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Profile of Bangladesh Economy: The Challenges and


Prospects

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A BRIEF HISTORY BANGLADESH MACROECONOMIC

Bangladesh is an agricultural country. With some three-fifths of the population engaged


in farming. Jute and tea are principal sources of foreign exchange. Major impediments
to growth include frequent cyclones and floods, inefficient state-owned enterprises,
inadequate port facilities, a rapidly growing labor force that cannot be absorbed by
agriculture, delays in exploiting energy resources (natural gas), insufficient power
supplies, and slow implementation of economic reforms. Economic reform is stalled in
many instances by political infighting and corruption at all levels of government.
Progress also has been blocked by opposition from the bureaucracy, public sector
unions, and other vested interest groups.

For higher GDP growth, investments in both public and private sectors will need to be
accelerated. The prevailing political and economic stability has greatly encouraged
investment in the private sector. The trend of foreign direct investment is very
encouraging.

The government is committed to market economy and has been pursuing policies for
supporting and encouraging private investment and eliminating unproductive
expenditures in the public sector. A number of measures have been taken to strengthen
the planning system and intensify reforms in the financial sector. The present
government believes that wastage of resources is a far greater obstacle to development
than inadequacy of resources.

It is common knowledge that many development efforts in the past years turned into
exercises in futility because of inefficiency and corruption in high places. Terrorism was
allowed to paralyses law and order. Administration was over centralized at the cost of

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local government institutions. The government has, therefore, decided to decentralize


administration in the quickest possible time.

INTRODUCTION

The Bangladesh economy has experienced both macro-economic stability and robust
economic growth following the transition to a democratic rule in the early of 1990s. In
the backdrop of the deep macro-economic crisis of the late 1980s, a series of
stabilization measures were introduced in the Bangladesh economy which largely
restored macro-economic stability in the early 1990s. Subsequently, the Bangladesh
economy registered an average GDP growth rate of 4.8 per cent in the 1990s, which
was one full percentage point higher than that recorded in the previous decade (i.e. 3.8
per cent) (Bhattacharya: 2002). Despite of such impressive growth throughout the
decade, the per capita income of Bangladesh at the beginning of the new decade was
not only the lowest among the South Asian countries, but also below the average per
capita income of the least-developed countries (LDCs). Within the decade of the 1990s,
the second half demonstrated an even more impressive growth performance (5.2 per
cent, FY96-00) in comparison with the first half (4.4 per cent for FY91-95). However,
the per capita growth rate of 4-5 per cent is impressive by LDC and even developing
country standards.

Indicator FY91-00 FY91-95 FY96-00 FY01-04 FY05* FY06*

GDP Average
Growth Rate 4.8 4.4 5.2 5.1 6.0 6.5
(per cent)

Notes: indicates PRSP Projections

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Source: Computed from CPD-IRBD Database and BBS Data

The macroeconomic developments in Bangladesh since the beginning of the 1990s,


until middle of the decade, were characterized by a record-low rate of inflation, an
unprecedented build-up of external reserves and an improved resource position of the
government. These developments have been interpreted in part as evidence of
successful macroeconomic stabilization, but also in part as symptoms of economic
stagnation. The changes in the macroeconomic trends in the early 1990s came in the
wake of a transition to a democratic rule along with the launching of a comprehensive
programme of market-oriented liberalizing policy reforms. After that period there was a
evident in a build-up of inflationary pressures, a deterioration in the government's
budgetary balances and a rapid draw-down on foreign exchange reserves.

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PROBLEMS AND PROSPECTS

The Bangladesh government and the Bangladesh Aid Group have taken seriously the
idea that Bangladesh is the test case for development. In the late 1980s, it was possible
to say, in the somewhat patronizing tone sometimes adopted by representatives of
donor organizations, that Bangladesh had generally been a "good performer." Even in
straitened times for the industrialized countries, Bangladesh remained a favored country
for substantial commitments of new aid resources from a strikingly broad range of
donors. The total estimated disbursement for FY 1988 was estimated at US$1.7 billion,
an impressive total but just US$16 per capita. Half of that total was for food aid and
other commodities of limited significance for economic growth. Even with the greatest
imaginable efficiency in planning and administration, resource-poor and overpopulated
Bangladesh cannot achieve significant economic improvements on the basis of that level
of assistance.

