Economy Of Bangladesh Assignment Notebook

Skyscrapers in Dhaka

CurrencyTaka৳ (BDT)

Fiscal year

1 July – 30 June

Trade organisations

SAFTA, BIMSTEC, WTO, AIIB, IMF, Commonwealth of Nations, World Bank.
GDP $273 billion (nominal; 2018)[1]
$751 billion (PPP; 2018)[2]
GDP rank44th (nominal) / 32nd (PPP)

GDP growth

7.28% (2017f)[3][4]

GDP per capita

$1,610 (nominal; FY2016-17)[4][2]
$4,204 (PPP; 2017)[2]

GDP per capita rank

150th (nominal) / 139th (PPP)[5]

GDP by sector

agriculture: 14.7%
industry: 29.32%
services:56.50% (FY2016-17)[6]


5.44% (FY2017)[7]

Population below poverty line

12.9% living below $3/day (2016)[8]

Gini coefficient

.320 (2010)

Labour force

81.95 million (2015)[9]

Labour force by occupation

agriculture: 40%, industry: 30%, services: 30% (2013)
Unemployment 4.18% (FY2015-16)[10]

Main industries

Ease-of-doing-business rank

176th (2017)[11]
Exports $34.02 billion (FY2016-17)[12]

Export goods

garments, knitwear, agricultural products, frozen food (fish and seafood), jute and jute goods, leather

Main export partners

Imports $43.49 billion (FY 2016–17)[14]

Import goods

cotton, machinery and equipment, chemicals, iron and steel, foodstuffs

Main import partners

Gross external debt

$35.49 billion (31 December 2015 est.)
Public finances

Public debt

31.9% of GDP (2015 est.)
Revenues$33.33 billion (2017 est.)
Expenses$30.75 billion (2015 est.)

Credit rating

BB- (domestic)
BB- (foreign)
BB- (T&C assessment)
Outlook: Stable
(Standard & Poor's)[15]

Foreign reserves

$33.02 billion (June 2017)[16]

Main data source:CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

The market-basedeconomy of Bangladesh is the 44th largest in the world in nominal terms, and 32nd largest by purchasing power parity; it is classified among the Next Elevenemerging market economies and a Frontier market. According to the IMF, Bangladesh's economy is the second fastest growing major economy of 2016, with a rate of 7.1%.[17][18]Dhaka and Chittagong are the principal financial centers of the country, being home to the Dhaka Stock Exchange and the Chittagong Stock Exchange. The financial sector of Bangladesh is the second largest in the subcontinent.

In the decade since 2004, Bangladesh averaged a GDP growth of 6.5%, that has been largely driven by its exports of ready made garments, remittances and the domestic agricultural sector. The country has pursued export-oriented industrialisation, with its key export sectors include textiles, shipbuilding, fish and seafood, jute and leather goods. It has also developed self-sufficient industries in pharmaceuticals, steel and food processing. Bangladesh's telecommunication industry has witnessed rapid growth over the years, receiving high investment from foreign companies. Bangladesh also has substantial reserves of natural gas and is Asia's seventh largest gas producer. Offshore exploration activities are increasing in its maritime territory in the Bay of Bengal. It also has large deposits of limestone.[19] The government promotes the Digital Bangladesh scheme as part of its efforts to develop the country's growing information technology sector.

Bangladesh is strategically important for the economies of Northeast India, Nepal and Bhutan, as Bangladeshi seaports provide maritime access for these landlocked regions and countries.[20][21][22]China also views Bangladesh as a potential gateway for its landlocked southwest, including Tibet, Sichuan and Yunnan.

In 2016, per-capita income was estimated as per IMF data at US$3,840 (PPP) and US$1,466 (Nominal).[23] Bangladesh is a member of the D-8 Organization for Economic Cooperation, the South Asian Association for Regional Cooperation, the International Monetary Fund, the World Bank, the World Trade Organisation and the Asian Infrastructure Investment Bank. The economy faces challenges of infrastructure bottlenecks, insufficient power and gas supplies, bureaucratic corruption, political instability, natural calamities and a lack of skilled workers.

