of the population living in poverty. However, over the following decades, the country's economy began to grow at a steady rate.
In the 1980s and 1990s, the government implemented economic reforms, including liberalizing trade and investment and reducing state intervention in the economy. These policies helped to create a more favorable environment for private sector growth and foreign investment. As a result, GDP per capita increased to around $300 by the end of the 1990s.
In the 2000s, the country's economy continued to grow at an average annual rate of around 5%, driven by the ready-made garment (RMG) sector, remittances, and the service sector. GDP per capita reached around $1,000 by the end of the decade.
In the 2010s, Bangladesh's economy grew at an average annual rate of around 6%, driven by the same sectors as in the previous decade. GDP per capita reached around $1,500 by the end of the decade.
As of 2021, the GDP per capita of Bangladesh is around $1,800, and the country's economy is expected to continue to grow in the coming years. However, the country still faces significant challenges, including political instability, corruption, and a lack of infrastructure.
Additionally, Bangladesh has been experiencing a steady decrease in the poverty rate from around 40% in the 1990s to less than 20% in 2021. The country has also made significant progress in increasing access to education and healthcare and reducing infant and maternal mortality rates.
Poverty Reduction Success
Bangladesh has had notable success in reducing poverty over the last several decades. The country has made significant progress in increasing economic growth and reducing poverty through a combination of economic reforms, government programs and policies, and the growth of the ready-made garment (RMG) sector.
In the 1990s, the poverty rate in Bangladesh was around 40%. However, over the following decades, the country's economy grew at a steady rate and poverty began to decrease. By the early 2010s, the poverty rate had dropped to around 25%.
In the following years, the country has been able to sustain a steady reduction in poverty. In 2021, the poverty rate in Bangladesh is around 20%. This is a result of the combination of economic growth, targeted poverty reduction programs and policies, and an increase in wages and employment opportunities in the RMG sector.
Remittance as a driving force
Remittances have been a significant driving force behind economic growth and poverty reduction in Bangladesh. Remittances refer to the money that is sent by migrant workers to their families and friends in their home country.
Bangladesh has one of the highest rates of emigration in the world, with millions of Bangladeshis working abroad, primarily in the Middle East and Southeast Asia. As a result, remittances have become a major source of foreign exchange for the country.
RMG and export earnings
The ready-made garment (RMG) sector has been a major contributor to the economic growth and export earnings of Bangladesh. The sector has grown rapidly since the late 1990s and has become the country's largest export sector, accounting for around 80% of total export earnings. The RMG sector has also created millions of jobs, particularly for women, and has played a critical role in reducing poverty and increasing the standard of living for many Bangladeshis. The sector has also been a key driver of the country's economic growth, with an average annual growth rate of around 10% in the past decade. The sector has also attracted foreign investment and has helped to diversify the country's economy. Despite facing some challenges in recent years such as labor rights issues, the RMG sector remains a vital sector for the country's economy.
Doing Business Challenges
Bangladesh faces a number of challenges when it comes to doing business, which can make it difficult for companies to operate effectively and efficiently in the country. Some of the main challenges include:
Complex and time-consuming bureaucracy: The process of registering a business, obtaining licenses, and dealing with government regulations can be lengthy and difficult in Bangladesh.
Lack of infrastructure: The country's inadequate transportation and power infrastructure can make it difficult for businesses to move goods and services and increase the cost of doing business.
Political instability: Political instability and frequent changes in government policies can create uncertainty for businesses and make it difficult to plan for the long term.
Corruption: Corruption is a significant problem in Bangladesh, and businesses may be required to pay bribes or face delays in government processes.
Limited access to finance: Many businesses in Bangladesh struggle to access adequate financing, which can limit their ability to invest and grow.
Labor rights issues: Businesses in Bangladesh have been criticized for poor working conditions and labor rights issues, which can lead to negative publicity and impact the company's reputation.
Overall, Bangladesh is also facing challenges in increasing productivity and competitiveness in the RMG sector, which is the backbone of the country's economy. With the increasing pressure from other low-cost countries, Bangladesh needs to improve its productivity and competitiveness to maintain its competitiveness in the global market.
The country is expected to continue to grow economically in the future, but it will need to address these challenges in order to achieve sustainable and inclusive growth.
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