In examining the economy of Bangladesh, wherever one turns the problems crowd in
and threaten to overwhelm the analysis. Underlying problems that have threatened the
young nation remain unsolved. These problems include overpopulation and inadequate
nutrition, health, and education resources; a low standard of living, land scarcity, and
vulnerability to natural disaster; virtual absence of valuable metals; and inadequate
government and bureaucratic structures. Yet the brief history of independent
Bangladesh offers much that is encouraging and satisfying. The World Bank, leader of
the Bangladesh Aid Group, described the country in 1987 as a success story for
economic development and expressed optimism that the goals of the Third Five-Year

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Plan, and longer term development goals as well, could be attained. Government
policies had been effective in stimulating the economy. The private sector had benefited
from an environment of greater economic freedom and had improved performance in
banking and production of jute, fertilizer, ready-made garments, and frozen seafood.
The average growth rate of economy had been a steady, if unspectacular, 4 percent
since the beginning of the 1980s, close to the world average for developing countries.

The picture of day-to-day and even year-to-year performance of the economy of


Bangladesh is a mixture of accomplishment and failure, not significantly different from
that of the majority of poor Third World countries. The government and people of
Bangladesh are entitled to take some pride in the degree of success they have achieved
since independence, especially when one contrasts their success with the gloomy
forecasts of economists and international experts. The international donor community,
led by the World Bank, similarly can be proud of the role it has played in assisting this
"largest poorest" nation to become a respected member of the family of nations.

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MACRO-ECONOMY (GROWTH, SAVINGS AND INVESTMENT)

Growth

The Bangladesh Economy has experienced acceleration during the 1990s in comparison
to the 1980s. The economic growth of Bangladesh has routinely registered 4 per cent
plus growth in the 1990s (Figure 1). In the 1990s, the growth momentum was higher
during the second half of the decade in comparison to the first half: average growth
rates were 4.4 per cent (FY91-95) and 5.2 per cent (FY96-00).

Figure 1: Trend in GDP Growth (FY91-FY05)

According to the BBS, the Bangladesh economy posted a growth of 5.5 per cent during
FY04 as against 5.3 per cent in FY03 and 4.4 per cent in FY02. And I-PRSP projections
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indicate that GDP growth rate will grow at 6.0 per cent in FY05 and reach to 6.5 per
cent in FY06.

Sectoral Contribution to Incremental Growth

Analysis of the sectoral growth figures show that within the real economy sectors such
as Industry demonstrated stronger growth during the first half of the 1990s as against
the impressive performance of the Agriculture in the subsequent period. It should be
noted that during the second half of the 1990s, the Agriculture and Industry emerged
as the major source of GDP growth in comparison to more pronounced role of the
Service Sector in the earlier half of the decade.

But in the recent time Service Sector again dominates as the major source of GDP
growth and accounted an average of more than 50 per cent from FY01-FY04 (Table 1).

Trends in Incremental Contribution of Sectors in GDP Growth

FY91-95 FY96-00 FY01-04

Agriculture Sector 20.46 18.05 9.50

Industrial Sector 25.91 33.92 35.54

Manufacturing Sector 20.26 20.09 18.35

Service Sector 45.73 42.26 54.67

Source: Computed from CPD-IRBD Database and BBS (Various Issues)

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Savings

Bangladesh has one of the lowest domestic savings rates among the developing
countries in general and South Asian countries in particulars. Bangladesh's domestic
savings performance in the early 1990s was in fact paralleled the budgetary
performance. The national savings rate was more or less stagnated in the first period of
1990s, which represents a reversal of the macroeconomic gains of that period. But the
domestic savings rates were more remarkable in that period. In FY91, the domestic
savings rate was 18.23 per cent of GDP which was much more higher than the average
growth rate of the same period (14.12 per cent). The possible reasons responsible for
that scenario were weakening efforts for mobilization of public sector resources and
import liberalization, in the absence of a strengthening of domestic tax efforts after
FY91.

Notes: indicates I-PRSP projections

Figure II: Trends in Savings Rate (FY91-FY06)

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Savings as per cent of GDP (FY91-06)

Savings as % of GDP FY91-95 FY96-00 FY01-04 FY05* FY06*

Gross National Savings 18.97 21.58 23.52 25.2 26.5

Gross Domestic Savings 14.12 16.72 18.16 20.0 20.7

Notes: * indicates I-PRSP Projections

Source: Computed from CPD-IRBD Database and Finance Division (2004)

The savings rate both domestic and national showed an increasing trend in the latter
period of 1990s compared to its previous period, although it did not show any drastic
change. The domestic savings rate is stagnated for last couple of years. In FY01 it was
18.00 per cent, stagnates at 18.27 per cent in FY04. On the other hand, the national
savings rate also increased marginally from 22.41 per cent in FY01 to 22.49 per cent in
FY04. The marginal increase of the latter is underpinned by increasing flow of foreign
remittances from the expatriate Bangladeshi workers. The prolonged stagnation of the
domestic savings may be largely explained by the deteriorating income distribution
scenario in the Bangladesh economy as the poor who demonstrate higher propensity to
save are being deprived of their proportionate share in incremental national income.

