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COUNTRY PROFILE 2000

BangladeshThis Country Profile is a reference tool, which providesanalysis of historical political, infrastructural and economictrends. It is revised and updated annually. The EIU’s CountryReports analyse current trends and provide a two-yearforecast

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EIU Country Profile 2000 © The Economist Intelligence Unit Limited 2000

Comparative economic indicators, 1999

1


Contents

3 Basic data

4 Political background4 Historical background7 Constitution and institutions9 Political forces

10 International relations and defence

12 Resources and infrastructure12 Population14 Education14 Health15 Natural resources and the environment16 Transport and communications19 Energy provision

21 The economy21 Economic structure23 Economic policy27 Economic performance29 Regional trends

30 Economic sectors30 Agriculture and forestry32 Mining and semi-processing33 Manufacturing35 Construction36 Financial services38 Other services

38 The external sector38 Trade in goods40 Invisibles and the current account41 Capital flows and foreign debt42 Foreign reserves and the exchange rate

43 Appendices43 Sources of information44 Reference tables44 Population44 Labour force45 Energy: reserves and production of natural gas45 Transport46 Gross domestic product46 Gross domestic product by expenditure47 Gross domestic product by expenditure47 Gross domestic product by sector48 Central government finances48 Tax revenue receipts49 Money supply49 Interest rates

2


49 Consumer prices49 Consumer prices (national)50 Consumer price indices (urban/rural)50 Index of nominal wages50 Agricultural crop production51 Production and value of non-energy minerals51 Production and value of selected manufactured items52 Stockmarket indices53 Main exports53 Main imports53 Main trading partners54 Direction and composition of trade, 199855 Balance of payments, IMF series55 External debt, World Bank series56 Remittances from Bangladeshis working abroad56 Net official development assistance57 Foreign reserves57 Exchange rate

Bangladesh 3

© The Economist Intelligence Unit Limited 2000 EIU Country Profile 2000

Bangladesh

Basic data

147,570 sq km

111.5m (1991 census); 130.2m (January 2000 official estimate)

Population in ‘000 (1991 census)

Dhaka (capital) 6,951Chittagong 2,348Khulna 1,002Rajshahi 545

Tropical monsoon

Hottest month, July, 23-35°C (average daily minimum and maximum); coldestmonth, January, 11-28°C; driest months, December and January, 5 mm averagemonthly rainfall; wettest month, July, 567 mm average monthly rainfall

Bengali; Urdu and Hindi are minority languages and English is also used

Imperial system. Local measures include: 1 tola=11.66 grams; 1 seer=80tolas=932 grams; 1 maund=40 seers=37.29 kg

Numbers are commonly expressed in crores and lakhs; 1 crore=10m, written1,00,00,000; 1 lakh=100,000, written 1,00,000

Taka=100 paisa. Average annual exchange rate was Tk50.33:US$1 in fiscal year1999/2000. Exchange rate on October 2nd 2000 was Tk54:US$1

July 1st-June 30th

6 hours ahead of GMT

January 1st (New Year’s Day), January 8th (Eid-ul Fitr), February 21st(Mourning day), March 16th (Feast of Sacrifice), March 17th (Birth of SheikhMujibur Rahman), March 26th (Independence Day), April 6th (Islamic NewYear), May 1st (May Day), June 15th (Birth of Prophet), August 15th(Assassination of Sheikh Mujibur Rahman), November 7th (NationalRevolution Day), December 16th (National Day); religious holidays whichdepend on lunar sightings and optional holidays for different religious groups

Land area

Population

Main towns

Climate

Weather in Dhaka

Languages

Measures

Currency

Fiscal year

Time

Public holidays 2000

4 Bangladesh


Political background

Bangladesh has a parliamentary democracy based on universal suffrage. Acabinet headed by the prime minister exercises executive power. The AwamiLeague (AL), led by Sheikh Hasina Wajed, was elected to power in June 1996,ending the five-year rule of the Bangladesh National Party (BNP). The BNP,now the main opposition party, is led by the former prime minister, BegumKhaleda Zia. The country had a presidential form of government before theconstitution was amended in 1991.

Historical background

The eastern part of Bengal became part of Muslim Pakistan as British ruleended in India in 1947. East Pakistan had an uneasy relationship with themore powerful and richer West Pakistan from the very beginning. Discontentgrew, and despite some concessions from the rulers in West Pakistan, such asapproving Bengali as a joint official language with Urdu, and dividing Pakistaninto two wings (East and West) with equal representation in the parliament, asecessionist movement led by Sheikh Mujib and the AL gained increasingsupport. In 1970 Sheikh Mujib led the AL to victory in East Pakistan in bothnational and provincial assembly elections, and demanded a loose federationof the two parts of Pakistan, in which a central authority would be responsiblefor foreign affairs, currency and defence only. This was refused by thepresident, General Yahya Khan, whose refusal coincided with the failure of hisgovernment to aid East Pakistan when it was hit by a severe cyclone and tidalwave in 1970. The AL declared independence on March 26th, following a non-cooperation movement launched earlier in the month. A full-scale civil warbroke out, and the Bengali freedom fighters eventually triumphed, after Indiaintervened on their side on December 16th 1971.

Although Sheikh Mujib led the AL to an electoral victory in 1973, the overalleconomic and political situation deteriorated rapidly. A state of emergency wasdeclared in late 1974, and by early 1975 Sheikh Mujib became president withdictatorial powers under a one-party rule. He was assassinated in August 1975together with several family members. Following a series of further coups,General Ziaur Rahman had consolidated power by 1977. Military interventionin politics began more earnestly, as rivalry between the two main parties, theAL and the BNP, intensified. Army officers have been prominent in bothparties, and periods of democratic government have been interspersed withperiods of martial law and strong executive government.

General Zia’s period in power was characterised by improvements in publicorder and economic management. In June 1978 he won the presidentialelection, and in the following year his newly formed party, the BNP, won two-thirds of the seats in parliament. In May 1981 General Zia was assassinated bya group of army officers. In March 1982 in a widely signalled action, the armychief, General Hossain Ershad, took over power in a bloodless coup, replacingJustice Abdus Sattar, General Zia’s successor.

Bangladesh winsindependence

Military involvement

Bangladesh 5


General Ershad initially tried to hold parliamentary and presidential electionsto legitimise his position. However, the opposition parties refused to participateas they believed that the elections would not be free and fair under martial law.In March 1985 he banned all political activities and staged a presidentialelection, in which he declared himself the winner, despite a turnout of only5%. His attempt to institutionalise the army’s role in government provokedviolent riots, and by late 1987 the main opposition groups launched a unitedmovement to force him to resign. Three years of violence followed, duringwhich General Ershad proclaimed a state of emergency and arrested scores ofopposition activists. He succeeded in exploiting divisions between theopposition parties and used the catastrophic floods of 1987 and 1988 to hisadvantage by involving the military in emergency relief operations.

As opposition strikes and demonstrations intensified, in December 1990General Ershad handed over power to a caretaker government which organisedthe country’s first free and fair election in February 1991. General Ershad andmany of his cronies faced charges of corruption and the illegal possession ofarms. He was sentenced to 13 years’ imprisonment in 1991, but was released inJanuary 1997 in recognition of his party’s crucial support for the newly electedAL government.

The 1991 election was won by the BNP, led by Khaleda Zia, widow of GeneralZia. There was initially an uneasy truce in parliament between the AL and theBNP government, but following alleged irregularities by the BNP at a by-election in February 1994, all the opposition parties boycotted parliament. Theopposition demanded that the government resign and hand over power to acaretaker government to conduct a free and fair general election. Parliamentwas finally dissolved in late 1995, but the general election, called for February1996, was boycotted by the opposition, as Begum Zia refused to step downbefore the election. The BNP won a landslide victory on a very low turnout,but as violence escalated, it was forced to hand over power to a caretakergovernment.

All the main political parties participated in the election on June 12th 1996,which was held under a caretaker government. The AL won a majority in theelection and was able to form a government with crucial support from theJatiya Party (JP-Ershad). The AL government repealed the IndemnityOrdinance, which was passed in 1975 to protect the killers of Sheikh Mujib.The trial of some of those accused of the killing began in January 1997. InNovember 1998 death sentences were passed on 15 former army personnel,although most of them have since been released. The highest courts of thecountry are now hearing the case for confirmation of the death sentences.

A new BNP government

The AL returns to power

6 Bangladesh


Important recent events

February 15th 1996: The Bangladesh National Party (BNP) government wins alandslide victory in the general election, which is boycotted by all the opposition parties.

June 12th 1996: The Awami League (AL) wins the majority of seats in the freshparliamentary election held under a caretaker government. Sheikh Hasina Wajed headsthe first AL government since the murder of her father, Sheikh Mujib, in 1975.

December 12th 1996: A 30-year agreement is reached with India on the sharing ofthe waters of the Ganges.

January 6th 1997: The leader of the Jatiya Party (JP), General Hossain Ershad, isreleased from jail on bail in recognition of his party’s support for the AL government.

December 2nd 1997: A peace treaty between the Chakma rebels in the ChittagongHill Tracts and the AL government is signed, ending a 20-year insurgency.

July 15th-September 30th 1998: Bangladesh experiences the worst floods in itsrecent history, causing extensive damage to more than two-thirds of the country.

November 8th 1998: The verdict on the killing of Sheikh Mujib in August 1975 isannounced in Dhaka. Out of the 19 accused, 15 are given death sentences.

January 6th 1999: An alliance of the main opposition political parties is formed inorder to drive the AL government from power.

February 15th 2000: The controversial Public Safety Act 2000 is passed,strengthening the power of the government to deny bails to persons accused of certaincrimes for up to 75 days. Certain provisions of the Act are relaxed on April 5th.

Although controversy has continued during the rule of the AL governmentunder Sheikh Hasina Wajed since 1996, the government may be credited with:a treaty with India on water sharing in the Ganges; a peace treaty with tribalrebels in the Chittagong Hill Tracts (CHT) that ended a 20-year insurgency; thecompletion of the multipurpose bridge over the Jamuna river; and therehabilitation of the economy, which was wrecked by floods in 1998. However,the AL government faces an uphill task in resolving a crippling power shortageand halting the deterioration in law and order. The situation is aggravated byintense political antagonism between the AL and the BNP. The BNP now leadsa four-party opposition alliance and has emulated former AL tactics in an effortto undermine political stability, by boycotting parliament and calling for theimmediate removal of the AL government. It has also adopted a strategy ofboycotting elections under the AL rule, calling hartals (general strikes) anddemanding that all elections—at upazila (subdistrict), zila (district) orparliamentary level—be held under a caretaker government.

Bangladesh 7


Constitution and institutions

Bangladesh has a parliamentary system of government based on universaladult franchise. Before the 12th amendment of the constitution, passed in1991, there was a presidential form of government. Under the current systemthe prime minister is vested with executive power and the president (elected byparliament) can act only on the advice of the prime minister. The presidentappoints the council of ministers on the recommendation of the primeminister. The parliament (Jatiya Sangshad) is a unicameral legislature with 300directly elected seats, plus 30 additional seats reserved for women. It sits forfive years unless dissolved earlier. Laws are passed by a simple majority inparliament, but constitutional amendments require a two-thirds majority.

Bangladesh has a four-tier local government system. At the top are 64 zilas(districts), each with its own zila parishad (district council). Beneath the zilasare 490 upazilas (subdistricts). The union parishads (union councils) comprisethe third layer of system and the gram parishads (village councils) comprise thefourth. Although the constitution provides for elected bodies at all tiers of localgovernment, only the third tier of the system—union parishads and pourashavas(municipalities, mostly upazila and zila headquarters)—is elected; all others areadministratively controlled. The country has six administrative divisions—Dhaka, Chittagong, Khulna, Barisal, Rajshai and Sylhet—and four majormunicipal corporations—Dhaka, Chittagong, Rajshahi and Khulna. Themayors of the municipal corporations are directly elected and wield consider-able political power.

Local government reform has been on the political agenda since 1990. A gramparishads act, passed in September 1997, allows the government to select ninemale and three female members to each gram parishad, with no provision fordirect election. A zila parishad Act, passed in June 2000, provides for anindirectly elected government for the zila parishads. A 20-member committee,with five women members from a reserved quota and a chairman, would beelected for five years by public representatives elected to other local bodies. Thelocal members of parliament would serve the parishad as advisers. The act,however, drew fire from the opposition as it provided for an appointedchairman of the parishad until an elected chairman could take over. Theopposition has demanded that the act be repealed claiming that such aprovision violated the country’s constitution that ensures the election of alllocal government bodies directly by the people. The act was also challenged inthe High Court, which has suspended its implementation for the time being.

A candidate can compete in a maximum of five constituencies in aparliamentary election. A by-election occurs if a candidate wins in more thanone constituency. This ensures that political leaders can manage to get electedin at least one constituency. Also, by-elections are held when a member ofparliament dies or resigns, or his or her membership is terminated. Theparliament has 30 seats reserved for female MPs, who are indirectly electedwhen the parliament sits for the first time after a general election. The partywith the majority selects all the female seats in the parliament. The current

Parliament

Local government system

Constitutional peculiarities

8 Bangladesh


constitutional provision of reserved seats for female MPs will expire by April2001, if it is not renewed before this date.

The Supreme Court is the highest court and its judges are appointed by thepresident. There is a nationwide system of both criminal and civil courts, andmetropolitan magistrates in the major cities. In addition, money-loan courtsand bankruptcy courts deal with financial matters. The legal framework,however, remains archaic and court procedures are often cumbersome.Moreover, the judiciary is not as yet independent of the executive branch.Citizens are equal before the law and are free from arbitrary arrests anddiscrimination. The judiciary has been playing a more active role in recentyears—in 1999 it warned the sitting prime minister, Sheikh Hasina, againstexercising caution in making statements about the judiciary, demanded thatthe executive branch consult with the chief justice when appointing highcourt judges, and declared general strikes unconstitutional. Recently, it cameunder fire from the ruling party for granting advance bails, especially topolitical detainees.

However, detention without trial is allowed in a state of emergency and underthe Special Powers Act (SPA) of 1974. Since the original constitution of 1972did not provide for the arrest and detention of ordinary citizens, thegovernment of Sheikh Mujib passed the SPA to allow it to arrest and detaincitizens without cause for an indefinite period. The government of SheikhHasina subsequently passed the Public Safety Act (PSA) in February 2000,strengthening the power of the government to deny bail to an accused for amaximum of 75 days. Over 65,000 people were detained under the SPA in1981-96 and the number of people being detained under the PSA is on the rise.

Women in parliament

Although currently, women hold the top positions in both the ruling and the oppositionparties, historically, women’s participation in politics and elections in Bangladesh hasbeen low. Normally, major political parties tend not to nominate women candidates infear of losing seats! Only 36 women candidates contested the general election in 1991and 35 in 1996, out of a total of 2,727 and 2,570, respectively. To offset women’s poorrepresentation in politics and parliament, Bangladesh introduced a system of reservedseats for women in the first constitution of 1972. The majority party or coalition inparliament is entitled to all the reserved seats. The 1972 constitution reserved 15 seatsfor women in parliament for the next ten years. In 1978 the number of reserved seatsfor women was raised to 30 seats and the provision was extended for another five years.The 1987 parliament had no seats reserved for women because the constitutionalprovision had expired. However, in 1990, through the tenth amendment to theconstitution, reserved seats for women were reinstated for another ten years.

A bill has been placed in the current parliament to extend the provision further. With theopposition boycotting parliament, however, it is unlikely that it will be passed as theextension will require a two-thirds majority, which the ruling party lacks. Meanwhile,various women’s bodies are demanding that the number of reserved seats for womenbe raised to 64—one for each zila—and that the seats be thrown open in directelections.

The judiciary

Bangladesh 9


Political forces

The main political parties are the Awami League (AL) and the BangladeshNationalist Party (BNP). The AL, which spearheaded the war of independenceand was led by Sheikh Mujib, is now led by his daughter, Sheikh Hasina. TheAL won the June 1996 election after 21 years in opposition. It has since movedaway from its past commitments to nationalisation and economic self-sufficiency, and now supports market-oriented economic policies.

