BANGLADESH

COUNTRY OVERVIEW

LOCATION AND SIZE.

Bangladesh is situated in southern Asia, on the delta of the 2 largest rivers on the Indian subcontinent—the Ganges and Jamuna (Brahmaputra). It borders with India in the west, north, and east, with Burma (also known as Myanmar) in the southeast, and with the Bay of Bengal in the south. The country's area is 144,000 square kilometers (55,598 square miles), and it is divided into 6 administrative divisions (Dhaka, Chittagong, Khulna, Barisal, Rajshai and Sylhet) and 4 major municipal corporations (Dhaka, Chittagong, Khulna and Rajshahi). Comparatively, the territory of Bangladesh is slightly greater than the state of New York. Bangladesh's capital city, Dhaka, is located in the central part of the country. Bangladesh occupies the eastern part of the Bengal region (the western part of the region is occupied by the Indian state of West Bengal), which historically was part of the great civilizations in the northeast of the Indian subcontinent.

POPULATION.

The population of Bangladesh was estimated at 129,194,224 in July of 2000, making Bangladesh the tenth-most populous state in the world. Having a total area the size of New York state, the country has a population equal to half that of the United States or 8 times the population of New York State. It has almost doubled since the 1960s, due to improved health, medical facilities, and longer life expectancy. In 2000 the birth rate stood at 25.44 per 1,000 (slightly higher than the world average), adding around 190,000 people every month. Meanwhile the death rate stood at 8.73 per 1,000. The estimated population growth rate is 1.59 percent, and if the current trend remains unchanged, the population could double within the next 45 years.

The Bangladesh population is relatively homogeneous, with Bengalis making up 98 percent of the population and other ethnic groups, including various tribal groups, making up the remaining 2 percent. Religion plays a very important role in this country, and the main division is between Islam and Hinduism. Almost 88.3 percent of the population are Muslims, 10.5 percent are Hindus, and 1.2 percent are Buddhists, Christians, or animists. The Bangladesh population is very young, with 36 percent below age 14 and just 4 percent of the population older than 65. In 1998 over 80 percent of Bangladeshis were living in rural areas, although during the last decade the growth of the population in the urban areas was twice as fast as in rural areas (due to both the migration of the rural population and the high birth rate). The rapid growth of the urban population is especially noticeable in the urban centers of Dhaka, Chittagong, Khulna, and Rajshahi.

In 1970, the population of Bangladesh was about 66 million, and the country at one time had one of the highest birth rates in Asia. The country's population doubled between 1950 and 1977 and almost doubled again between 1977 and 2001, putting severe pressure on the natural resources and leading to land shortages. In the 1970s the government introduced population control and family

planning initiatives, aided by various international organizations, including United Nations Children's Fund (UNICEF), United Nations Population Fund (UNFPA), and the World Bank. The fertility rate (the average number of children born to a woman) in Bangladesh declined from 6.8 babies per woman in 1965 to around 3 per woman in 1999. However, these population control initiatives were undermined by the fact that two-thirds of the population still lives in rural areas, where historically population growth was very high, and by the fact that almost two-thirds of the people in the country are illiterate. A number of issues still need to be addressed, including the supply of safe drinking water, malnutrition among children (which remains the highest in the world), early and forced marriages, and illiteracy among the population in general and women in particular.

The population growth in the country was offset by rapidly rising emigration of people, both permanent and temporary, in the 1980s and 1990s. The major destinations for Bangladeshi workers seeking temporary jobs are Kuwait, Malaysia, Qatar, Saudi Arabia, Oman, and the United Arab Emirates, where they are employed mainly in the low-skill and low-wage construction and service sectors and in agricultural plantations. Other popular destinations for emigration are Western Europe, the Americas and Australia, where large Bangladeshi communities formed during the last 3 decades. According to the CIA World Factbook, the emigration rate stood at the 0.77 migrant(s) per 1,000 population in 2000, or around 1 million a year.

INDUSTRY

MINING.