Investment

The official estimates show that the gross investment-GDP ratio increased steadily by
more than 4 percentage points between FY91 and FY95. The import boom witnessed in
this period can be perhaps attributed to a short-lived investment dynamism, coupled
with large cuts in import duty rates undertaken as part of import liberalization
programme.

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Investment as percentage of GDP (FY91-FY04)

FY91-95 FY96-00 FY01-04 FY05* FY06*

Gross Investment 17.94 21.51 23.31 26.00 27.00

Private Investment 11.24 14.52 16.83 18.20 18.90

Public Investment 6.69 6.79 6.49 7.80 8.10

Notes: * indicates I-PRSP Projections

Source: Computed from CPD-IRBD Database and Finance Division (2004)

Gross investment as a share of GDP reached 23.02 in FY00 from 19.99 per cent in
FY96, recording an average growth of about 21.51 per cent during the that period. In
average, the public investment rate has increased marginally from 6.69 per cent during
FY91-FY95 to 6.79 per cent during FY96-FY00. The time series data shows that a virtual
stagnation was prevailing in the rate of private investment as it is hovering at an
average less than 15 per cent of GDP during the period.

Note: * indicates I-PRSP projections

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Figure III: Investment Trend (FY91-FY04)

The gross investment rate was 23.09 per cent and 23.58 per cent of GDP in FY01 and
FY04, respectively, indicating a less than 0.50 per cent growth during this period. The
public investment rate has declined from 7.25 per cent in FY01 to 6.12 per cent of GDP
in FY04. The private investment rate private investment has increased from 15.86 per
cent in FY01 to 17.47 per cent of GDP in FY04. However, data shows that private
investment is more or less stagnated during the period. So, it is obvious that without
the sustained increase of the public investment rate during the corresponding period,
the gross investment scenario would had been much more depressing.

Country Forecast Overview (3 Year)

Key Indicators 2008 2009 2010

Real GDP Growth (%) 4.70 3.60 3.00

Consumer Price Inflation (av;%) 8.90 4.90 6.30

Budget Balance (% of GDP) -4.90 -5.70 -5.90

Current-Account Balance (% of GDP) .80 .20 .10

Exchange Rate US$:Euro (av) 68.60 69.08 69.80

Exchange Rate US$:Euro(year-end) 68.92 69.30 70.00

Source: Country Forecast Bangladesh May 2009

Bangladesh GDP PPP & GDP Growth Rates


2004 - 2008

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Source: EIU Country Data

CHALLENGES
Challenges facing the country are also grave. Now let us focus on the challenges.
Bangladesh, indeed, politically as well as on the economic front, is at a critical juncture
and facing a difficult and challenging time ahead.

Corruption
Food security and inflation are pressing concerns
Make economic growth more inclusive
Private sector driven economic development is the key
Regional integration

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The bureaucracy needs transformation


Convert huge population as assets
Environment and climate change pose a serious development challenge
Developing agriculture system

Corruption

Corruption and poor governance are impeding Bangladesh's efforts to reduce its
massive poverty by reducing economic growth and lowering the achievement of social
objectives. They destroy citizens' faith in their government. They deter the foreign and
domestic investment which Bangladesh needs so badly. And they undermine the ability
of Bangladesh's development partners to sustain their support for the country.
Economic growth is essential to reduce poverty; however, corruption slows economic
growth.

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Corruption invariably channels public resources to the rich. The poor suffer from
corruption. Their access to public services, such as public health and education, is
reduced while drugs and textbooks are stolen from public facilities and sold privately
and while doctors and teachers have high rates of absenteeism from their public jobs
and sell their services privately.

Corruption is not a new phenomenon in Bangladesh. The East India Company, which
effectively seized power in Bengal in 1757, perpetuated a highly corrupt system, paying
its employees sub-subsistence wages, thereby compelling them to resort to private
business and extortion. Robert Clive described the employees of the company as "a set
of men whose sense of honor and duty to their employers had been estranged by the
larger pursuit of their own immediate advantages."