The opposition BNP, founded by an ex-president, General Zia, in 1978, iscurrently led by his wife, Begum Khaleda. The BNP stakes its claim onauthentic Bangladeshi nationalism and espouses anti-Indian and pro-Islamicstances. The BNP is committed to fostering a market economy and the privatesector, giving priority to industrialisation, and encouraging both domestic andforeign investment. The differences between the AL and the BNP in terms ofeconomic policy had largely disappeared by the late 1990s. However, a strongpersonal animosity between Begum Zia and Sheikh Hasina keep the twoparties apart.

Other parties active in Bangladesh include the Jatiya Party (JP), led by thedeposed president, General Ershad. It has experienced several damaging splitssince 1997 owing to its support for the ruling AL. The Jamaat-e-Islami(Jamaat) is a fundamentalist party that espouses an Islamic state. In recentyears it came under a severe onslaught from the ruling AL, which condemnedit for its pro-Pakistan stance at the time of the country’s liberation war in 1971.There are several leftist parties, including a communist party, which haveentered a variety of shifting alliances for electoral purposes.

General election results(no. of parliamentary seats)

19961979 1986 1988 1991 Feba Jun

Awami League (AL) 39 76 – 96 – 146

Bangladesh National Party (BNP) 207 – – 139 272 116

Jatiya Party (JP) – 153 251 35 – 31

Jamaat-e-Islami (Jamaat) – 10 – 18 – 3

Others 54 61 49 12 – 4

1973 1976 1983 1990 1995 2000

Total no. of voters (m) 35.2 38.4 47.3 62.0 60.0 77.7 % of the population 50.7 50.5 51.5 60.3 47.3 54.0

a Boycotted by opposition parties.

Source: Press reports.

Students are active in Bangladeshi politics, both within their own parties and inpolitical life generally. This stems from the important role they played in thecountry’s liberation war in 1971. In 1990 the All Party Students’ Union wasinstrumental in forging the alliance between the quarrelling opposition parties

Student politics

10 Bangladesh


that ultimately toppled the government of General Ershad. But the active roleof students in national politics has been criticised in recent years, as violentelements, including non-students, are perceived as dominating student politics.

The army has played a prominent role in Bangladeshi politics, especially since1975, and many leading politicians have been drawn from its ranks. After thefall of General Ershad in 1990, the army had to withdraw from the politicalarena to play a strictly military role. However, in May 1996, in the run-up tothe second general election held in that year, the chief-of-staff, General ASMNasim, staged a military revolt against the caretaker government, apparently inan attempt to ensure the installation of an AL government. Although theaction failed to gain widespread support, the episode demonstrated that,should there be a serious breakdown of law and order, military interventioncan not be ruled out.

Main political figures

Sheikh Hasina Wajed: Prime minister and leader of the Awami League (AL). Daughterof the founding president, Sheikh Mujib, she took over as leader of the AL in 1981.Under her leadership, the AL returned to power in 1996 after 21 years in opposition.

Begum Khaleda Zia: Leader of the Bangladesh National Party (BNP), the mainopposition party, and prime minister in 1991–96. Wife of a former president, ZiaurRahman, she took over the BNP leadership in 1981, following the assassination of herhusband by a group of rebel military officers.

General Hossain Mohammad Ershad: Ex-president and leader of the Jatiya Party(JP). He overthrew the government of Justice Abdus Sattar in a bloodless military coup in1982 and ruled as an autocrat up to 1990.

Shahabuddin Ahmed: Former chief justice and president of Bangladesh. He led acaretaker government in 1991 that oversaw the country’s first free and fair election. Hebecame president again in 1996, with the support of the AL.

Professor Golam Azam: Amir (leader) of the Jamaat-e-Islami, the country’s largestIslamic fundamentalist party. Remains controversial for his pro-Pakistani role in 1971.

Humayan Rasheed Chowdhury: Speaker of parliament. A career civil servant turnedpolitician, he was foreign minister in General Ershad’s government before he joinedthe AL.

International relations and defence

Bangladesh is a member of the South Asian Association for Regional Co-operation (SAARC), the South Asian Preferential Trade Agreement (SAPTA), theOrganisation of Islamic Countries (OIC), the Commonwealth, the Non-AlignedMovement (NAM), the World Trade Organisation (WTO), the UN, and manyother regional and international organisations.

The army’s role in politics

Bangladesh 11


Relations between Bangladesh and India have improved in recent years sincethe AL—traditionally more pro-Indian than the BNP—came to power. Disputesover sharing the water of the Ganges river, an insurgency movement in theChittagong Hill Tracts (CHT) and road transit through Bangladesh were factorsthat had soured relations over the years. In December 1996 a Ganges water-sharing agreement was signed. In December 1997 the CHT Peace Accord wassigned ending the 20-year tribal insurgency. In 1998 Kalpa Ranjan Chakma, atribal leader, was appointed minister for CHT affairs. In May 1999Joyotirindriyo Larma, alias Shantu Larma, who led the insurgency movement,was appointed chairman of the CHT Regional Council, composed of 22members, including 14 tribal rebels. In July 1999 the government agreed inprinciple to provide overland transshipment facilities to India. However, theproposal for transshipment between Bangladesh and India has been shelvedowing to sharp political opposition, especially from the BNP-led four-partyalliance. Railway and bus services, linking some key cities of both thecountries, have been introduced in recent years. The BNP rejects the Gangeswater-sharing treaty as a “hoax,” promises to cast aside the CHT treaty andsharply opposes the transshipment deal with India.

Relations with China have been improving in line with greater trade andassistance has risen. Bangladesh backed Nepal when India blockaded thelandlocked kingdom in 1989 and looked to Nepal for support against Indiaover the Ganges water-sharing issue. The relationship with the US hasimproved in recent years as US interest and involvement in oil and gasexploration in Bangladesh have intensified. As the leading importer ofBangladeshi ready-made garments (RMG), the US is also an important tradingpartner. Relations with Japan are getting stronger. Japan has emerged as thelargest bilateral donor to Bangladesh. Relations with Myanmar have beenunder pressure since 1992 when around 250,000 Rohingyas (Muslims from theArakan region of Myanmar) fled into the area around Chittagong allegingpersecution by the Burmese army. Most Rohingyas had returned by 1995, butabout 20,000 still remain in the camps in and around Cox’s Bazar.

The armed forces totalled 137,000 in 2000, with an army of 120,000, a navy of10,500 and an air force of 6,500. In addition, Bangladesh has a paramilitaryforce of 55,200. Expenditure on defence has hovered at around 2% of GDP inrecent years and is on the rise. The inclusion of Bangladeshi troops in UNpeacekeeping forces around the world has given the army an international roleand a new source of income for both itself and the government. Currentlyabout 2,100 Bangladesh nationals are serving in eight UN peace missions incountries spreading as wide as the Democratic Repunlic of Congo, Kosovo, EastTimor and Sierra Leone. At least 13 Bangladeshi soldiers have lost their lives inUN peacekeeping operations so far. The government has recently facedcriticism for its purchase of MiG–29s, air defence radars and some frigates.Opponents believe the low level of external threat does not warrant the cost,particularly as it will prove a drain on the country’s already precarious foreign-exchange reserves.

Relations with other states

Defence

Relations with India

12 Bangladesh


Defence forces, 1999

Army 120,000

Navy 10,500

Air force 6,500

Total 137,000

Paramilitary 55,200

Source: The International Institute for Strategic Studies: The Military Balance 1999/2000.

Bangladesh army opens the door to women

In a landmark decision, the Bangladesh army opened its officer ranks to femalecandidates in early 2000. The army received about 15,000 applications in July to createa platoon for the 47th Long Course. The first batch of female recruits, who are to becalled Gentle Women Cadets (GWC), will undergo a two-year training programme atthe Bangladesh military academy (BMA). Recruitment procedures for the females willbe the same as those for their male peers. The first intake of the female cadet officerswill be in their command positions by 2003. In the past, recruitment of female officerswas restricted to the Army medical corps. The Bangladesh army has a long history ofusing female inductees in its medical corps. Almost 33% of the army medical officers arefemales. However, this is the first time that females will be posted to active branches ascommissioned officers. Currently the army does not have provisions for recruitingfemales for non-commissioned positions. Bangladesh is the third country in South Asiato allow females officers in the army along with India and Sri Lanka.

Resources and infrastructure

Population

Bangladesh, with a land area of 147,570 sq km and a population officiallyrecorded at 111.5m in the census in 1991 and estimated at 130.2m in January2000, is among the world’s most densely populated countries (see Referencetable 1 for historical data on population). The urban population has beengrowing at roughly twice the overall population growth rate and now accountsfor around one-fifth of the total. The principal urban centre is Dhaka, followedby Chittagong, Khulna and Rajshahi. The 1991 census indicated that 88% ofthe population was Muslim, 11% Hindu and the remainder mainly Buddhistor Christian.

Bangladesh 13


Population by age, 1996

Age Population (m) % of total

0-4 15.5 12.7

5-9 18.7 15.3

10-14 15.4 12.7

15-24 21.3 17.4

25-34 17.4 14.2

35-44 13.4 10.9

45-59 10.7 8.8

60+ 9.7 8.0

Total 122.1 100.0

Source: Bangladesh Bureau of Statistics, Monthly Statistical Bulletin.

The population is estimated to be expanding at about 1.6% per year, andcontaining population growth remains a high priority, given the scarcity ofland and resources. Various internationally funded programmes havesupplemented government initiatives on population control and familyplanning. In 1998 Bangladesh had a crude birth rate of 19.9 per 1,000 and acrude death rate of 4.8 per 1,000. These rates compare well with otherdeveloping countries. As contraception use has become more prevalent, thefertility rate (the average number of children a women bears in her lifetime)has fallen to three children in 1999, from 6.8 in 1965.

Health indicators

1996 1997 1998

Crude birth rate (per 1,000) 25.6 21.0 19.9

Crude death rate (per 1,000) 8.1 5.5 4.8

Infant mortality rate (per 1,000 live births) 67 60 57

Maternal mortality rate (per 1,000 live births) 4.4 3.5 3.0

Life expectancy (years) 58.9 60.3 60.8


The agricultural sector is the country’s largest employer, providing work forabout 60% of the labour force. The government employs around one-third ofthose in formal sector employment, either directly in the civil service or instate-owned enterprises (SOEs). Since the early 1990s there has been a leap inthe size of the labour force following the recognition of many householdactivities, mainly carried out by females, as economic activities. In 1995/96(the latest data available) the civilian labour force stood at 56m compared with30.9m in 1985/86. Only 7.7% of the total labour force was classified asindustrial labour. (See Reference table 2.)

The number of Bangladeshis working abroad and the remittances fromemployment rose throughout the 1980s and 1990s. While only 78,000 skilledand unskilled persons obtained employment abroad in 1985/86, the numberswelled to 270,390 in 1998/99. Remittances from abroad rose from aboutUS$500m to US$1.6bn over this period. Popular destinations of Bangladeshiworkers are Saudi Arabia, the United Arab Emirates, Kuwait, Oman, and more

14 Bangladesh


recently, Malaysia. In 1997 some 54% of overseas workers were classified asunskilled, 20% as semi-skilled, and the remainder as professionals.

Education

Bangladesh has still not attained universal adult literacy, although in January2000 the adult literacy rate (over 15 years of age) increased to 60%, from 56%in 1999 and 51.2% in 1997. The literacy rate (over seven years of age) increasedto 50% in 2000, compared with 24% in 1991. Although large disparities remainbetween the urban and rural segments of the population and between malesand females, the gaps are narrowing. The government is the main provider ofprimary education, while private schools predominate at the secondary schoollevel. Primary education has been made universal, compulsory and free. Boysare entitled to five years of free schooling and girls eight years (reflecting thefact that families are less willing to pay to educate their daughters).

Expenditure on education

1995 1996 1997

Total public expenditure on education (Tk bn) 35.7 33.2 38.5

Per head public expenditure on education (Tk) 298 272 310


As a result of increased budgetary allocations, the employment of femaleteachers, stipends for female students, a food-for-education programme andenrolment in primary schools increased dramatically in the 1990s. The totalnumber of primary school children increased from 12m in 1990 to 20.7m in2000, and the proportion of female students of the total rose from 44.7% to48% over the same period. However, fewer than half of all children completefive years of primary education. According to government statistics, the poorquality of education (largely because of badly trained or absentee teachers,large classes and a shortage of books) is responsible for the fact that only 10%of those who enter primary school leave with any useful skills.

Secondary education is provided largely by the private sector. In 2000 therewere 12,400 secondary schools with 6.7m students. At the higher educationlevel, the many vocational and technical colleges and institutes are not wellattended. Universities receive generous government subsidies but generallyproduce poor-quality graduates at a high cost. Only 30% of university studentsare female. Female participation in the education system remains significantlylow compared with male participation and in comparison with many countriesin South-east Asia.

Health

Medical facilities are scarce in Bangladesh. In 1999 there were 30,629 hospitalbeds, 28,631 registered physicians, 16,972 registered nurses and 14,915midwives in the public sector, which provides more than 90% of the country’shealth services. In 1999 there was one hospital bed for 4,128 persons, one

Bangladesh 15


physician for 4,524 persons, one nurse for 7,547 persons and one nurse-assistant for 8,589 persons.

Spending on healthcare and family planning remained at around 1% of GDPover the period 1993–98, and government health spending per head is aroundUS$3.60 per year. Access to medical services is more restricted in Bangladeshthan in Pakistan and India. Government health services are seen as poor inquality, and only about 12% of serious cases are referred to public healthfacilities. Private clinics have been mushrooming in both urban and rural areas.In addition, non-governmental organisations (NGOs), such as the BangladeshRural Advancement Committee (BRAC), have been making some headway inthe provision of health services.

Bangladeshis suffer from some of the highest malnutrition levels in the world.Major problems include childhood protein-energy deficiency, maternal under-nutrition as evidenced by low weight, short stature and anaemia in expectantand nursing mothers, and micronutrient deficiencies, particularly of VitaminA, iron and iodine, which affect all ages. In 1996-97, 56% of children underfive were moderately or severely underweight, or suffering from moderate orsevere stunting. About 2m children suffer from an iodine deficiency disorder(IDD) and about 40,000 children go blind every year due to a vitamin Adeficiency. There have been some improvements in recent years—the infantmortality rate fell from 92 per 1,000 live births in 1991 to 83 per 1,000 livebirths in 1996, and the mortality rate for children under five fell from 146 per1,000 live births to 112 over the same period.

Natural resources and the environment

The land in Bangladesh is mostly flat, although there are some hilly areas inthe north-eastern and south-eastern regions. Much of the land is intersected bythe numerous waterways of the Ganges delta and the Brahmaputra river(known locally as the Padma and Jamuna), the annual flooding of whichprovides rich alluvial soils. The monsoon climate results in average annualrainfall that is among the world’s heaviest, exceeding 2,540 mm and fallingmainly between July and October. Every year massive flooding takes placeduring the monsoon season, with soil erosion and changes to the riverchannels posing constant problems. The possibility of natural disasters is a factof life as many Bangladeshis live in precarious dwellings close to rivers and thecoast. The low-lying area at the mouth of the Ganges delta is at risk of tidalsurges and cyclones.

Most of Bangladesh’s soil is rich and fertile. Forested land currently covers1.9m ha, or 12.7% of the total land area. Rice takes up about 75% of the totalplanted crop area. A large and growing proportion of the cropped area issubject to multiple cropping—weather conditions, improved seed varieties andirrigation facilities permit three rice crops each year. Bangladesh has littleadditional land that can be brought under crop production. According to theWorld Bank, the total land area available increased by about 4% between 1974and 1996, while during the same period land not available for cultivationincreased by 8%. This trend largely reflects the impact of urbanisation.

16 Bangladesh


Bangladesh is poor in non-energy minerals. Known resources include naturalgas, limestone, glass sand and certain heavy minerals such as traces of uraniumand thorium. There are five major coal deposits in the country, but many aretoo deep for commercial exploitation. The largest coal mines are: Khalashpir(Rangpur), which is 12.56 km wide with a reserve of 685m tonnes; Jamalgonj(Joypurhat), which is 11.66 km wide with a reserve of 1.1bn tonnes, andBarapukuria (Dinajpur), which is 5.25 km wide and has a reserve of389m tonnes. In 1995 deposits of high-quality bituminous coal were found atDighipara (Dinajpur), which probably contains the largest coal reserve in thecountry (see Mining and semi-processing).

