Bangladesh is a developing country with a population of 157,949,908 where the economy is expanding day by day. After independence, our economy is reformed to manage it in our own way. Now the ready-made garment (RMG) sector is performing very well compared with another sector.
Current Economic Condition of Bangladesh
With the expansion of information technology, many new industries have emerged. The contribution of each and every industry is considerable although 10 to 15 years back the contribution of information technology & telecommunication sector to our economy was minor. But now these two sectors generating a large amount of revenue for their own and make a good contribution to our economy. With the increase in educational status, the standard of living is improving. If these continue our economy will be a model for other developing countries. Although the current economic condition of Bangladesh is good enough government needs to monitor every economic activity closely.
Contribution to our GDP
The performance of the economy can be measured with the help of GDP (gross domestic product) i.e. the value of all products and services produced within the boundary of our country. Our GDP for the year 2013-2014 was 6.12% where the growth is 12.68% from the previous year. GNI is 4.76% which is grown by 11.24% compared with the previous year.
Industrial Contribution to our Economy
- The contribution of agriculture to our economy is most. Once upon a time, we cannot think about our economy without agriculture because 85% of people in our country were involved in agriculture. But now the situation has changed, with agriculture now ready-made garments (RMG), bank and non-bank financial institutions, outsourcing, exporting manpower adding extra value to our economy.
- Our economy can be divided into 15 different industries in a broader sense. If you check the industrial contribution to our GDP for 2014 we will see that the manufacturing industry is contributing a larger portion to our GDP of 17% whereas agricultural and wholesale-retail trade contributing to each 13% of total 26%.
- Communication and service sector contribution total of 23%. Where community and service sector contributing 12% of our total GDP and communication (transportation, telecommunication) sector adding 11% value to the GDP of Bangladesh for 2014. The other ten industries also contributing a considerable amount each and every year.
For ensuring economic growth the government should take the following things seriously otherwise our economy down soon.
The condition of the Stock Market of Bangladesh
In our capital market, there are two stock exchanges. One is DSE-Dhaka Stock Exchange and the other is Chittagong Stock Exchange-CSE. Dhaka stock exchange has total of 549 listed companies and Chittagong stock has a total of 250 listed companies. Although the stock market doing well over the years a few years back stock market (capital market of Bangladesh) crashed. Stock market accelerating unpredictably, at that time many investors acquire much capital gain. The capital market rises by 62% in 2009 and 83% in 2010 but then went down 10% in January 2011, and a further 30% fall in Feb 2011. These falls continue for this reason many investors lost them all investment. The government tried to make a correction and still trying but it will take time to stabilize. In 2015 if we check the index of the stock market then we can see that market still not doing well. So investors must be cautious before making any investment decisions in the stock market.
The flow of Remittances of Bangladesh
People working outside Bangladesh are contributing to our economy indirectly by sending remittance each month. This large amount of remittance is helping us to improve our economy. Foreign currency reserve also increasing by the remittances and export of ready-made garments. Here is the scenario of remittances for the year 2014 and 2015. Remittances flow looks stable but in this year remittances are decreased compared with the previous year.
Reserves of Foreign Currencies of Bangladesh
There is a considerable change in the reserve of foreign currencies. If we look at the reserves for each year we will see there is a positive movement each year. In 2004-2005 our foreign currency reserve was only 2930 million dollars whereas in 2013-2014 our reserve is 21558 million. Within these 10 years, the rate of increase in reserve is 635% which is a great achievement for our economy. If we can utilize this large amount of foreign currency reserves by importing capital goods and invest in productive sources then our economy will be much more efficient. This ultimately helps our economy to grow faster than previously.
Scenario of Import
Every year we import a large number of goods from different countries around the world but a larger portion comes from China and India. Last year we imported from China 20.70%, 16.60% from India, 6.30% from Singapore, 5.60% from Malaysia, and 3.50% from Japan. The electronic product mainly imported from China. Reserved foreign currencies are used to import.
The potentiality of the Economy of Bangladesh
- RMG sector is the highest growing sector which contributes to a huge amount of money each year. It is the government’s responsibility to ensure a positive environment so that this sector can grow fluently. One of the main reasons for the success of the RMG sector is the cheapest labor available in our country, which ensures the low cost of production.
- We have a large number of young people who have the ability to the world. If we can ensure proper use of human resource then we will be a developed country soon.
- Availability of natural resources and low cost of factors of production foreign buyers are interested to invest here. If there is a large amount of foreign direct investment then it will create the employment of many peoples.
- Outsourcing and tourism are two potential industry which will bring millions of dollar’s foreign currency, which will increase our reserve of foreign currencies. We required foreign currencies to import capital goods.
Major Problems for Economy of Bangladesh
- Political instability is one of the main problems which we can see in recent years. At the end of the 2013 political condition started to deteriorate now 2015 looks like our economy is stuck.
- Export is decreasing for the reason of the delay in delivery of goods. Exporters cannot send the goods timely because of a lockout of internal route transportation. Burning and breaking of vehicles etc.
- The decision taken by the economic policymaker is most of the cases wrong and in some cases are not an effective one.
- There is an absence of a proper monitoring system for the potential sector, so the government failed to deliver the subsidiary and ensure a positive environment.
Although our economy is doing well there are many problems that we must overcome. We need a good leader who will lead us toward our goal and make every decision by giving priority to our national benefit, not their personal benefit. Things also required are:
- Ensuring political stability to attract foreign buyers and investors.
- Forming proper monitoring and controlling cells.
- Taking effective economic decisions to ensure proper use of resources both natural and technical.
- Keeping the inflation rate at a normal level so that buying the power of money not reduce significantly.
If we can ensure the above-mentioned things then our economy will be perfect for investment. And one day this economy will be stable and more growth potentials.
Md. Nahian Mahmud Shaikat
Email: [email protected]