The Basic Democracy Program, introduced during the 1960s to strengthen local
government, provides a more recent example of the evolution of corruption in
Bangladesh. An integral feature of this program was the use of food aid to finance rural
development through the introduction of public works programs. "Wheat" became the
new language of development during this period and in the process entrenched a
culture of institutionalized corruption that fundamentally marred the sphere of local
government and rural development.

How corruption effects the economy

The government responds to the development obstacles by increasing government


spending on recovery programs. Minimal tax revenues, however, cannot completely
fund these projects, which typically fail due to poor management, and the government
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runs a deficit. Tax evasion and corruption of government officials reduce tax revenues,
and government projects fail as bureaucrats become wealthy. The reduction of funds
increases the government debt.
A banking system plagued by default, and bribery and theft in utilities such as power,
ports and telecommunications, human development services are also subject to poor
governance.

To illustrate the corruption function, this is an equation for fiscal deficit

(D = G -Yt) with government corruption:

D = G -[Yt-Cr].

Corruption (Cr) reduces tax revenues (Yt), and the subtotal is the amount of useful
funds. The deficit (D) is the amount of funds subtracted from government spending
(G). This equation is a mathematical demonstration of how corruption effects the
economy. The effects of corruption on aggregate expenditures are observable from the
equation, as is the relation between Bangladesh's rate of growth and its capacity if
corruption did not exist.

To continue, government deficit crowds-out investment spending because it utilizes


most of the available credit. Investment spending is a very weak variable of
Bangladesh's economy. If businesses cannot obtain credit in order to expand, then
investment spending remains low, as do wages and employment. Bangladesh's rate of
unemployment in 1996 was 35.2%. This high rate reduces wages because of the
principle of supply and demand in the labor market. Then, the cost-push theory of
inflation dictates that companies maintain low prices on merchandise because they do
not need to finance high wages. The Bank of Bangladesh takes advantage of this low-
inflation opportunity to lower the discount rate, which increases the money supply and
the amount of credit available to businesses for investment spending. According to the
monetary theory of inflation, increasing the money supply also increases the rate of
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inflation. These two contradictory inflation trends in Bangladesh created a 5.8% rate of
inflation based on 2000 consumer prices. This inflation rate might be lower and more
stable if the BOB did not need to accommodate profuse government spending.

Another method to encourage investment spending is to attract foreign investment and


trade. The Bank of Bangladesh occasionally devalued the Takka, maintaining an
exchange rate that is semi-flexible in relation to the exchange and inflation rates of
Bangladesh's trading partners. As of April 2005, the exchange rate was 63DT to the
USD. Devaluation improves the balance of trade by encouraging other countries to
purchase Bangladeshi exports. Bangladesh also attempts to reduce foreign competition
and to generate more revenue for its generous government spending through high
tariffs. Almost 60% of its revenue derives from import taxes, tariffs, and duties.

Latest development in the fight against corruption in Bangladesh

In February 2004 parliament passed the Anti-Corruption Commission Act, paving the
way for the establishment of an independent body to fight corruption in the country.
The act provides the legal framework to set up a commission to promote good
governance and ensure transparency in public administration. The commission is to
consist of three commissioners

With a chairman to be appointed from among them by the countrys president. Whether
the commission will truly be independent, however, is doubtful.

The planning ministry introduced new public procurement regulations in October 2003,
in an attempt to promote transparency and accountability in the public procurement
system. The regulations aim to ensure value for money in public procurement and that
procurement is conducted in a fair, transparent and non-discriminatory manner. A
major limitation of the regulations, however, is that exceptions are allowed on matters
of state security, including military procurement. The rules also fall to mention price-

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quality considerations in procurement and delays in delivery. Most importantly, the


regulations do not have the full force of a law. The government can, therefore, prevent
their implementation at its own discretion.