Natural gas is the main energy resource, and to date 21 gasfields have beendiscovered—of which 12 are currently under production, five are awaitingproduction to begin and three have had production suspended. (See Referencetable 3 for historical data on energy reserves and production of natural gas.)Total reserves are estimated at around 23trn cu ft and recoverable reserves at13.8trn cu ft. In fiscal year 1999/2000 actual production was 307bn cu ft,compared with 282bn cu ft in the previous year.

Transport and communications

Poor transport facilities and infrastructure have severely hindered economicdevelopment. In recent years the situation has begun to improve. The roadnetwork now connects every district and subdistrict headquarters, even inremote areas in the country.

The problem of pollution and traffic chaos in the cities, particularly in Dhakaand Chittagong, is at the top of the government’s urban transport agenda, buta solution remains elusive. Outside the major cities the country is crisscrossedby a myriad of rivers and waterways. The 4.8-km-long bridge over the Jamunariver—the 12th longest in the world—was opened to traffic in June 1998. Thebridge provides crucial facilities for rail, gas and electricity transmission, andtelecommunications with the western part of the country, which hadpreviously been difficult.

Bangladesh had 2,733 km of railways in 1999, operated by BangladeshRailways—a state-owned monopoly, compared with 2,706 km in 1997/98 and2,874 km in 1972/73. Over the years the length of railways has declined,service standards deteriorated, and freight and passenger transportation onroads increased. With the opening of the Bangabandu bridge over the Jamunariver with provisions for rail lines and some railway links with neighbouringIndia, rail transport could acquire a new life.

Bangladesh Railway

1995 1996 1997

Railway locomotives (no.) 279 272 284

Coaching vehicles (no.) 1,323 1,277 1,245

Freight of wagons (no.) 17,498 19,948 16,092


Mineral reserves

Railways

Bangladesh 17


Railways operated 3.7bn passenger-km in 1998/99, compared with 3.9bn in1997/98, and carried a load of 3.76m tonnes of merchandise in 1998/99,compared with 3.14m in 1997/98. (See Reference table 4 for historical data ontransport.) Despite this slight increase in freight, the railway network remainsin long-term decline, needing large subsidies from the government, owinglargely to inefficient management and a failure to control costs and collectfares. In the meantime, many railway services, like ticket reservations and in-service catering, have been privatised. Currently an Asian Development Bank(ADB) financed project is advising on improvements to cost efficiency, labourrationalisation, institutional reform and economic investment.

Bangladesh had a road network of about 20,958 km in 1999, compared with16,070 km in 1995. Most district and upazila (subdistrict) towns have beenconnected. Currently 3,090 km of roads (15%) are national highways,1,752 km (8%) are regional highways and the remaining 16,118 km aresubregional or feeder roads. In addition, local governments maintain morethan 16,000 km of rural roads, but only 8,546 km of these are paved. In manyparts of the country, animal-driven carts still provide the main means of land-based transport for shorter distances. Despite the problems of road transport,66% of all freight and 73% of all passengers travelled by road in 1999, up from35% and 54% respectively, in 1975.

Waterways are becoming less important as a means of transport due to thedeclining navigability of some rivers and the poor performance of the largelystate-operated system. Currently, there are about 8,300 km of navigable inlandwaterways, although this drops to 3,800 km in the dry season. The network isparticularly important as it is one of the few transport links to some of themost remote parts of the country. Badly needed improvements to thewaterways include more dredging programmes, better boat safety regulationsand the privatisation of some of the ferry and cargo routes.

There are two major seaports, at Chittagong and Mongla, and smaller inlandports at Dhaka, Narayanganj, Chandpur, Barisal and Khulna. Chittagong is thelargest of the seaports, handling around 80% of imports and 75% of exports,and is well connected to inland road, rail, river and air routes. Containerhandling at Chittagong port has been increasing rapidly, from 150,000 TEUs in1992/93 to 365,000 twenty-foot equivalent units (TEUs) in 1998/99. Thequantity of cargo handled has also increased from 1.4m tonnes to 3.4m tonnesduring the same period. In 2000/01 container and cargo handling is projectedto increase to 415,000 TEU and 3.85m tonnes respectively.

The port authorities are now building additional berth facilities for increasedcontainer services and a new container yard. However, the labour unions areopposed to private-sector plans to set up two modern container terminals—oneat Patenga in Chittagong and the other at Pangaon in Dhaka. The Mongla porthandles around one-quarter of exports and imports, but making itcommercially viable would require improvements in its navigability for ocean-going ships.

Roads

Waterways

Seaports

18 Bangladesh


The national airline, Bangladesh Biman, serves 25 overseas and seven domesticdestinations, including direct flights between Dhaka and New York. Its fleetincludes five DC10-30s, three Airbus 310-300s, three F-28s and two ATPs. Oneof the DC 10-30s and one of the Airbuses were acquired in 1999 on lease forthree years. In 1998/99 Biman carried 1.22m passengers and 30,869 tonnes ofcargo, compared with 1.25m passengers and 32,313 tonnes of cargo in1997/98. Although Biman has traditionally been profitable, it has incurredhuge losses in the past few years. This may be partly the result of the sectorhaving been opened to private companies on both domestic and internationalcargo and passenger routes in 1996. Plans are under way to establish apartnership with another international airline by 2000.

The country currently has 14 operational airports—including two internationaland seven domestic ones—and two more under construction. The maininternational airport is Zia International at Dhaka. The flight handling capacityof Biman has been enhanced in recent years and works are in progress toestablish a computerised departure control system and to strengthen groundsupport equipment. The second international airport is in the port city ofChittagong, and plans are under way to upgrade the Sylhet airport tointernational standards by 2000.

With around four telephones per 1,000 inhabitants, Bangladesh has one of thelowest telephone densities in the world. The number of telephones hasincreased from 220,000 in 1991 to 460,000 in 1999. Digital telephone lines arereplacing analogue technology. Internal communication links consisting of23,185 nationwide dialling circuits are currently in operation, compared with11,410 in 1998. In addition, the number of international dialling circuits wasincreased from 1,645 in 1997 to 2,100 in 1999. A public telephone card systemwas introduced in 1992 and has been expanded to cover all district towns andsome upazilas. Some 800 operator-assisted dialling stations now providetelephone access to people in remote areas. However, despite these improve-ments, access to domestic and international telecommunications remainspoorly developed and inadequate to meet the growing demands of commerceand industry.

Private-sector investment in the telecommunications industry has beenallowed since 1992. The private sector is now operating cellular mobileservices, rural telephone exchanges, Internet and e-mail services, and pagingand operator-assisted services. Over 40 private companies have ventured intoInternet and e-mail services. The monopoly of the Bangladesh Telegraph andTelephone Board (BTTB) has been eliminated and its regulatory function isbeing transferred to an independent regulatory commission.

Postal services are extremely poor and archaic. There are 9,336 post offices inthe country: 793 in urban areas and 8,543 in rural areas. Only 164 postalstations, mostly in urban areas, provide guaranteed express post. Bangladeshhas agreements for an express mail service (EMS) with 45 countries, and for aninternational money order service with 13. The postal service is scarcelyavailable to the rural population. Before the completion of the bridge over the

Air transport

Telecommunications

Postal services

Bangladesh 19


Jamuna river, the entire north-western part of the country had a postal servicein name only.

There is a thriving local press with over 100 daily newspapers, a dozen ofwhich are published in English. The press has considerable freedom, althoughsome reporting restrictions were imposed during the periods of political unrest.Until recently radio and television were state monopolies. Since 1999,however, private television channels have been allowed—with the first onecoming into operation in early 2000. International television channels arepermitted to operate in Bangladesh.

Energy provision

Consumption of commercial energy per head is among the lowest in theworld, and a lack of reliable sources of electricity has been a major factor indeterring foreign investors and preventing the country from achieving higherlevels of economic growth. Installed capacity in 2000 stands at 3,673 mw,compared with 3,603 mw in 1999, but due to outdated plants and inefficientmanagement, actual production stood at 2,838 mw in early 2000, comparedwith 2,500 mw in 1999. This is higher than the recent average of 1,600–1,800mw. Per head electricity generation was 110 kwh in 2000, compared with 106kwh in 1999. However, 85% of households are without electricity, only 60% ofthe electricity generated is actually paid for and system loss often exceeds 30%.The electricity is mostly generated from gas—about 85%—and the rest comesfrom hydroelectric (7%) and liquid fuel (8%). In 1999 the household sectorconsumed 42% of the total produced, followed by the industrial sector with41%, the commercial sector 7% and the agricultural sector 5%.

The power supply remains severely stretched as peak hour demand is around3,150 mw. Inconsistent and low-voltage electricity supplies also make itimpossible for the state-run monopoly, the Water and Sewerage Authority(WASA), to operate its nationwide network of water pumps properly. Factoriesare often forced to run fewer shifts or opt for their own expensive generators,and irrigation systems in the countryside are often disrupted. In 1999 massiveload-shedding prompted street protests and demonstrations across the country,but by early 2000 the situation had improved, although widespread load-shedding continues.

The power crisis is likely to persist beyond 2000, despite new power plantscoming on stream and older plants being repaired. Progress is being made onthe quick completion of three barge-mounted power plants (BMPP)—a 110-mwplant in Khulna, an 82-mw plant at Bagabari and a 110-mw plant at Haripur.The commissioning of the plants has improved electricity supply in thenorthern region. The 210-mw Ghorasal power plant (public sector) began oper-ation in early 1999 and a 60-mw gas-based plant is expected to come on streamshortly. Two more plants—the 450-mw Meghnaghat plant and the 360-mwHaripur plant, along with three 30-mw plants of the rural electrification board(REB), are currently at various stages of installation. The new plants will add1,200 mw of new capacity to the national power grid by 2002.

Media

Electricity

20 Bangladesh


Gas reserves, Aug 2000(trn cu ft)

Known discovered (proven & probable) 23.1

Proven recoverable 13.8

Already used –3.7

Total recoverable reserves 10.5

Source: Ministry of Finance, Bangladesh Economic Survey.

Bangladesh has abundant reserves of environmentally-friendly natural gas.Total reserves are estimated at 23.1trn cu ft and recoverable reserves at13.8trn cu ft, of which 3.7trn cu ft has been extracted. Annual gas utilisationhas ranged from 260bn cu ft in 1995 to 370bn cu ft in 2000, but demandcontinues to rise and a large proportion of the population remains withoutaccess to gas. Gas transmission lines are currently being extended into thenorthern and western regions of the country following the construction of theJamuna bridge. The relatively recent Ashugonj-Bakhrabad pipeline, completedin 1998, allows the Surma basin to supply the Chittagong region. About 50%of the gas produced is used for power generation, followed by fertiliserproduction, household cooking and other industrial and commercial uses.

Production-sharing gas exploration contracts (to Dec 1999)

ExplorationOil company block Location

Occidental of Bangladesh Ltd 13, 14 Greater Sylhet district

Occidental Explorations of Bangladesh Ltd 12 Greater Sylhet district

Cairn Energy & Holland Sea Search JV district 15, 16 Bay of Bengal & Greater Chittagong

Rexwood Oakland JV 17, 18 Bay of Bengal

United Meridian Corporation 22 Greater Chittagong Hill district

Source: Petrobangla.

As a result of the gas sector being opened to foreign investment in the late1990s, six production-sharing contracts (PSCs) have been signed with inter-national oil companies for gas exploration in eight blocks. Of the remaining15 blocks, bids have been accepted for six of the blocks. However, the oftendubious bidding procedures have not escaped international press attention.

Pressure for gas exports mounts

The government has come under increasing pressure in recent years to allow gasexports to India. Foreign investors involved in gas exploration in Bangladesh are findingthat the domestic market is too small to recoup their investments. The World Bank,Asian Development Bank (ADB) and even the US president on a recent trip toBangladesh have stepped up pressure, arguing that revenue from the export of gaswould improve the country’s fragile foreign-exchange position and increase foreigndirect investment (FDI). However, both the ruling Awami League (AL) and theopposition Bangladesh National Party (BNP), who rarely agree on anything, remaincommitted to exporting gas only after ensuring that the country has 50 years worth ofreserves for domestic use. It remains to be seen whether gas exports to India willcommence after the next general election scheduled for June 2001.

Gas

Bangladesh 21


Primary energy balance, 1999(m tonnes oil equivalent)

Elec-Oil Gas Total tricity Other Total

Primary production 0.05 7.30 0.22a 0.22 7.00 14.57Imports 2.80 2.80Exports – – – – – –Stock change etc – – – – – –

Primary supply 2.85 7.30 0.22a 0.22 7.00 17.37Losses & transfers 0.30 3.55 0.47 – – 4.32Transformation output – – 1.31b – – 1.31

Final consumption 2.55 3.75 1.06b 7.00 14.36

Note. Losses and transfers comprise input to transformation processes (electricity generation, gasmanufacture, liquids from coal etc), plus energy industry fuel and losses. In the electricity columnprimary electricity output and imports/exports of electricity are expressed as input equivalents, onan assumed generating efficiency of 33%.a Input basis. b Output basis.

Source: Energy Data Associates.

The economy

Economic structure

Main economic indicators, 1999a

Real GDP growth (constant market prices; %) 5.5

Consumer price inflation (av; %) 6.3

Current-account balance (US$ m) 291.4

Exchange rate (av; US$) 49.1

Populationb (m) 127

Foreign debtc (year-end; US$ bn) 17.1

a Provisional estimates for fiscal year ending June 30th 1999 derived using 1995/96 as the base yearunder the new accounting system. b Mid-year 1999. c Estimate.

Source: EIU, CountryData.

Agriculture currently contributes 25.5% to nominal GDP. (See Reference tables5-8 for historical data on GDP.) In addition to meeting the nation’s foodrequirements, agriculture supplies raw materials for the manufacturing andagro-processing sectors. Bangladesh has almost achieved food self-sufficiencyand has diversified the crop base (wheat is now the country’s second largestcrop after rice). However, unpredictable climatic conditions—flooding anddroughts—regularly undermine production plans and targets, disrupt theeconomy, and necessitate food imports.

22 Bangladesh


Revisions to the national accounts

Poor quality data collection, incomplete coverage of economic activities, outdatedaccounting methods and the existence of a huge shadow economy have long beenresponsible for a lack of reliability and consistency in national accounting in Bangladesh.In 1996 a national accounts task force was formed to update the system of nationalaccounting (SNA) reflecting World Bank and UN guidelines.

A revised set of accounts was drafted for 1989/90 with the following changes: datawere rebased to 1989/90 (rather than 1984/85); the coverage and weights ofdeflators were updated; and GDP by industrial origin was re-classified into 15 mainsectors compared with 11 previously. As a result of these changes, the value of GDP atcurrent market prices rose by 30%. Furthermore, the sectoral breakdown of GDP haschanged—agriculture’s share of GDP fell to 25% in the 1989/90 series compared with30.9% under the old; industry’s share rose to 25% compared with 17.6% (mainlyowing to an upward revision of construction value added); new investment/GDPratios rose to between 17% and 19% under the new series compared with 11.5-16.6%;and, domestic savings ratios increased to between 10.6% and 13.3% compared with2.7-8.2%.

The SNA was reviewed again in 1999 and rebased to 1995/96. The current series givesgreater coverage to private health, education and non-profit institutions. Under therevised estimates released in March 2000, relative to the 1984/85 series, GDP growth atcurrent market prices falls from 6% to 5.5%. The share of agriculture rises slightly to25.5% in the 1995/96 series, and the share of industry rises to 26%, while the servicessector estimates remain the same at about 49%. The domestic savings and investmentratios in the 1995/96 series are slightly lower, but the rates of growth of savings andinvestment are higher.

Most non-agricultural raw materials, machinery and equipment have to beimported. Although natural gas production is increasing, Bangladesh still runsa heavy fuel import bill. Attempts are being made to diversify the economicand export base by promoting industries such as information technology andagro-processing, but the opportunities and success of the programmes havebeen limited.