Economic history[edit]

Ancient Bengal[edit]

East Bengal—the eastern segment of Bengal—was a historically prosperous region.[24] The Ganges Delta provided advantages of a mild, almost tropical climate, fertile soil, ample water, and an abundance of fish, wildlife, and fruit.[24] The standard of living is believed to have been higher compared with other parts of South Asia.[24] As early as the thirteenth century, the region was developing as an agrarian economy.[24] Bengal was the junction of trade routes on the Southeastern Silk Road.[24]

Mughal Bengal[edit]

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

Under Mughal rule, Bengal operated as a center of the worldwide muslin, silk and pearl trades.[24] Domestically, much of India depended on Bengali products such as rice, silks and cottontextiles. Overseas, Europeans depended on Bengali products such as cotton textiles, silks and opium; Bengal accounted for 40% of Dutch imports from Asia, for example.[25] 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.[26]Real wages and living standards in 18th-century Bengal were comparable to Britain, which in turn had the highest living standards in Europe.[27]

During the Mughal era, the most important center 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.[28]Bengali peasants rapidly learned techniques of mulberry cultivation and sericulture, establishing Bengal as a major silk-producing region of the world.[29] Bengal accounted for more than 50% of textiles and around 80% of silks imported by the Dutch from Asia, for example.[25]

Bengal also had a large shipbuilding industry. In terms of shipbuilding tonnage during the 16th–18th centuries, the annual output of Bengal totaled around 2,232,500 tons, larger than the combined output of the Dutch (450,000–550,000 tons), the British (340,000 tons), and North America (23,061 tons).[30] Bengali shipbuilding was advanced compared to European shipbuilding at the time. Ship-repairing, for example, was very advanced in Bengal, where European shippers visited to repair vessels.[30] 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.[31]

British Bengal[edit]

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.[24] The development of East Bengal was thereafter limited to agriculture.[24] 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.[24]

Modern Bangladesh[edit]

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.[24] As life expectancy increased, the limitations of land and the annual floods increasingly became constraints on economic growth.[24] Traditional agricultural methods became obstacles to the modernisation of agriculture.[24] Geography severely limited the development and maintenance of a modern transportation and communications system.[24]

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.[24] 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.[24] The lack of natural resources meant that East Pakistan was heavily dependent on imports, creating a balance of payments problem.[24] Without a substantial industrialisation program or adequate agrarian expansion, the economy of East Pakistan steadily declined.[24] 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.[24]

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.[32] There were critical shortages of essential food grains and other staples because of wartime disruptions.[32] External markets for jute had been lost because of the instability of supply and the increasing popularity of synthetic substitutes.[32] Foreign exchange resources were minuscule, and the banking and monetary systems were unreliable.[32] Although Bangladesh had a large work force, the vast reserves of under trained and underpaid workers were largely illiterate, unskilled, and underemployed.[32] Commercially exploitable industrial resources, except for natural gas, were lacking.[32] Inflation, especially for essential consumer goods, ran between 300 and 400 percent.[32] The war of independence had crippled the transportation system.[32] Hundreds of road and railroad bridges had been destroyed or damaged, and rolling stock was inadequate and in poor repair.[32] The new country was still recovering from a severe cyclone that hit the area in 1970 and caused 250,000 deaths.[32] India came forward immediately with critically measured economic assistance in the first months after Bangladesh achieved independence from Pakistan.[32] 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.[32]

After 1975, Bangladeshi leaders began to turn their attention to developing new industrial capacity and rehabilitating its economy.[33] 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.[33] Beginning in late 1975, the government gradually gave greater scope to private sector participation in the economy, a pattern that has continued.[33] Many state-owned enterprises have been privatised, like banking, telecommunication, aviation, media, and jute.[33] 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.[33]

In the mid-1980s, there were encouraging signs of progress.[33] Economic policies aimed at encouraging private enterprise and investment, privatising public industries, reinstating budgetary discipline, and liberalising the import regime were accelerated.[33] 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.[33] 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.[33] 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 program up to 2006.[33] Seventy million dollars was made available immediately.[33] In the same vein the World Bank approved $536 million in interest-free loans.[33] In the year 2010 Government of India extended a line of credit worth $1 billion to counterbalance China's close relationship with Bangladesh.

Bangladesh historically has run a large trade deficit, financed largely through aid receipts and remittances from workers overseas.[33] Foreign reserves dropped markedly in 2001 but stabilised in the USD3 to USD4 billion range (or about 3 months' import cover).[33] In January 2007, reserves stood at $3.74 billion, and then increased to $5.8 billion by January 2008, in November 2009 it surpassed $10.0 billion, and as of April 2011 it surpassed the US $12 billion according to the Bank of Bangladesh, the central bank.[33] The dependence on foreign aid and imports has also decreased gradually since the early 1990s.[34] According to Bangladesh bank the reserve is $30 billions in August 2016

In last decade, poverty dropped by around one third with significant improvement in human development index, literacy, life expectancy and per capita food consumption. With economy growing close to 6% per year, more than 15 million people have moved out of poverty since 1992.[35]

Macro-economic trend[edit]

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.