The main commercially viable natural resource in Bangladesh is gas, although there are reports of the existence of moderate-sized reserves of coal. Total gas reserves are estimated at 21,000 billion cubic feet. In 2000 Bangladesh utilized 370 billion cubic feet, mainly for domestic consumption. The major gas fields are situated in Greater Sylhet district, the Bay of Bengal, and Greater Chittagong district. Transnational corporations are keen to be involved in gas exploration in Bangladesh and its exportation to the huge Indian market, however the Bangladeshi government is resistant to the idea of exporting the gas, as according to local experts' estimates the proven reserves could run out within the next 30 to 40 years.

MANUFACTURING.

During the 20th century Bangladesh, like neighboring Burma (Myanmar) and Nepal, largely missed the industrialization wave that changed the economies of many countries in the Asian region, such as Malaysia, Singapore, and Taiwan. At the beginning of 2001, manufacturing contributed about 24.3 percent of the GDP, providing employment to 6.2 million people or 11 percent of the workforce. Between 1989 and 1999, the manufacturing sector in Bangladesh grew at an average annual rate of around 7.2 percent, albeit from a very low base. The cheap, reliable, and abundant labor available in Bangladesh is attractive to the world's leading transnational corporations, but they have been very slow to move into the country, as they face regular industrial unrest led by radical trade unions, poorly developed infrastructure, red tape, and a very small local market. As in neighboring India, the Bangladeshi government promoted the idea of state-led industrialization combined with heavy state involvement in and state control of enterprise activities.

The manufacturing sector in Bangladesh comprises mainly small, privately-owned, often unmechanized enterprises or large, state-owned, often loss-making enterprises. The main industrial centers are Dhaka, Chit-tagong, Khulna, and Rajshahi, which have (by local standards) well-developed transport infrastructure, including access to seaports and railways and the sizeable and very cheap unskilled and skilled labor force. The industrial enterprises concentrate mainly on the production of jute goods, ready-made garments, foodstuff processing, and chemical production.

Most of Bangladeshi jute goods are produced in large state-controlled enterprises for export to the United States, Europe, and other markets, contributing Tk13.3 billion in 1997-98 to the country's export earnings and Tk11.7 billion in 1998-99. According to the EIU Country Profile, Bangladesh accounts for 90 percent of world jute fiber exports. The jute processing enterprises are vulnerable to downturns in the regional and international market and experienced some recession in 1998-99. Additionally, during the last few years the demand for jute in the international market has been in decline due to increasing use of synthetic materials in the areas where jute was previously used. However, these jute processing businesses still have plenty of the cheap local supply of raw materials and, if they continue to improve the quality of their products, with efficient management and marketing they may expand their export potential.

During the last 2 decades Bangladesh has found a strong niche in ready-made garments (RMG), becoming one of the world's leading exporters of these products. There are around 2,600 small and medium-size garment-manufacturing enterprises, providing employment for about 1.4 million local workers, mainly women. Access to cheap and reliable local labor makes Bangladeshi RMG manufacturers very competitive in the international market, although most of the fabrics and machinery must be imported (in 2000 Bangladesh imported 160,000 metric tons of cotton from the United States). According to the U.S. Department of State, total clothing exports reached about US$5 billion in 1999-2000, mainly to the United States, Europe, and Canada. Bangladesh especially benefited from the multi-fiber arrangement with the United States and the generalized system of preferences with the European Union, which set special quotas for the RMG imports from Bangladesh. The RMG sector experienced rapid growth during the last 5 years, but with the rise of free trade and elimination of the quota system at the end of 2004, Bangladesh will face very tough competition from other Asian countries such as China, India, Indonesia, Thailand, and Vietnam.

Bangladesh has a well-established food processing sector, which relies on domestic agricultural production and is oriented mainly to domestic needs. It includes sugar refining and milling, production of edible oils, processing and preserving of fruits and fruit juices as well as fish processing, especially shrimp and prawns. As a tropical country Bangladesh has a plentiful domestic supply of exotic fruits and sea species.