Food security and inflation are pressing concerns

In the macroeconomic front, rapidly growing inflation is the biggest problem at the
moment, which has been pushed by higher import bills on food grains and fuels due to
inconceivable price hike of these commodities in the international market. The unusual
rise of food prices in the recent time, which has been a world phenomenon, has really
hard hit the poorest and the marginalized groups. This price hike was caused by
domestic production shortfall following successive natural disasters and also by
international higher prices. The food price rise has severe human dimension and has
seriously eroded the purchasing capacity of people living below the poverty line and
government employees, industrial workers, and others with fixed incomes. Addressing
the hardship of poor people affected by higher food prices remains a challenge. Failure
to contain higher food prices could seriously undermine macroeconomic and political
stability. Government responses including raising food-grain imports, building its own
stock through imports and domestic procurement, and widening social safety net
programs are commendable. But over the medium to longer term, improving
productivity by disseminating modern production technologies, developing rural
infrastructure including reliable and expanded irrigation systems, bringing ecologically
disadvantaged areas under cultivation, providing extension services, improving
marketing, producing quality seeds through public-private partnerships, and ensuring
rural financial services are essential.

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Make economic growth more inclusive

We all understand that challenges of Bangladesh's development agenda are immense.


However, in the quest for quick economic growth and development, the country must
seek inclusive economic growth and put in more resources for reduction of poverty of
millions of people who live under desperate poverty. This would need to create and
expand access to opportunities and more investment in health, education and safety
net programs for the poorest. Alongside, the country needs big investment in
infrastructures- energy, power generation, roads, railway and ports to attract further
investment and ensure industrial development and employment creation through
private sector participation. The country also needs to expand and improve the
education and health services and to protect the environmental degradation.

Private sector driven economic development is the key

Bangladesh's aspiration to become a middle income country by 2020 must be led by the
private sector. A robust private sector is the key to attracting investment,
entrepreneurship and technological innovation needed for quick economic growth. It is
obvious that without private sector investment, jobs and economic opportunities for the
thousands of people cannot be ensured. The government, therefore, needs to
continuously invest in infrastructures and social development, and to further liberalize

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the policies and regulations and remove obstacles to inclusive growth and private sector
driven development efforts.

Regional integration

I think you would all agree that Bangladesh can gain a lot from regional and sub-
regional integration and cooperation. Economic and social cooperation through forums
like SAARC and BIMSTEC can indeed help the country not only to accelerate its
economic development through promoting regional trade and investment, but would
also protect the people from cross-border environmental and health risks. In this
context, I would like to stress on upgrading and opening the Chittagong Port for the
use of eastern Indian states and other landlocked neighboring countries and developing
it as a regional hub, which could be a major driver for economic development of the
country.

The bureaucracy needs transformation

The caretaker government has implemented many landmark governance reforms.


Unfortunately, one major reform that has remained untouched is the sluggish and
complex bureaucratic structure of the Government. In my view, this is the mother of all
other reforms. The pyramid bureaucratic structure and its archaic systems and

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procedures, inherited from the colonial days, are characterized by inefficiency,


centralization, lack of delegation and job description; too many tiers in the decision
making process; archaic filing and noting system and lack of e-governance; and poor
pay structure are out of place in the modern states. That is why it is incapable of
implementing government's own development projects, let alone promoting business
and investment. We need to highlight this to the government for transforming this
bureaucracy. Without its reforms, implementation target of development projects will
always fall short and the vision of transforming Bangladesh into a middle-income
country by 2020 may remain as an illusion.

Convert huge population as assets

We live in a world that is transforming fast, and the stock and quality of human
resources has become a key to accelerating growth and reducing poverty. Bangladesh
has made considerable progress in establishing a comprehensive education system,
particularly in providing access to primary education. The quality of education, however,
needs improvement at all levels. Even though there are pockets of excellence, the
overall quality of higher education remains a concern due to a lack of funds, shortage of
qualified teachers, weak management and supervision, and in certain cases,
politicization of campuses. In many universities, access to ICT, science laboratories, and
other educational facilities is limited. Education that is provided is not strongly linked to
market demands. There is also inadequate focus on science and technology or on areas
that produce marketable skills. Over 80% of young graduates enroll in general studies;
only 20% study science, technology, and applied subjects. Any nation that does not
possess the ability and the technology to gain and process vast amounts of information
quickly will lag behind in development. Much instructional time is lost due to
demonstrations and strikes, particularly at public universities. As a result, degrees are
not awarded in time, which adversely affects the academic and career pursuits of the
students. It is a genuine concern that campus violence has now extended to some

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private universities. Bangladesh can easily double or even triple the foreign exchange
remittance from expatriate workers, which was more than $7 billion this year, by
investing and focusing a little more on technical and science education, human resource
development and language training. The country needs more skilled technicians, data
entry clerks, professional managers, accountants, computer programmers, IT
consultants, bio-technicians, architects, designers and corporate lawyers than generalist
graduates in literature and social sciences. In a world where knowledge is not only
power, but also for sale, and where almost every large company that relies upon
remote transactions is starting to hire more cost-effective labor overseas, the stock and
quality of human resources has become a key for less developed countries like
Bangladesh to participate in the global growth process, and to reduce poverty and
attain a better quality of life.