YearGross Domestic Product (Million Taka)US Dollar ExchangeInflation Index
Per Capita Income
(as % of USA)
1980250,30016.10 Taka201.79
1985597,31831.00 Taka361.19
19901,054,23435.79 Taka581.16
19951,594,21040.27 Taka781.12
20002,453,16052.14 Taka1000.97
20053,913,33463.92 Taka1260.95
20085,003,43868.65 Taka147
201517,295,66578.15 Taka.1962.48

Mean wages were $0.58 per man-hour in 2009.

Economic sectors[edit]


Main article: Agriculture of Bangladesh

Most Bangladeshis earn their living from agriculture.[33] Although rice and jute are the primary crops, maize and vegetables are assuming greater importance.[33] Due to the expansion of irrigation networks, some wheat producers have switched to cultivation of maize which is used mostly as poultry feed.[33] Tea is grown in the northeast.[33] Because of Bangladesh's fertile soil and normally ample water supply, rice can be grown and harvested three times a year in many areas.[33] 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.[33] These include better flood control and irrigation, a generally more efficient use of fertilisers, and the establishment of better distribution and rural credit networks.[33] With 28.8 million metric tons produced in 2005–2006 (July–June), rice is Bangladesh's principal crop.[33] By comparison, wheat output in 2005–2006 was 9 million metric tons.[33] Population pressure continues to place a severe burden on productive capacity, creating a food deficit, especially of wheat.[33] Foreign assistance and commercial imports fill the gap,[33] but seasonal hunger ("monga") remains a problem.[36] Underemployment remains a serious problem, and a growing concern for Bangladesh's agricultural sector will be its ability to absorb additional manpower.[33] 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.[33] 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.[36]

Manufacturing and industry[edit]

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.[33] 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.

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.[37]

Other industries which have shown very strong growth include the pharmaceutical industry,[38] shipbuilding industry,[39] information technology,[40] leather industry,[41]steel industry,[42][43] and light engineering industry.[44][45]

Main articles: Bangladesh textile industry and Leather industry in Bangladesh

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.[46] 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.[47][48] 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.[49] The urban garment industry has created more than one million formal sector jobs for women, contributing to the high female labour participation in Bangladesh.[50] 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.[51] 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."[51]

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."[52] 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.[52]

After massive labour unrest in 2006[53] the government formed a Minimum Wage Board including business [17] 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,[54][55][56] 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.[48][57] On 28 July 2010 it was announced that the minimum entry level wage would be increased to 3,000 taka, about $43.[58]

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).

Shipbuilding and ship breaking[edit]

Main article: Shipbuilding in Bangladesh

Shipbuilding is a growing industry in Bangladesh with great potential.[59][60] The potential of shipbuilding in Bangladesh has made the country to be compared with countries like China, Japan and South Korea.[61] 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.[62]

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.[63]Chittagong Ship Breaking Yard is 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 defense.


Until 1980s, the financial sector of Bangladesh was dominated by state-owned banks.[64] With the grand-scale reform made in finance, private commercial banks were established through privatization. The next finance sector reform program 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.


Information and Communication Technology[edit]

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.[65] 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 [66] internet users, an estimated 9% growth in internet use by June 2017 powered by mobile internet. Bangladesh currently has an active 23 million [67] Facebook users. Bangladesh currently has 143.1 million mobile phone customers.[66] Bangladesh has exported $800 millions [68] worth of software, games, outsourcing and services to European countries, the United States, Canada, Russia and India by June 30, 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.[69]


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 USD 50 billion in August 2010.[70] 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.[71]

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.[72] In 2011, Japan Bank for International Cooperation ranked Bangladesh as the 15th best investment destination for foreign investors.[73]

2010–11 market crash[edit]

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.[74] 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.[74]


Main article: List of companies of Bangladesh

The list includes ten largest Bangladeshi companies by trading value (millions in BDT) in 2018. [75][76]

