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Bangladesh: Country Report
Problems and Potential:
Bangladesh, like many of its neighbors in South Asia, has had sustained economic growth over the last several years. Despite that strong growth the country remains very poor and overpopulated, and lacks an efficient government. Bangladesh must contend with creating enough jobs for a growing labor force, fighting corruption and government infighting in order
to push through economic reforms, and dealing with the harsh weather conditions which result from its geographic location in South Asia.
Economic Indicators:
· Bangladesh’s estimated GDP per capita (PPP) in 2016 was $3,900 (est.). The same year, the GDP real growth rate was approximately 6.9%. The growth rate has remained steady, around 6%, since 1996, despite troubles in the country related to government instability and poor economic reforms.[1]
· In 2016 and 2015, Bangladesh’s unemployment rate was 4.9%. It is estimated that roughly 40% of Bangladesh’s citizens are underemployed, meaning they work few hours per week for insufficient wages. [2]
Figure 1: Bangladesh’s GDP growth rate from 2006-2016. Source: tradingeconomics.com
Economic Structure:
· The Bangladeshi economy is driven mainly by the services sector, despite that the majority of the labor force works in the agricultural sector. Bangladesh is continuing the process of economic liberalization, although it is expected to progress slowly. The government is trying to encourage foreign direct investment, especially in the textile industries. [3]
· The labor force in Bangladesh is roughly 45% agriculture, 21% industry, and 34% services as of 2013 estimates. [4]
· The United States and Germany are Bangladesh’s main export partners. Its main exports are garments, frozen fish and seafood, jute products, and leather. [5]
· Bangladesh’s exports totaled $ 33.32 billion (est.) in 2016. [6]
· Bangladesh receives most of its imports from China and India, with machinery, chemicals, iron, steel, food products, and petroleum being among the top imports. In 2016, imports totaled $39.17 billion (est.). [7]
· Bangladesh is a member of the South Asian Association for Regional Cooperation (SAARC), which accelerates economic exchange between member states, such as India and Pakistan. [8]
· Bangladesh joined the South Asian Preferential Trade Agreement (SAPTA) and is committed to a South Asia Free-Trade Agreement. [9]
Figure 2: Geographical location. Source: https://www.cia.gov/library/publications/the-world-factbook/geos/bg.html
Political Considerations:
· Bangladesh is a Parliamentary Democracy with a unicameral parliament composed of 300 members, who are elected by geographical constituencies for terms of five years. [10]
· Executive powers are vested in the prime minister of the leading party in the parliament or with the head of the caretaker government. [11] The current Prime Minister is Sheikh Hasina, who was elected in 2009.
· A caretaker government takes office following the expiration of a government’s term in office and administers the next general election, then leaves office once a new government is elected. [12]
· The current president of Bangladesh, as of 2013, is Abdul Hamid. Hamid served as acting president following the death of Zillur Rahman, who was elected into office in 2009. Hamid began serving as acting president in March 2013 and was subsequently elected and sworn into office that April. [13]
Figure 2: Flag of Bangladesh Source: https://www.cia.gov/library/publications/the-world-factbook/geos/bg.html
Attractions:
· Low Costs and Large Market: At present the costs of labor are comparatively low in both skilled and semi-skilled production. In turn with a population of over 150 million, Bangladesh has a potentially large market for foreign products, as its middle class continues to grow.
· Regulations and Location: Bangladesh has the lowest import-tariff rate in the South Asia region. It is ideally positioned between the economies of South Asia and South-East Asia to become a regional economic hub. [14]
· Economic Liberalization: Estimated figures show that Bangladesh has continued to liberalize its economy with mixed results, as exports have skyrocketed, while expensive imports of food and oil continue to hurt its balance of trade.
Troubled Spots:
· Continued Decline in Current Account Position: Despite record inflows of expatriate workers' remittances, nearly $15 billion (2015 est.), the current-account position is expected to deteriorate as growth in remittances fails to keep pace with import expansion[15]
· Reintroduction of Democracy: After concerns of the permanent imposition of military rule and the suspension of democratic processes, Bangladesh finally held democratic elections in 2009.
· Poverty and Infrastructure: Despite its strong growth, GDP per-capita is only $3,900, with much of the population living on far less than that. There are problems with transportation and electrical infrastructure, which must be addressed for the country to grow economically.
Acknowledgements: Research and data development provided by Meagan Pace and Pranay Sethuraman, research assistants under the supervision and coordination of Dr. Gerard Janco, President Eurasia Center/EBC. Last updated by Olivia Ricks on February 10, 2017.
[1] CIA World Factbook 2016: https://www.cia.gov/library/publications/the-world-factbook/geos/bg.html
[2] CIA World Factbook 2016: https://www.cia.gov/library/publications/the-world-factbook/geos/bg.html
[3] CIA World Factbook 2015: https://www.cia.gov/library/publications/the-world-factbook/geos/bg.html
[4] Labor Force Survey 2013: http://www.ilo.org/dyn/lfsurvey/lfsurvey.list?p_lang=en&p_country=BD
[5] CIA World Factbook 2015: https://www.cia.gov/library/publications/the-world-factbook/geos/bg.html
[6] CIA World Factbook 2015: https://www.cia.gov/library/publications/the-world-factbook/geos/bg.html
[7] CIA World Factbook 2015: https://www.cia.gov/library/publications/the-world-factbook/geos/bg.html
[8] Foreign Investment: http://www.bangladoot.org/foreigninvestment.pdf
[9] Foreign Investment: http://www.bangladoot.org/foreigninvestment.pdf
[10] The Economist, Political Structure: http://www.economist.com/countries/Bangladesh/profile.cfm?folder=Profile%2DPolitical%20Structure
[11] The Economist, Political Structure: http://www.economist.com/countries/Bangladesh/profile.cfm?folder=Profile%2DPolitical%20Structure
[12] The Economist, Political Structure: http://www.economist.com/countries/Bangladesh/profile.cfm?folder=Profile%2DPolitical%20Structure
[13] CIA World Factbook 2015: https://www.cia.gov/library/publications/the-world-factbook/geos/bg.html
[14] Foreign Investment: http://www.bangladoot.org/foreigninvestment.pdf
[15] Overseas Employment of Bangladeshi Workers 2015: https://www.adb.org/sites/default/files/publication/190600/overseas-employment-ban-workers.pdf