Industrial activity is centred largely on Bangladesh’s two main cities, Dhakaand Chittagong. Export processing zones (EPZs) have been set up in both citiesto attract foreign investors, and offer generous tax concessions to firms thatlocate there. Of the industrial sector’s contribution to nominal GDP, large-scaleenterprises (that employ more than ten workers) account for around two-thirdsof total industrial output.

Bangladesh 23


Comparative economic indicators, 1999

Bangladesh India Pakistan Sri Lanka Vietnam

GDP (US$ bn) 36.6 430.0 64.0 15.7 27.8

GDP per head (US$) 291.0 440.0 480.0 830.0 350.0

Consumer price inflation (av; %) 6.3 5.0 4.1 4.7 4.3

Current-account balance (US$ bn) –0.3 –4.9 –1.8 –0.7 0.3 % of GDP –0.8 –1.1 –2.9 –4.2 1.0

Exports of goods fob (US$ bn) 5.5 36.7 8.8 4.9 11.5

Imports of goods fob (US$ bn) 7.4 47.1 9.8 5.7 10.4

External debt (US$ bn) 17.1 100.1 35.6 9.5 10.5

Debt-service ratio, paid (%) 7.8 18.5 15.3 8.4 9.3

Source: EIU, CountryData.

Economic policy

Successive governments in Bangladesh have been confronted with the problemof how to raise the rate of economic growth in a country where a substantialsegment of the population lives below the subsistence level. According to theWorld Bank, the incidence of poverty, as measured by the cost of basic needs ofthe very poor, declined from 42.7% in 1991/92 to 35.6% in 1995/96. However,this masks the fact that poverty remains much higher in rural areas (39.8%)than in urban areas (14.3%).

Bangladesh remains highly dependent on foreign aid, not only fordevelopment projects but also for food for the poorest segments of thepopulation. As a condition of foreign aid, the government has been forced topursue economic policies aimed at encouraging GDP growth, increasingdomestic foodgrain production and reducing the country’s reliance on foreignaid, but with varying degrees of success. As donor fatigue increases, thepressure for reform will mount.

Summary of government finances, 1999/2000a

% changeTk bn year on year

Total revenue 241.5 22.6 Tax 186.3 43.5 Non-tax 55.2 17.5

Total expenditure 333.0 13.8 Current expenditure 178.0 6.2 Annual Development Plan 155.0 24.0

Budget balance –91.5 –3.2

a Provisional—based on budgetary estimates.

Source: Ministry of Finance, Bangladesh Economic Review, 2000.

Economic policies are guided by five-year plans, although most have failed toachieve their, usually unrealistic, objectives. GDP growth in the 1970s and1980s averaged around 3.3%, well below target owing to plans being derailed

Alleviating povertythrough growth

24 Bangladesh


by problems both at home and abroad—the world oil price shock, severe floodsand cyclones, political disorder, and inept economic management. Neverthe-less, some progress has been made over the years. In the 1990s GDP growthmoved to a higher trajectory of an annual average rate of around 5%. Thecountry has gained near self-sufficiency in foodgrain production, reduced therate of population growth, lowered the incidence of poverty and raised exportincome, particularly in the case of the vibrant ready-made garments(RMG) sector.

Policies that promote economic liberalisation gained momentum in the late1980s and have been continued by both the Bangladesh National Party (BNP)and the Awami League (AL) governments in the 1990s. In 1991-96 theBNP government emphasised policies aimed at raising economic growth—downsizing the role of government, encouraging the private sector andattracting foreign investment. The BNP government also attempted to improvethe fiscal balance by reducing current expenditure and increasing tax revenuethrough expansion of the tax base and improving collection andadministration. Despite stiff opposition, in 1992 value-added tax (VAT) wasintroduced.

As revenue increased, the proportion of development projects that could befinanced from domestic resources peaked at 48.9% of the Annual DevelopmentPlan (ADP, the government’s capital expenditure programme) in 1996/97, buthas since fallen. In 1998/99 the proportion fell to 31% as a result of thedevastating floods of that year. This has raised the country’s dependence onforeign aid but the share is forecast to recover to over 50% in the currentfiscal year.

The AL has pursued similar economic policies to those of the former BNPgovernment. The current government has broadened the VAT net, tightenedtax administration and further streamlined tariff rates. The import dutystructure has been liberalised by reducing the highest rate of duty andeliminating previously existing anomalies in the duty rates for finished goodsand raw materials. (See Reference tables 9 and 10 for historical data on centralgovernment finances and tax revenue receipts.) However, the fiscal deficitremains stuck above 5% of GDP due to both expenditure overruns and revenueshortfalls. Revenue collection fell below target again in 1999/2000 owing to atoo ambitious target, and widespread mismanagement and corruption in theadministration of tax revenue.

The banking system remains fragile. The central bank continues to set interest-rate bands for different types of loans and has been slow to develop a moremarket-oriented policy, focussing on regular Treasury-bill auctions andmonitoring of the bank rate. Money supply grew more rapidly than nominalGDP in the 1990s and interest rates were cut several times. (See Referencetables 11 and 12 for historical data on money supply and interest rates.) In theearly 1990s the government dealt with the resulting inflationary pressures bygradually raising interest rates and selling government bonds to soak up theexcess liquidity. In the late 1990s several bumper harvests kept inflation under

Economic liberalisation

A fragile banking system

Bangladesh 25


check—food prices constitute a disproportionate share of the consumer priceindex—and overall investment sentiment remained subdued.

Major changes in the 2000/01 budget

• Personal income tax ceiling raised to Tk100,000; tax holiday for various industries—including tourism and infrastructure—extended until 2002; and the facility to “whiten”black money extended.

• Tax relief granted on investments up to Tk200,000 and tax exemption up toTk250,000 granted for investment with publicly traded companies.

• Tax exemptions granted for donations to welfare organisations for the disabled and100% charitable hospitals outside city corporations and income from micro-credit.

• Value-added tax (VAT) withdrawn on raw materials for TSP and SSP fertilisers, pro-vitamins and vitamins used for animal foods, import and production of spare parts fortextile and jute mills, rubber slippers and plastic footwear, production of spare parts forbicycles, newsprint, modem, CD-ROM drive, CD and software.

• Import duties have been withdrawn for CNG-propelled double-deckers, import ofmedical equipment, chemicals and reagents, bay-incubator, colour televisions, videoand cassette players. Public buses with 40 seats or more capacity will pay 5% importduty. Import duty on gold reduced to Tk200 per tola (11.7 g). Individuals are permittedto import a maximum of 10 kg of gold and 20 kg of silver.

• Supplementary duty on raw materials for agricultural products reduced to 5%; andduty on cars with cylinder capacity between 850cc and 1,049cc reduced to 25% from32.5%, and for cars ranging from 1,050cc to 1,349cc to 45% from 52.5%.

• VAT imposed on four-stroke auto-rickshaws and tempos (a variety of auto-rickshaw),their engines and chassis, and reconditioned pickups. The import of auto-rickshaw andtempo engines has been banned.

• The import and production of black polythene bags has been brought under the VATnet, and VAT and supplementary duty has been imposed on cigarettes through theintroduction of a band roll system.

• Supplementary duty has been increased on toilet tissue and napkin papers to 25%from 20%; duty on facial tissue stock and napkin stock has been increased to 10% from5%; and a supplementary duty of 100% has been imposed on imports of four-strokeauto-rickshaw engines and chassis with engine.

• Tk18bn interest-earning bonds are to be issued by the government to pay for theaccumulated debts of state-owned enterprises (SOEs), and a Tk1bn equity developmentfund is to be developed for investments in viable software, food processing and agro-processing industries.

However, as a result of an expansionist monetary policy, the broad moneysupply (M2) rose by almost 20% year on year in the first quarter of 2000 toTk714.8bn (US$14.7bn) from Tk599.7bn in March 1999. The narrow money

26 Bangladesh


supply (M1) rose by 18.8% year on year to Tk198.3bn. M1 and M2 rose by7.4% and 11.4% in 1997/98 and by 12.8% and 15.5% respectively, in 1998/99.

The banking system is beset with bad debts, corruption and overstaffing. Thegovernment has set reform of the sector as a priority on its economic policyagenda. In 1999 about 40% of the combined portfolio of the nationalisedcommercial banks (NCBs) and private domestic banks (PDBs), which commandabout 80% of loans and 90% of total deposits, was classified as non-performingloans (NPLs). A large part of the problem is poor collection of bad loans andthe archaic legal system that allows the defaulters to delay paymentindefinitely. In recent years some changes have been introduced in the legalframework to facilitate bad debt collection and some progress has been made.

In 1972, under a government committed to socialist principles, Bangladeshintroduced wholesale nationalisation of industrial, commercial and tradeenterprises. In recent years attempts have been made to reduce governmentinvolvement in industry and to increase the role of the private sector. Morethan 600 state-owned enterprises (SOEs)—ranging from small to large,commercial to industrial—had been either denationalised or divested by 1986.However, the process came to a standstill after this, and in 1993 the BNPgovernment of Begum Khaleda Zia established a Privatisation Board to expeditethe divestment processes. This was followed by a law in 1994 that allowedSOEs to be turned into public limited companies. However, despite theseefforts only 12 SOEs were privatised during the BNP government, and withonly nine privatised by the AL government so far, neither government hassucceeded in accelerating the process.

In March 2000 a privatisation act turned the Privatisation Board into aprivatisation commission with greater power and flexibility. Around 90 SOEsare now targeted for privatisation through direct sale or stockmarket flotation,and government shares in some joint-venture companies have been offloaded.The gross losses of non-financial SOEs remain at around 2% of GDP, while thepublic sector still controls over 40% of the country’s manufacturing and utilityassets. However, as a result of a lack of political commitment, bureaucratic andlabour union resistance, the pace of privatisation remains slow.

The country’s first export processing zone (EPZ) was built in Chittagong in theearly 1980s and is dominated by garments manufacturing firms. The DhakaEPZ, which specialises in high-tech firms, was opened in 1993. At least threeother EPZs are now being developed, one at Chalna near Mongla port inKhulna, one in Comilla and a private EPZ in Chittagong. They are currently atdifferent stages of completion. Two more EPZs are being planned at Ishwardi inPabna and Niphamari (a northern district). Up to January 2000, a total ofUS$413m had been invested in the country’s EPZs, which fetched exportincome of US$711m, which was 13.4% of the country’s total export earningsin 1999/2000. A total of 149 firms are located in these EPZs, of which 23%make ready-made garments and 11% textiles, employing 85,238 persons. SouthKorea remains the largest investor, followed by Japan, the US, the UK, China,Malaysia and India.

Privatisation of state-owned industries

Export processing zones

Bangladesh 27


The liberalisation of industrial and investment policies in the 1990s hassharply reduced bureaucratic control over private investment and opened upmany investment areas previously reserved for the public sector. Exchangecontrols were liberalised for current-account transactions; the Board ofInvestment (BOI) was given the task of facilitating rather than regulatinginvestments; and import controls were reduced and import permits abolished.VAT replaced import sales taxes, and most domestic excise duties and tariffrates have been simplified and reduced. In 2000 the highest rate of import dutywas 35%, although an infrastructure development surcharge (IDS) of 2.5%,introduced in 1997, has been retained. Cotton (import) synthetic staple fibreyarn and fabrics are exempt from both the 2.5% IDS levy and the 15% on VAT.In the 1990s exports were encouraged through duty-drawback schemes andspecial bonded warehouse (SBW) facilities. The SBW schemes have been crucialfor the success of the RMG industry. Firms located in EPZs can import capitaland raw materials free of duty, retain foreign-currency earnings, employexpatriates and non-unionised labour, and enjoy ten-year tax holidays andpreferential treatment in establishing utility connections.

Economic performance

Based on the 1984/85 national accounts series (see box: Revisions to nationalaccounts), the economy grew at an annual average rate of 4% in the 1980s, butmoved to a higher 5% growth trajectory in the 1990s. The credit for this hasoften been given to the rapid liberalisation of the early 1990s. The top customsduty rate was cut from 350% in 1991 to 35% in 2000. The rate of GDP growthreached 5.9% and 5.7% in 1997 and 1998 respectively, and 5.2% in 1999. (SeeReference table 8 for historical data on GDP by sector.) According to the WorldBank, sectoral growth rates also improved in the 1990s. The annual averagegrowth rate of the agriculture sector reached 3.3% in the 1990s compared with2% in the 1980s. Manufacturing sector growth rose from an annual averagerate of 3% in the 1980s to 7% in the 1990s. Export growth followed a similartrend, growing by an annual average of 16% in the early 1990s, compared with7% in the 1980s.

Despite the vagaries of the weather, agriculture, representing about a quarter ofGDP in 1999/2000, remains the driving force behind economic growth,particularly as the industrial sector sources many of its inputs from the cropand fisheries sectors. The catastrophic floods of 1998 damaged infrastructureand disrupted normal economic activities for several months. However, theywere followed by several bumper harvests in the post-flood seasons, which areexpected to push up the rate of GDP growth in 1999/2000 to a respectable 6%(based on the 1984/85 national accounts series) or 5.5% (if the new series using1995/96 as the base year is adopted). As a result of more effective flood relief,agriculture grew by over 7% in 1999/2000, boosted by the higher growth of itssubsectors—fisheries, livestock and forestry.

Incentives for privateinvestment

Erratic GDP growth

28 Bangladesh


The slowdown in the RMG sector dampened overall manufacturing growth in1999/2000 to 4.2%, which was an improvement over 3% in 1998/99, but adismal performance compared with 9.5% in 1997/98. The growth of small-scale industries improved dramatically in 1999/2000 to reach 4% from 0.7% inthe previous fiscal year, while large-scale industries grew by 4.3% in 1999/2000,a small improvement on the 4.2% achieved in the previous year.

Export earnings rose by 7% year on year to US$4.6bn in the first ten months of1999/2000. While leather and other primary commodities, raw jute, knitwear,frozen food, and petroleum products exceeded the export targets in 1999/2000,other exportables, such as ready-made garments, jute products and tea, did notmeet their targets. The government has increased its efforts to set up displaycentres in Bangladesh’s overseas missions and websites in an attempt toboost exports.

In 1998/99 national income (GDP) per head reached around Tk18,528(US$377), having risen by an annual average of only 3% in real terms since1993/94. A growth rate of around 7% has been targeted as necessary if there isto be any meaningful reduction in poverty. A major obstacle to achieving thistarget has been a failure to raise the rate of savings and investment as apercentage of GDP. The domestic savings rate increased to 17.8% in 2000 from14.6% in 1991, and the investment rate to 22.6% from 19.7% during the sameperiod. The private sector provides about 71% of investment and the publicsector 29%. In recent years approximately 80% of total investment has beenconstruction-related, with the private sector accounting for two-thirds.Investment in machinery and equipment follows. With only limitedopportunities to expand investment from domestic sources, the country’spriority remains attracting foreign direct investment (FDI), by encouragingexport-oriented industries, reducing bureaucratic obstacles and selling off loss-making SOEs.

Macroeconomic stability kept inflation rates between 2.5% and 8.9% in the1990s. Food accounts for almost two-thirds of the index, and consequentlyfood prices are the main determinant of inflation. In December 1998 theinflation rate soared to 12%, owing to the food shortages caused by the floods.But with an increase in the availability of food in recent years, the inflationrate began to decline, and in March 2000 point-to-point inflation stood at3.2% and food inflation at 3.1%. (See Reference tables 13-15 for historical dataon prices.) Although inflationary effects have been unevenly spread betweenrural and urban areas, and rich and poor households, since the early 1990s thedifferences in price rises between different income groups have become lesspronounced. Despite the recent expansion in monetary policy and increasedborrowing by the government from domestic banks, inflation remains subdueddue to increased availability of food at cheaper prices and slack industrialactivity in the country.

Low savings andinvestment rates

Inflation remains subdued

Bangladesh 29


Prices and wages, 1999(% change)

Annual average 1999a 1995-99a

Consumer pricesRural population (national) 8.6 5.0 of which: food 11.4 5.2 Rural population, Dhaka region 9.7 <> of which: 4.0 food 13.2 5.0

Wage ratesManufacturing 5.3 5.3 Agriculture 4.3 3.4 All occupations 5.5 4.8

a Fiscal years ending June 30th.