Environment and climate change pose a serious


development challenge

Last but not the least, the climate change also poses a major development challenge for
Bangladesh. Bangladesh's vulnerability to natural disasters also poses a risk. The recent
severe flooding and cyclone are premonitions of future possible catastrophe. According
to the United Nations Human Development Report 2007/2008, one meter rise in sea
level would inundate 18% of land area in Bangladesh, directly threatening 11% of the
population. Rising sea levels and exposure to climate disasters could result over 70
million people being permanently or temporarily displaced. These impacts are envisaged
to raise the country's vulnerability to natural disasters, thus stresses the need for
improved disaster preparedness, and risk mitigation and adaptation measures.

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Development partners need to strongly support the country to undertake a holistic


approach to mitigate the effects of climate change and to adapt with the impacts of
environmental degradation, and natural disasters.

Developing agriculture system

The economy of Bangladesh is primarily dependent on agriculture. About 84 percent of


the total population live in rural areas and are directly or indirectly engaged in a wide
range of agricultural activities. The agriculture sector plays a very important role in the
economy of the country accounting for 31.6 percent of total GDP in 1997-98 at constant
(1984-85) prices. The agriculture sector comprises crops, forests, fisheries and
livestock. Of the agricultural GDP, the crop sub-sector contributes 71 per cent, forest 10
per cent, fisheries 10 percent and livestock 9 per cent. The sector generates 63.2%
percent of total national employment, of which crop sectors share is nearly 55 %.
Agricultural exports of primary products constituted 10.4% of total exports of the
country in 1997-98. In the past decade, the agriculture sector contributed about three
percent per annum to the annual economic growth rate.

The agriculture sector is the single largest contributor to income and employment
generation and a vital element in the countrys challenge to achieve self-sufficiency in
food production reduce rural poverty and foster sustainable economic development.
The Government has therefore accorded highest priority to this sector to enable the
country to meet these challenges and to make this sector commercially profitable.

One of the weak links of Bangladesh's rural economy is the flow of agricultural credit
from institutional sources. Financial institutions have rather emerged as a guide for
rural-urban resource transfers. Throughout the 1990s a little net inflow of resources

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from the rural areas had been observed as the annual disbursement figure exceed the
corresponding recovery figure. For example, during FY91-FY95 and FY96-FY00 on
average, such net outflows registered Tk. 13.6 billion and Tk. 2.63 billion respectively.

Average Agricultural Credit Expansion

(In Billion Tk.)

Year Disbursement Actual Recovery Net Flow

Target Actual

FY91-FY95 15.82 9.88 6.25 1.36

FY96-FY00 27.91 21.99 19.35 2.63

FY01-FY03 31.11 30.89 32.16 -1.27

Source: Computed from CPD-IRBD Database and Bangladesh Bank data

After a long time, the government went for an extraordinary agricultural expansion with
a view to both reviving rural economic activity and sustaining aggregate demand in the
post-flood situation in FY99. As against a recovery of Tk. 19.2 billion, Tk. 30.2 billion
was disbursed resulting in a net inflow of Tk. 11.03 billion of agricultural credit. That
large amount of agricultural credit played a significant role in boosting the record boro
crop of FY99, which played such an important part in helping the rural economy to
recover from the effects of the floods. At the end of the 1990s and the beginning of the
new decade, a net outflow of resources from rural areas was observed, registered, on
average, Tk. (-) 1.27 billion during FY01-FY03.

Conclusion

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Bangladesh's development challenges are critical and manifolds. To tackle these


challenges, the country needs capable and mature political leadership, pro-poor
economic agenda, business friendly policies, efficient but smaller bureaucracy,
decentralization, strong local governments and opportunities for participation of the
poorest. The country also needs to invest more for human resource and skill
development so that the country can rise to the challenges of a competitive and
globalize world. I personally believe that Bangladesh will realize its goals and become
an economically viable country and could even emerge as one of the next eleven fast
developing countries as predicted by Goldman Sachs. We are optimistic about
Bangladesh's future and stand ready to continue assisting Bangladesh in unlocking its
abundant potential, as we tackle the development challenges together in the period
ahead.

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