Bangladesh Economic Conditions

By | June 6, 2022

Bangladesh is a state in South Asia, on the Indian Ocean (Bay of Bengal). The land border divides it from India, and only for a very short distance, in the extreme SE, from Myanmar. Until 1971 it was the eastern province of the state of Pakistan, completely separated from the rest of the country.

Economic conditions

According to Homosociety, the economy of Bangladesh is still largely dependent on agricultural production, on emigrant remittances and, to a lesser extent, on foreign aid. More than half of the active population works in the agricultural sector, which however provides only a fifth of GDP; productivity per worker is therefore very low, despite undoubted progress made in cultivation techniques and water management, which are leading the country to food self-sufficiency. The industrial structure (13% of employees) is weak, but presents interesting trends; the tertiary sector is mainly represented by small businesses and public employment, but it is also developing advanced activities. Overall, the economic structure is still inadequate, as is evident from a per capita GDP which is around 400 dollars a year, and is such both for the environmental characteristics of the country, and for the effect of the division of the Indian empire, which in 1947 detached the Bangladesh, devoid of communication infrastructures and productive development centers, from Indian Bengal and from the port and industrial area of Calcutta, of which it formed part of the hinterland.

  • About two thirds of the total area is cultivated, mainly rice (up to three crops per year in the South); also relevant is the production of sugar cane, potatoes and jute and that of timber. Rice growing does not require irrigation in the Center-South, while in the northern regions it is spreading thanks to appropriate plumbing works. The increase in rice production was determined by the adoption of high-yielding hybrids and also by the wide (and indiscriminate) use of pesticides and synthetic fertilizers; the introduction of synthetic products has however already developed negative consequences, eg. reducing the fishiness of inland waters, which traditionally provided a non-negligible nutritional contribution.
  • Mineral resources are scarce: peat and coal are insignificant, gas and oil at the start of exploitation. The main industries are textiles, which have a large traditional base, recently upgraded and modernized by virtue of relocation processes and a strong demand for products for export. Chemicals, petrochemicals, engineering, paper, shipbuilding are also represented, especially in the Dhaka region and Chittagong, and as a whole the industrial sector appears to be the most productive per employee.
  • In the overall economic scenario, however, the tertiary sector has the greatest weight, given that with just over a third of employees (rapidly growing in the last two decades), it accounts for practically half of GDP. These are largely small-scale businesses or activities related to the public administration, but there is also the growth of high service functions, such as those in the IT sector. Very interesting is the phenomenon of the dissemination of micro-entrepreneurial activities, which mainly concern women in rural areas and artisanal production (textiles, agri-food), but also service companies; in Bangladesh a credit disbursement system (village bank) based on very modest amounts, but sufficient to take off economic activities, has taken off strongly, with low repayment installments and barely profitable interest rates; about 50 million residents del Bangladesh have taken advantage of these forms of microcredit (promoted by the Nobel Prize M. Yunus), and according to many observers the recent rapid growth of the country’s GDP (5-6% in the early 21st century) is largely due to this injection of capital; it is also clear that the entry of women into the monetary production circuit is modifying traditional behaviors (with regard to reproductive life, access to education, etc.), so that the medium-term consequences of the process could have an even more far-reaching, affecting the structure of the population and its overall degree of development.
  • Communications can count on 2,800 km of railways and 23,900 km of asphalted roads (2004), plus a not particularly dense network of rolling stock with natural ground; Dhaka (mainly) and Chittagong are important airport locations.

Bangladesh Economic Conditions