bangladesh · bangladesh has a parliamentary democracy based on universal suffrage. executive power...

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EIU Country Profile 1999-2000 © The Economist Intelligence Unit Limited 1999

Comparative economic indicators, 1998

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© The Economist Intelligence Unit Limited 1999 EIU Country Profile 1999-2000

Contents

Bangladesh

4 Political background4 Historical background7 Constitution and institutions9 Political forces

10 International relations and defence

12 Resources and infrastructure12 Population13 Education13 Health14 Natural resources and the environment15 Transport and communications17 Energy provision

19 The economy19 Economic structure20 Economic policy24 Economic performance28 Regional trends

28 Economic sectors28 Agriculture and forestry31 Mining and semi-processing31 Manufacturing34 Construction34 Financial services37 Other services

38 The external sector38 Trade in goods40 Invisibles and the current account40 Capital flows and foreign debt41 Foreign reserves and exchange rate

43 Appendices43 Sources of information44 Reference tables44 Population44 Labour force45 Transport45 Energy: production of natural gas by gasfield45 Central government finances46 Current revenue receipts46 Money supply46 Interest rates47 Gross domestic product47 Gross domestic product by expenditure48 Gross domestic product by expenditure49 Gross domestic product by sector

October 4th 1999

2


49 Prices50 Consumer prices50 Consumer prices by income and location50 Index of nominal wages51 Agricultural crop production51 Production and value of non-energy minerals52 Production and value of selected manufactured items53 Stockmarket indices53 Main exports54 Main imports54 Main trading partners55 Balance of payments, IMF estimates56 Balance of payments, national figures57 External debt, World Bank estimates58 Remittances from Bangladeshis working abroad58 Net official development assistancea59 Foreign reserves59 Exchange rate

Bangladesh 3


Bangladesh

Basic data

147,570 sq km

111.5m (1991 census); 128.1m (January 1999 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=80 tolas=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 has been Tk42.70:$1 in fiscalyear 1996/97 and Tk45.46:$1 in fiscal year 1997/98. Exchange rate onSeptember 24th 1999 was Tk49.50:$1

July 1st-June 30th

6 hours ahead of GMT

January 1st (New Year’s day), January 8th (Eid-ul Fitr), February 21st (Mourningday), March 16th (Feast of Sacrifice), March 17th (Birth of Sheikh MujiburRahman), March 26th (Independence Day), April 6th (Islamic New Year), May1st (May Day), June 15th (Birth of Prophet), August 15th (Assassination ofSheikh Mujibur Rahman), November 7th (National Revolution Day), December16th (National Day); religious holidays which depend on lunar sightings andand 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.Executive power is exercised by a cabinet headed by the prime minister. TheAwami League (AL), led by Sheikh Hasina Wajed, was elected to power in June1996, ending the five-year rule of the Bangladesh National Party (BNP). The BNP,now the main opposition party, is led by Begum Khaleda Zia. The country had apresidential form of government before the constitution was amended in 1991.

Historical background

The eastern part of Bengal became part of Muslim Pakistan as the 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 separatingPakistan into two wings (East and West) with equal representation in theparliament, a secessionist movement led by Sheikh Mujibur Rahman and theAL gained increasing support. In 1970 Sheikh Mujib led the AL to victory inEast Pakistan in both national and provincial assembly elections. Sheikh Mujibdemanded a loose federation of the two parts of Pakistan, in which a centralauthority would be responsible for foreign affairs and defence only, but thiswas refused by the president, General Yahya Khan. The refusal coincided withthe failure of the Pakistan government to aid East Pakistan when it was hit bysevere flooding in 1970. On March 7th 1971 the AL seized power, and declaredindependence on March 26th. A full-scale civil war broke out, and the Bengalifreedom fighters eventually triumphed, after India intervened on their side, onDecember 16th 1971.

Sheikh Mujib led the AL to an overwhelming electoral victory in 1973. Theeconomic and political situation deteriorated, however, and Sheikh Mujibdeclared a state of emergency in late 1974 and became president in early 1975with dictatorial powers. Sheikh Mujib—together with several familymembers—was assassinated in August 1975. Following a series of further coups,General Ziaur Rahman came to power in 1977. Since then the history ofBangladesh has been dominated by the intervention of the army in politicsand by an intense rivalry between the two main parties, the AL and the BNP.Army officers have been prominent in both parties, and periods of democraticgovernment have been interspersed with periods of martial law and strongexecutive government.

General Zia’s period in power was characterised by improvements in publicorder and economic management. In June 1978 he won the presidential elec-tion and in the following year his party, the BNP, won two-thirds of the seats inparliament. However, in May 1981 General Zia was assassinated by a group ofarmy officers. In March 1982 in a widely signalled action, the army chief,General Hossain Ershad, took power in a bloodless coup, replacing JusticeAbdus Sattar.

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 they could not be fair and free under martial law. InMarch 1985 he banned all political activities and staged a presidential election,in which he declared himself winner, despite a turnout of only 5%. Hisattempt to institutionalise the army’s role in government provoked violentriots and by late 1987 the main opposition groups launched a united move-ment to force him to resign. Three years of violence followed, during whichGeneral Ershad proclaimed a state of emergency and arrested scores of oppo-sition activists. He succeeded in exploiting divisions between the oppositionparties and used the catastrophic floods of 1987 and 1988 to his advantage byinvolving the military in emergency relief operations.

As opposition strikes and demonstrations intensified, in December 1990General Ershad accepted a caretaker government. The caretaker governmentheld the country’s first free and fair election in February 1991. General Ershadand many of his cronies faced charges of corruption and the illegal possessionof arms. He was sentenced to 13 years’ imprisonment in 1991, but was releasedin January 1997, in recognition of his party’s crucial support for the newlyelected AL government.

The 1991 election was won by the BNP, led by Begum Khaleda Zia. A cyclonein April 1991 posed an immediate test for the new government, while theconflicting demands of donors and trade unions over privatisation of state-owned enterprises and economic reform also had to be confronted. There wasinitially an uneasy truce in parliament between the AL and the BNP govern-ment, but following alleged irregularities by the BNP at a by-election inFebruary 1994, all the opposition parties boycotted parliament. The oppositiondemanded that the government resign and hand over power to a caretakergovernment that would 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, when Khaleda Zia refused to stepdown. The BNP won a landslide victory on a very low turnout, but as violenceescalated, it was forced to hand over power to a caretaker government.

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 support from the Jatiya Party(JP). The AL government repealed the Indemnity Ordinance, which was passedin 1975 to protect the killers of Sheikh Mujib. The trial of some of thoseaccused of the killing began in January 1997. Death sentences were passed on15 former army personnel in November 1998, although none have beencarried out, and few are held in custody.

A new BNP government

The AL returns to power

6 Bangladesh


Important recent events

February 27th 1991: The country’s first free and fair elections are held under acaretaker government.

April 29th-30th 1991: A severe cyclone hits the coast of Bangladesh, devastating thecoastal areas around Cox’s Bazar.

February 15th 1996: The BNP government wins a landslide victory in the generalelection, which is boycotted by all the opposition parties.

June 12th 1996: The AL wins the majority of seats in the fresh parliamentary electionheld under a caretaker government. Sheikh Hasina Wajed heads the first AL governmentsince the murder of her father, Sheikh Mujib.

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 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 government from power.

May 12th 1999: The high court rules that strikes are illegal as they undermine stabilityin the country.

July 28th 1999: The government decides to allow India the right of transhipment ofgoods through Bangladesh.

Although controversy has continued during the AL’s three-year rule, underSheikh Hasina the government may be credited with: a treaty with India onwater-sharing in the Ganges; a peace treaty with tribal rebels in the ChittagongHill Tracts (CHT) that ended a 20-year insurgency; the completion of the multi-purpose bridge over the Jamuna river; and the rehabilitation of the economy,which was wrecked by floods in 1998. However, the AL faces an uphill task inresolving a crippling power shortage and halting the deterioration in law andorder, both of which have continued to worsen throughout 1999. The situationis aggravated by intense political antagonism between the AL and the BNP. TheBNP now leads a seven-party opposition alliance of smaller parties and hasemulated former AL tactics in an effort to undermine political stability, by

Bangladesh 7


frequently boycotting parliament and calling nationwide strikes and stoppages.In mid-1999 it adopted a strategy of street marches, and hopes to expand thesein time for Independence Day celebrations on November 7th 1999.

Constitution and institutions

Bangladesh has a parliamentary system of government based on universaladult franchise. Before the 12th amendment of the constitution, passed inAugust 1991, there was a presidential form of government. Under the currentsystem the prime minister is vested with executive power and the president(elected by parliament) can act only on the advice of the prime minister. TheCouncil of Ministers is appointed by the president on the recommendation ofthe prime minister. The parliament (Jatiya Sangshad) is a unicameral legislaturewith 300 directly elected seats, plus 30 additional seats reserved for women. Itsits for five years unless dissolved earlier. Laws are passed by a simple majorityin parliament, but constitutional amendments require a two-thirds majority.

Local government system

Bangladesh has a four-tier local government system. At the top are 64 zilas (districts),each with its own zila parishad (council). Beneath the zilas are 490 upazilas (policestations). The union parishads (union councils) comprise the third layer of system andthe gram parishads (village councils) comprise the fourth. Although the country’sconstitution provides for elected bodies at all tiers of local government, only the thirdtier of the system—union parishads and pourashavas (municipalities, mostly thana anddistrict headquarters)—is elected; all the others are administratively controlled. Thecountry has five administrative divisions—Dhaka, Chittagong, Khulna, Barisal andRajshai, and four major municipal corporations—Dhaka, Chittagong, Rajshahi andKhulna. The mayors of the municipal corporations are directly elected and wieldconsiderable political power.

Local government reform has been on the political agenda since 1990. A bill reformingthe gram parishads was passed in September 1997. The bill allows the government toappoint a niyontron kortipokkho (controlling authority) to select nine male and threefemale members for each gram parishad, with no provision for direct election. Upazilaelections are likely to take place by December 1999.

A candidate can compete in a maximum of five constituencies in a parlia-mentary election. A by-election occurs if a candidate wins in more than oneconstituency. This ensures that political leaders can manage to get elected in atleast one constituency. Parliament has 30 seats reserved for female MPs, whoare indirectly elected when parliament sits for the first time after a general elec-tion. Normally the party with a majority selects all the female seats in theparliament.

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, andin the major cities there are metropolitan magistrates. In addition, money loan

Parliament

The judiciary

Constitutional peculiarities

8 Bangladesh


courts and bankruptcy courts deal with financial matters. The legal framework,however, remains archaic and court procedures are often cumbersome.Moreover, the judiciary is not yet independent of the executive branch.Citizens are equal before the law and are free from arbitrary arrests anddiscrimination. However, detention without trial is allowed in a state of emer-gency and under the Special Powers Act 1974, a method which has been usedby every government to date (see below).

Although the original constitution of Bangladesh, as enacted in 1972, did notprovide for arrest and preventive detention of ordinary citizens, the SpecialPowers Act 1974 was enacted by Sheikh Mujib’s regime to empower thegovernment to arrest and detain citizens without cause for an indefiniteperiod. Despite the grounds of detention having to be communicated within15 days, the detainee is not required to be produced before any court. (Thetable below shows how the number of detainees has increased over the years.)

No. detained, 1981-98Year No.

1981 1,759

1982 1,548

1983 872

1984 643

1985 882

1986 2,194

1987 4,585

1988 4,907

1989 4,482

1990 4,615

1991 5,302

1992 6,497

1993 3,669

1994 2,968

1995 4,173

1996 5,413

1997 4,016

1998 6,740

Source: Ministry of Home Affairs.

Political forces

The main political parties are the Awami League (AL) and the BNP. The AL,which spearheaded the war of independence and was led by Sheikh Mujib, isnow led by his daughter, Sheikh Hasina Wajed. The AL won the June 1996election after 21 years in opposition. The AL has moved away from its pastcommitments to nationalisation and economic self-sufficiency, and now sup-ports market-oriented economic policies.

Special Powers Act 1974

Bangladesh 9


The opposition Bangladesh Nationalist Party (BNP) was founded by anex-president, Ziaur Rahman, in 1978, and is currently led by his wife, KhaledaZia. The BNP stakes its claim on authentic Bangladeshi nationalism and accusesthe AL of being pro-Indian. The BNP is committed to fostering a marketeconomy and the private sector, giving priority to industrialisation andencouraging both domestic and foreign investment. By 1996 the differencesbetween the AL and the BNP in terms of economic policy had largelydisappeared. However, a strong personal animosity between Khaleda Zia andSheikh Hasina keep the two parties apart.

Other parties active in Bangladesh include the Jatiya Party (JP), led byGeneral Ershad. It has experienced several damaging splits since 1997 owing toits support for the ruling AL. The Jamaat-e-Islami (Jamaat) is a fundamen-talist party that espouses an Islamic state. There are several leftist parties,including a communist party, which have entered a variety of shifting alliancesfor electoral purposes.

General election results(no. of parliamentary seats)

1996 1979 1986 1988 1991 Feba Jun

Awami League (AL) 39 76 – 96 – 146

Bangladesh National Party (BNP) 207 – – 139 272 116Jatiya Party (JP) – 153 251 35 – 31

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

Others 54 61 49 12 – 4

a Boycotted by opposition parties.Source: Press reports.

Students are active in Bangladeshi politics, both within their own parties andin political 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 partiesthat 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 studentpolitics.

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 A S MNasim, 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, incase of a serious breakdown in law and order, military intervention cannot beruled out completely.

Student politics

The army’s role in politics

10 Bangladesh


Main political figures

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

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 polls. 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), theCommonwealth, the World Trade Organisation (WTO), the United Nationsand many other regional and international organisations.

The relations between Bangladesh and India have improved in recent yearssince the AL—traditionally more pro-Indian than the BNP—came to power.Disputes over sharing the waters of the Ganges, an insurgency movement inthe Chittagong Hill Tracts (CHT), and road transit through Bangladesh werefactors that had soured relations over the years. In December 1996 a Gangeswater-sharing agreement was signed. This was followed 12 months later withthe signing of the CHT Peace Accord, ending the 20-year tribal insurgency. InJuly 1999 the government of Bangladesh agreed, in principle, to provideoverland transshipment facilities to India. The BNP, however, rejects theGanges water-sharing treaty as a “hoax”, promises to cast aside the CHT treatyupon return to power and sharply opposes the transshipment deal with India.