RankCompanyTrading name at Dhaka Stock ExchangeHeadquartersIndustryTrading Value
1Square Pharmaceuticals LimitedSQURPHARMADhakaPharmaceuticals449.8880
2Dragon Sweater and Spinning LimitedDSSLDhakaApparel129.4030
3Ifad Autos LimitedIFADAUTOSDhakaAutomotive117.5370
4Grameenphone Private LimitedGPDhakaTelecommunications106.8660
5Bangladesh Thai Aluminium LtdBDTHAIDhakaManufacturing99.7690
6City Bank LimitedCITYBANKDhakaBanking78.6010
7Golden HarvestGHAILDhakaAgricalture76.6710
8IPDC Finance LimitedIPDCDhakaFinancial Services67.0430
9Olympic industries limitedOLYMPICDhakaManufacturing60.5570
10Shahjalal Bank Private LimitedSHAHJABANKDhakaBanking53.1710

Composition of economic sectors[edit]

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.[77]

"[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.[78]

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.[79]

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.[80] 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.[81] 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[edit]

In the year 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).[82] In the year 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).[82]

In the year 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).[82] In the year 2015, the top import origins are China ($13.9B), India ($5.51B), Singapore ($2.22B), Hong Kong ($1.47B) and Japan ($1.36B).[82]

Bangladeshi women and the economy[edit]

As of 2014, female participation in the labour force is 58% as per World Bank data,[83] 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.[50] 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.[84] 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.[85]

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.[86] 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.[86]

Historical statistics[edit]

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,[87] 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.[88] Foreign aid has seen a gradual decline over the last few decades but economists see this as a good sign for self-reliance.[89] There has been a dramatic growth in exports and remittance inflow which has helped the economy to expand at a steady rate.[90][91]

Gross Export and Import[edit]

Fiscal YearTotal ExportTotal ImportForeign Remittance Earnings
2013–2014$30.10b$29.37b[citation needed]$14.2b
2014–2015$31.2b [93]$40.69b$14.23b[94]
2015-2016$34.97b [95]$40.08b [96]$13.6b [97]
2016-2017$34.8b [98]$44.83b[99]$12.76b [100]

See also[edit]

Chittagong is the second largest city in Bangladesh and its chief seaport, being home to many of the country's largest and oldest companies
A woman in Dhaka clad in fine Bengali muslin, 18th century.
Map showing the growing areas of major agricultural products.
A Bangladeshi textile fabric plant
The picture is showing a photo of BNS Durgam of Bangladesh Navy. BNS Durgam has been built in Bangladesh
Treemap of Bangladesh Exports (2016)
Male and female labour participation rates
Bazaars in Bangladesh are popular trading places for everyday household necessities.

Economy Development in Bangladesh

Bangladesh is a developing country. In fact Bangladesh is under developing country.  Still we behind from our neibour country. There are various reasons for this situation. It is not possiable to make change Bangladesh over night. But if we can take and do some pragmatic job step by step than it will possible to transform Bangladesh into a progressive country. As a Bangladeshi civilian we should do it.

To build Bangladesh as a progressive country we have to keep eyes and make improve must those are show in below:-

Agriculture  :  Bangladesh is primarily an agrarian economy. Agriculture is the single largest producing sector of economy since it comprises about 30% of the country’s GDP and employing around 60% of the total labor force. The performance of this sector has an overwhelming impact on major macroeconomic objectives like employment generation, poverty alleviation, human resources development and food security. . The crop sub-sector dominates the agriculture sector contributing about 72% of total production. So we have to develop this sectors for developing our country. To develop this sector we need to take some important step like:-

1. Improve technology: At first we have to improve agricultural technology.  Because without it it is really hard to increase production.

2. Supply high quality fertilizer: Without high quality fertilizer it is not possible to production  high amount.

3. Agriculture bank : Most of the farmer of our country are poor. They have not much money to do any thing . If we setup some agriculture bank who will provide loan for cultivation.

4. Direct supply by government : This is the common scenery of our country that the wholesalers who collect crops from farmer they get more profit by storage. If government collect crops from farmer directly than they will get more profit.

Education : Education is the backbone of a nation . There is no single country developed without education. In Bangladesh many people are uneducated . To build Bangladesh as a100 percent educated country we can take some important step like :-

Full free up to secondary level : If we can full free up to secondary level for all class people than it will possible to educate many people. Because poverty is the main problem people do not want to take education.

Education for old people : All class people can contribute in economy by income or experience . Old people are not out of this boundary , so they also need education.

Improve study policy: Our education system is not standard that much. So this is needed to improve study system.

Buildup more institution : Bangladesh is a populated country so we have to buildup more educational inistitution.

