Bangladesh - Economic sectors
According to the World Bank Development Indicators, Bangladesh is the 50th-largest economy in the world, judged by its gross national income, although it is the 10th-largest state in the world if judged by its population. Although it has a good environment and climate for the production of various crops and huge potential for developing a tourist industry, the country suffers from
For decades after independence, political instability, low demand in the local market, and economic stagnation hindered the economic development of the country. Since establishing a civil government in 1991, Bangladesh has been struggling to diversify its economy, to reform its agricultural sector, and to expand its industrial sector, as it needs average annual economic growth of at least 7 percent in order to eliminate widespread poverty. In the 1990s while Bangladesh was unable to solve its economic difficulties and eliminate poverty, it achieved impressive growth in many areas, including manufacturing and agriculture. Recognizing the difficulties, the Bangladeshi government was willing to accept the IMF's recommendations and to conduct structural changes, which included relinquishing its socialist orientation and state control over the economy, decentralization of economic management, and privatization, although many of these changes were painful and implemented only slowly.
Agriculture is still the single most important sector of economy. Between 1989 and 1999, it experienced stagnation with an average annual growth of only 1.6 percent, which was not enough to support a rapidly growing population. Throughout the 1980s and 1990s, Bangladesh tried with some success to achieve politically and economically important self-sufficiency in food production, increasing productivity and diversifying the crop base. Nevertheless, the share of agriculture in the GDP declined from 55 percent in 1970 to 19.6 percent in 1999.
The role of the manufacturing sector is growing, but the growth is painfully slow due to a lack of foreign investment, small demand in the local market, and red tape and inefficiency in the local bureaucracy. According to the World Bank, the industrial sector in Bangladesh grew at an average annual rate of around 4.1 percent between 1979 and 1989 and around 7.3 percent between 1989 and 1999. Bangladesh has a relatively large reserve of gas, which has become increasingly important as a source of energy and has potential to become a source of export revenue.
Bangladesh tries to promote its service sector, especially tourism and the information technologies sector. However, in doing so it has to compete with neighboring India. Local trade, tourism, and other services currently make important contributions to the country's GDP, providing employment for 26 percent of the labor force in the country.