Relations with India

Bangladesh 11


Background to the Chittagong Hill Tracts (CHT) dispute

For over 20 years the CHT was an arena for sporadic fighting between the Bangladeshiarmy, brought in to protect Bengali settlers, and indigenous Chakma rebels. In 1986around 50,000 tribal people fled to the neighbouring Indian state of Tripura, allegingbrutality by the Bangladeshi army. The Chakmas continued to live there in refugeecamps, from which militant elements, known as the Shanti Bahini, mounted armed raidsagainst the army, police and Bengali settlers in the CHT. The tribes demanded regionalautonomy for the CHT, the withdrawal of government troops and the resettlement ofabout 50,000 Bengalis living in the area.

The CHT accord provides a 22-member regional council—the chairman and 14members of which must be tribal people—with responsibility for maintaininglaw and order, levying taxes and overseeing development projects in the CHTarea. The national parliament must now consult the council on matters affect-ing tribal members living in the CHT region. In 1998 a ministry for CHT affairswas created and a tribal leader, Kalpa Ranjan Chakma, was appointed ministerof CHT affairs. In May 1999 Jyotirindriyo Bodhipriyo Larma, alias ShantuLarma, who led the insurgency movement, was appointed chairman of theinterim Regional Council. Long-term prospects for peace in the area areuncertain—the BNP and its allies have rejected the accord as unconstitutionaland a threat to sovereignty, and differences between tribal groups have begunto surface.

Relations with China have consistently improved in line with greater trade,and assistance 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 has improved in recent years. Increasing USinterest and involvement in oil and gas exploration in Bangladesh has furtherconsolidated relations. The US, as the leading importer of Bangladeshi ready-made garments, is also an important trading partner.

Relations with Myanmar (Burma) have been under pressure since 1991, whenaround 250,000 Rohingyas (Muslims from the Arakan region of Myanmar) fledinto the area around Chittagong after persecution by the Burmese army. MostRohingyas returned by 1995, but about 20,000 of them remain in the camps inand around Cox’s Bazar.

The armed forces totalled 121,000 in 1999, with an army of 101,000, a navy of10,500 and an air force of 9,500. In addition, Bangladesh has a paramilitaryforce of 49,700. 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, including former Yugoslavia, has giventhe army an international role and a new source of income for both it and thegovernment. The government has recently faced criticism for the purchase ofMiG-29s from Russia. Opponents believe the low level of external threat does

Defence

Relations with other states

12 Bangladesh


not warrant the cost, particularly as it will prove a drain on the country’salready precarious foreign-exchange reserves.

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 128.1m in January1999, is among the world’s most densely populated countries (see Referencetable 1 for population details). The urban population has been growing atroughly twice the overall population growth rate and now accounts for aroundone-fifth of the total. The principal urban centre is Dhaka, followed byChittagong, Khulna and Rajshahi. (See Basic data page for population by maintown.) The 1991 census indicated that 88% of the population was Muslim,11% Hindu and the remainder mainly Buddhist or Christian.

Population by age, 1996Age 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, Statistical Yearbook of Bangladesh

According to government statistics, the population is estimated to be expand-ing at about 1.7% per year, and containing growth remains a high priority,given the scarcity of land and resources. Various internationally funded pro-grammes have supplemented government initiatives on population controland family planning. In 1999, with a crude birth rate of 25 per 1,000 and acrude death rate of eight per 1,000, Bangladesh now has one of the lowest ratesregistered in developing countries. As contraception use has become more pre-valent, the fertility rate (the average number of children a women bears in herlifetime) has fallen to 3.6 children in 1999, from 6.8 in 1965.

The number of Bangladeshis working abroad and the remittances fromemployment have been rising throughout the 1980s and 1990s. While only78,000 skilled and unskilled persons obtained employment abroad in 1985/86,the number swelled to 243,000 in 1997/98. Remittances from abroad jumpedfrom about $500,000 to $1.5bn during the same period. Popular destinationsof Bangladeshi workers are Saudi Arabia, the United Arab Emirates, Kuwait andOman, and more recently, Malaysia. In 1997 some 54% of overseas workers

Bangladesh 13


were classified as unskilled, 20% as semi-skilled, and the remainder asprofessional. In 1997/98, in terms of remittances from abroad, Saudi Arabiamaintained the top position, followed by Kuwait and the US. (See Referencetable 27.)

The agricultural sector is the largest employer, providing work for about 60% ofthe country’s labour force. The government employs around one-third of thosein formal sector employment—either directly in the civil service or indirectlythrough the state-owned enterprises (SOEs). Since the early 1990s there hasbeen a leap in the size of the labour force following the recognition of manyhousehold activities, mainly carried out by females, as economic activities.According to the Labour Force Survey in 1995/96 (latest data available), thecivilian labour force of the country stood at 56m, compared with 30.9m in1985/86. Only 7.7% of the total labour force was classified as industrial labourby the survey. (See Reference table 2.)

Education

Bangladesh has still not attained universal adult literacy,, although in January1999 the adult literacy rate rose to 56%, compared with 51.2% in 1997. Thisrepresents considerable progress, as in 1991 the literacy rate was about 24%.Big disparities, however, remain between the urban and rural segments of thepopulation and between males and females, although the gap is narrowing.The government is the main provider of primary education, while privateschools predominate at the secondary school level. Primary education has beenmade universal as well as compulsory and free. Boys are entitled to five years offree schooling and girls up to eight years (reflecting the fact that families areless willing to pay to educate their daughters). Thanks to increased budgetaryallocations, increased employment of female teachers, stipends for femalestudents and a food-for-education programme, enrolment in primary schoolshas increased phenomenally in the 1990s. The number of primary schoolchildren increased from 12m in 1990 to 18.3m in 1998, and the number offemale students increased from 44.7% of the total number to 47.8% during thesame period. Despite this, fewer than half of all children complete five years ofprimary education. According to government statistics, the poor quality ofeducation (because of badly trained or absentee teachers), large classes andshortages of books are reflected in the fact that only 10% of those who enterprimary school leave with any useful skills.

Universities receive generous government subsidies but generally producepoor-quality graduates at a high cost. Only 30% of university students arewomen. Female participation in the education system is significantly lowerthan for males, and overall participation rates remain low in comparison tomany countries in South-east Asia.

Health

Medical facilities are extremely scarce in Bangladesh. In 1997 there were 29,106hospital beds, 26,535 registered physicians, 13,830 registered nurses and 13,500

14 Bangladesh


midwives in the public sector, which provides more than 90% of healthservices in the country. According to the Bangladesh Bureau of Statistics, in1996 (latest figures available) there were 3,288 persons per hospital bed, 4,955persons per physician and 10,902 persons per nurse. Spending on healthcareand family planning has remained at around 1% of GDP over 1993-98, andgovernment health spending per head is around $3.60 per year. Access tomedical services is more restricted in Bangladesh than in Pakistan and India.Government health services are seen as poor in quality, and only about 12% ofserious cases are referred to public health facilities. Private clinics have beenmushrooming in urban and rural areas. In addition, non-governmentalorganisations (NGOs), such as the Bangladesh Rural Advancement Committee(BRAC), have been making some headway in the provision of health services.

Natural resources and the environment

The land in Bangladesh is mostly flat, although there are some hilly areas inthe north-eastern and south-eastern parts. Much of the land is intersected bythe numerous waterways of the delta of the Ganges and Brahmaputra rivers(known locally as the Padma and Jamuna), the annual flooding of whichprovides rich alluvial soils. The climate is monsoon-type with average rainfallamong the world’s heaviest, exceeding 2,540 mm and falling mainly betweenJuly and October. Every year massive flooding takes place during the monsoonseason, with soil erosion and changes to the river channels posing constantproblems. The possibility of natural disasters is a constant fact of life as manyBangladeshis live in precarious dwellings very close to rivers and the coast. Thelow-lying area at the mouth of the Ganges delta is at risk of tidal surges andcyclones. (See table on natural disasters below.)

Most of Bangladesh’s soil is rich and fertile, but intensive farming is taking itstoll. Forested land currently covers 1.9m ha, or 12.7% of the total land area.Rice takes up 75% of the total planted crop area, and a large and growingproportion of the cropped area is subject to multiple cropping: weatherconditions, improved seed varieties and irrigation facilities permit three ricecrops each year. Bangladesh has little additional land that could be broughtinto crop production. According to the World Bank, the total land area avail-able increased by about 4% between 1974 and 1996, while during the sameperiod land not available for cultivation increased by 8%. This trend largelyreflects the impact of urbanisation.

Major natural disastersDate Event Nature of calamity

1998 Floods Devastating floods submerge over 60% of Bangladesh land area, causing an estimated 1,100 deaths

1995 & 1997 Floods Major floods kill 6,000 & cause widespread damage to livestock and fisheries

1991 Cyclones Sea surges associated with cyclones kill about 140,000 inhabitants on the Bay of Bengal coasts. About 15mresidents are affected

1990 Floods Widespread and devastating flooding

1989 Tornado Massive tornado strikes Manikganj west of Dacca resulting in 1,000 deaths and considerable devastation

1987 & 1988 Floods A series of floods kills 5,000 people and causes widespread damage and devastation

Sources: David Alexander, World Disasters Report, 1993; Ministry of Finance, Bangladesh Economic Review, 1997.

Bangladesh 15


Bangladesh is poor in non-energy minerals. Known resources include lime-stone, glass sand and certain heavy minerals such as traces of uranium andthorium. There are coal deposits, but many are too deep for commercialexploitation. In 1995 deposits of high-quality bituminous coal were found atDighipara in Dinajpur, probably the largest in the country. Work is in progressto complete the Barapukuria coal mine in Dinajpur, with a 1m-tonne annualproduction capacity (see Mining and semi-processing).

Gas is the main energy resource, and so far 20 gasfields have been discovered.Total reserves are estimated at around 23trn cu ft and recoverable reserves at13.7trn cu ft. Gas provides critical inputs to power generation, fertiliser produc-tion and for commercial and domestic uses (see Reference table 4 for data ongas production). The government has recently opened the gas sector to inter-national investment under production-sharing contracts (PSCs). By mid-1999six PSCs had been signed with international oil companies for gas and oilexploration, in eight blocks.

Transport and communications

Poor transport facilities and infrastructure have severely hindered economicdevelopment in recent years; only the major cities have anything other thanthe most rudimentary road or rail connections (see Reference table 3 for trans-port data). Dealing with the problem of pollution and traffic chaos in thecities, particularly in Dhaka and Chittagong, is at the top of the government’surban transport agenda, but a solution remains elusive. Outside the majorcities the country is criss-crossed by a myriad of rivers and waterways. Theopening of a multipurpose bridge over the Jamuna (Brahmaputra) river in 1998has connected the east and the west of the country, which had previouslybeen divided.

In 1998/99 there were 2,733 km of railways operated by Bangladesh Railway—astate-owned monopoly—compared with 2,706 km in 1997/98. The smalladdition in 1998 came from the bridge over the Jamuna. Bangladesh had arailway network of 2,874 km in 1972/73, but over the years the length declinedas service standards deteriorated and freight and passenger transportation viaroads increased. The railway operated 4.1bn passenger-km in 1998/99,compared with 3.9bn passenger-km in 1997/98 and 5.3bn passenger-km in1991/92. It carried a load of 1bn tonnes/km of merchandise in 1998/99,compared with 800m in 1997/98. Despite this slight increase it remains inlong-term decline, needing large subsidies from the government, owing largelyto a lack of efficiency and a failure to control costs and collect fares.

Bangladesh had a road network of about 21,000 km in 1999, compared with6,000 km in 1995. Most district and thana towns have been connected. About15% of roads are national highways, 8% are regional highways and the restsub-regional or feeder roads. In addition, local governments maintain morethan 16,000 km of rural roads, but data from mid-1996 indicate that only8,546 km of these are paved. In many parts of the country, animal-driven cartsstill provide the main means of land-based transport for shorter distances.

Mineral reserves

Roads

Railways

16 Bangladesh


Despite the problems of road transport, 65% of all freight and 75% of allpassengers travelled by road in 1998, up from 35% and 54% respectivelyin 1975.

Waterways are becoming less important as a means of transport owing 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 theremotest parts of the country. Badly needed improvements to the waterwaysinclude more dredging programmes, better boat safety regulations and theprivatisation 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 byfar the largest of the seaports, handling around 80% of imports and 75% ofexports, and is well connected to inland road, rail, river and air routes.Container handling at Chittagong port has been increasing rapidly, from170,000 TEUs (twenty-foot equivalent units) in 1993/94 to 380,000 TEUs in1998/99, and is officially forecast to exceed 1m TEUs by 2005. The portauthorities are now building additional berth facilities for increased containerservices and building 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.

The national airline, Bangladesh Biman, serves 25 overseas and seven domesticdestinations. Its fleet includes four DC-10-30s, two Airbus 310-300s, two F-28sand two ATPs, one of which was delivered in February 1999. Moreover, Bimansigned a contract in mid-1999 to lease another DC-10-30 for three years.Between July and December of fiscal year 1998/99, Biman carried 600,000passengers and 16,415 tonnes of cargo, compared with 1.3m passengers and30,840 tonnes of cargo in 1996/97. Although Biman has traditionally beenprofitable, it has incurred huge losses in the past few years. This may be due topartly reflect the sector being opened up to private companies on bothdomestic and international cargo and passenger routes in 1996. Plans are underway to establish a partnership with another international airline by 2000.

The country currently has 14 operational airports—including two internationaland seven domestic ones—and two more are now under construction. Themain international airport is Zia International at Dhaka. The flight handlingcapacity of Biman has been enhanced in recent years and works are in progressto establish 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 to inter-national standards by 2000.