Increase GDP growth :  The growth of GDP in the current fiscal year which is estimated to be6.2 percent is slightly lower than previous year’s growth. But the deceleration in growth is still satisfactory compared to many countries in Asia. Based on recent macro-economic indicators, we may reasonably expect that Bangladesh will achieve 6.5 percent growth in FY 2008-09 assuming that that there would be no major natural disaster. We have to more productive than we increase growth rate of GDP. Every depand on GDP for a country .So make a progressive as Bangladesh we must increase GDP growth.

Control inflation :

In the wake of lower production of food grains in FY 2007-08 coupled with soaring price of food grains in the international market, I would not hesitate to admit that food inflation has significantly affected the life of the common man. In December 2007, the inflation reached a high of 11.6 percent on a point to point basis. However, it is heartening to note that there has been a downward trend of inflation in Bangladesh of late. We have to bear in mind that there exists a high inflationary trend across the world, including our neighboring countries. The Government has been implementing different measures to curb inflation. Short-term measures included ‘Dal-Bhat Programme’ of BDR, open market sale of food grains at subsidized price, withdrawal of customs duty on the import of food grains and edible oil, increasing the amount of food grain imports, lowering of interest rate against import credit of food grains, regular monitoring of markets, and fixation of maximum retail price for edible oil. So this is most important thing we have to control inflation with hardly.

Capital Market :

Up to January 2007, market capitalization of all listed securities in theDhaka Stock Exchange was Tk. 31,709 core (7 percent of GDP). Thisincreased more than double to Tk. 88,195 crore (16.4 percent of GDP) byMay, 2008. In January 2007, the share price index in Dhaka StockExchange was 1582, which climbed to 3168 by the end of May 2008.Government has started the process of off-loading the shares of a number ofState Owned Enterprises from the energy, telecommunication and industrial

sectors in the capital market. It is expected that this initiative would positively contribute to employment generation and industrialization in the country.

Tex :

The total revenue for the FY 2008-09, has been estimated at Tk. 69,382 crore which is 11.3 percent of GDP. Out of this, the NBR revenue has been targeted at Tk. 54,500 crore which is 8.9 percent of GDP. Non-tax and Non-NBR

revenues have been estimated at Tk. 12,593 crore (2.1 percent of GDP) and Tk 2,289 crore (0.4 percent of GDP) respectively. It may be mentioned that following the corporatisation of T&T Board, non-tax revenue collection may decline in the following years. We can charge highly on fashionable goods.

Increase export :

To make a country progressive export is most important thing. If we can increase export than the income will increase for country. To increase export we can take some necessary step like :-

Buildup more EPZ :

To increase export we have to increase EPZ (export pressing Zone) . Because we have to create export environment in our country.

Produce high raw materials : If we can produce high qualities raw materials than there is no need to buy raw materials from abroad .

Reward : We can offer a reward that we will awarder top 10 high productive company for every year .

Health & Medical : Adequate and planned investment in the health sector is fundamental to human resource development. To this end, the Government is implementing a seven-year (2003-2010) Health, Nutrition and Population Sector Programme (HNPSP) at an estimated outlay of Tk. 32,450 crore.. As a step towards updating the existing polices and laws, we are revising our National Health Policy, rules relating to hospital waste management, private medicare laws and the Essential Drugs Lists. The Government is laying emphasis on increased involvement ofprivate initiative in the health sector.Implementation of a programme isunderway to outsource the management of 342 community clinics and 130Union Health and Family Welfare Centres and Hospitals tothe privatesector. So we have to ensure health and medical for Bangladeshi people.

Commerce & Industry: In 1972-73, the export earnings of the country totaled US$348.33 million, of which 90% came from the jute export sector. The other major export producing items were tea and leather. Since then, the country has been widening its export base. The situation has now vastly improved with addition of non-traditional items like readymade garments, shrimps, fish, finished, leather, newsprint chemical fertilizer, handicrafts, naphtha, ceramic products, fresh fruits, flowers and vegetables, etc. As a result, the export earnings increased, estimated to be US $ 5020 million during 1997-98.

The major importable items include raw cotton, textile fabrics and accessories cotton yarn, petroleum products, capital machinery, automobiles including spares and accessories, industrial chemicals and dyes, pharmaceutical raw materials, milk food, edible-oil, coal, ferrous and non-ferrous metals, cement, etc. The value of imports during 1997-98 has been estimated to be US$ 7525 million.