Wage growth has tended to fall behind inflation rates since the mid-1990s. Theaverage wage increase (across all occupations) in 1998/99 was 5.5%, while theaverage increase in the rate of inflation was 6.3%. Wages are growing fastest inthe construction sector, followed by the manufacturing sector. Wages in theagricultural sector picked up from 3.7% in 1997/98 to 4.3% in 1998/99. (SeeReference table 16 for historical data on index of nominal wages.)

Regional trends

There is a considerable disparity in incomes across the country. Income perhead is highest in the centres of economic activity—in Dhaka, Chittagong andKhulna. Dhaka is the seat of the government, has the largest internationalairport and is at the centre of the country’s transport network. Chittagong isthe country’s main port and commercial centre and the first EPZ was locatedthere. The airport at Chittagong is being upgraded and is likely to reachinternational standards very soon. (The government has also announced plansto upgrade Sylhet airport to an international airport in the near future.)Inhabitants of Chittagong enjoy an income per head well above the nationalaverage, largely due to the economic benefits of Chittagong port. In contrastpeople living in northern districts such as Rangpur and Pabna, situated alongthe Ganges-Jamuna rivers, have an income per head lower than the nationalaverage. The opening of the 4.8-km Jamuna bridge in June 1998 has improvedaccess to the northern and western areas of the country. The bridge provides arail and road link, and carries a gas pipeline. Of the three main river systems inthe delta, the Meghna and Brahmaputra (Jamuna) now have bridges, leavingonly the Padma without a fixed link. Talks are currently taking place withJapan to arrange assistance to build a bridge over the river Padma.

Wage rates

30 Bangladesh


Economic sectors

Agriculture, forestry and fishing

Using the new national accounts series derived from the base year 1995/96,agriculture accounted for 25.5% of nominal GDP in 1999/2000. The decliningshare of agriculture in GDP arises from the incorporation of many informalsector activities into the GDP calculation that were hitherto unaccounted for.The crop sector contributed 15.4% to GDP in 1999/2000, maintaining itsposition as a major source of agricultural growth. Moreover, other subsectors ofagriculture—fisheries, livestock and forestry—also experienced higher growthrates on a sustained basis in the 1990s. (See Reference table 17 for historicaldata on agricultural crop production.)

Serious flooding is a constant threat to agricultural production, destroyingcrops, livestock and human life, and placing unforeseeable strains on foreign-exchange requirements and exports, particularly when jute or tea crops aredamaged. Despite a noticeable improvement in recent years, crop yields,particularly food crops, remain well below attainable levels. Application ofchemical fertilisers is infrequent and unbalanced, and although use isincreasing, the fertility of the land has fallen in recent decades. Manure fromanimals is still by far the largest source of fertiliser. The distribution andmarketing of fertiliser was privatised in the late 1980s, but governmentcontrols have been resumed following the fertiliser crisis in 1995.

The total land area of Bangladesh is about 35m acres, of which two-thirds isunder cultivation. The population explosion, urbanisation and river erosionhave reduced the proportion of cultivated land over the years. Around 5% offarm households own and operate about one-quarter of all agricultural land inthe country. Agricultural land is highly fragmented due to the populationincrease and cumbersome inheritance rights. The fragmentation of farms andthe insecurity of tenure discourage investment in the long-term productivity ofthe land. The use of more intensive methods of cultivation and moderntechnology to raise agricultural output has begun to marginalise the peasantry,with small farmers using traditional farming methods finding it difficult tosurvive. Liberalisation of seed policy has allowed the introduction of new high-yielding varieties of rice and wheat, and has contributed to increasedproduction.

Land utilisation

1983-84 1997

Total operated area 22,674 20,209

Net cultivated area 20,238 17,449

Uncultivated area 2,436 2,760

Source: World Bank, Bangladesh: Study of Land Issues.

The area under irrigation has expanded from 17% of cropped land in the late1980s to 54% in 1999, with modern methods, such as pumps and shallow and

Severe flooding is aconstant threat

Structure of land andfarm ownership

Bangladesh 31


deep tube-wells, gradually replacing traditional ones. By 1999 about 4m hawere irrigated. This has helped to raise yields, especially for the boro (dryseason) rice and vegetable crops. However, the long-term future of tube-wellirrigation, which supplies over 90% of the irrigated area and has been thelinchpin of agricultural growth, is now being questioned. There is widespreadbelief that the recent arsenic crisis, which emerged as a serious health hazardfor a large segment of the population, was related to the suction ofunderground water for irrigation.

The introduction of high-yielding varieties of rice, coupled with increasedirrigation and fertiliser application, has resulted in an almost doubling of riceproduction in the last two decades, overtaking population growth. Riceproduction increased from 17.8m tonnes in 1990/91 to 19.9m tonnes in1998/99. The major contribution came from high-yielding boro varieties,production of which has almost doubled in the last ten years, from6.3m tonnes in 1991 to an estimated 10.6m tonnes in 1998/99. However, riceproduction remains susceptible to drought, floods and fertiliser shortages, asmanifested in 1998 when the devastating floods wiped out much of the ausand aman harvests and the government was forced to import and arrange foodaid of more than 1m tonnes. Output of wheat, the second largest foodgrain,grew rapidly over the same period, from an annual average of 100,000 tonnesin the early 1970s to about 2m tonnes in 1998/99. This was achieved byplanting high-yielding varieties and bringing new areas under wheatcultivation.

Bangladesh is the largest exporter of raw jute in the world. Jute also constitutesan important industrial raw material and export commodity. Bangladeshaccounts for as much as 30% of world jute production, 90% of world jute fibreexports and 50% of jute manufactured exports. About 3m farm households areinvolved in the production of this cash crop. The area under jute fluctuates inresponse to changes in the relative procurement prices of jute and rice, but hasbeen declining. In 1998/99, 1.2m acres of land were under jute cultivation,compared with 1.4m acres in 1997/98. Exports of raw jute have also fluctuatedin recent years. In 1998/99, Tk2.7bn (US$55m) was earned from exports of rawjute, compared with Tk4.8bn in 1997/98.

Tea is an important cash crop and export commodity, and exceptionally strongdemand raised tea exports in the late 1990s. The production of tea has risenfrom 38,000 tonnes in 1981/82 to 56,000 tonnes in 1998/99, but it stillremains below potential, despite a major rehabilitation program carried out inthe 1980s. The export of tea represented less than 1% of the country’s overallexport income in the late 1990s. Poor climatic conditions, managementproblems in the tea estates, falling demand for Bangladesh tea and low teaprices are some of the problems afflicting the industry.

Other important crops include sugarcane, tobacco and cotton. Sugarcaneoutput is broadly static but subject to wide swings from year to year. In theearly to mid-1990s production ranged between 7,000 and 7,500 tonnes peryear. Low mill prices have diverted some cane from crushing at the mills to use

Tea

Other crops

Jute

Rice

32 Bangladesh


in the production gur, used as a local sweetener. Smuggling of cheaper sugarfrom India is a constant problem. Tobacco output, which finds a ready marketinside the country, has started to decline since the mid-1990s. Cotton is afairly new crop. There are plans for large production increases in order toreduce Bangladesh’s high import bill for the commodity, used to supply thetextiles and garments industry.

The livestock sector grew strongly in the 1990s. In 1999/2000 the sectorcontributed 3% to GDP growth and 16% to agricultural growth. While it isonly a minor source of food, it plays a critical role in agriculture—oftenproviding the only source of non-human farm energy (providing most of thedraught power for ploughing, crushing and rural transportation) and manure,the largest source of fertiliser. The sector also provides hides and skins, whichare major sources of export income. It has a huge potential in contributing toincreased employment as well as poverty alleviation in rural areas. Currentlyabout 25% of the population is directly involved in this sector.

Bangladesh has a total forest area of approximately 2.5m ha, covering just over17% of the total land area. In 1999/2000 forestry contributed 1.9% to GDP and9.8% to agricultural GDP, and grew at a rate of 4%. A 20-year plan has beenundertaken since 1993 to expand forestry and preserve the ecological balance.In addition, massive tree plantation programmes are under way under theForestry Policy initiated in 1994. The commercial felling of timber is limited,amounting to around 6.1m cu ft in 1994/95. It is used for sawn timber and toproduce pulp for the paper and newsprint industry. Besides providingindustrial and commercial raw materials, forestry remains a major source offirewood for the rural population.

With about 4.3m ha of rivers, canals, ponds and water reservoirs, and12 nautical miles of territorial waters around the Bay of Bengal, Bangladeshoffers tremendous prospect for fisheries development. In 1999/2000 this sectorcontributed 4.9% to overall GDP, 6% of export income and nearly 60% of theprimary exports, especially through the export of shrimp. In 1999/2000 exportearnings from shrimps were Tk16bn, 42% higher in volume and 39% higher invalue than in 1998/99. Overall export earnings from the fishing sector wereTk18.1bn, the highest record so far. There are 776 fish hatcheries in thecountry—141 in the public sector and 635 in the private sector—and fishproduction stood at 1.6m tonnes in 1999/2000.

Mining and semi-processing

New figures for the contribution of mining and quarrying to GDP (using1995/96 as the base year) suggest that the contribution in 1998/99 and1999/2000 was 1%, down slightly from the previous two years. Mining andmineral exploration are carried out under the auspices of the publicly ownedPetrobangla (Bangladesh Mineral Exploration and Development Corporation).The only minerals commercially exploited at present are limestone and chinaclay, although there are plans to mine coal, with Chinese assistance, from

Livestock

Forestry

Fishing

Bangladesh 33


Barapukuria in Dinajpur. (See Reference table 18 for historical data onproduction and value of non-energy minerals.)

Manufacturing

The manufacturing sector is largely involved in the processing of domesticallyproduced agricultural raw materials, such as jute and tea. In recent yearsindustrial activities have been expanded into new and non-traditional areassuch as ready-made garments (RMGs) and fertiliser manufacturing. Small-scaleindustries, often utilising little capital and making simple goods wholly for thedomestic market, have declined in recent years. (See Reference table 19 forhistorical data on production and value of selected manufactured items.)

Despite the growth of large-scale manufacturing, the sector still accounts forjust 14% of nominal GDP (using 1995/96 as the new base year for nationalaccounting). Recent government policy to revitalise the sector hasconcentrated on promoting private-sector investment (which was about 15.6%of GDP in 1998/99) in order to achieve rapid industrialisation, mainly throughan export push and the gradual lowering of tariffs and import controls. Currentindustrial policy is aimed at raising the contribution of the industrial sector toGDP and the proportion of the labour force employed in the sector over thenext decade. It also aims to eliminate differences between domestic andinternational investment, and to diversify the industrial base.

State-owned enterprises (SOEs) still dominate the sector and are among theworst performers in terms of investment, growth and efficiency. The combinedlosses of the SOEs grew to around US$500m per year in the late 1980s, but fellsharply in the late 1990s after the government stopped providing subsidies tothe jute sector—the largest loss-maker—under the Jute Sector AdjustmentCredit (JSAC) provided by the World Bank in 1994. A credit line of SDR175m(US$242m) was cancelled in 1997 after the release of the first tranche when thegovernment failed to fulfil the World Bank’s conditionalities. Annual losses ofthe 40 state-owned non-financial corporations were estimated at Tk4.7bn in1998/99. These corporations also owe Tk83bn in outstanding loans to state-owned banking institutions, about 47% of which are classified as non-performing loans (NPLs).

The average growth rate of the manufacturing sector ranged between 3% and10% in the 1990s, a considerable improvement on the 1980s, but well belowits potential. The dominance of the state sector and the draining of scarcepublic resources to SOEs crowd out resources available for the private sector.This is one of the major sources of lower growth rates—other problems includeindustrial unrest, unwieldy labour unions and a corrupt bureaucracy.

34 Bangladesh


Trends in industry

Annual average 2000a 1997-2000a

Industry % of nominal GDP 18.4 16.3 % change 4.2 5.3

Large-scale manufacturing % of nominal GDP 11.6 11.0 % change 4.3 5.4

Small-scale manufacturing % of nominal GDP 4.3 4.5 % change 4.0 4.8

a Fiscal years ending June 30th using figures derived from 1984/85 national accounts series;provisional.

Sources: Ministry of Finance, Bangladesh Economic Survey; Bureau of Statistics, Monthly Statistical Bulletin.

Bangladesh is the second largest producer of manufactured jute goods in theworld after India, and the largest exporter due to the limited size of itsdomestic market. In 1998/99 export earnings from jute were Tk11.7bn,compared with Tk13.3bn in 1997/98. The long-term future for jute exports isthreatened by synthetic substitutes and the extremely inefficient production inBangladesh, despite jute products having won international recognition fromthe “green” movement. Jute goods produced include carpet backing, twine andsacking, and efforts are now being focused on improving the quality of rawjute to produce paper. Between 1982 and 1986, 35 of the 66 jute mills wereprivatised. However, because the government remains the largest shareholderof many of the privatised mills and wholly owns the Bangladesh Jute MillsCorporation (BJMC), the jute sector remains a drain on the national exchequer.

There has been a rapid increase in export-oriented RMG manufacturingenterprises (typically small) over the last two decades. However, most of theinputs of the fabrics used in the manufacturing process have to be imported.There are about 2,600 factories employing 1.4m workers, about 95% of whomare female. Clothing has emerged as the most important export item—comprising around 70% of export earnings. Bangladesh has been particularlysuccessful in supplying RMGs to the US and the EU, benefiting from the Multi-Fibre Arrangement (MFA) in the case of the former and the Generalised Systemof Preferences (GSP) in the case of the latter. In 1998/99 export earnings fromthe garments industry reached Tk130bn, compared with Tk126bn in 1997/98and Tk99bn in 1996/97. However, the garments industry will have to face upto the eventual dismantling of the MFA, when Bangladesh will find itselfcompeting with other Asian countries, such as China, India and Vietnam.

The food-processing sector is geared primarily to domestic needs. It comprisessugar refining and milling, edible oils, and fruit juice production. There is alsoa large fish-processing industry, composed typically of small units, which is inpart geared towards export, mainly of shrimp, frogs legs and prawns. However,the production of shrimp and frogs legs has been declining in recent years with

Jute goods

Ready-made garments

Food-processing

Bangladesh 35


the EU, among other importers, demanding higher standards of food-processing. A temporary ban by the EU in 1997 caused huge losses toBangladesh exporters of shrimps—the domestic market offered little scope fordisposing of their products. Since the EU has lifted its ban, the shrimp industryhas bounced back.

The abundance of natural gas in the country has led to the establishment of achemicals industry producing mainly urea fertiliser, for which there is hugedomestic demand. From as little as 610,000 tonnes in 1982/83, the country’sproduction of urea rose to 2.2m tonnes in 1998/99. There are six fertiliserfactories under the state-owned Bangladesh Chemical Industries Corporation(BCIC), plus the Karnaphuli Fertiliser Company (KAFCO) at Chittagong, whichis a joint venture between the government and foreign investors from Japanand Italy. With the increased availability of natural gas in recent years, thegovernment is now encouraging domestic and foreign investment in order toestablish more fertiliser factories, mainly for export purposes.

Small-scale manufacturing enterprises and assembly of industrial andconsumer products includes matches, cigarettes, bicycles, tyres and tubes,batteries, pumps, motors and engines, radio and television sets, and otherelectrical items. Recently there has been some expansion into electronics, witha number of foreign investors setting up light electronics assembly plants inthe export processing zones (EPZs), encouraged by the lower wages inBangladesh compared with many other Asian countries.

Construction

From around 200,000 tonnes in 1992/93, cement production increased to543,000 tonnes in 1997/98 and 560,000 tonnes in 1998/99. (See Referencetable 19 for historical data on production and value of selected manufactureditems.) Since domestic production can only meet about 10–15% of domesticdemand, the country remains heavily dependent on imported cement.Encouraged by the booming domestic construction industry, internationalinvestors are beginning to invest in this sector. Several new plants, includingsome joint ventures, such as with Daewoo of South Korea, Associated CementCompanies (ACC) of India and Scancem of Sandanavia, will be coming onstream soon.