Waterways

Seaports

Air transport

Bangladesh 17


With around four telephones per 1,000 inhabitants, Bangladesh has one of thelowest telephone densities in the world, but the government aims to increasethe ratio to seven per 1,000 by 2000. While this target may be ambitious, thelevel of services available has been increasing. The number of telephones hasincreased from 220,000 in fiscal year 1990/91 to 460,000 in 1998/99. Analoguemicrowave link technology is being replaced by digital telephone lines.Internal communication links consisting of 20,695 nationwide dialling circuitsare currently in operation, compared with 11,410 in 1997/98. In addition, thenumber of international dialling circuits has been increased from 1,645 in1997/98 to 2,100 in 1998/99. A public telephone card system was introducedin 1992 and has been expanded to cover all district towns and some thanas.Some 400 operator-trunk-dialling stations now provide telephone access topeople in remote areas. However, despite these improvements, access todomestic and international telecommunications remains poorly developed andinadequate to meet the growing demands of commerce and industry.

Private-sector investment in the telecommunications industry has beenallowed since 1992. The private sector is now operating in cellular mobileservices, rural telephone exchanges, Internet and e-mail services, and pagingand trunking services. Over 40 private companies have ventured into Internetand e-mail services. The monopoly of the Bangladesh Telegraph and TelephoneBoard (BTTB) has been eliminated and its regulatory function is being trans-ferred to an independent regulatory commission.

Postal services are extremely poor and archaic. There are 9,245 postal stationsin the country: 793 in urban areas and 8,452 in rural areas. Only 163 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 scarcely avail-able to the rural population. Before the completion of the bridge over theJamuna river, the entire northern part of the country had a postal service inname only.

There is a thriving local press with over 100 daily newspapers, with about adozen published in English. The press has considerable freedom, althoughsome reporting restrictions have been imposed during periods of politicalunrest. Until recently radio and television were state monopolies. From 1999,however, private television channels are being allowed—with the first onebeing scheduled to go into operation in the latter half of the year. Internationaltelevision channels are permitted 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 reasonably priced electricity has been amajor factor in deterring foreign investors and preventing the country fromachieving higher rates of GDP growth. It is estimated that at present usage, a1% increase in GDP growth will require a 2-2.5% expansion in energy supply.Current installed capacity stands at 3,411 mw, compared with 3,100 mw last

Telecommunications

Media

Electricity

Postal services

18 Bangladesh


year, but owing to old and outdated plants and inefficient management, actualproduction stood at 2,105 mw in 1998/99. This is higher than the recentaverage of 1,600-1,800 mw, but figures for 1998/99 indicate that only 15% ofhouseholds were electrified, only 60% of the electricity generated is actuallypaid for and system loss often exceeds 30%. The electricity is mostly generatedfrom gas—about 85%—and the rest comes from hydroelectric (7%) and liquidfuel (8%). In 1997/98 the household sector consumed 43% of the totalproduced, followed by 41% by the industrial sector, 9% by the commercialsector and 5% by the agricultural sector.

The power supply remains severely stretched as peak hour demand is around2,700 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 March-April1999 load shedding increased, to the extent that there were street protests anddemonstrations across the country.

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 two barge-mounted power plants (BMPP), while the90-mw Baghabari plant began operation in June 1999. The commissioning ofthe plant improved electricity supply in the northern region. The 210-mwGhorasal power plant (public sector) began operation in early 1999 and a 60-mw gas-based plant is expected to come on line shortly. The new plants willadd 1,200 mw of new capacity to the national power grid by 2002. In addition,the World Bank has committed a loan of $600m, to be disbursed over a 12-yearperiod, but on condition that the government agrees to make the Power GridCompany of Bangladesh (PGCB) fully operational. The PGCB will initiallyestablish a national load despatch centre in Dhaka, but by 2002 it will take overthe country’s entire transmission system.

National energy balance, 1998(m tonnes oil equivalent)

Elec- Oil Gas Coal tricitya Other Total

Primary supplyProduction 0.05 7.00 0.00 0.21b 7.00 14.26Imports 2.95 0.00 0.00 0.00 0.00 2.95Exports 0.00 0.00 0.00 0.00 0.00 0.00Total 3.00 7.00 0.00 0.21 7.00 17.21

Processing and transformationLosses & transfersc –0.35 –3.25 0.00 –0.44 0.00 –4.04Transformation output 0.00 0.00 0.00 1.21d 0.00 1.21

Final consumption 2.65 3.75 0.00 0.98d 7.00 14.38

a Hydroelectric power. b Expressed as input equivalents on an assumed generating efficiency of33%. c Losses and transfers comprise input to transformation processes (electricity generation, gasmanufacture, liquids from coal etc), plus energy industry fuel and losses. d Output basis.

Source: Energy Data Associates.

Bangladesh 19


Bangladesh has abundant reserves of environmentally-friendly natural gas.Total reserves are estimated at 23trn cu ft and recoverable reserves at13.8trn cu ft, of which it has already extracted 3.4trn cu ft. Out of the 20 gas-fields discovered so far, ten, with 38 wells, are currently in operation. A total of282bn cu ft of gas was produced in 1997/98, rising to an estimated 308bn cu ftin 1998/99. Gas is used primarily for power generation, followed by fertiliserproduction, and other industrial and commercial uses, and demand for gas israpidly increasing and is expected to reach 377bn cu ft by 2000. The sector hasbeen opened to international investment and the country is divided into 23blocks for possible bidding under production sharing contracts (PSCs). By1998, six PSCs had been signed for eight blocks with international oil and gascompanies. At the same time exploration is being continued by BAPEX, asubsidiary of Petrobangla concentrating on the gas sector. The government isalso implementing the Gas Infrastructure Development Project and the ThirdGas Development Project. Gas transmission lines are being expanded to coverthe northern and western parts of the country, following the construction of abridge over the Jamuna river. In addition, the completion of the Ashugonj-Bakhrabad pipeline in 1998 has allowed gas to be transported from the Surmabasin to the Chittagong region.

Gas reserves(trn cu ft; Jul 1999)

Known discovered 21.0

Proven recoverable 12.6

Already used –3.0

Newly discovered (not announced) 5.5

Total recoverable reserves 15.1

Source: John C Holeman, “Prospects for the Bangladesh Gas Industry” July 1999 in The Holiday, July 23rd 1999.

The economy

Economic structure

Main economic indicators, 1998

Real GDP growth at constant market pricesa (%) 5.7

Consumer price inflation (av; %) 9.5

Current-account balance ($ m) –189.8

Exchange rate (av; $) 46.9

Population (m) 122.01b

Foreign debt (year-end; $ bn) 16.3

a Fiscal year ending June 30th 1998. b 1997.

Source: EIU, CountryData.

Gas

20 Bangladesh


Agriculture contributes close to 30% to nominal GDP. (See Reference tables 9-12 for data on GDP.) In addition to meeting the nation’s food requirements,agriculture supplies raw materials for the manufacturing sector, such as juteand paper production, and agro-processing. Bangladesh has almost achievedfood self-sufficiency, and progress has been made in diversifying the crop base(wheat is now the country’s second largest crop after rice). However, unpredict-able climatic conditions—mainly flooding and droughts—regularly undermineproduction plans and targets, disrupting the overall economy and necessi-tating additional food imports.

Most non-agricultural raw materials and machinery and equipment must beimported. Although natural gas production is increasing, Bangladesh still runsup a heavy fuel import bill. Levels of domestic saving and investment havebeen rising in the 1990s but remain low, constraining economic growth anddevelopment. Attempts are being made to diversify the economic and exportbase by promoting industries such as information technology and agro-processing, but the opportunities and success of the programmes have beenlimited. The country runs large trade and budget deficits, and relies on donorassistance to meet the shortfalls.

Industrial activity is centred mainly on Bangladesh’s two main cities, Dhakaand Chittagong. Export processing zones (EPZs) have been set up to attractforeign investors in both cities, and offer generous tax concessions to firms thatlocate there. The industrial sector contributes about 18% to nominal GDP, withlarge-scale enterprises (usually with more than ten workers) accounting forabout two-thirds of total industrial output. A faster rate of growth relative toother sectors has been the main cause of its share rising as a proportion of GDP.

Comparative economic indicators, 1998Bangladesh India Pakistan Sri Lanka Vietnam

GDP ($ bn) 34.1 462.3 63.9 15.8 27.2

GDP per head ($) 275 489 453 842 297

GDP per head ($ at PPP) 986 1,780 1,620 2,596 1,780

Consumer price inflation (av; %) 9.5 14.0 6.2 9.4 8.7

Current-account balance ($ bn) –0.2 –7.8 –2.0 –0.4 –1.6

% of GDP –0.6 –1.6 –3.1 –2.8 –7.0

Exports of goods fob ($ bn) 5.14 33.4 8.5 4.8 9.4

Imports of goods fob ($ bn) 6.86 45.6 9.1 5.3 10.3

External debt ($ bn) 16.3 99.3 31.6 8.4 10.9

Debt-service ratio, paid (%) 9.5 19.6 27.1 6.9 9.6

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 subsistence level. According to theWorld Bank’s 1998 Poverty Assessment, the incidence of poverty, as measuredby the cost of basic needs of the very poor, had declined from 42.7% in

Alleviating povertythrough growth

Bangladesh 21


1991/92 to 35.6% in 1995/96. However, this masks the fact that povertyremains 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, governments of all parties have beenforced to pursue economic policies aimed at encouraging GDP growth,increasing domestic foodgrain production and reducing the country’s relianceon foreign aid, but with varying degrees of success. As donor fatigue increases,the pressure for reform will undoubtedly mount. In particular, bilateral andmultilateral donors have been criticising through consensus politics. Parties’use of street politics involving violence and strikes is seen as detrimental to thestability required to ensure sustainable growth.

Summary of government finances, 1998/99% change

Tk bn year on year

Total revenue 207.8 10.6 Tax 166.2 0.1 Non-tax 41.6 10.1

Total expenditure 295.4 15.7 Current expenditure 159.4 9.9 Annual Development Plan 136.0 23.3

Budget balance –87.6 29.8

Source: Ministry of Finance, Bangladesh Economic Review, 1999.

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%, well below target, as plans were derailed byproblems ranging from the world oil price shock to domestic obstacles, such assevere floods and cyclones, political disorder, and inept economic manage-ment. Nevertheless, some progress has been made over the years. Bangladeshhas gained near self-sufficiency in foodgrain production, reduced the rate ofpopulation growth, alleviated poverty and boosted export income, especiallyfrom the vibrant ready-made garments sector.

Policies promoting economic liberalisation gained momentum in the late1980s and have been furthered by both the Bangladesh National Party (BNP)and the Awami League (AL) governments in the 1990s. The BNP, ingovernment in 1991-96, emphasised market-based policies to raise the growthrate, downsize the role of government, encourage the private sector and attractforeign investment. The BNP government also attempted to reduce currentexpenditure and increase tax revenue, by expanding the tax base andimproving collection and administration. Despite stiff opposition, in 1992 avalue-added tax (VAT) was introduced. As revenue has increased, theproportion of development projects that can be financed from domesticresources has risen to reach 46% of the Annual Development Plan (ADP, thegovernment’s capital expenditure programme) in 1998/99, from only 25% in1991/92, helping to reduce the country’s dependence on foreign aid.

Economic liberalisation

22 Bangladesh


Domestic share of resources in Annual Development Plan (ADP) expenditure

1993/94 1994/95 1995/96 1996/97 1997/98 1998/99

ADP (Tk bn) 96.0 111.5 104.5 117.0 122.0 136.0

% of ADP from domestic resources 35.8 43.0 42.2 48.9 45.2 45.7

Source: Ministry of Finance,.Bangladesh Economic Survey, 1999.

The AL has pursued similar economic policies to those of the former BNPgovernment. The first four budgets presented by the AL government anddelivered by the finance minister, S A M S Kibria, emphasised broadening theVAT net, tightening the tax administration and further streamlining tariff rates.In 1999 the AL government continued to liberalise the import duty structureby reducing the highest rate of duty and eliminating previously existing anom-alies in the duty rates for finished goods and raw materials. These measureswere seen as essential in order to strengthen incentives for domestic produc-tion and the assembly of import-based products. (For details of governmentfinances, see Reference tables 5 and 6.)

However, the fiscal deficit remains stuck at above 5% of GDP owing to bothexpenditure overruns and revenue shortfalls. Revenue collection in 1998/99was 10% below the target set by the government, owing largely to the 1998floods, which wrecked the economy. Government expenditure on relief andrehabilitation rose significantly, resulting in an additional Tk4bn ($81m) beingadded to the ADP budget for fiscal year 1998/99. The floods also forced thegovernment to augment donor assistance by about Tk73bn, in addition to a$338m loan from the IMF and the World Bank for emergency imports. As theportion of the deficit financed domestically has risen, domestic public debt hasincreased from 1.5% of GDP in fiscal year 1997/98 to 1.6% of GDP in 1998/99.

Monetary policy has been used sparingly by successive governments as aninstrument of economic policy, partly because its impact in an undevelopedfinancial system could be slightly haphazard, and strict controls over monetarygrowth would place severe strains on the fragile banking system. The centralbank continues to set interest-rate bands for different types of loans and hasbeen slow to develop a more market-oriented policy, which focuses on regularTreasury-bill auctions and monitoring of the bank rate. Money supply grewmore rapidly than nominal GDP in the early 1990s and interest rates were cutseveral times. (See Reference tables 7 and 8 for data on the money supply andinterest rates.) The government then dealt with the resultant inflationarypressures by gradually raising interest rates from September 1995 onwards andby selling government bonds to soak up excess liquidity. However, as a result ofa moderately expansionist monetary policy in order to encourage growth, M1increased by 4.8% and 7.1%, and M2 by 10.3% and 9.5% in 1997/98 and1998/99, respectively. Domestic credit also increased from 11.9% in 1997/98 to16.8% in 1998/99.