In line with the global trend, the government has steadily liberalized its trade barriers and significant progress has been achieved in recent years in reducing or eliminating non-tariff restrictions, rationalizing tariff rates and raising export incentives. The county was one of the major exporters of textiles, silk and sugar till the eighteenth century but the industrialization process was subsequently halted during the 200 years of colonial exploitation. As a result, Bangladesh inherited a narrow industrial base when it became independent in 1971.

It has a good number of large, medium and small-sized industries in both public and private sectors based on both indigenous and imported raw materials. Among them are jute, cotton, textile, fertilizer, engineering, shipbuilding, steel, oil-refinery, paper, newsprint, sugar, chemicals, cement and leather. Jute Industry has traditionally played an important role in the national economy. But in recent years, Ready Made Garments Industry has replaced Jute as the principal export-earner for the country. Considerable progress has been attained in the past few years in industries such as leather, ceramic, shrimp, fish, pharmaceuticals and frozen food.

With the development of infrastructures, supportive policies for trade and investment and comparative advantage in labour-intensive Industries, excellent prospects for investment exist in Bangladesh today. Industrial growth was recorded at 81% during 1997-98. Foreign investors are pouring into the country in greater numbers everday, especially in the export processing zones special facilties existing at Dhaka and Chittagong.

To attract local and foreign investors, the present government has introduced a number of perks and incentives. These include provision for setting up export processing zones in the private sector, initiatives to set up new EPZs in the public sector, tax holiday for export-oriented industries, scope for 100 percent foreign investments and repatriation of profits. etc.

Due to the present economic necessity and past experiences, privatization of state-owned enterprises are being geared up by the present government. So we have to build up more industries.


The Armed Forces are the national pride and the ever-vigilant sentinels of the country’s independence. The primary task of the Armed Forces is to defend the national independence, sovereignty and territorial integrity of Bangladesh. It also assists the civil administration in maintaining internal peace and security in times of emergencies. Other important assignments like disaster management and UN peace-keeping missions are also carried out by them when required. There are three main branches of Bangladesh Armed Forces, namely, the Army, the Navy and the Air Force. Paramilitary forces such as Bangladesh Rifles, Bangladesh Police, Ansars and the Village Defence Party also exist in the country. We have to maintain those forces for our betterment.

Stop corruption :

We have to stop corruption at first , without it we can not be a progressive country. Mostly our political leader are doing this very much. Role and police commission who maintain our country they are not out of this boundary.. We are the champion five times for this. This is not positive sign for a country, so we like prothomalo slogan we have to say ‘’Bodle gao, bodle dao” .


In our country there are about 15 core people. Day by day the percentage is increasing. Population growth rate 1.59%, Birth rate: 25.12 births/1,000 population,    Death rate: 8.47 deaths/1,000 population, Net migration rate: -0.75 migrant(s)/1,000 population(2002 est.). To control this growth rate we have to take some step like:-

Make Awareness : We have to make awareness among the people that more children is curse for a family. Two children is enough either male or female.

Civilian Facilities : We offer among the people like that who will take two or one children for whole life he and she will get civilian facilities from government.

Labor Force:

Occupationally, 75 percent of the civilian labour force, which is currently estimated at 56 million, is directly or indirectly engaged in agriculture. Only 12 percent is engaged in industry. Unemployment is estimated at around 18.5 percent. In terms of age structure, it is more youthful than in the western countries. Heavy pressure of population on scarce land has no doubt created an extremely unfavourable land-man ratio.

Coupled with this is the problem of unequal distribution and heavy fragmentation of land in the rural areas. This is expected to improve with more vigorous efforts at poverty alleviation and raising of educational and social consciousness. Sluggishness of the agricultural sector has resulted in its increasing dependence on the whims of nature and the per capita daily availability of food grains coming down to low level of 432 gram. Nearly 45% of the people live below the poverty line.

As the country steps to the 21st century, it aims at accelerated economic growth, human resource development and self-reliance. Central to all the efforts to reach those targets will be poverty alleviation, rural development, involving women in all national activities and creating a well-educated healthy nation to be able to face up to the challenges of a fast moving technologically advanced global society.

 Foreign Aid :

The government is aware of the fact that because of the existing international economic environment the amount of foreign aid so essential for developing countries like Bangladesh is fast dwindling. The conditionalities of aid are also becoming stringent. The government has, therefore, taken appropriate initiatives for proper utilization of foreign aid. The country’s development partners at the same time, ought to acknowledge that Bangladesh not only needs more aid but also better aid.