According to the new national accounts series (using 1995/96 as the base year),the construction sector contributed around 12-13% to GDP in the 1990s. In1999/2000 the share of the construction sector was 13.4%. The sector has beenexperiencing strong growth, especially in urban areas with high-rise apartmentcomplexes being built to meet the demands of the growing middle class. Theconstruction industry has also generated growth in related industries, such astransport, storage, communications, housing and trade services. However, ithas added further burdens on the already strained power, gas, water andsanitary services in the major cities.

Chemicals

Other industrial andconsumer products

Cement

36 Bangladesh


Financial services

The financial services sector is small and undeveloped and, despite reforms, itscontribution to GDP remains less than 2% of GDP. There have been someimprovements such as interest rate deregulation, a strengthening of loanclassification standards, a reduction in the central bank’s control over financialtransactions and various loan recovery measures. However, despite theseefforts, the financial system still suffers from unusually high levels of non-performing loans (NPLs), an extremely low loan recovery rate, a failure of localbanks to meet capital adequacy requirements, rampant insider trading,fraudulent transactions and various other systemic inefficiencies. Many of theNPLs that plague the sector were made on orders of the government. Bankswere encouraged to lend to loss-making state-owned enterprises (SOEs) andseveral large private-sector defaulters that wield considerable politicalinfluence. The World Bank, in a recent report, identified four major problemswith the financial system: a deficient legal framework, poor governance,inadequate financial disclosure and a weak central bank.

State-owned banks—the nationalised commercial banks (NCBs)—dominate thefinancial sector. Since the government is the owner, regulator and customer ofthe NCBs, there has been ample opportunity for mismanagement and politicalinterference. Despite a major reform program conducted during the 1990s—theFinancial Sector Reform Programme (FSRP)—the banking sector remainsplagued with poor credit discipline, an archaic loan recovery system,corruption and inefficiency—including chronic overstaffing. The Ministry ofFinance approves all NCB budgets; salaries of NCB officials are tied togovernment pay scales; and there is no system for encouraging goodperformance. Private commercial banks fare better in terms of operationalefficiency with lower staff ratios and more competitive compensation levels.However, they too suffer from capital inadequacy and insider trading. Thelimited availability of credit and its high cost have hindered the expansion ofprivate banks. A Commercial Bank Reform Project (CBRP) was launched in May1999 to facilitate loan recovery, strengthen the NCBs, re-capitalise privatebanks and improve the central bank’s supervision and controlling powers.

Bangladesh Bank is the central bank and issuing authority, but it has provedineffective in its use of monetary policy and its control of the banking andfinancial sectors. This is largely due to a failure to clearly define the functionsof the central bank and its responsibilities, and to give it an independentstatus. The powers of the central bank do not allow it to effectively supervisethe NCBs or the private banks, dictate monetary or exchange-rate policy, orenforce regulations without interference from the finance ministry. Like theNCBs, it is also overstaffed and inefficiently managed.

There are four NCBs: the Agrani Bank, the Janata Bank, the Rupali Bank andthe Sonali Bank. Two NCBs were privatised in the 1980s: the Pubali Bank andthe Uttara Bank. The remaining four NCBs currently account for around 60%of total deposits and 50% of total advances. NCBs, whose lending is oftendirected by the government, have substantial portfolios of NPLs—the default

Need for bank reform

The central bank

The nationalisedcommercial banks

Bangladesh 37


rate of which was estimated at 50% in June 1999 using internationalaccounting standards. They have also been forced by the government toundertake loan-forgiveness programs. The four NCBs were recapitalised in 1992and 1993 at a cost of Tk31.9bn (US$709m), but they are again suffering fromcapital inadequacy. One of the objectives of the current commercial bankreform project is to recapitalise the NCBs.

The growth of private banks since the 1980s has injected some much-neededcompetition into the banking sector. There are now 43 private banks in thecountry—29 domestic and 14 foreign—whose more competitive interest rateschallenge the established state banks. The proportion of deposits and advancesat private banks rose from 42% of total deposits in 1997/98 to almost 49% in1998/99, and the proportion of total advances rose from 25% in 1997/98 to26% in 1998/99. At present the private banks operate exclusively in urbanareas, primarily Dhaka and Chittagong. The activities of foreign banks tend tobe restricted to offshore and foreign trade business. Foreign banks are graduallyemerging as competitors in the local deposit and the credit markets.

There are two specialised banks for industry, the Bangladesh Shilpa Bank (BSB)and the Bangladesh Shilpa Rin Sangstha (BSRB), and two for agriculture, theBangladesh Krishi Bank (BKB) and the Rajshahi Krishi Unnayan Bank (RAKUB).All four banks are publicly owned, have a negative net worth and a highdefault rate on their loans. The BKB has, however, made some improvementsin the last few years—its loan disbursement rates rose to 90% in 1998/99 from85% in 1997/98. Other specialised banks in Bangladesh include the InvestmentCorporation of Bangladesh, the Grameen (rural) Bank and the House BuildingFinance Corporation. All the state-owned specialised banks, with oneexception—the Grameen bank—suffer from political interference, poormanagement and a culture of lax credit discipline. The Grameen Bank,founded by Professor Mohammad Yunus, has already earned a globalreputation for micro-credit. In 1998 the government gave permission for16 merchant banks, three of which came into operation in 1999, in the hopethat they would help stimulate the capital market.

The bulk of insurance activity is in the hands of two nationalised companies,Jiban Bima Corporation (life insurance) and Sadharan Bima Corporation(general insurance). Private insurance companies have been allowed to operatesince 1984. The largest privately owned insurance company is Green Delta.Foreign investor participation is permitted.

There are two bourses in Bangladesh: the Dhaka Stock Exchange (DSE) and theChittagong Stock Exchange (CSE), which opened in October 1995. (SeeReference table 20 for historical data on stockmarket indices.) The demand forshares, however, remains weak due to the preference and the availability oflow-risk high-yielding government bonds and saving schemes. The stock-market is poorly developed, with only about 200 shares traded, and liquidity islow. Market capitalisation of the stock exchange relative to GDP, at 0.5%, issmall compared with its South Asian neighbours. Share prices rose dramaticallyafter the June 1996 election (market capitalisation reached US$6bn or 19% of

The private banks

Insurance companies

The stock exchange

The specialised banks

38 Bangladesh


GDP on November 4th 1996), fuelled largely by unofficial kerbside dealers.Evidence of widespread manipulation of share prices emerged later.

The DSE all-share index has been trading in a range of 540 to 670 in the lastfew years, from more than 3,600 in November 1996, and hopes for a recoveryremain slight. Some measures have been taken to boost the capital market inrecent years, but with limited success. In 1997 the government withdrew thelock-in system for initial public offerings (IPOs) to attract foreign investors,waived taxes on capital gains on bonus shares, increased ceilings for creditagainst shares/debentures from 40% to 50% of the market value, andintroduced a circuit breaker system to control abnormal fluctuations. In a bidto encourage institutional investors, from mid-2000, commercial banks—bothdomestic and foreign—were allowed to operate as merchant banks.

Share transactions are now automated in both bourses, but the long-awaitedcentral depository system (CDS)—a system of scriptless electronictransactions—is unlikely to be introduced before January 2001. The securitiesand exchange commission (SEC)—the securities market watchdog set up in1994—was criticised for a string of financial and administrative irregularities in1999, further inhibiting government efforts to kick-start the market.

Other services

The tourism sector is small, although between 1993 and 1998 the number ofvisitors to Bangladesh increased from 120,000 to 171,000 (an increase of 42%)and earnings from tourism increased from Tk594m (US$15m) to Tk2.4bn. Thesector has received a boost in recent years owing to the end of the tribalinsurgency in the Chittagong Hill Tracts (CHT) area, which has lakes,mountains and other sights that have traditionally attracted both foreign andlocal visitors. The most important origin of foreign visitors is, predictably,India, accounting for 34% of the total number in 1999, followed by the UK,Germany, Thailand and US. The Dhaka-Calcutta direct bus service, introducedin June 1999, and other such routes coming on stream with Indian cities, willfurther increase the number of Indian tourists.

The external sector

Trade in goods

Bangladesh suffers from a chronically weak foreign trade account, reflecting itsdependence on imports for most essential goods as well as generally poorprices for its traditional staple exports of jute, jute manufactures and tea. (SeeReference tables 21-24 for historical data on trade partners.)

Tourism

Bangladesh 39


Foreign trade, 1998/99(Tk bn)

Exports fob 208.5 of which: ready-made garments 129.8 fish & prawns 14.8. jute products 11.7 hides, skins & leather 7.8 jute & meshta 2.7 tea 1.5 fertiliser 0.6

Imports cif 384.8 of which: textile yarn & fabrics 70.1 machinery & transport equipment 94.6 petroleum & petroleum products 13.0 iron & steel 16.6 cereals & dairy products 36.8 chemicals 12.2

Trade balance –176.3

Source: Bangladesh Bank, Economic Trends.

Import liberalisation, coupled with the growing demand for industrial inputsin the 1990s, increased the pressure on the merchandise trade account.Between 1990 and 1996, imports grew at about 16% per year as a result of theremoval of quantitative restrictions on imports and sizeable reductions intariffs. During 1997-99 the growth rate fell to 5%, reflecting slack industrialactivity, subdued investment activities and increased illegal trade with India.This declining trend, according to provisional estimates, has been reversed in1999/2000, with imports rising by 13.7% to Tk465.8bn (US$7bn), comparedwith Tk409.8bn in 1998/99.

The non-traditional garments industry overtook jute goods as the major exportearner in 1987/88, and by 1998/99 garments exports reached Tk129.8bn.However, ready-made garment (RMG) exports are highly import-dependent;the cost of imported fabric, yarn and buttons came to Tk81bn in the same year,hence the net benefit to export earnings was around Tk49bn, or 30% of thesector’s gross export earnings. The RMG industry employs around 1.4mworkers, of whom about 95% are female. However, the industry is currentlyfacing a number of challenges stemming from the phasing out of the Multi-Fibre Arrangement (MFA), under the GATT-Uruguay Round agreement, andfierce competition in export markets as a result of the relative appreciation ofthe taka vis-à-vis the currencies of other Asian garments manufacturers.

The jute industry’s share of total export earnings has fallen from 49% in1985/86 to less than 10% in the late 1990s. Earnings from jute, tea and hidesare highly susceptible to fluctuations in prices on world markets. Recentinitiatives have encouraged production in the leather industry, export earningsof which have grown steadily to account for around 5% of total earnings in the1990s. A sizeable export trade in frozen and processed fish products has beendeveloped, of which shrimps are by far the most important product, and

Recent import trends

Garments exports faceinternational competition

40 Bangladesh


further export growth should be possible barring any problems meeting thehygiene standards of export markets.

Main trading partners, 1998/99

Exports to: % of total Imports from: % of total

US 35.7 India 20.8

Germany 11.1 China 9.3

Germany 9.5 Singapore 8.6

France 7.0 Hong Kong 7.6

Italy 5.8 Taiwan 6.1

Netherlands 4.8 South Korea 4.5

Belgium 3.7 Japan 4.5

Japan 2.0 US 3.6

Source: Bangladesh Bank Statistics Department.

In 1993 Bangladesh Bank (the central bank) liberalised foreign-exchangeregulations. The new measures introduced allow dealers in effect to fixexchange rates and increase their permitted holding of foreign currency. Thefollowing year the taka was made convertible for all current-accounttransactions, and foreigners are allowed to invest in the capital market andfreely repatriate their proceeds. Moreover, quantitative restrictions (QRs) wereremoved from a large number of imported goods and tariff rates simplifiedwith a top rate of 37.5%. However, an infrastructure development tax of 2.5%,introduced in 1996/97, remains in place (textiles are excluded) and tariff ratesneed further rationalisation since they remain higher than in competitorcountries such as Indonesia, Korea, Malaysia and Thailand.

Invisibles and the current account

Bangladesh runs a large deficit on its invisibles (services and income) account,primarily made up of the costs of freight and insurance on imports, expensesrelating to technical and financial services for development projects, andinterest on foreign debt. (See Reference tables 25 and 26 for historical data onbalance of payments, IMF estimates and external debt, World Bank estimates.)

Current account, 1999(US$ m)

Merchandise exports fob 5,458

Merchandise imports fob –7,420

Trade balance –1,962

Services balance –652

Net income –168

Net transfers 2,491

Current-account balance –291

Source: IMF, International Financial Statistics.

Foreign exchange and traderegulations

Bangladesh 41


The deficits on the merchandise trade and invisibles accounts are largely offsetby current transfers. After several years in surplus, the current account dippedheavily into deficit in 1995, as net transfers of around US$2bn could notcounter the soaring trade and services deficits. The current-account deficitreturned to a more manageable level in 1997 of US$327m on net currenttransfers of US$2.1bn. In 1998 the current-account deficit fell to US$35m andthen increased sharply to US$291m in 1999. The bulk of current transfers ismade up of remittances from Bangladeshis working abroad (private transfers),with the remainder comprising foreign grants and food aid (official transfers).Workers’ remittances have grown steadily over recent years, as Bangladeshinationals continue to seek employment opportunities overseas (see Referencetable 27 for historical data on remittances from Bangladeshis working abroad).Official transfers, however, have tended to fluctuate—for example, aid for flooddamage boosted official transfers in 1998. As a result, current transfers reachedUS$2.5bn in 1999, owing to the rise in aid inflows to assist the governmentduring the flood crisis.

Capital flows and foreign debt

Almost all inward capital flows consist of foreign loans for developmentprojects, much of which is channelled through the Consortium ofDevelopment Partners (see Reference table 28 for historical data on net officialdevelopment assistance). Between independence in 1971 and 1998 a total ofUS$33.2bn in foreign aid was disbursed, of which 48% was in the form ofgrants and 52% loans. In early 2000 donor countries agreed to grantBangladesh around US$2bn in aid on the condition the disbursement of theaid would depend on the pace of economic reforms and good governance.Much of the project aid committed over the last few years has not beendisbursed owing to bureaucratic delays and the government’s inability to raisesufficient domestic resources to match donor assistance.

Aid inflows are tending to take the form of loans, and total debt service willsubsequently rise over the next few years. Although the debt/GDP ratio wasestimated at about 47% in 1999, over 90% of the debt is long-term officialbilateral and multilateral debt on concessional terms with long maturities andlow rates of interest with ten-year grace periods. This makes the debt burdenconsiderably easier for the country to bear.

The inflow of foreign direct investment (FDI) has accelerated in recent years inline with the increase in gas exploration and the building of new power plants.Annual FDI inflows increased from US$2m in 1995 to US$179m in 1999.However, foreign interest in the energy sector has begun to fall. Such a heavyconcentration of FDI in the sector has raised concerns about the government’sability to meet the foreign-currency repayment obligations that it has agreedwith foreign investors in the sector. Hence pressure on the government toagree to gas exports is mounting with investors arguing that that the domesticmarket is too small to ensure a return on their investments. (See box: Pressurefor gas exports.) Both the World Bank and the Asian Development Bank (ADB)

Transfers

Foreign aid and loans

FDI in the gas andpower sectors

42 Bangladesh


have advised the government to export gas to improve the country’s foreign-exchange reserves and encourage more foreign investment. Other then the gassector, export processing zones (EPZs) are benefiting from an increase in FDI inrecent years.

Foreign reserves and the exchange rate

As the balance-of-payments position improved in the early 1990s, reservesincreased steadily reaching a record US$3bn in 1994, equivalent to 7 monthsof import cover. However, the deterioration in the current-account balancesince 1995 has been reflected in a large reduction in foreign reserves, which fellto US$1.9bn in 1998, sufficient for just 2.9 months of imports. Hard-currencyremittances from Bangladeshi workers abroad, principally in the Middle East,have helped offset lower aid disbursement, but the country’s foreign-exchangeposition remains fragile. (See Reference table 29 for historical data onforeign reserves.)