The banking system is beset with bad debts, corruption and overstaffing, andthe government has set reform of the sector as a priority on its economicpolicy agenda (see Economic sectors, Financial services). About 50% of thecombined portfolio of the nationalised commercial banks (NCBs) and private

A fragile banking system

Bangladesh 23


domestic banks (PDBs), which commanded about 80% of loans and 90% oftotal deposits, was classified as non-performing in 1997. Approximately 90% ofnon-performing loans were to the private sector and about 500 borrowersaccounted for 70% of the total. A large part of the problem is poor collection ofbad loans and an archaic legal system that allows the defaulters to delaypayment indefinitely. The AL government has introduced some changes in thelegal framework to facilitate bad debt collection and some progress has beenmade, although this is likely to continue at a slow pace.

Major changes in the 1999/2000 budget:

• Non-taxable income limit raised to Tk75,000 ($1,546), from Tk60,000 in fiscal year1998/99. The rate of income tax will be 10% on the next Tk50,000, 18% on the nextTk125,000, and 25% on income above these levels.

• The number of tariff levels has been reduced to four, from five: 5%, 15%, 25% and37.5%. Previously the highest was 40%. Pre-shipment inspection (PSI) was mademandatory for all imports (excluding some specified imports).

• Another 31 items were added to the value-added tax (VAT).

• The existing 2.5% infrastructure development surcharge (IDS), the 3% advancedincome tax and the 15% VAT on cotton (imported), synthetic staple fibre yarn andfabrics were all withdrawn.

• A 5% tax on the purchase of luxury cars with engines above 2000cc capacity andjeeps above 3000cc was imposed.

• The advance income tax of 0.25% at source on exports was abolished. Special exportincentives were extended for garments and jute sectors, and new export incentives forleather and several other small sectors, like quilts and fresh and artificial flower exports,were provided.

• Real estate companies have to pay advance income tax as final discharge of taxliability before submission of building plans for government approval.

Bangladesh started a process of wholesale nationalisation of industrial,commercial and trade entities in 1972, under a government committed tosocialistic principles. In recent years attempts have been made to reducegovernment involvement in industry and to increase the role of the privatesector.

According to the World Bank, more than 600 state-owned enterprises (SOEs)—ranging from small to large, commercial to industrial—were either de-nationalised or divested by 1986. However, the process came to a standstillafter this, and in 1993 the BNP government of Begum Khaleda Zia establisheda Privatisation Board to expedite the divestment processes. This was followedby a law in 1994, which allowed SOEs to be turned into public limitedcompanies. Despite these efforts, only 12 SOEs were privatised during the BNP

Privatisation of state-owned industries

24 Bangladesh


government, and with only four privatised by the AL government so far,neither government has succeeded in accelerating the process.

Some 87 SOEs are now listed for privatisation: 79 through direct sale and eightthrough a stockmarket flotation. The gross losses of non-financial SOEs arenow equivalent to around 2% of GDP, while the public sector still controls over40% of the country’s manufacturing assets. Thanks to resistance from thebureaucracy and labour unions and lack of political commitment, the pace ofprivatisation will remain slow.

Export processing zones (EPZs)

The country’s first EPZ was built in Chittagong in the early 1980s and is dominated bygarments manufacturing firms. The Dhaka EPZ, which specialises in high-tech firms, wasopened in 1993 and is due to be expanded. At least three other EPZs are now beingdeveloped, one at Chalna near Mongla port in Khulna, one in Comilla, and a private EPZin Chittagong. They are currently at different stages of completion.

Firms located in EPZs enjoy tax concessions, easier access to infrastructure facilities andreduced bureaucratic regulation. Up to January 1999, a total of $347m had beeninvested in the country’s EPZs, which fetched export income of $636m, or 12.3% oftotal export earnings in 1997/98. A total of 126 firms are located in these EPZs, of which31% make ready-made garments and 12% textiles. South Korea remains the largestinvestor, followed by Japan, the US, the UK, China and India.

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 wereabolished. VAT replaced import sales taxes and most domestic excise duties,and tariff rates have been simplified and reduced. In 1999 the highest rate ofimport duty was cut from 40% to 37.5%, although an infrastructuredevelopment surcharge (IDS) of 2.5%, introduced in 1997, was retained.However, cotton (import) synthetic staple fibre yarn and fabrics were exemptedfrom both the 2.5% IDS levy and 15% on VAT in the 1999/2000 budget. Inaddition to the EPZs, exports during the 1990s have been encouraged throughduty-drawback schemes and special bonded warehouse (SBW) facilities. TheSBW schemes have been crucial for the success of the ready-made garmentsindustry. Firms located in EPZs can import capital and raw materials free ofduty, retain foreign-currency earnings, employ expatriates and non-unionisedlabour and enjoy ten-year tax holidays.

Economic performance

Overall, the economy grew at an annual rate of 4% in the 1980s, but moved to5% growth rates in 1990s. The credit for this has often been given to the rapid

Incentives for privateinvestment

Erratic GDP growth

Bangladesh 25


liberalisation of the economy in the early 1990s. The top customs duty rate wascut from 350% in 1991 to 37.5% by 1999. The rate of GDP growth reached5.9% and 5.7% in 1997 and 1998 respectively, and 5.2% in 1999 (see Referencetable 12). According to World Bank sources, sectoral growth rates alsoimproved in the 1990s, compared with an annual average growth rate of 2% inthe 1980s, and agriculture grew by 3.3% in the 1990s. Manufacturing sectorgrowth also improved, rising from an annual average growth rate of 3% in the1980s, to 7% so far in the 1990s. Export growth followed a similar trend,growing by an annual average of 16% in the 1990s, compared with 7% inthe 1980s.

Despite the vagaries of the weather, agriculture, representing close to 30% ofGDP in 1998/99, remains the driving force behind economic growth, partic-ularly as the industrial sector also sources many inputs from the crop and fish-eries sector. Despite catastrophic floods during July-September 1998, whichwiped out aus and prevented plantation of aman, a strong post-flood boro (dryseason) harvest of about 10m tonnes pushed up the rate of GDP growth in1998/99 to a respectable 5.2%. This was in sharp contrast to the situationfollowing floods in 1988 and 1989, when GDP grew by 2.9% and 2.5%respectively. In 1998/99 wheat production reached a record 2m tonnes,compared with the previous record of 1.8m. As a result of more effective floodrelief, agriculture grew by 5% in 1998/99, as its sub-sectors, fisheries, livestockand forestry, also experienced higher growth.

Impressive growth in export-oriented ready-made garments (RMG) continuesto underpin industrial growth in the country. However, the floods in 1998damaged infrastructure and disrupted normal economic activities for severalmonths. As a consequence, the RMG sector’s export income fell to $4bn in1998/99, against the original target of $4.3bn. The sector’s poor performancelowered the net growth of overall exports of the country, and preliminarygovernment estimates suggest growth is likely to be less than 5% in 1998/99,compared with the double-digit growth rates of the recent past. The slowdownin the RMG sector dampened overall manufacturing growth in 1998/99 to anegligible 2.5%, compared with 9.5% in the last fiscal year. In contrast toearlier years, small-scale industries contributed more to manufacturing growthin 1998/99. While large-scale industries grew by a rate of 2.2%, small-scale andcottage industries grew by 3% in 1998/99.

Gross domestic product 1998/99(% real change; 1984/95 constant prices)

Annual average 1999ab 1995-99a

Agriculture 5.0 3.4

Industryc 7.3 6.6 Manufacturing 2.5 5.9 of which: large-scale 2.2 6.9

GDP 5.2 5.0

a Fiscal years ending June 30th. b Provisional. c Includes mining and quarrying, manufacturing,construction, power, gas and water.Source: Bangladesh Bureau of Statistics, Monthly Statistical Bulletin.

26 Bangladesh


The manufacturing base remains narrow. However, greater diversification hasbeen targeted in the new industrial policy announced in April 1999, with soft-ware development and agro-based industries being designated “thrust indus-tries”. The policy aims to increase the industrial sector’s share of GDP to 25%within ten years.

Revisions to the national accounts

Poor data quality and discrepancies between official and private estimates, as well as theexistence of a huge shadow economy, have often been blamed for the lack of reliabilityand consistency of national accounts data in Bangladesh. Recently, the BangladeshBureau of Statistics (BBS)—the government agency responsible for national accounts—improved its methodological weaknesses by switching to new national accounts series.A revised set of accounts has been drafted for 1989/90 to 1994/95 with the followingmain improvements:

• data have been rebased to 1989/90 (rather than 1984/85) and the coverage andweights of deflators have been updated;

• GDP by industrial origin has been re-classified into 15 main sectors compared with 11previously; and

• estimation of sectoral activity (agriculture, particularly crops, electricity, gas and watersupply, small-scale industries, transport and trade services) has been made moreaccurate by wider coverage and methodological improvements.

These changes highlight the extent to which GDP, investment levels andsavings/investment ratios have been underestimated in the past. The most noteworthyare:

• GDP per head for 1994/95 is $336 under the new series compared with $254 underthe old;

• GDP at current market prices is around 30% higher under the new series;

• the sectoral breakdown of GDP is altered: agriculture’s share of GDP falls to 25% ofGDP in 1994/95 under the new series compared with 30.9% under the old, whileindustry’s share rises to 25% compared with 17.6% (mainly owing to an upwardrevision of construction value added); and

• new investment/GDP ratios range between 17% and 19% under the new seriescompared with 11.5-16.6% under the old, while domestic savings ratios range between10.6% and 13.3% compared with 2.7-8.2%.

Despite some improvement in the 1990s, GDP growth remains too low toenable the majority of the population to see much improvement in their livingstandards. In 1998/99 national income (GDP) per head reached aroundTk13,655 ($275), having risen by an annual average of only 3% in real termssince 1993/94. A growth rate of around 7% has been targeted as necessary ifthere is to be a meaningful reduction in poverty. A major obstacle to achieving

Low savings andinvestment rates

Bangladesh 27


this target has been a failure to raise the rate of savings and investment as apercentage of GDP. While the domestic savings rate increased to 8% in 1999from 4% in 1991, and the investment rate increased to 18% from 11% duringthe same period, rapid industrialisation will require significantly higher levels.

Approximately 80% of total investment has been construction-related in thepast five years, with the private sector accounting for around 60% of the total.Investment in machinery and equipment accounts for 14% of the total, ofwhich the private sector accounts for only about 6%. With only limited opport-unities to expand investment from domestic sources, the country’s priorityremains to attract foreign direct investment, by encouraging export-orientedindustries, reducing bureaucratic obstacles and selling off loss-making SOEs.

Thanks to relative macroeconomic stability, inflation rates ranged between2.5% and 8.9% in the 1990s. In 1997/98 the inflation rate was 6.7%, comparedwith 4.7% in the previous fiscal year. According to the IMF, the year-on-yearchanges in consumer prices averaged 3.5% per year in the 1992-97 period. (SeeReferences tables 13-15.)

Food accounts for almost two-thirds of the index weighting, 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 the market, the inflation ratebegan to decline in January and by the end of the 1998/99 fiscal year, theannual inflation rate fell to 6.7%. Sharp fluctuations in food prices often occurowing to delays in delivery and speculative hoarding.

Inflationary effects are not evenly spread. In 1994/95, for example, prices rosefaster for lower-income and rural families than for middle- and high-incomefamilies living in Dhaka. This was largely because food makes up a greater partof the consumer price index for lower-income and rural families—up to 72%,compared with 56% for higher-income urban families. The differences in pricerises for different income groups are becoming less pronounced during the late1990s, although poorer families continue to face the biggest price increases.

Prices and wages, 1998(% change)

Annual average 1998 1994–98a

Consumer pricesMiddle-income families, Dhaka 7.0 5.6 of which: food 7.5 5.5Rural population, Dhaka region 5.4 4.0 of which: food 6.4 4.0

Wage ratesManufacturing 10.8 6.8Agriculture 3.7 4.2All occupations 7.6 5.5

a Fiscal years ending June 30th.Source: Bangladesh Bureau of Statistics, Monthly Statistical Bulletin, March 1999 .

Inflation

28 Bangladesh


Wage growth has tended to outpace inflation rates and this trend appears tohave accelerated in the mid- to late 1990s. The wage increase (for alloccupations) in 1997/98 was 7.6%, while the increase in the overall rate ofinflation was 4.7%. Wages are growing fastest in the manufacturing sectorfollowed by the construction sector. Wages in the agricultural sector appear tobe increasing less quickly. From 4.6% in 1994, the rate of growth in agriculturalwages fell to 3.7% in 1998. (See Reference table 16.)

Regional trends

There is considerable disparity in incomes across the country. Income per headis highest in the centres of economic activity: Dhaka, Chittagong and Khulnaon the coast. Inhabitants of Chittagong have recently enjoyed an income perhead well above the national average, largely owing to the economic benefitsof Chittagong port, while Pabna, situated on the Ganges in the north-west ofthe country, has had the lowest income per head, at roughly three-quarters ofthe national average.

Government offices are concentrated in Dhaka, the country’s capital. Dhakahas the country’s largest international airport and is at the centre of thecountry’s transport network. Chittagong is the country’s main port andcommercial centre and the first EPZ is sited there. The airport at Chittagong isbeing upgraded and is likely to reach international standards in 1999, at a costof $149m. The government has also announced plans to upgrade Sylhet airportinto an international airport in the near future. The opening of the 4.8-kmJamuna multipurpose bridge in June 1998 has improved access to the northernand western areas of the country, which are separated from the eastern regionby the Jamuna river. Construction of the bridge, which has a rail line and gaspipeline running alongside the roadway, is aimed at promoting developmentin the remote areas of the country. Of the three main river systems in the delta,the Meghna and Brahmaputra (Jamuna) now have bridges, leaving only thePadma without a fixed link.