The government has given the highest priority to implementing with utmost efficiency the annual development programme (ADP) which allocates domestic and foreign resources to different sectors of the economy. From the economic and social points of view, agriculture is the country’s most important sector as it contributes 32.4 percent of GDP and about 75 percent of its 120 million people are directly or indirectly dependent on it for their livelihood. But because of declining growth in agriculture in the past the standard of life of the small and marginal farmers had been going down forcing the nation to become increasingly dependent on food imports.

The government has, therefore, decided to increase allocation for agriculture substantially and offer a wide range of incentives to the farmers including liberal credit to raise production and generate on-farm and off-farm employment for the rural poor. An Agriculture Commission has also been set up to recommend long-term policy reforms to boost the sector.


Foreign direct investment (FDI) is direct investment by a company in production located in another country either by buying a company in the country or by expanding operations of an existing business in the country. Foreign direct investment is done for many reasons including to take advantage of cheaper wages in the country, special investment privileges such as tax exemptions offered by the country as an incentive for to gain tariff-free access to the markets of the country or the region. Foreign direct investment is in contrast to portfolio investment which is a passive investment in the securities of another country such as stocks and bonds.

Inward FDI to the middle-income countries has the evidence as a major stimulus to the economic growth; conventionally at export-oriented manufacturing sector. In point of fact, basic macro fundamentals like as growth of gross domestic capital formation, foreign reserve, infrastructure etc. accelerates the FDI inflows. This study reviews the long-run trend on the time scale of FDI to Bangladesh over the period 1975- 2006 and major factors determining foreign companies’ decisions to invest, in associated with economic growth. Contents of the paper describe the theoretical development and extensive literature review to find out the appropriate variables to deter the foreign direct investment from time series data. On the basis of intricate link between foreign direct investment and growth, all explained determinants enhance the facilitation, turnover, and return in FDI concentrated sectors that promote long-term sustainable growth with specific shortcomings, directly or indirectly, in our labor-intensive economic activity. Reduced government’s ineffectiveness along with supporting policy framework makes Bangladesh as an attractive destination of FDI, that has a positive spillover and significant impacts affect over time through dynamic effects on economic growth.


Bangladesh has an agrarian economy with 32% of GDP coming from the Agriculture Sector. Major agricultural products are rice, jute, wheat, potato, pulses, tobacco, tea, sugarcane, etc. The country is the largest exporter of jute and jute goods in the world. Readymade garments are among the most exportable items. Tea, frozen shrimps, fish, leather goods and handicrafts are also major exportable commodities.

The country has under gone a major shift in its economic philosophy and management in recent years. On its birth, it embraced socialism as the economic ideology with a dominant role for the public sector. But since the mid-seventies, it undertook a major restructuring towards establishing a market economy with emphasis on private sector-led economic growth.

During the nineties, the country has completed a major stabilization program which has reduced inflation as well as fiscal and current account deficits and established a healthy foreign exchange reserve position with low and sustainable debt-service liabilities. With a modest economic growth, the basic indicators related to health, education and poverty have all shown sustained improvement

According to a World Bank estimate, Bangladesh has the 36th largest economy in the world in terms of GNP based on purchasing power parity method of valuation, and 55th largest in terms of nominal GNP in U.S. Dollars. However, because of the population size, per capita income was US$ 280 in 1998(1 US$=Taka 48.50).


Bangladesh has pursued the path of planned development since independence. Short term Annual Development Programs. Medium term Five-year Plans and Long term perspective plans have been used for the purpose. The First-Five year plan (1973-78) was launched in 1973, while the Fourth-Five year plan concluded in June. 1995.

The Fifth Five Year Plan has been launched by the previous government covering the period 1997-002 in order to enable the country to face the challenges of the 21st century. Export-led economic growth through a liberal free market approach, alleviation of poverty and empowerment of the poor, industrialization, agricultural growth and human resource development have been attached topmost priority in recent Development Plans.

During the l990s, the government policy has focused on strengthening the government’s role in social and infrastructure development, with the private sector playing the leading role in directly productive activities. The roles of the government are mainly confined to regulatory and promotional ones.

Foreign Relations :

The Constitution embodies the basic principles of foreign Policy; that says, the state shall base its international relations on the principles of respect for national sovereignty and equality, non-interference in the internal affairs of other countries, peaceful settlement of international disputes and respect for international laws and principles as enunciated in the United Nations Charter.