In 1995 the BNP government began a policy of allowing the value of the takato depreciate against the US dollar, the main currency in the basket ofcurrencies against which the taka is measured. (See Reference table 29 forhistorical data on the exchange rate.) The taka has been devalued in stages eversince. The sharpest adjustment in the value of the taka came in early August2000 in response to an earlier depreciation of the Indian rupee, when the takawas devalued by 6%, raising the official purchasing rate to Tk53.85:US$1 andthe selling rate to Tk54.15:US$1. Taking this latest adjustment into account,the taka has been devalued against the US dollar by 33% since the AwamiLeague (AL) came to power in June 1996. However, the real value of the takaremains overvalued against many of Bangladesh’s neighbours’ currencies. Indiadevalued its currency against the US dollar by 19.8% between June 1997 andJune 2000, and Pakistan by 22.1% over the same period. A sharper depreciationof the taka is therefore probable with the government coming under increasingpressure to raise exports. However, the high import requirements of thecountry mean that inflationary pressures could rise as a result.

Further adjustmentin the taka

Bangladesh 43


Appendices

Sources of information

Bangladesh Bank, Annual Report

Bangladesh Bank, Bulletin (quarterly)

Bangladesh Bank, Economic Trends (monthly)

Bangladesh Bureau of Statistics, Bangladesh Census of Agriculture and Livestock,1983/84

Bangladesh Bureau of Statistics, Bangladesh Education in Statistics, 1991

Bangladesh Bureau of Statistics, Bangladesh Health and Demographic Survey:Findings in Brief, 1994 and 1995

Bangladesh Bureau of Statistics, Child Nutrition Survey of Bangladesh, 1992

Bangladesh Bureau of Statistics, Labour Force Survey, 1995/96

Bangladesh Bureau of Statistics, Monthly Statistical Bulletin

Bangladesh Bureau of Statistics, Population Census, 1991

Bangladesh Bureau of Statistics, Statistical Pocketbook of Bangladesh, 1997(annual)

Bangladesh Bureau of Statistics, Yearbook of Agricultural Statistics of Bangladesh,1994

Ministry of Finance, Annual Budget

Ministry of Finance, Bangladesh Economic Review (annual)

Bank for International Settlements, International Banking and Financial MarketDevelopments (quarterly)

Energy Data Associates, Bishops Walk House, 19-23 High Street, Pinner,Middlesex HA5 5PJ

IMF, International Financial Statistics (monthly)

International Institute for Strategic Studies, Military Balance (annual), London

OECD, Financial Statistics Monthly

OECD, Geographical Distribution of Financial Flows to Developing Countries(annual)

UN Food and Agriculture Organisation, Quarterly Bulletin of Statistics, Rome

World Bank, World Debt Tables (annual), Washington

World Bank, World Development Report (annual), Washington

World Bank, World Tables (annual), Washington

National statistical sources

International statisticalsources

44 Bangladesh


Moudud Ahmed, Democracy and the Challenge of Development: A Study of Politicaland Military Interventions in Bangladesh, Dhaka University Press, 1995

Jorge Barenstein, Overcoming Fuzzy Governance, Dhaka University Press, 1994

Centre for Policy Dialogue, A Review of Bangladesh’s Development, 1997, DhakaUniversity Press, 1998

CAF Dowlah, Privatisation Experience in Bangladesh, 1991-96, World Bank,Dhaka, 1997

Clare E Humphrey, Privatisation in Bangladesh: Economic Transition in a PoorCountry, Dhaka University Press, 1992

Sirajul Islam (ed), History of Bangladesh, Asiatic Society of Bangladesh, Dhaka,1992

Stanley A Kochanek, Patron-client Politics and Business in Bangladesh, DhakaUniversity Press, 1995

Talukder Maniruzzaman, Bangladesh Revolution and its aftermath, DhakaUniversity Press, 1979

Rounaq Jahan, Pakistan: Failure in National Integration, Dhaka University Press,1976

Lawrence Ziring, Bangladesh from Mujib to Ershad: An Interpretative Study,Karachi, Oxford University Press, 1992

Reference tables

These reference tables provide the most up-to-date statistics available at the time ofpublication.

Reference table 1

Population

1995 1996 1997 1998 1999

Total population (m) 119.9 122.1 124.3 124.8 127.0

% change, year on year 1.9 1.8 1.8 0.4 1.8


Reference table 2

Labour force(m)

1985-86 1989 1990/91 1995-96

Total civilian labour force 30.9 50.7 51.2 56.0 Male 27.7 29.7 31.1 34.7 Female 3.2 21.0 20.1 21.3

Employed population 30.5 50.1 50.2 54.6 Male 27.4 29.4 30.5 33.8 Female 3.1 20.7 19.7 20.8

Source: Bangladesh Bureau of Statistics, Bangladesh Statistical Year Book.

Select bibliography

Bangladesh 45


Reference table 3

Energy: reserves and production of natural gas(bn cu ft)

Total reserves Cumulative Balance(proven & reserves production Reserves

Gasfields probable) (recoverable) (up to Dec 1998) (Dec 1998)

In productionBakharabad 1,432 867 574 293Habigonj 3,669 1,895 752 1,143Jalalabad 1,500 900 22 878Kailastilla 3,657 2,529 199 2,330Meghna 159 104 17 87Narsingdi 194 126 24 102Rasshidpur 2,242 1,309 165 1,144Sylhet 444 266 164 102Sangu (offshore) 1,031 848 50 798Salda Nadi 200 140 10 130Titas 4,138 2,100 1,668 432Bianibazar 243 167 3 164Bibiyana – – – –Moulvi Bazar – – – –

Not yet in productionBegumgonj 25 15 – 15Fenchugonj 350 210 – 210Kutubdia (offshore) 780 468 – 468Semutang 164 98 – 98Shahabazpur 514 333 – 333

SuspendedChhatak 1,900 1,140 27 1,113Kamta 325 195 21 174Feni 132 80 40 40

Total 23,099 13,790 3,736 10,054

Source: Ministry of Finance, Bangladesh Economic Survey.

Reference table 4

Transport

1994/95 1995/96 1996/97 1997/98 1998/99

Railway trafficFreight carried (m tonnes) 3.35 2.67 2.75 3.14 3.76Passengers carried (m) 40 32 34 38 37Passenger-km (m) 4,091 3,277 3,874 3,933 3,701

Sea transport (Chittagong & Mongla ports) 1994/95 1995/96 1996/97 1997/98 1998/99Vessels handled (no.) 1,436 1,552 1,624 1,484 1,739Cargo (imports) handled (‘000 tonnes) 10,960 11,181 11,237 9,635 12,027

Air traffic 1994 1995 1996 1997 1998Air traffic movements (‘000) 47 68 67 114 85Passengers carried (‘000) 2,376 2,522 2,669 2,785 2,636Freight/mail carried (‘000 tonnes) 67 137 76 80 89


46 Bangladesh


Reference table 5

Gross domestic product(market prices)

1995/96 1996/97 1997/98 1998/99 1999/2000a

GDP (Tk bn)At current prices 1,663 1,807 2,002 2,196 2,413 At constant (1995/96) prices 1,663 1,752 1,844 1,934 2,040 % change, year on year 4.6 5.4 5.2 4.9 5.5

GDP per head (Tk)At current prices 13,622 14,538 15,824 17,137 18,528 GDP per head (in US$) 333.4 340.5 349.0 355.4 366.0 At constant (1984/85) prices 5,262 5,472 5,681 5,904 – % change, year on year 3.5 4.0 3.8 3.9 –

a Provisional.

Sources: World Bank; Ministry of Finance, Bangladesh Economic Survey.

Reference table 6

Gross domestic product by expenditure(Tk m at current prices; % of total in brackets)

1994/95 1995/96 1996/97 1997/98 1998/99a

Private consumption 913,050 1,026,130 1,099,420 1,200,101 1,355,920 (63.8) (63.8) (62.6) (61.3) (73.4)

Government consumption 160,800 177,655 198,225 215,107 245,123 (11.17) (11.0) (11.3) (11.0) (13.3)

Exports of goods & services 165,705 184,359 216,723 266,809 324,173 (11.6) (11.4) (12.34) (13.63) (17.54)

Imports of goods & services –263,130 –310,910 –325,590 –365,878 –400,631 (18.4) (19.3) (18.8) (19.1) (18.6)

GDPb 1,170,260 1,301,600 1,403,050 1,548,334 1,749,256

Net factor income from abroad 55,671 60,032 71,028 75,182 79,618 (4.8) (4.6) (5.1) (4.9) (5.9)

GNI at current market prices 1,225,932 1,361,632 1,474,078 1,623,516 1,828,874 (104.8) (104.6) (105.1) (104.9) (112.6)

a Provisional. b Includes stockbuilding.


Bangladesh 47


Reference table 7

Gross domestic product by expenditure(Tk m at constant 1984/85 prices; % change year on year in brackets)

1993/94 1994/95 1995/96 1996/97 1997/98

Private consumption 459,408 497,225 530,729 555,557 584,220 (1.9) (8.2) (6.7) (4.7) (5.2)

Government consumption 83,914 87,568 91,888 100,169 105,178 (3.6) (3.6) (4.9) (9.0) (5.0)

Gross fixed investment 57,508 62,769 68,526 74,008 81,409 (7.7) (9.1) (9.2) (8.0) (10.0)

Exports of goods & services 71,044 92,859 100,359 117,420 131,511 (3.7) (30.7) (8.1) (17.0) (12.0)

Imports of goods & services –88,034 –130,628 –149,061 –166,948 –183,643 (–6.1) (48.4) (14.1) (12.0) (10.0)

GDP 583,840 609,793 642,441 680,206 718,674 (4.2) (4.4) (5.4) (5.9) (5.7)

Source: Derived from World Bank, World Development Report.

Reference table 8

Gross domestic product by sector(Tk bn; constant 1984/85 market prices; % change year on year in brackets)

1995/96 1996/97 1997/98 1998/99 1999/00a

Agriculture 207.1 220.5 226.9 394.3 417.9 (3.7) (6.5) (2.9) (5.1) (7.2)

Crops 152.2 161.6 163.8 170.9 183.4 (2.8) (6.2) (1.4) (4.4) (7.2)

Forestry 15.3 16.0 16.7 173.3 180.3 (4.3) (4.6) (4.3) (4.0) (4.0)

Livestock 19.7 21.3 22.9 24.7 26.6 (8.0) (8.0) (8.0) (7.6) (7.7)

Fisheries 19.9 21.6 23.5 25.4 27.6 (5.9) (8.5) (8.6) (8.4) (8.4)

Mining & quarrying 0.2 0.2 0.3 0.3 0.4 (26.7) (27.6) (32.0) (15.7) (19.8)

Manufacturing 72.8 75.4 82.6 85.1 88.7 (5.3) (3.5) (9.5) (3.0) (4.2)

Large-scale 47.6 49.2 54.6 56.9 59.4 (6.0) (3.4) (11.0) (4.2) (4.3)

Small-scale 25.2 26.2 28.0 28.2 29.3 (3.9) (3.9) (6.8) (0.7) (4.0)

Construction 40.1 42.1 45.0 47.9 51.0 (4.0) (4.9) (7.0) (6.4) (6.5)

Power, water & sanitation 12.5 12.7 13.0 13.5 14.0 (9.9) (1.7) (3.0) (3.5) (3.4)

Transport, storage & communications 77.9 82.9 88.6 93.7 99.2 (5.0) (6.5) (6.8) (5.8) (5.9)

Trade 64.5 68.8 73.4 77.4 81.9 (10.0) (6.6) (6.7) (5.5) (5.8)

continued

48 Bangladesh


1995/96 1996/97 1997/98 1998/99 1999/00a

Banking & insurance 11.5 11.9 12.4 12.8 13.3 (3.5) (3.8) (3.7) (3.7) (3.7)

Professional & miscellaneous services 75.1 80.3 85.9 91.3 97.1 (6.7) (7.0) (7.0) (6.3) (6.2)

Housing 47.2 49.0 51.0 52.7 54.6 (3.8) (3.9) (3.9) (3.5) (3.5)

Public administration & defence 33.5 36.3 40.0 42.6 45.8(8.3) (8.4) (8.6) (8.0) (7.5)

Totalb 642.4 680.2 718.7 756.1 801.7 (5.3) (5.9) (5.7) (5.2) (6.0)

a Provisional. b Totals may not add due to rounding.

Sources: Ministry of Finance, Bangladesh Economic Survey.

Reference table 9

Central government finances(Tk bn unless otherwise indicated)

1995/96 1996/97 1997/98 1998/99 1999/2000a

Total revenue 155.1 171.4 187.8 197.0 241.5 Tax 122.3 140.7 150.0 158.5 186.3 Non-tax 32.8 30.7 37.8 38.4 55.2

Total expenditure 218.3 235.8 255.4 292.7 333.0 Revenue expenditure 118.1 125.3 145.0 167.6 178.0 Development expenditure (Annual Development Plan) 100.1 110.4 110.4 125.1 155.0

Budget balanceb –63.2 –64.4 –67.5 –95.7 –91.5 Government expenditure (% of GDP) 13.1 13.0 12.7 13.3 13.8

a Provisional estimates. b Totals may not add owing to rounding.

Source: Ministry of Finance, Bangladesh Economic Review.

Reference table 10

Tax revenue receipts(Tk m)

1994/95 1995/96 1996/97 1997/98 1998/99

Customs duty 36,769 37,772 40,073 45,391 47,436

Excise tax 1,778 1,831 2,001 2,152 2,242

Income tax 14,916 15,248 16,407 19,536 23,586

Value-added taxDomestic 12,483 13,047 15,179 16,682 17,934Imports 22,162 25,474 27,890 29,007 30,377

Supplementary taxDomestic 13,441 14,642 16,191 17,157 17,049Imports 1,876 3,593 4,522 5,670 7,718

Total tax revenue incl others 111,100 122,330 140,740 141,593 148,350


Bangladesh 49


Reference table 11

Money supply(Tk m unless otherwise indicated; end-Jun)

1995 1996 1997 1998 1999

Currency outside banks 65,651 71,233 75,746 81,533 86,866

Demand deposits 66,143 73,361 75,924 77,352 85,628

M1 131,794 144,594 151,670 158,885 172,494 % change, year on year 18.0 9.7 4.9 4.8 8.6

M2a 422,679 457,600 507,110 558,690 630,267 % change, year on year 16.0 8.3 10.8 10.2 12.8

a M1 plus time deposits.

Sources: World Bank, Bangladesh–Recent Economic Performance, March 2000; Bangladesh Bank, Economic Trends.

Reference table 12

Interest rates(%; period averages unless otherwise indicated)

1995 1996 1997 1998 1999

Short-term interest ratea (av) 12.22 13.41 13.69 14.02 14.16

Short-term interest rateb (end-period) 4.86 6.11 6.67 7.07 7.28

a Commercial bank prime rate set by government. b Deposit interest rate from Bangladesh Bank.


Reference table 13

Consumer prices(1991=100; period averages)

1994 1995 1996 1997 1998

Consumer price index 94.5 100 102.7 108.5 118.8 % change, year on year 3.6 5.8 2.7 5.6 9.5


Reference table 14

Consumer prices (national)(1985/86=100; period averages)

1994/95 1995/96 1996/97 1997/98 1998/99

Consumer price index 178.4 190.3 195.1 208.7 227.3 % change, year on year 8.9 6.7 2.5 7.0 8.9

Only food items 176.8 189.1 191.9 205.6 229.7 % change, year on year 9.3 7.0 1.4 7.4 11.8

Non-food items 181.48 191.9 201.0 214.5 223.1 % change, year on year 8.2 5.8 4.8 6.7 4.0

Source: Ministry of Finance, Bangladesh Economic Review.