Economic sectors

Agriculture and forestry

Agriculture accounted for 31.5% of nominal GDP in 1998/99, down from34.5% in 1991/92. The declining share of agriculture in GDP arises from itslower GDP growth rates in the last two decades, relative to other sectors in theeconomy. The crop sector, which contributed 22.8% of GDP in 1998/99, hasalso been declining as a proportion of GDP since 1992/93, when it contributed27.9%. However, the sector still remains an important source of growth: it wasthe crop sub-sector that pushed the GDP growth rate to 5.2% in 1998/99, andwithout a bumper dry season harvest (boro) in the post-flood period, GDPgrowth would have been closer to 4%. The crop sector’s growth rate rangedbetween 1.% and 2.2% between 1991 and 1995. But it grew by 6.2% in

Bangladesh 29


1996/97 and by 4.3% in 1998/99. The other sub-sectors of agriculture—fisheries, livestock and forestry—have been experiencing higher growth rateson a sustained basis in the 1990s. In 1998/99 forestry grew by 4%, livestock by7.6%, and fisheries by 8%, compared with 4.3%, 8.% and 8.6% respectively, inthe previous fiscal year. (See Reference table 17.)

Bangladesh’s climate is tropical monsoon, and weather conditions can changethe agricultural situation dramatically from one year to the next. Serious flood-ing is a constant threat, destroying crops, livestock and human life. Thedestruction of food crops places heavy and unforeseeable strains on import andforeign-exchange requirements, even though aid donors usually contribute tosome of the shortfall. Damage to the jute or tea crops adversely affects exportsand, in view of the symbiotic relationship between agriculture and industry inBangladesh, cash-crop shortfalls, especially of jute, can reduce industrialactivity.

Despite a noticeable improvement in recent years, yields, particularly of foodcrops, are still well below attainable levels. Application of chemical fertilisers isinfrequent and unbalanced, and although use is increasing, a deficiency infertiliser has reduced the fertility of land in recent decades. Manure fromanimals are still by far the largest source of fertiliser. Distribution andmarketing were privatised in the late 1980s, but government controls largelyresumed following a fertiliser crisis in 1995.

Most farms have been declining in size, but around 5% of farm households stillown and operate 26% of agricultural land, and this category of larger land-owners has been increasing in size and power. The fragmentation of farms andthe insecurity of tenure of most farmers discourage investment in the long-term productivity of the land. Moreover, the use of more intensive methods toraise agricultural output has begun to marginalise the peasantry, as moderntechnology favours larger agriculturists at the expense of small farmers andtraditional farming methods. As population growth places ever greater pressureon the land, there has been an increase in indebtedness, landlessness anddestitution.

Distribution of seeds has enabled the introduction of new high-yieldingvarieties of rice and has contributed to increased wheat production. The areaunder irrigation has expanded from 17% of cropped land in the late 1980s to51% in 1997/98, with modern methods, such as pumps and shallow and deeptube-wells, gradually replacing traditional ones. By 1995/96 about 3.75m hawere irrigated. This has also helped to raise yields, especially for the boro (dryseason) rice and vegetable crops. However, the long-term future of tube-wellirrigation, which provides over 90% of irrigated area and has been the linchpinof agricultural growth, is now in jeopardy as heavy usage in some regions hasled to a fall in groundwater levels and, in periods of drought, many tube-wellsdry up totally. Although more scientific evidence is needed, there are conjec-tures that an arsenic crisis, which emerged as a serious health hazard for a largesegment of the population recently, has to do with suction of undergroundwater for irrigation.

Severe flooding is aconstant threat

Structure of land and farmownership

30 Bangladesh


The introduction of high-yielding varieties, an increase in irrigated water andincreased application of fertiliser has resulted in rice production almostdoubling in the last two decades, growing faster than the population. Riceproduction increased from 17.8m tonnes in 1990/91 to 19.3m tons in 1998/99.A major contribution came from high-yielding boro varieties, production ofwhich has almost doubled in the last ten years, from 6.3m tons in 1991 to anestimated 12m tons in 1999. However, rice production remains susceptible todrought, floods and fertiliser shortages, as in 1998, when owing to devastatingfloods much of aus and aman were wiped out and the government had toimport or arrange food aid of more than 1m tons. Output of wheat, the secondlargest foodgrain, grew rapidly over the same period, from an annual average of100,000 tonnes in the early 1970s to about 1m tonnes in the 1980s and 2mtonnes in 1998/99. This was achieved as high-yielding varieties were plantedand new areas were brought under wheat production.

Bangladesh is the largest exporter of raw jute in the world, and jute remainsimportant as an industrial raw material and as an export commodity.Bangladesh accounts for as much as 30% of world jute production, 90% ofworld jute fibre exports and 50% of exports of jute manufactures. About 3mfarm households are involved in the production of this cash crop. The areaunder jute fluctuates in response to changes in the relative procurement pricesof jute and rice, but is on the decline. Yields have been improving, but thequality of output is falling as a result of overcropping. Jute production fell backsharply in 1995/96, when the crop was hit by drought. A bumper harvest of890,000 tonnes in 1996/97 was, however, accompanied by lower prices forgrowers as the hard-pressed jute milling industry struggled to buy the crop.Exports of jute have been declining in both volume and value. Although highworld prices in 1995 and early 1996 gave the sector a boost, the trend fromend-1997 to end-1999 has been for weak international prices.

Tea is an important cash crop and export product, and exceptionally strongdemand raised tea exports in 1996/97. The production of tea has been increas-ing, from 38,000 tonnes in 1981/82 to 51,000 tonnes in 1997/98, but stillremains below potential, despite a major rehabilitation programme carried outin the 1980s. The export of tea represented less than 1% of the country’soverall export income in the late 1990s, and it became negligible in 1998/99 asthe 1998 floods damaged tea plantations. Poor climatic conditions,management problems in the tea estates, the diversion of customers away fromBangladesh and low tea prices have been some of the problems afflicting theindustry.

Other important crops include sugarcane, tobacco and cotton. Sugarcaneoutput is broadly static but subject to wide swings from year to year. In the1990s production ranged between 7,000 and 7,500 tonnes per year. Low millprices have diverted some cane from crushing at the mills to use in the produc-tion of artisanal sweeteners, known locally as gur. Smuggling of cheaper sugarfrom India is a constant problem. Tobacco output, which finds a ready marketinside the country, has largely declined in the early 1990s. Cotton is a fairlynew crop. There are plans for big production increases in order to cut

Rice

Tea

Other crops

Jute

Bangladesh 31


Bangladesh’s large import bill for the commodity, which is used to supply thetextiles and garments industry.

The livestock sector has been growing strongly in the 1990s. In 1998/99 thesector contributed 3.3% to GDP and 10.4% to agricultural GDP. While it is onlya minor source of food, it plays a critical role in agriculture and also provideshides and skins, which are also major sources of export income. Livestock isthe main, often the only, source of non-human farm energy, providing most ofthe draught power for ploughing, crushing and rural transportation. Livestockhas a huge potential in contributing to increased employment as well aspoverty alleviation in rural areas.

Bangladesh has a total forest area of approximately 1.9m ha, covering just over12% of the total land area. In 1998/99 forestry contributed 2.3% to GDP, 7.3%to agricultural GDP and grew at a rate of 4%. A 20-year master 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 other water reservoirs, and 12nautical miles of territorial waters around the Bay of Bengal, Bangladesh offerstremendous prospect for fisheries development. In 1998/99 this sectorcontributed 3.4% to overall GDP, 10.7% to agricultural GDP and grew at a rateof 8%. Nearly 8% of the total exports and 61% of the primary exports nowcome from this sector, especially through the export of shrimp. In 1999 therewere 772 fish hatcheries in the country—141 in the public sector and 631 inthe private sector—and fish production stood at 1.5m tonnes, compared with1.3m in 1997/98, and 1.2m tonnes in 1996/97.

Mining and semi-processing

Mining and quarrying contributed only 0.03% to nominal GDP in 1997/98.Mining and mineral exploration are carried out under the auspices of thepublicly-owned Bangladesh Mineral Exploration and DevelopmentCorporation (BMEDC). The only minerals commercially exploited at presentare limestone and china clay, although there are plans to mine coal, withChinese assistance, from Barapukuria in Dinajpur. (See Reference table 18 fordata on minerals production.)

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 areas

Forestry

Fishing

Livestock

32 Bangladesh


such as ready-made garments 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.)

Despite the growth of large-scale manufacturing, the sector still accounts forjust 18% of nominal GDP. Recent government policy to revitalise the sector hasconcentrated on promoting private-sector investment (which was about 11%of GDP in 1998/99) in order to achieve rapid industrialisation, mainly throughan export push and the gradual lowering of tariffs and import controls.Industrial policy in 1999 is aimed at increasing the share of the industrialsector in GDP to 25% and raising the proportion of the labour force involvedto 25% of the total in a decade. It also aims to eliminate differences betweendomestic and international 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 swelled to around $500m per year in the late 1980s, but fellsharply in the late 1990s as the government had to stop providing subsidies tothe largest loss-maker, the jute sector, under the Jute Sector Adjustment Credit(JSAC) provided by the World Bank in 1994. The credit line of SDR175m($242m) was, however, closed down in 1997 after the release of the firsttranche, as the government failed to fulfil the World Bank’s conditionalities.Annual losses of the 38 state-owned non-financial corporations have beenestimated at Tk4bn ($81m) in 1998/99. These corporations also owe Tk43bn inoutstanding loans to the state-owned banking institutions, about 42% ofwhich are classified as non-performing loans.

The growth rates of the manufacturing sector averaged around 5% to 6% in the1990s, much better than in the 1980s, but well below its potential. Thedominance of the state sector and the draining of scarce public resources asSOEs are subsidised crowd out resource availability for the private sector, andthis has been identified as major source in preventing higher growth rates. Inaddition, industrial unrest, unwieldy labour unions and a corrupt bureaucracyremain major obstacles to increased growth. In the fiscal year 1998/99, thissector recorded its worst performance of the 1990s. However, this was duelargely to the floods that disrupted most economic activities for four months.

Trends in industry 1994-99Annual average

1999ab 1995-99a

Industry% of nominal GDP 11.2 9.8 % growth 2.5 6.0

Large-scale manufacturing% of nominal GDP 7.4 6.4 % growth 2.2 7.2

Small-scale manufacturing% of nominal GDP 3.8 3.8 % growth 3.0 3.9

a Fiscal years ending June 30th. b Provisional.

Source: Bangladesh Bureau of Statistics, Monthly Statistical Bulletin.

Bangladesh 33


Bangladesh is the second biggest producer of jute goods in the world, secondonly to India, but as its domestic market is limited in size it is the world’slargest exporter of the product. Jute and jute-related activities still contributeabout 12% to GDP and about 20% of total export earnings. (In 1973 about80% of Bangladesh’s export earnings came from jute and jute products.) Thissector produces about 30% of the country’s total manufacturing output andprovides 10% of employment in the economy. But the long-term future of thejute trade is threatened by synthetic substitutes and extremely inefficientproduction in Bangladesh, although jute products have won support from the“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, but thanks to the government’s share, even in the privatised jutemills, and continued losses at the state-owned Bangladesh Jute MillsCorporation that oversees the sector, jute continues to be a drain on thenational exchequer.

In the last two decades there has been a proliferation of export-orientedgarment manufacturing enterprises (typically small) and output has risendramatically, although most of the fabrics used have to be imported. There arenow some 2,600 factories employing 1.4m workers, 90% of whom are female.Clothing has emerged as the most important export item—now comprisingaround 70% of export earnings. Bangladesh has been particularly successful insupplying garments to the US and the EU, benefiting from the Multi-FibreArrangement (MFA) in the case of the former and the Generalised System ofPreferences (GSP) in the case of the latter. In 1997-98 Bangladesh garmentexports faced difficulties when the EU cancelled thousands of GSP certificateson the grounds that the rules of origin provisions were violated. The problemwas corrected, but the 1998 floods then damaged many garment factories andcaused havoc with export shipments owing to disruptions in domestic trans-port. As a result, export earnings fell dramatically in 1998/99—to singledigits—in sharp contrast to the double-digit growth rates experienced in therest of the 1990s. The garment industry needs to establish backward linkages ifit is to expand further. Development of the industry is becoming more pressingowing to the eventual dismantling of the MFA, when Bangladesh will finditself competing with other Asian countries, such as China and India.

This sector is geared primarily to domestic needs and includes sugar refiningand milling, edible oils, and fruit juice production. There is also a large fish-processing industry, composed typically of small units, which is in part gearedtowards export, mainly of shrimp, frog legs and prawns. But production ofshrimp and frog legs has been declining in recent years, as some importers,especially the EU countries, are increasingly emphasising higher processingstandards. A recent temporary ban by the European Union caused huge lossesto the processed shrimp exporters of Bangladesh as they could not export, andthe domestic market offered little scope for disposing of their products.

The abundance of natural gas in the country has led to the establishment of achemicals industry. Its major product is urea fertiliser, for which there is huge

Ready-made garments

Food processing

Chemicals

Jute goods

34 Bangladesh


domestic demand, which was met in the past mainly by imports. From aslittle as 610,000 tonnes in 1982/83, the country’s production of urea rose to2.03m tonnes in 1997/98. There are six fertiliser factories under the state-owned Bangladesh Chemical Industries Corporation (BCIC), plus theKarnaphuli Fertiliser Company (KAFCO) at Chittagong, which is a jointventure between the government and foreign investors from Japan and Italy.With the increased availability of natural gas in recent years, the government isnow encouraging domestic and foreign investment in order to establish morefertiliser factories, mainly for export purposes.

Small-scale manufacture or assembly of industrial and consumer productsincludes matches, cigarettes, bicycles, tyres and tubes, batteries, pumps, motorsand engines, radio and television sets, and other electrical items. Recently therehas been some expansion into electronics, with a number of foreign investorssetting up light electronics assembly plants in the export processing zones(EPZs), partly to escape rising wages in many other Asian countries.

Construction

Cement production stood at 207,464 tonnes in 1992/93. It increased to610,508 tonnes in 1996/97, but then fell in 1997/98 to 591,000 tonnes astransport links failed following the floods. Domestic production can only meetabout 10-15% of demand and the country remains heavily dependent onimported cement. Given the booming construction industry, especially in themajor cities, international investors are now being attracted to this sector.Several new plants, including some joint ventures, such as Daewoo of SouthKorea and Associated Cement Companies (ACC) of India, are coming onstream soon.

