Economy

Bangladesh has made significant strides in its economic sector since its independence in 1971. Bangladeshi garments industry is one of the largest and comprehensive industry in the world. Before 1980, Bangladesh's economy and foreign exchange earnings were driven by the jute industry. However, this industry started to fall dramatically from 1970, when polypropylene products gained popularity over the jute products.

Current GDP per capita of Bangladesh registered a peak growth of 57% in the 70s immediately after Independence. But this proved unsustainable and growth consequently scaled back to 29% in the 80s and 24% in the 90s.

Bangladesh has also made major strides to meet the food needs of its increasing population, through increased domestic production. Currently, Bangladesh is the third largest rice producing country in the world. The land is devoted mainly to rice and jute cultivation, although wheat production has increased in recent years; the country is largely self-sufficient in rice production. Nonetheless, an estimated 10% to 15% of the population faces serious nutritional risk. Bangladesh's predominantly agricultural economy depends heavily on an erratic monsoonal cycle, with periodic flooding and drought.

Although improving, infrastructure to support transportation, communications, and power supply is poorly developed. The country has large reserves of natural gas and limited reserves of coal and oil. While Bangladesh's industrial base is weak, unskilled labour is inexpensive and plentiful.

Agriculture

Most Bangladeshis earn their living from agriculture. Although rice and jute are the primary crops, wheat is assuming greater importance. Tea is grown in the northeast. Because of Bangladesh's fertile soil and normally ample water supply, rice can be grown and harvested three times a year in many areas. 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. These include better flood control and irrigation, a generally more efficient use of fertilizers, and the establishment of better distribution and rural credit networks.

With 2 million metric tons produced in 1999, rice is Bangladesh's principal crop. National sales of the classes of insecticide used on rice, including granular carbofuran, synthetic pyrethroids, and malathion exceeded 13,000 tons of formulated product in 2003. The insecticides not only represent an environmental threat, but are a significant expenditure to poor rice farmers. The Bangladesh Rice Research Institute is working with various NGOs and international organisations to reduce insecticide use in rice.

In comparison to rice, wheat output in 1999 was 1.9 million metric tons. Population pressure continues to place a severe burden on productive capacity, creating a food deficit, especially of wheat. Foreign assistance and commercial imports fill the gap.

Underemployment remains a serious problem, and a growing concern for Bangladesh's agricultural sector will be its ability to absorb additional manpower. 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.

Textile Sector

Bangladesh's textile industry, which includes knitwear and ready-made garments along with specialised textile products, is the nation's number one export earner. The sector, which employs 2.2 million workers, accounted for 75% of Bangladesh's total exports of US$10.53 billion in 2005-06, in the process logging a record growth rate of 24%. However, since May of 2006 the industry has been plagued by on-going industrial unrest, as textile workers, who are among some of the most low paid in the world, have staged regular violent demonstrations in a bid to achieve a higher minimum wage, regular rest days and safer working conditions.

Foreign Aid

Since independence in 1971, Bangladesh has received more than $30 billion in grant aid and loan commitments from foreign donors, about $15 billion of which has been disbursed. Major donors include the World Bank, the Asian Development Bank, the UN Development Programme, the United States, Japan, Saudi Arabia and West European countries. However, Bangladesh's poverty rate remains high. With nearly half of its 138 million people living below the poverty line, Bangladesh still has the highest incidence of poverty in South Asia and the third highest number of poor people living in a single country after India and China. As in other countries with similar income levels, Bangladesh still faces deficiencies in the quality of social services. Bangladesh has historically run a large trade deficit, financed largely through aid receipts and remittances from workers overseas.