Bangladesh pursues a forward-looking foreign policy based on friendship with all and malice towards none. As an active member of the UN, the Non-Aligned Movement, the OIC, the Commonwealth and various international organizations, Bangladesh promotes global peace, stability, co-operation and development. Bangladesh pioneered the formation of SAARC-a regional co-operation forum comprising seven South Asian countries-Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. Bangladesh has vigorously pursued the cause of enhancing economic co-operation in the region. One of the outcome has been the formation and implementation of SAPTA or South Asian Preferential Trading Arrangement.

Since assumption of office in 1996, the present Government has been pursuing an active and aggressive foreign policy mainly for economic ends. It is a matter of pride that as many as eight outstanding statesmanof the world visited Bangladesh during the inaugural year of the present Government. Prime Minister Sheikh Hasina addressed the 51 st session of the UN General Assembly in October, 1996.

During the World Food Summit held in Rome the same year, her call to build a poverty-free world earned praise all over the world. Her chairing the World Microcredit Summit in Washington D.C. in February, 1997 has been a matter of great honour for Bangladesh. Among her foreign visits, trips to Saudi Arabia. China and India were tremendous diplomatic successes.

In the bilateral front, longstanding dispute with India on sharing the Ganges waters has been tinally resolved by signing the historic 30-year Water-sharing Treaty in December, 1996. Other outstanding issues with neighbouring countries are also being gradually addressed.

Efforts for strengthening South Asian Regional Co-operation through the SAARC got a new momentum due to the pragmatic role played by Prime Minister Sheikh Hasina at the Male and Colombo summits held in 1997 and 1998 respectively. The scope for regional cooperation for economic growth has been further widened through Bangladesh joining the BIMSTEC (Bangladesh, India, Myanmar, Sri Lanka, Thailand Economic Cooperaton) and D-8 (Developing eight countries-Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey) economic groupings.


Employment is a contract between two parties, one being the employer and the other being the employee. An employee may be defined as:”A person in the service of another under any contract of hire, express or implied, oral or written, where the employer has the power or right to control and direct the employee in the material details of how the work is to be performed.”

Economic growth (rise in GDP) is always deemed to be desirable as an outcome. Economic growth means more output, employment, income and, in consequence, more wellbeing for the people. That is why most nations strive to reach the higher growth path. Economists used to “worship” growth once, till they realized that growth could not be an end in itself; it was a means to an end. In other words, economic growth is necessary but not sufficient for people’s welfare.

Bangladesh is believed to have performed well over the years as far as the indicators are concerned. Economic growth rate crossed the 6 percent mark in recent years from a feeble 4 percent or below in the 1980s and 5 percent plus in the second half of the 1990s. Under a business as usual scenario, reaching the target of 7 percent growth rate does not seem to be too difficult. By and large, the per-capita income grew roughly at 4 percent per year in a regime of falling population growth rate.

 Investment :

Bangladesh is now trying to establish itself as the next rising star in South Asia for foreign investment. The government has implemented a number of policy reforms designed to create a more open and competitive climate for private investment, both foreign and local.

The country has a genuinely democratic system of government and enjoys political stability seen as a sine qua non for ensuring a favorable climate for investment and sustained development.

Bangladesh has been quick to undertake major restructuring for establishing a market economy, with the major thrust coming from the private sector. The country enjoys modest but steady economic growth. Its current development strategy is based on the premise that the creation and distribution of wealth occurs through the acceleration of growth driven by competitive market forces, with the government facilitating growth and making a clean break from the practices of a controlled economy where private investment is constrained. With this end in view. The government has been gradually withdrawing its involvement in this industrial and infrastructure sectors and promoting private sector participation.

The government has moved speedily to translate its policy pronouncements into specific reforms. It has been consistently pursuing an open-door investment policy and playing a catalytic rather than a regulatory role.

Regulatory controls and constrains have been reduced to a minimum. The government has steadily liberalized its trade regime. Significant progress has been achieved in reducing non-tariff restrictions on trade, rationalizing tariff rates and improving export incentives. The introduction of VAT has helped rationalization of the import tariff and domestic tax structures. The tariff structure and the import policy are kept under constant review to identify areas where further improvements are called for.

On the legal and administrative front, the government has initiated measures to give greater autonomy and independence to the judiciary – a pre-requisite as viewed by investors, for the restoration of confidence in the judicial system.

A permanent Law Reform Commission has already been set up to ensure greater transparency and predictability in the way rules and regulations are made and implemented.An Administrative Reform Commission to rationalize existing rules, regulations and procedures has also been set up.

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