The construction sector has been contributing around 6% to GDP since thelate 1990s. In 1998/99 its share was 6.4% of GDP. Annual growth rates in thesector varied between 4% and 7% during the same period, reaching 7% in1997/98 and 6.5% in 1998/99. The sector has been experiencing stronggrowth, especially in the urban areas as high-rise apartment complexes arebeing built to meet increasing demands of the growing middle class. A boom-ing construction industry has also generated growth in related industries, suchas transport, storage and communications, and housing and trade services. Thesector has, however, added further burdens on the already strained power, gas,water and sanitary services in the major cities.

Financial services

The financial services sector is small and undeveloped, and despite reforms, itscontribution to GDP has remained at around 2% of GDP in recent years.However, the depth of the financial system, as measured by the ratio of themoney supply (M2) to GDP, has been growing, albeit slowly. There have beensome improvements through interest rate deregulation, a strengthening ofloan classification standards, a reduction in the central bank’s control over

Other industrial andconsumer products

Cement

Bangladesh 35


many financial transactions and loan recovery measures. But the financialsystem still suffers from unusually high levels of non-performing loans, anextremely low loan recovery rate, a failure by local banks to meet capitaladequacy requirements, rampant insider lending and fraudulent transactions,and other systemic inefficiencies. Many of the bad loans now plaguing thesector have been made following orders from the government, which hasencouraged banks to lend to loss-making state-owned enterprises and severallarge private-sector defaulters, who wield political influence. The World Bank,in its recent report, identified four major problems with the financial system: adeficient legal framework, poor governance, inadequate financial disclosureand a weak central bank.

State-owned banks—the nationalised commercial banks (NCBs)—dominate thefinancial sector. As the government is the owner and regulator, as well as acustomer of the NCBs, there has been ample opportunity for mismanagementand political interference. Although a major reform programme, the FinancialSector Reform Programme (FSRP), was carried out between 1990 and 1996, thebanking sector is still plagued with a lack of credit discipline, archaic loanrecovery laws, corruption and inefficiency, including chronic overstaffing. Thefinance ministry still approves all NCB budgets, salaries of NCB officials are tiedto government pay scales and there is no system of encouraging good perform-ance. The private commercial banks are better in terms of operational effic-iency, as there is little overstaffing and compensation levels are competitive.But they suffer from capital inadequacy and high incidents of insider lending.Surveys of private-sector business indicate that the limited availability of creditand its high cost have stalled business expansion. The inadequacies of thebanking system have long been the focus of both the government and theWorld Bank. In the 1990s some changes have been made in the legal frame-work to improve financial discipline, and the government launched aCommercial Bank Reform Project (CBRP) in May 1999 to facilitate loan recov-ery, strengthen the NCBs, re-capitalise private banks and strengthen the centralbank’s supervision and controlling powers.

The Bangladesh Bank is the central bank and issuing authority, but it hasproved ineffective in its use of monetary policy and control of banking andfinancial institutions. This is largely due to a failure to define its functions andresponsibilities and to give it an independent status, although the CBRP (seeabove) may partially improve the definition of the bank’s role. Currently, itcannot effectively supervise the NCBs or private banks, dictate monetary andexchange-rate policies, or enforce its regulations without interference from thefinance ministry. It is also overstaffed: of the 6,200 staff, 1,720 are clerical andmost non-clerical staff lack professional training.

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 four currently account for around 60% of total depositsand 50% of total advances. These NCBs,, whose lending is often directed by thegovernment of the day, have a substantial portfolio of non-performing loans(with a default rate estimated at 50% in June 1999 using international

The central bank

The nationalisedcommercial banks

Need for bank reform

36 Bangladesh


accounting standards). They have also been forced by the government toundertake loan forgiveness programmes. The four NCBs were recapitalised in1992 and 1993 at a cost of Tk31.9bn ($709m), but they are again facing asimilar problem. One of the objectives of the current commercial bank reformproject is to recapitalise the NCBs.

The growth of private banks since the 1980s has injected some much-neededcompetition into the banking sector. In 1995 seven private-sector banks weregranted licences, and most of these started operations by mid-1996. In 1998nine more private banks were given licences. The new private banks, includingsome foreign joint ventures, have been challenging established banks by offer-ing more competitive interest rates for both borrowers and savers. Theyincreased their proportions of deposits and advances from 20% of totaldeposits in 1986 to 28% in 1996, and total advances rose from 17% in 1986 to26% in 1996. However, the rate of default experienced by private banks inFebruary 1997 was 48%. Moreover, the operations of the private banks are limi-ted to urban areas, primarily in Dhaka and Chittagong. There are also 14foreign banks whose activities are mainly restricted to offshore and foreigntrade business. They have only about 7% market share but are gradually emer-ging as competitors for local deposit banks and the credit market.

The specialised banks

There are two specialised banks for industry, the Bangladesh Shilpa Bank (BSB) and theBangladesh Shilpa Rin Sangstha (BSRB), and two for agriculture, the Bangladesh KrishiBank (BKB) and the Rajshahi Krishi Unnayan Bank (RAKUB). All four banks are publiclyowned, have a negative net worth and have had a high percentage of their loans indefault in recent years. The BKB, however, made some improvement in the last fiscalyear, when its loan disbursement rate exceeded targets by 16% and its loan recoveryrate rose. However, the improvement in loan disbursement may reflect the exceptionalneeds in the aftermath of the floods of 1998. Loan disbursement rates were 85% in1997/98 and 87% in 1996/97. Other specialised banks in Bangladesh are theInvestment Corporation of Bangladesh, the Grameen (rural) Bank and the HouseBuilding Finance Corporation. Like the NCBs, all state-owned specialised banks alsosuffer from political interference, poor management and a culture of lax credit discipline.But the Grameen Bank, founded by Professor Mohammad Yunus, has already earned aglobal reputation for micro-credit. It lends small amounts, principally to poor ruralwomen, in order to boost rural employment opportunities, and has so far managed tokeep the default rate down to only 2%. It receives its funds from donor agencies via theBangladesh government. In 1998 the government gave permission for 16 merchantbanks to operate in the hope that they will help boost capital market, and three of thesecame into operation in 1999.

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, andforeign investor participation is allowed.

The private banks

Insurance companies

Bangladesh 37


There are two bourses in Bangladesh: the Dhaka Stock Exchange (DSE) and theChittagong Stock Exchange (CSE), which opened in October 1995. (SeeReference table 20.) Demand for shares has been weak because of the avail-ability of low-risk high-yielding government bonds and saving schemes. As aresult the stockmarket is poorly developed, with about 200 shares traded andpoor liquidity. Market capitalisation of the stock exchange relative to GDP, at0.5%, is small compared with its South Asian neighbours. Share prices rosedramatically after the June 1996 election (market capitalisation reached $6bnor 19% of GDP, on November 4th 1996), fuelled largely by the unofficialkerbside dealers, but evidence of widespread manipulation of share pricesemerged later. The DSE all-share index has been trading in a range of 540 to600 in the last few years, from more than 3,600 in November 1996, and hopesfor a recovery remain slight. Some measures have been taken to boost thecapital market in recent years, but with limited success. In 1997 thegovernment withdrew the lock-in system for initial public offerings (IPOs) toattract foreign investors, waived taxes on capital gains on bonus shares andincreased ceilings for credit against shares/debentures from 40% to 50% of themarket value, as well as introducing a circuit breaker system to controlabnormal fluctuations.

In 1998/99 the government established a central depository system (CDS) andautomated the share transactions in both the bourses. But these measures havealso failed to restore the confidence of investors, which was lost owing mainlyto the manipulation of shares in 1996 (see above), when many small investorslost their life savings. The Securities and Exchange Commission, which was setup in 1994 to regulate the capital market, has recently been caught in a stringof financial and administrative irregularities, further inhibiting thegovernment’s efforts to kick-start the market. This follows a government audit,released in July 1999, which detected gross irregularities in the appointment ofseveral staff as well as payments to foreign and local consultants.

Other services

The tourism sector is small, although between 1993 and 1997 the number ofvisitors to Bangladesh increased from 120,000 to 180,000, representing anincrease of 50%, and earnings from tourism increased from Tk594m toTk2.7bn. The sector has received a boost in recent years owing to the end ofthe tribal insurgency in the Chittagong Hill Tracts (CHT) area, which has lakes,mountains and other sights which have traditionally attracted both foreignand local visitors. The most important origin of foreign visitors is, predictably,India, accounting for 44% of the total number in 1997, followed by 20% fromthe UK. The Dhaka-Calcutta direct bus service, introduced in June 1999, willfurther increase the number of Indian tourists.

The stock exchange

Tourism

38 Bangladesh


The external sector

Trade in goods

Foreign trade, 1997/98(Tk bn)

Exports fob 204.0 of which: ready-made garments 126.2 fish & prawns 14.9 jute products 13.3 hides, skins & leather 8.1 jute & meshta 4.8 tea 2.0 fertiliser 0.6

Imports cif 341.8 of which: textile yarn & fabrics 84.1 machinery & transport equipment 42.8 petroleum & petroleum products 19.8 iron & steel 17.7 cereals & dairy products 13.3 chemicals 11.2

Trade balance –137.8

Source: Bangladesh Bank, Economic Trends.

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 21-23.)

Import liberalisation, coupled with the growing demand for industrial inputs inthe 1990s, has put pressure on the merchandise trade account. The number oneimport item during this period has been yarn and fabric for the booming gar-ment industry, with machinery and transport equipment, and petroleum andpetroleum products in second and third places respectively. According to theBangladesh Bank (the central bank), imports rose by 16.8% to Tk341.8bn($7bn) in 1997/98 from Tk303bn in 1996/97. Import growth in 1998/99 isestimated to have risen rapidly as the country experienced floods in July-October 1998, which worsened owing to food shortages and infrastructuredamage. In the first 11 months of the 1998/99 fiscal year, the import billincreased by 8.5% in dollar terms and 15% in taka terms, compared with thecorresponding period last year. Letters of credit (L/Cs) worth Tk328.94bn wereopened during the July-May period of the 1998/99 fiscal year, compared withTk279.6bn in the same period of 1997/98. A significant increase in imports offood grains and capital machinery has been the main cause of this surgein imports.

The non-traditional garments industry overtook jute as an export earner in1987/88, and by 1997/98 garments exports earned Tk126bn. However, garment

Recent import trends

Garments exports faceinternational competition

Bangladesh 39


exports are highly import-dependent; the cost of imported fabric, yarn andbuttons came to Tk84bn in the same year, so that the net benefit of the gar-ments industry to export earnings in 1997/98 was only around Tk42bn, or 30%of the sector’s gross export earnings. The garments industry also faces fiercecompetition in export markets as a result of the appreciation of the taka vis-à-vis the currencies of other Asian garment competitors.

Main trading partners, 1997Exports to: % of total Imports from: % of total

US 39.4 South Korea 12.0

UK 11.0 China 9.8

Germany 10.1 Hong Kong 7.1

France 7.9 India 6.8

Italy 6.0 Japan 6.0

Netherlands 5.1 Singapore 4.6

Belgium 4.5 US 4.4

Japan 2.9 Malaysia 3.4

Source: IMF, Direction of Trade Statistics.

The jute industry contributed 49% of total export earnings in 1985/86, but lessthan 10% in 1996/97. Earnings from jute, tea and hides are highly susceptibleto the fluctuating conditions on world markets. Recent initiatives have encour-aged production in the leather industry, export earnings of which have grownsteadily to account for around 5% of total earnings in the 1990s. A sizeableexport trade in frozen and processed fish products has been developed; shrimpare by far the most important product, and further export growth should bepossible barring problems meeting the hygiene standards expected by exportmarkets. Export earnings from fish products continue to rise and in 1997/98contributed 7% to Bangladesh’s total export earnings, although this was lowerthan the 8.4% achieved in 1996/97, owing to greater competition from otherAsian competitors.

Foreign exchange and trade regulations

In August 1993 the Bangladesh Bank (the central bank) liberalised foreign-exchangeregulations, allowing dealers in effect to fix exchange rates. Their holding limit onforeign currency was also raised. The taka was made convertible for all current-accounttransactions in March 1994. Foreigners are allowed to invest in the capital market andcan freely repatriate their proceeds.

The number of imported goods subject to quantitative restrictions (QRs) fell from 137 inthe early 1990s to 41 in 1997/98, as the government continued to liberalise trade. Tariffrates were simplified and compressed into a 7.5-37.5% range, and in the 1999/2000budget import tariffs on intermediate raw materials were reduced further. Aninfrastructure development tax at a rate of 2.5% was introduced in 1996/97 and thecharge still continues, with the exception of some specified sectors, such as textiles.Average unweighted tariffs came down from 94% in 1989 to 20% in 1999 and import-weighted tariffs declined from 42% to 16%.

40 Bangladesh


Invisibles and the current account

Current account, 1998($ m)

Merchandise exports fob 5,142

Merchandise imports fob –6,862

Trade balance –1,721

Services balance –529

Net income –108

Net transfers 2,168

Current-account balance –190

Source: IMF, International Financial Statistics.

Bangladesh runs a large deficit on its invisibles (services and income) account,largely 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 24 and 25.)

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 1995-96, as net transfers of around $2bn could not coun-ter the soaring trade and services deficits. The current-account deficit returnedto a more manageable level in 1997 of $327m on net current transfers of$2.1bn. The bulk of current transfers is made up of remittances fromBangladeshis working abroad (private transfers), with the remainder made upof foreign grants and food aid (official transfers). Workers’ remittances havegrown steadily over recent years, as Bangladeshi nationals have continued toseek employment opportunities overseas (for details on remittances seeReference table 27). Official transfers have fluctuated; for example, aid for cyc-lone damage boosted official transfers in 1991. Current transfers reached$2.2bn in 1998, as aid inflows rose to assist the government during theflood 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). Between independence in 1971and March 1997 the total of foreign aid commitments to Bangladesh amoun-ted to $36.6bn, 46% in the form of grants and 54% in loans. The trend forgrants and concessional aid has continued throughout the 1990s, but thedevelopment partners have departed from their conventional practices: in1999 they have refrained from making any pledge, and instead have describedthe government’s request for $2.04bn as “realistic”. The change in how aid isgiven is being driven by the fact that much of the project aid committed overthe years has not been disbursed, mainly because of bureaucratic delays andthe government’s inability to raise sufficient domestic resources to matchdonor assistance (see Economic policy).