50 Bangladesh


Reference table 15

Consumer price indices (urban/rural)

1994/95 1995/96 1996/97 1997/98 1998/99

All urban (base: 1985–86=100) 175.26 185.96 191.27 204.41 222.59All rural (base: 1985–86=100) 179.06 191.50 196.35 210.15 228.28

Middle income, govt employees (base: 1969–70=100) 1,878 1,964 2,048 2,171 2,299

Rural population, Dhaka region (base 1973–74=100) 650 690 685 722 792

Rural population, Chittagong Region (base 1973–74=100) 685 729 722 756 805


Reference table 16

Index of nominal wages(1969/70=100; period averages; % change year on year in brackets)

1994/95 1995/96 1996/97 1997/98 1998/99

Manufacturing 1,947 2,064 2,161 2,395 2,522 (6.5) (6.0) (4.7) (10.8) (5.3)

Construction 1,613 1,754 1,848 1,990 2,163 (0.9) (8.7) (5.3) (9.8) (8.7)

Agriculture 1,653 1,738 1,804 1,870 1,950 (3.8) (5.1) (3.8) (3.7) (4.3)

All occupations 1,786 1,900 1,989 2,141 2,259 (4.5) (6.4) (4.7) (7.6) (5.5)


Reference table 17

Agricultural crop production(‘000 tonnes)

1994/95 1995/96 1996/97 1997/98 1998/99

Cerealsa 18,083 19,056 20,333 20,665 21,893 Rice 16,838 17,687 18,883 18,862 19,905 Aus 1,791 1,676 1,871 1,875 1,617 Aman 8,509 8,790 9,552 8,850 7,736 Boro 6,538 7,221 7,460 8,137 10,552 Wheat 1,245 1,369 1,450 1,803 1,988

FibresJute 964 739 883 1,057 1,852Cotton 13 14 14 14 –

VegetablesPotatoes 1,468 1,492 1,508 1,553 2,762Sweet potatoes 435 435 406 398 383

Other cropsPulses 518 508 501 519 413Oilseeds 479 472 477 482 449Spices & condiments 269 265 270 267 395Sugarcane 7,446 7,165 7,520 7,379 6,951Tea 52 48 53 51 56Tobacco 38 39 38 37 29

a Totals may not add owing to rounding.

Sources: Bangladesh Bureau of Statistics, Monthly Statistical Bulletin; Bangladesh Bank, Economic Trends.

Bangladesh 51


Reference table 18

Production and value of non-energy minerals

1994/95 1995/96 1996/97 1997/98 1998/99

LimestoneTonnes 28,032 20,574 28,273 32,324 5,053a

Tk m 16.8 12.3 17.0 19.4 3.0

China clayTonnes 6,597 6,855 8,849 7,731 8,137 Tk m 2.4 5.4 7.2 5.9 6.9

a Provisional.


Reference table 19

Production and value of selected manufactured items

1994/95 1995/96 1996/97 1997/98 1998/99

Jute manufactures‘000 tonnes 425 405 411 409 368Tk bn 10.5 10.4 10.0 11.3 n/a

Cotton clothm metres 16.9 10.3 10.9 10.3 10.6Tk bn 0.4 0.6 0.4 0.3 0.3

Cotton yarnm kg 49.1 50.0 50.1 52.8 53.2Tk bn 6.3 7.6 7.7 8.1 8.1

Ready-made garmentsm dozens 47.2 48.8 53.4 65.6 64.7Tk bn 67.8 79.7 94.7 129.0 143.2

Leather for exportm sq metres 15.0 16.1 12.0 12.1 16.2Tk bn 7.8 8.7 8.5 7.4 8.2

Cement‘000 tonnes 316 426 611 543 560Tk bn 1.3 1.9 2.6 2.5 2.7

Steel ingots‘000 tonnes 25.0 21.0 16.0 23.0 9.1Tk m 36.6 24.9 22.1 42.0 12.7

Paper (all kinds)‘000 tonnes 82.7 82.3 67.5 45.9 59.9Tk bn 2.7 2.8 2.5 2.0 2.2

Chemical fertilisers‘000 tonnes 2,145 2,248 1,773 2,031 1,799 Tk bn 8.3 8.5 6.8 9.7 8.5

Sugar‘000 tonnes 270 184 135 166 n/aTk bn 7.3 5.0 3.7 4.6 n/a

Tea‘000 tonnes 47 51 53 54 n/aTk bn 2.0 2.4 2.0 2.9 n/a

continued

52 Bangladesh


1994/95 1995/96 1996/97 1997/98 1998/99

Shrimps & frogs legs‘000 tonnes 26.2 26.0 25.7 18.6 19.9Tk bn 10.5 11.1 9.4 1.2 10.4

Bicyclesno. 13,223 12,710 12,643 12,882 12,903Tk m 23.5 22.2 20.9 21.4 21.5

Motorcyclesno. 7,625 10,681 9,641 9,906 n/aTk m 429 566 567 620 n/a

Motor vehiclesno. 1,333 1,286 1,245 1,289 n/aTk m 1,024 1,013 820 851 n/a

Diesel enginesno. 520 270 525 360 n/aTk m 33 40 27 23 n/a

Televisions (black & white)‘000 42 31 56 81 103Tk m 193.2 156.0 225.0 355.0 436.6

Televisions (colour)‘000 37 30 24 50 37Tk m 554.6 435.5 393.6 629.9 542.2

Dry-cell batteriesm 52 55 51 48 51Tk m 620 627 513 695 583


Reference table 20

Stockmarket indices(1986/87=100; averages)

1994/95 1995/96 1996/97 1997/98 1998/99

Banks & financial institutions 190.2 221.2 352.3 248.9 198.5

Engineering & construction 459.5 1,219.8 3,975.6 1,711.9 473.45

Food and allied products 263.2 264.1 631.4 371.9 440.4

Jute industries 213.1 178.5 236.4 124.3 188.6

Pharmaceuticals & chemicals 520.4 298.3 523.6 275.9 218.2

Textiles industry 190.0 165.1 238.1 164.8 143.7

Power & fuel 267.1 297.2 487.2 274.5 277.5

Paper & printing 119.4 95.2 242.7 184.2 127.1

Transport & communications 97.7 109.9 286.0 116.1 97.6

Miscellaneous 320.9 187.0 726.8 536.8 392.8

General index 260.4 245.8 580.1 380.4 282.1


Bangladesh 53


Reference table 21

Main exports(Tk bn; fob)

1994/95 1995/96 1996/97 1997/98 1998/99

Clothing 74.4 82.0 98.9 126.2 129.8

Fish & prawns 13.2 13.1 14.0 14.9 14.8

Jute goods 13.7 12.4 13.3 13.3 11.7

Leather 8.8 9.0 9.0 8.1 7.7

Raw jute 2.6 2.9 5.4 4.8 2.7

Tea 1.3 1.2 1.5 2.1 1.5

Fertiliser 3.1 0.1 0.5 0.6 0.6

Total incl others 131.3 138.5 165.7 204.0 208.5


Reference table 22

Main imports(Tk bn; cif)

1994/95 1995/96 1996/97 1997/98 1998/99

Yarn, fabric etc for garments industry 53.1 64.0 74.0 84.1 81.2

Machinery & transport equipment 29.1 39.6 40.9 42.8 94.6

Petroleum & petroleum products 15.4 13.1 16.0 19.8 18.6

Iron & steel 8.3 7.5 18.6 17.7 16.6

Food grains 19.1 23.9 7.9 16.8 34.2

Chemicals 13.8 15.2 21.0 11.2 12.0

Total incl othersa 234.6 271.4 303.0 341.8 384.8

a Includes loans and grants.


Reference table 23

Main trading partners(Tk m)

1994/95 1995/96 1996/97 1997/98 1998/99

Exports to fob:US 47,501 48,979 60,980 87,528 64,072Germany 12,043 15,099 18,236 23,180 19,937UK 12,767 17,083 18,636 19,962 17,114France 7,738 11,160 13,312 16,744 12,558Italy 8,473 8,470 8,670 12,270 10,436Japan 3,997 4,940 4,856 5,081 3,071India 1,811 2,964 1,969 2,978 2,318Singapore 1,117 744 6,97 7,84 9,54

Imports from fob:India 13,218 24,717 44,243 42,462 59,031South Korea 13,282 18,535 19,441 17,335 12,849Singapore 11,766 17,013 18,387 14,611 24,501Japan 11,817 13,504 17,727 21,949 12,658Hong Kong 12,579 24,881 17,048 20,120 21,689US 6,350 11,705 10,140 14,124 24,240UK 3,774 3,316 4,754 15,940 7,300Pakistan 3,634 8,652 4,638 3,638 3,978

Sources: Export Promotion Bureau of Bangladesh, Exports from Bangladesh 1972–73 to 1997–98; Bangladesh Bureau of Statistics,Monthly Statistical Bulletin.

54 Bangladesh


Reference table 24

Direction and composition of trade, 1998(US$ m)

Exports fob US Germany France UK Total

Food & live animals 144.9 5.0 2.1 16.3 358.5 of which: fish 142.5 4.9 1.9 15.2 285.1Leather 1.4 2.0 3.4 3.2 106.0Textile fibres, yarn, cloth & manufactures 99.2 7.8 9.2 20.3 516.4 of which: raw jute 0.4 0.1 0.0 1.0 83.0 jute yarn & fabrics 6.6 3.2 0.5 10.0 131.5 Jute twine 6.9 0.5 0.0 1.4 47.2 jute sacks, bags etc 3.5 1.9 0.5 1.2 86.7Clothing 1,690.9 422.1 413.3 318.3 3,785.8Total incl others 1,992.7 449.0 447.5 371.1 5,056.9

Imports cif India Japan Singapore South Korea Total

Food & live animals 300.4 0.1 2.4 2.1 704.0 of which: dairy products 6.9 0.0 1.0 0.0 64.8 cereals & preparations 236.1 0.0 0.5 0.6 416.7Cement etc 75.4 1.5 1.3 5.2 278.0Mineral fuels 7.0 0.0 154.1 1.5 527.0Animal & vegetable oils & fats 0.9 0.0 4.7 0.0 243.0Chemicalsa 78.4 26.1 52.3 61.3 676.8Paper & manufactures 9.8 6.7 1.5 33.1 141.1Textile fibres, yarn, cloth & manufactures 319.4 13.6 73.9 159.7 1,860.5 of which: raw cotton 18.0 0.0 1.2 0.1 236.6Non-metallic mineral manufactures 8.9 0.4 0.7 0.4 45.4Iron & steel & manufacturesb 51.4 149.5 30.0 66.0 545.1Other metals & manufacturesb 37.4 1.0 13.4 14.7 161.6Machinery & transport equipment 112.8 250.8 94.1 37.4 1,373.1 of which: road vehicles & tractors 30.6 81.3 1.7 1.1 162.4 ships 0.9 70.3 10.5 0.0 225.4Total incl others 1,040.7 478.7 455.5 425.1 7,018.0

a Including crude fertilisers and manufactures of plastics. b Including scrap.

Source: UN, External Trade Statistics, series D.

Bangladesh 55


Reference table 25

Balance of payments, IMF series(US$ m)

1995 1996 1997 1998 1999

Goods: exports fob 3,733 4,009 4,840 5,142 5,458

Goods: imports fob –6,057 –6,285 –6,588 –6,862 –7,420

Trade balance –2,324 –2,275 –1,748 –1,721 –1,962

Services: credit 698 605 687 724 780

Services: debit –1,531 –1,166 –1,288 –1,253 –1,432

Balance on goods $ services –3,157 –2,836 –2,348 –2,087 –2,614

Income: credit 270 129 86 91 94

Income: debit –202 –193 –196 –206 –263

Current transfers: credit 2,267 1,913 2,135 2,173 2,496

Current transfers: debit –2 –4 –4 –6 –5

Current-account balance –824 –991 –327 –35 –291

Direct investment inward 2 14 141 190 145

Direct investment abroad 0 0 –3 –3 0

Inward portfolio investment (incl bonds) –15 –117 –14 –3.8 –1

Outward portfolio investment 0 0 0 0 0

Other investment assets –244 –427 –675 –860 –1,1463

Other investment liabilities 436 623 451 565 437

Financial balance 179 92 –100 –112 –561

Capital account nie credit 0 371 368 239 362

Capital account nie debit 0 0 0 0 0

Capital account nie balance 0 371 368 239 362

Net errors & omissions 133 114 –77 –138 576

Overall balance –512 –414 –136 –46 87

Financing (– indicates inflow)Movement of reserves 799 504 255 15 10Use of IMF credit & loans –61 –86 –119 –31 –97


Reference table 26

External debt, World Bank series(US$ m unless otherwise indicated; debt stocks as at year-end)

1994 1995 1996 1997 1998

Public medium- & long-term 15,392 15,501 15,327 14,578 15,804

Private medium- & long-term 0 0 0 0 0

Total medium-& long-term debt 15,392 15,501 15,327 14,578 15,804 Official creditors 15,123 15,328 15,185 14,464 15,713 Bilateral 5,839 5,562 5,341 4,853 5,118 Multilateral 9,284 9,766 9,844 9,611 10,596 Private creditors 269 173 142 114 91

Short-term debt 197 203 163 175 150 of which: interest arrears 12 19 0 0 0

Use of IMF credit 669 622 517 372 422

Total external debt 16,258 16,325 16,007 15,125 16,376

continued

56 Bangladesh


1994 1995 1996 1997 1998

Principal repayments 406 623 485 519 503

Interest payments 198 189 213 186 180 of which: short-term debt 7 10 10 9 8

Total debt service 603 812 698 705 683

Ratios (%)Total external debt/GNP (%) 44.7 41.8 38.7 34.7 37.1Debt-service ratio, paida 14.1 14.8 11.8 10.6 11.8Short-term debt/total external debt (%) 1.2 1.2 1.0 1.2 0.9Concessional long-term debt/total long-term debt (%) 92.3 93.3 94.4 95.2 95.6Multilateral long-term debt/total long-term debt (%) 57.1 59.8 61.5 63.5 64.7

Note. Long-term debt is defined as having original maturity of more than one year.a Debt service as a percentage of earnings from exports of goods and services.

Source: World Bank, Global Development Finance.

Reference table 27

Remittances from Bangladeshis working abroad(Tk bn)

1994/95 1995/96 1996/97 1997/98 1998/99

Saudi Arabia 19.2 20.4 25.1 26.8 33.0

Kuwait 6.7 7.1 9.0 9.7 11.1

US 4.5 4.7 6.7 9.2 11.5

UAE 3.3 3.4 3.8 4.9 6.0

Oman 3.3 3.3 4.0 4.0 4.4

Malaysia 2.0 3.0 4.0 3.5 3.2

Total incl others 48.1 49.8 63.0 68.2 82.1


Reference table 28

Net official development assistancea

(US$ m)

1994 1995 1996 1997 1998

Bilateral 843.7 712.9 644.5 539.0 760.0 of which: Japan 227.6 254.9 174.0 130.0 230.4 Germany 104.9 61.5 84.0 47.3 60.0 UK 65.7 76.0 71.4 70.3 64.5 Netherlands 54.5 57.5 67.2 63.7 116.3 US 152.0 56.0 41.0 30.0 91.0

continued

Bangladesh 57


1994 1995 1996 1997 1998

Multilateral 908.5 576.5 611.4 475.6 625.1 of which: IDA 379.5 155.3 229.1 245.1 290.8 UNDP 23.3 13.5 10.8 11.7 20.8 Asian Development Bank (ADB) 358.1 248.6 263.2 149.2 87.3 UNICEF 37.1 27.6 24.5 23.3 14.4 UNHCR 18.6 5.5 3.6 2.8 –

Total incl others 1,757.5 1,279.5 1,254.7 1,009.2 1,382.5

a Disbursements by OECD and OPEC members and multilateral agencies. Official developmentassistance is defined as grants and loans, with at least a 25% grant element, administered with theaim of promoting economic or social development.

Source: OECD, Geographical Distribution of Financial Flows to Aid Recipients.

Reference table 29

Foreign reserves(US$ m unless otherwise indicated; end-period)

1995 1996 1997 1998 1999

Total reserves excl gold 2,339.7 1,834.6 1,581.5 1,905.4 1,603.6

SDRs 160.0 110.0 29.0 12.9 0.9

Reserve position with the IMF 0.1 0.2 0.1 0.2 0.3

Golda 27.0 28.0 25.3 22.3 19.6

Total reserves incl gold 2,367 1,863 1,607 1,928 1,623

Memorandum itemGold (m fine troy oz) 0.1 0.1 0.1 0.1 0.1

a National valuation.


Reference table 30

Exchange rate(Tk:US$)

1995 1996 1997 1998 1999

Calendar year 40.28 41.79 43.89 46.90 49.05

Fiscal year ending Jun 30th (IMF) 40.75 42.45 45.45 48.50 51.00


Editors: Jane Grigson (editor); Graham Richardson (consulting editor)Editorial closing date: September 30th 2000

All queries: Tel: (44.20) 7830 1007 E-mail: [email protected]

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