Transfers

Foreign aid and loans

Bangladesh 41


Aid inflows are increasingly in the form of loans, and total debt service willincrease substantially during the next few years. Although the debt/GDP ratiowas just over 50% in 1999, most of the debt is long-term official bilateral andmultilateral (over 90%) on concessional terms with long maturities, low ratesof interest and ten-year grace periods before interest becomes due. This makesthe debt burden considerably easier for the country to bear. (See Referencetable 26.)

Attempts have been made in recent years to attract more foreign direct invest-ment (FDI) as a means of accelerating economic growth. Both the BangladeshNational Party (BNP) and the Awami League (AL) governments have tried tocreate a conducive environment for private investment. Annual FDI inflowshave more than quadrupled in the last four years, increasing from $83m in1994/95 to $388m in 1997/98, but Bangladesh still lags behind many Asiancountries in attracting FDI. There is a strong interest from internationalinvestors in gas and power, and these sectors now account for most of the FDIflow: in 1997/98 $267m went to these sectors alone, out of a total of $388.Such a heavy concentration on the energy sector, however, has raised concernsabout the government’s ability to meet the foreign-currency repaymentobligations that it has agreed with the foreign investors: the government iscommitted to buying a certain proportion of the gas produced by foreignexploration companies in hard currencies. Nevertheless, according to theWorld Bank, FDI inflows are expected to increase to a range of between $700and $800m annually in the next few years.

Foreign reserves and exchange rate

As the balance-of-payments position improved in the early 1990s, reservesincreased steadily, reaching over $3.4bn by April 1995, equivalent to eightmonths of import cover. However, the deterioration in the current-accountbalance in 1995-97 has led to a large reduction in foreign reserves, which fell to$2.3bn in December 1995, and have continued to fall, reaching $1.9bn inDecember 1998, sufficient for less than three months of imports. Hard-currency remittances from Bangladeshi workers, principally in the Middle East,have helped offset lower aid disbursement, but foreign reserves remain meagreat around $1.7bn. (See Reference table 29.)

Foreign-exchange reserves, 1998(year-end)

Total ($ bn) Per head ($)

Bangladesh 1.9 15.3

India 24.3 28.1

Pakistan 1.2 7.2

Sri Lanka 2.0 106.4


FDI in the gas and powersectors

42 Bangladesh


The BNP government began a policy of allowing the value of the taka todepreciate slowly against the dollar, the currency that dominates the basket ofcurrencies against which the taka is measured (for data on the exchange rate,see Reference table 30). Since 1995, when the average annual exchange ratewas Tk40.28:$1, the taka has been devalued in stages. Since the AL governmenttook over in June 1996, the taka has been devalued by more than 18% againstthe dollar, but the taka still remains overvalued, particularly now, following thesharp devalutions in the currencies of many East Asian economies. However,while a sharper depreciation of the taka has been cited as essential in order toraise exports, this is likely to put pressure on inflation owing to the highimport requirements of the country, and export growth requires greaterstructural reforms to raise productivity, as well as adequate infrastructure. Thegovernment has recognised this and so is likely to continue on a gradualdownward adjustment, rather than making any sharp devaluations.

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 Education in Statistics, 1991

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

Child Nutrition Survey of Bangladesh, 1992

Labour Force Survey, 1995/96

Monthly Statistical Bulletin

Population Census, 1991

Statistical Pocketbook of Bangladesh, 1997 (annual)

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, 1 Regent Street, London SW1Y 4NR

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

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

National statistical sources

International statisticalsources

Select bibliography

44 Bangladesh


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

CAF Dowlah, Privatisation Experience in Bangladesh, 1991-96, The 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

Population1994 1995 1996 1997 1998

Total population (m) 116.49 118.23 120.07 122.01 123.84 % change, year on year 1.4 1.5 1.6 1.6 1.5

Sources: IMF, International Financial Statistics.

Reference table 2

Labour force(m)

1985-86 1989 1990/91 1995–96

Total 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: Statistical Year Book of Bangladesh, 1997.

Bangladesh 45


Reference table 3

Transport1993/94 1994/95 1995/96 1996/97 1997/98

Railway trafficFreight carried (m tonnes) 2.39 3.35 2.67 2.75 3.14Passengers carried (m) 46 40 32 34 38Passenger-km (m) 4,451 4,091 3,277 3,874 3,933

Sea transport (Chittagong & Mongla ports) 1993/94 1994/95 1995/96 1996/97 1997/98Vessels handled 1,465 1,436 1,552 1,624 1,484Cargo (imports) handled (‘000 tonnes) 8,192 10,960 11,181 11,237 9,635

Air traffic 1993 1994 1995 1996 1997Air traffic movements (‘000) 26 47 68 67 114Passengers carried (‘000) 2,143 2,376 2,522 2,669 2,785

Freight/mail carried (‘000 tonnes) 137 76 81 n/a n/a


Reference table 4

Energy: production of natural gas by gasfield(m cu ft)

1992/93 1993/94 1994/95 1995/96 1996/97

Titas 101,117 97,682 95,965 99,568 50,908

Habiganj 45,656 49,826 54,105 58,332 29,367

Sylhet 1,842 1,245 1,970 1,980 1,012

Kailashtila 7,941 9,978 9,817 16,704 9,461

Kamta 0 n/a n/a n/a n/a

Feni 5,414 5,643 7,984 8,829 2,487

Total production 210,613 223,373 247,346 265,516 133,299

Total consumption 194,260 210,310 234,090 251,400 n/a

a To December 1996.

Sources: Bangladesh Bureau of Statistics, Monthly Statistical Bulletin, Statistical Yearbook of Bangladesh; Petrobangla.

Reference table 5

Central government finances(Tk bn unless otherwise indicated)

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

Total revenue 142.1 155.1 171.4 187.8 207.8 Tax 111.1 122.3 140.7 150.0 166.2 Non-tax 31.0 32.8 30.7 37.8 41.6

Total expenditure 206.0 222.6 235.8 255.3 295.4 Current expenditure 103.0 118.1 125.3 145.0 159.4 Annual Development Plan 103.0 104.5 110.4 110.3 136.0

Budget balance –63.9 –67.5 –64.4 –67.5 –87.6

Government expenditure as % of GDP 17.5 17.6 16.8 16.5 16.9

Source: Ministry of Finance, Bangladesh Economic Review.

46 Bangladesh


Reference table 6

Current revenue receipts(Tk m)

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

Customs duty 29,836 36,769 37,772 40,073 45,391

Excise tax 15,080 1,778 1,831 2,001 2,152

Income tax 17,049 14,916 15,248 16,407 19,536

Value-added taxDomestic 10,327 12,483 13,047 15,179 16,682 Imports 17,135 22,162 25,474 27,890 29,007

Supplementary taxDomestic 11,824 13,441 14,642 16,191 17,157 Imports 704 1,876 3,593 4,522 5,670

Total tax revenue incl others 98,800 111,100 122,330 140,740 141,593

a Provisional.

Source: Bangladesh Bureau of Statistics. Monthly Statistical Bulletin.

Reference table 7

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

1994 1995 1996 1997 1998

Currency outside banks 54,160 65,651 71,233 75,746 81,533

Demand deposits 57,511 66,143 73,361 75,924 77,352

M1 111,671 131,794 144,594 151,670 158,885 M1 growth (%) 23.2 18.0 9.7 4.9 4.8

M2a 364,030 422,679 457,600 507,110 558,690 M2 growth (%) 15.4 16.0 8.2 10.8 10.3

a M1 plus time deposits.


Reference table 8

Interest rates(%; period averages unless otherwise indicated)

1994 1995 1996 1997 1998

Short-term interest rate (av)a 14.5 14.0 14.0 14.0 14.0

Short-term interest rate (end-period)b 6.4 6.0 7.3 8.1 8.4

a Commercial bank prime rate set by government. b Deposit interest rate from IMF, InternationalFinancial Statistics.

Source: IMF, International Financial Statistics..

Bangladesh 47


Reference table 9

Gross domestic product(market prices)

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

GDP (Tk bn)At current prices 1,170 1,302 1,403 1,548 1,749 At constant (1984/85) prices 610 642 680 719 756 % change; year on year 4.5 5.3 5.9 5.7 5.2

GDP per head (Tk)At current prices 9,760 10,660 11,288 12,240 13,655 At constant (1984/85) prices 5,086 5,262 5,472 5,681 5,904 Real change (%) 2.5 3.5 3.8 3.7 3.9

a Provisional.

Source: Ministry of Finance, Bangladesh Economic Survey, 1999.

Reference table 10

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

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

Private consumption 806,320 913,050 1,026,130 1,099,420 1,212,106(78.3) (78.0) (78.8) (78.4) (78.3)

Government consumption 147,280 160,800 177,660 198,230 218,217(–13.8) (–16.6) (–17.2) (–15.3) (–14.0)

Exports of goods & services 121,890 165,710 184,360 216,720 266,809(11.8) (14.2) (14.2) (15.4) (17.2)

Imports of goods & services –187,740 –263,130 –310,910 –325,590 –365,878(–18.2) (–22.5) (–23.9) (–23.2) (–23.6)

GDPa 1,030,360 1,170,260 1,301,600 1,403,050 1,548,334

Net factor income from abroad 48,637 55,671 60,032 71,028 75,182(4.7) (4.8) (4.6) (5.1) (4.9)

GNP at current market prices 1,078,998 1,225,932 1,361,632 1,474,078 1,623,516(104.7) (104.8) (104.6) (105.1) (104.9)

aIncludes stockbuilding.

Source: Bangladesh Bureau of Statistics, Monthly Statistical Bulletin,.

48 Bangladesh


Reference table 11

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) (4.4) (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 DevelopmentReport

Bangladesh 49


Reference table 12

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

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

Agriculture 199.8 207.1 220.5 227.0 238.4 (–1.0) (3.7) (6.5) (2.9) (5.0)

Crops 148.1 152.2 161.6 163.8 170.9 (–3.8) (2.8) (6.2) (1.4) (4.3)

Forestry 14.7 15.3 16.0 16.7 173.3 (4.5) (4.3) (4.6) (4.3) (4.0)

Livestock 18.2 19.7 21.3 22.9 24.7 (8.3) (8.0) (8.0) (8.0) (7.6)

Fisheries 18.8 19.9 21.6 23.5 25.3 (9.7) (5.9) (8.5) (8.6) (8.0)

Mining & quarrying 0.1 0.2 0.2 0.3 0.3 (13.5) (26.7) (27.6) (25.2) (21.5)

Manufacturing 69.2 72.8 75.4 82.6 84.6 (8.6) (5.3) (3.5) (9.5) (2.5)

Large-scale 44.9 47.6 49.2 54.6 55.8 (11.2) (6.0) (3.4) (11.0) (2.2)

Small-scale 24.3 25.2 26.2 28.0 28.8 (4.2) (3.9) (3.9) (6.8) (3.0)

Construction 38.6 40.1 42.1 45.0 48.0 (7.0) (4.0) (4.9) (7.0) (6.5)

Power, water & sanitation 11.3 12.5 12.7 13.0 13.3 (11.3) (9.9) (1.7) (3.0) (2.4)

Transport, storage & communications 74.2 77.9 82.9 88.6 93.9 (5.9) (5.0) (6.5) (6.8) (6.0)

Trade 58.7 64.5 68.8 73.4 77.6 (10.1) (10.0) (6.6) (6.7) (5.7)

Banking & insurance 11.1 11.5 11.9 12.4 12.8 (4.0) (3.5) (3.8) (3.7) (3.7)

Professional & miscellaneous services 70.4 75.1 80.3 85.9 91.3 (7.3) (6.7) (7.0) (7.0) (6.3)

Housing 45.5 47.2 49.0 51.0 52.0 (3.8) (3.8) (3.9) (3.9) (3.5)

Public administration & defence 31.0 33.5 36.3 40.0 42.6 (8.7) (8.3) (8.4) (8.6) (8.0)

Totalb 609.8 642.4 680.2 718.7 755.7 (4.4) (5.3) (5.9) (5.7) (5.2)

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

Sources: Ministry of Finance,,Bangladesh Economic Survey, 1999; Bangladesh Bureau of Statistics, Monthly Statistical Bulletin.

Reference table 13

Prices1994 1995 1996 1997 1998

Consumer price index 94.5 100 102.7 108.5 118.8

Consumer prices (% change, year on year) 3.6 5.8 2.7 5.6 9.5

Source: IMF, International Financial Statisics.

50 Bangladesh


Reference table 14

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

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

Consumer price index 163.87 178.40 190.27 195.07 208.71 % change, year on year 3.28 8.87 6.65 2.52 6.99

Only food items 161.80 176.77 189.13 191.85 205.55 % change, year on year 2.95 9.25 6.99 1.84 7.14

Non-food items 167.69 181.38 191.86 200.99 214.46 % change, year on year 3.91 8.16 5.78 4.76 6.70

Sources: Ministry of Finance. Bangladesh Economic Review, 1999; Bangladesh Bank, Economic Trends,.

Reference table 15

Consumer prices by income and location(1973/74=100; % change year on year in brackets)

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

Higher-income families, Dhaka 710 748 777 817 864(1.4) (5.3) (3.9) (5.1) (5.8)

Middle-income families, Dhaka 747 786 818 850 904(1.8) (5.2) (4.1) (3.9) (6.4)

Lower-income families, Dhaka 754 813 850 875 922(2.6) (7.8) (4.6) (2.9) (5.4)

Rural population, Dhaka region 606 650 690 685 722(2.2) (7.3) (6.2) (–0.7) (5.4)

Source: Bangladesh Bureau of Statistics, Monthly Statistical Bulletin,.

Reference table 16

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

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

Manufacturing 1,828 1,947 2,064 2,161 2,395 (6.0) (6.5) (6.0) (4.7) (10.8)

Construction 1,598 1,613 1,754 1,848 1,990 (1.2) (0.9) (8.7) (5.3) 9.8

Agriculture 1,593 1,653 1,738 1,804 1,870 (4.6) (3.8) (5.1) (3.8) (3.7)

All occupations 1,709 1,786 1,900 1,989 2,141 (4.3) (4.5) (6.4) (4.6) (7.6)

Source: Ministry of Finance, Bangladesh Economic Review, 1999.

Bangladesh 51


Reference table 17

Agricultural crop production(‘000 tonnes)

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

Cereals 19,173 18,078 19,060 20,330 20,310 Rice 18,041 16,838 17,687 18,883 18,862 Aus 1,850 1,791 1,676 1,871 1,875 Aman 9,419 8,509 8,790 9,552 8,850 Boro 6,772 6,538 7,221 7,460 8,137 Wheat 1,131 1,245 1,369 1,450 1,803

FibresJute 808 964 739 883 1,057 Cotton 14 13 14 14 14

VegetablesPotatoes 1,438 1,468 1,492 1,508 1,553 Sweet potatoes 427 435 435 406 398

Other cropsPulses 513 518 508 501 503b

Oilseeds 469 479 472 477 482b

Spices & condiments 275 269 265 270 267b

Sugarcane 7,111 7,446 7,165 7,520 7,379 Tea 51 52 48 53 51 Tobacco 38 38 39 38 37

a Provisional. b Data for pulses , oilseeds and spices is taken from World Bank (1999), Bangladesh:Key Challenges for the next Millennium.

Sources: Bangladesh Bureau of Statistics, Monthly Statistical Bulletin; World Bank, Bangladesh: Key Challenges for the next Millennium.

Reference table 18

Production and value of non-energy minerals1993/94 1994/95 1995/96 1996/97 1997/98a

LimestoneTonnes 23,872 28,032 20,574 28,273 32,324 Tk m 14.3 16.8 12.3 17.0 19.4

China clayTonnes 2,753 6,597 6,855 8,849 7,731 Tk m 2.1 5.4 7.2 5.9 –

a Provisional.


52 Bangladesh


Reference table 19

Production and value of selected manufactured items1993/94 1994/95 1995/96 1996/97 1997/98

Jute manufactures‘000 tonnes 421 425 405 405 411Tk bn 10.3 10.5 10.4 10.0 11.3

Cotton clothm metres 31.5 16.9 10.3 10.9 10.3Tk bn 0.8 0.4 0.6 0.4 0.3

Cotton yarnm kg 57.8 49.1 50.0 50.1 52.8Tk bn 6.9 6.3 7.6 7.7 8.1

Ready-made garmentsm dozens 34 47 48 53 66Tk bn 51.5 67.8 79.7 94.7 129.0

Leather for exportm sq metres 15 15 16 12 12Tk bn 6.6 7.8 8.7 8.5 7.4

Cement‘000 tonnes 324 316 426 611 543Tk bn 1.2 1.3 1.9 2.6 2.5

Steel ingots‘000 tonnes 6 25 21 16 23Tk m 7.5 36.6 24.9 22.1 42.0

Paper (all kinds)‘000 tonnes 90.9 82.7 82.3 67.5 45.9Tk bn 2.8 2.7 2.8 2.5 2.0

Chemical fertilisers‘000 tonnes 2,366 2,145 2,248 1,773 2,031 Tk bn 9.7 8.3 8.5 6.8 9.7

Sugar‘000 tonnes 221 270 184 135 166 Tk bn 5.7 7.3 5.0 3.7 4.6

Tea‘000 tonnes 51 47 51 53 54Tk bn 2.6 2.0 2.4 2.0 2.9

Shrimps & frogs’ legs‘000 tonnes 22.0 26.2 26.0 25.7 18.6Tk bn 7.9 10.5 11.1 9.4 1.2

Bicyclesno. 12,784 13,223 12,710 12,643 12,882 Tk m 22.5 23.5 22.2 20.9 21.4

Motorcyclesno. 6,136 7,625 10,681 9,641 9,906Tk m 338 429 566 567 620

Motor vehiclesno. 881 1,333 1,286 1,245 1,289Tk m 338 1,024 1,013 820 851

Diesel enginesno. 491 520 270 525 360Tk m 32 33 40 27 23

continued

Bangladesh 53


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

Televisions (black & white & coloured)‘000 77 79 61 94 131Tk m 641 748 592 710 985

Dry-cell batteriesm 65 52 55 51 48Tk m 647 620 627 513 695


Reference table 20

Stockmarket indices(1986/87=100; averages)

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

Banks & financial institutions 162.0 190.2 221.2 352.31 248.86

Engineering & construction 168.7 459.5 1,219.8 3,975.6 1,711.91

Food 180.9 263.2 264.1 631.4 371.85

Jute industries 160.8 213.1 178.5 236.4 124.27

Pharmaceuticals & chemicals 347.1 520.4 298.3 523.6 275.92

Textiles industry 141.8 190.0 165.1 238.1 164.75

Power & fuel 192.2 267.1 297.2 487.2 274.49

Paper & printing 164.8 119.4 95.2 242.7 184.22

Transport & communications 80.0 97.7 109.9 286.0 116.1

Miscellaneous 244.3 320.9 187.0 726.8 536.8

General index 189.5 260.4 245.8 580.1 380.4


Reference table 21

Main exports(Tk bn; fob)

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

Clothing 56.5 74.4 82.0 98.9 126.2

Fish & prawns 10.1 13.2 13.1 14.0 14.9

Jute goods 9.6 13.7 12.4 13.3 13.3

Leather 6.3 8.8 9.0 9.0 8.1

Raw jute 2.6 2.6 2.9 5.4 4.8

Tea 1.8 1.3 1.2 1.5 2.1

Fertiliser 1.8 3.1 0.1 0.5 0.6

Total incl others 98.0 131.3 138.5 165.7 204.0


54 Bangladesh


Reference table 22

Main imports(Tk bn; cif)

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

Yarn, fabric etc for garments industry 40.3 53.1 64.0 74.0 84.1

Machinery & transport equipment 16.9 29.1 39.6 40.9 42.8

Petroleum & petroleum products 11.4 15.4 13.1 16.0 19.8

Iron & steel 5.2 8.3 7.5 18.6 17.7

Food 3.0 12.0 22.6 4.2 13.3

Chemicals 9.2 13.8 15.2 21.0 11.2

Total incl othersa 167.7 234.6 271.4 303.0 341.8

a Includes loans and grants.


Reference table 23

Main trading partners(Tk m)

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

Exports to (fob):US 29,282 47,501 48,979 60,980 87,528Germany 10,967 12,043 15,099 18,236 23,180UK 10,331 12,767 17,083 18,636 19,962France 6,285 7,738 11,160 13,312 16,744Italy 6,798 8,473 8,470 8,670 12,270Japan 2,431 3,997 4,940 4,856 5,081India 669 1,811 2,964 1,969 2,978Singapore 210 1,524 935 1,277 1,181

Imports from (fob):India 10,140 13,218 24,717 44,243 n/aSouth Korea 13,997 13,282 18,535 19,441 n/aSingapore 11,357 11,766 17,013 18,387 n/aJapan 10,880 11,817 13,504 17,727 n/aHong Kong 11,331 12,579 24,881 17,048 n/aUS 7,969 6,350 11,705 10,140 n/aUK 4,179 3,774 3,316 4,754 n/aPakistan 4,755 3,634 8,652 4,638 n/a

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

Bangladesh 55


Reference table 24

Balance of payments, IMF estimates($ m)

1994 1995 1996 1997 1998

Goods: exports fob 2,934 3,733 4,009 4,840 5,142

Goods: imports fob –4,351 –6,057 –6,285 –6,588 –6,862

Trade balance –1,416 –2,324 –2,275 –1,748 –1,721

Services: credit 590 698 605 687 724

Services: debit –1,025 –1,531 –1,166 –1,288 –1,253

Income: credit 151 270 129 87 90

Income: debit –189 –202 –193 –196 –198

Current transfers: credit 2,091 2,267 1,913 2,135 2,174

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

Current-account balance 200 –824 –991 –327 –190

Direct investment inward 11 2 14 141 308

Direct investment abroad 0 0 0 –3 –3

Inward portfolio investment (incl bonds) 106 –15 –117 –15 1

Outward portfolio investment 0 0 0 0 0

Other investment assets –2 –244 –427 –675 –876

Other investment liabilities 633 436 623 451 597

Financial balance 749 179 92 –100 –26

Capital account nie credit 0 0 371 368 239

Capital account nie debit 0 0 0 0 0

Capital account nie balance 0 0 371 368 239

Net errors & omissions –257 133 114 –77 215

Overall balance 691 –512 –414 –136 290

Financing (– indicates inflow)Movement of reserves –729 799 504 256 –321Use of IMF credit & loans 0 0 0 0 130


56 Bangladesh


Reference table 25

Balance of payments, national figures

(Tk bn)a

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

Goods, services & income –67.1 –99.1 –126.8 –113.4 –113.0 Merchandise fob –49.6 –71.6 –93.8 –83.7 –84.2 Shipment –16.9 –23.5 –27.9 –30.6 –30.7 Other goods, services & income –0.6 –4.0 –5.0 0.8 –1.9

Unrequited transfers 78.3 93.1 87.9 107.0 105.3 Private 49.8 57.3 60.3 75.6 73.6 Official 28.4 35.8 27.7 31.4 31.7

Capital account 23.2 20.0 –1.2 70.7 14.8 Long-term capital 25.3 23.8 18.7 15.4 12.6 Resident official sector drawings & repayments on loans/credits (net) 21.3 20.6 18.3 18.5 15.3 Other assets/liabilities (net) 2.7 2.7 –0.6 –4.9 –4.9 Other sector assets/liabilities (net) 1.2 0.5 0.9 1.8 2.2 Short-term capital –2.1 –3.8 –19.8 –22.4 –23.0 Resident official sector assets/liabilities (net) 0.0 4.7 –0.5 –2.0 –2.5 Deposit money banks’ assets/liabilities (net) –2.1 –8.5 –19.3 –20.5 –20.6 Other sector assets/liabilities (net) 0.0 0.0 0.0 0.0 0.0

Reserves –28.5 –18.3 33.2 10.9 9.8 Bangladesh Bank (net) –26.4 –17.3 32.1 7.1 6.1 Deposit money banks (net) –2.1 –1.0 1.1 3.7 3.7

Errors & omissions –6.0 4.2 6.8 2.6 6.3

a Totals may not add owing to rounding. b Provisional. Calculated from data taken from Economic Trends.


Bangladesh 57


Reference table 26

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

1993 1994 1995 1996 1997

Public medium- & long-term 13,815 15,392 15,501 15,327 14,578

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

Total medium-& long-term debt 13,815 15,392 15,501 15,327 14,578 Official creditors 13,519 15,123 15,328 15,185 14,464 Bilateral 5,422 5,839 5,562 5,341 4,853 Multilateral 8,097 9,284 9,766 9,844 9,611 Private creditors 296 269 173 142 114

Short-term debt 153 197 203 163 175 of which: interest arrears 5 12 19 0 0

Use of IMF credit 682 669 622 517 372

Total external debt 14,650 16,258 16,325 16,007 15,125

Principal repayments 392 406 623 485 519

Interest payments 176 198 189 213 186 of which: short-term debt 7 7 10 10 9

Total debt service 568 603 812 698 705

Ratios (%)Total external debt/GNP 43.0 46.9 41.9 38.3 35.1Debt-service ratio, paida 14.4 14.1 14.8 11.8 10.6Short-term debt/total external debt 1.0 1.2 1.2 1.0 1.2Concessional long-term debt/total long-term debt 91.4 92.3 93.3 94.4 95.2Multilateral long-term debt/total long-term debt 55.3 57.1 59.8 61.5 63.5

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.

58 Bangladesh


Reference table 27

Remittances from Bangladeshis working abroad(Tk bn)

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

Saudi Arabia 17.7 19.2 20.4 25.1 26.8

Kuwait 7.4 6.7 7.1 9.0 9.7

US 3.2 4.5 4.7 6.7 9.2

UAE 3.5 3.3 3.4 3.8 4.9

Oman 3.0 3.3 3.3 4.0 4.0

Malaysia 0.4 2.0 3.0 4.0 3.5

Total incl others 43.5 48.1 49.8 63.1 69.1


Reference table 28

Net official development assistancea

($ m)

1993 1994 1995 1996 1997

Bilateral 690.4 843.7 712.9 644.5 539.0 of which: Japan 185.0 227.6 254.9 174.0 130.0 Germany 75.2 104.9 61.5 84.0 47.3 UK 71.7 65.7 76.0 71.4 70.3 Netherlands 53.2 54.5 57.5 67.2 63.7 US 94.0 152.0 56.0 41.0 30.0

Multilateral 687.6 908.5 576.5 611.4 475.6 of which: IDA 277.6 379.5 155.3 229.1 245.1 UNDP 30.4 23.3 13.5 10.8 11.7 Asian Development Bank 217.9 358.1 248.6 263.2 149.2 UNICEF 31.6 37.1 27.6 24.5 23.3 UNHCR 18.6 18.0 5.5 3.6 2.8

Total 1,383.4 1,757.5 1,279.5 1,254.7 1,009.2

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.

Bangladesh 59


Reference table 29

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

1994 1995 1996 1997 1998

Total reserves excl gold 3,138.7 2,339.7 1,834.6 1,581.5 1,905.4

SDRs 36 160 110 29 12.9

Reserve position with the IMF 0.1 0.1 0.2 0.1 0.2

Golda 27 27 28 25 22

Total reserves incl gold 3,166 2,367 1,861 1,610 1,935

Memorandum itemGold (m fine troy oz) 0 0 0 0 0

aNational valuation.

Source: IMF, International Financial Statistics..

Reference table 30

Exchange rate

(Tk:$)

1994 1995 1996 1997 1998

Calendar year 40.21 40.28 41.79 43.89 46.90

Ffiscal year ending Jun 30th 40.25 40.75 42.45 45.45 48.50

Source: IMF, International Financial Statistics,.

Editor: Kil DosanjhAll queries: Tel: (44.20) 7830 1007 Fax: (44.207) 830 1023

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