In the 1990s 2 major changes affected the development of the industrial sector in Bangladesh. First, the end of the numerous military coups and the establishment of civil government brought in political stabilization, which attracted direct international investments and encouraged the inflow of foreign aid. Secondly, the policy of economic liberalization, structural adjustment, and privatization helped to increase the competitiveness of the local industries and encouraged them to search for new overseas markets. In order to promote the attractiveness of the Bangladesh economy, the government established special export-processing zones (EPZ). They are situated in Chittagong, Dhaka, Chalna (near Mongla port in Khulna) and in Commila, where investors are given access to well-developed infrastructure and enjoy tax breaks and other privileges. By the year 2000, the EPZs had attracted around US$415 million worth of foreign investments and more than 150 firms had moved there. According to the U.S. State Department, the United States is the single largest foreign investor in Bangladesh with total fixed direct investment of about $750 million. The major investment projects were in the chemical, electronics, and electrical industries. The United States is followed by Malaysia, Japan, and the United Kingdom, and the next tier of investors are Singapore, India, Hong Kong, China, and South Korea. The U.S. State Department estimates U.S. investment in Bangladesh will be about $2.5 billion in 2 to 4 years.

SERVICES

TOURISM.

Tourism is a small but rapidly growing sector of Bangladeshi economy. According to the International Labor Organization, together with the wholesale and retail sector it provides employment for almost 6.0 million people (1996), or around 10.8 percent of the labor force. Government statistics state that 171,000 tourists visited the country in 1998, contributing Tk2.4 billion to the national economy. Most visitors were from India, Australia, Germany, the United Kingdom, and the United States.

Tourism could only take off in the 1990s, after the stabilization of the political situation in the country and the end of the tribal insurgency in the Chittagong Hill Tracts area (southeast of the country). Bangladesh has huge potential for attracting foreign tourists as it has a deep cultural heritage, a number of ancient monuments and temples, and a rich natural heritage, including tropical forests, beautiful hills, rivers, and national parks. The country offers bargain-shopping and exotic souvenirs, as well as a wide variety of activities, from eco-friendly to adventure tourism. However, it needs to renovate and expand its hotels' infrastructure and other services, which are still underdeveloped.

FINANCIAL SERVICES.

The financial service industry remains underdeveloped in spite of a decade of major reforms conducted under the Financial Sector Reforms Program. According to the International Labor Organization, this sector provides employment for 213,000 people (1996). Since independence it has been under state control, as the major commercial banks were nationalized soon after independence. The local banks are often accused of providing poor financial services and being beset by corruption, inefficient management and capital inadequacies. Bangladesh lags behind in the introduction of computerized banking payment systems, the development of electronic payment systems, and electronic banking. The Agrani Bank, Janata Bank, Rupali Bank and Sonali Bank are the main financial institutions still under state control. They account for almost half of all deposits.

In 1999 the government launched a Commercial Bank Reform Project intended to improve the functioning of the private commercial banks. One bank has provided a success story: the Grameen Bank, which was founded by university professor Mohammad Yunus, pioneered in providing small credits to local communities in need. At present the IMF and the World Bank, which are often notoriously ineffective in the poor countries of Asia and Africa, have carefully studied the Grameen Bank's microcredit model with a view to applying it in other developing countries.

RETAIL.

In Bangladesh, as in many other Asian countries, many small- and medium-sized businesses have been built around the retail sector and are often associated with small shops and restaurants. The retail sector provides employment for a large number of people, but it still remains relatively underdeveloped, due to a generally low level of income among the population. There are still a number of small family-run traditional shops and cafes, selling mainly locally-made products.

The United States has found that the enforcement of intellectual property rights is "weak" and that "intellectual property infringement is common." The Bangladeshi government has begun to address this problem seriously, introducing a new Copyright Act in 2000 in order to bring the country's copyright laws into compliance with the WTO. This act updated the Patents and Design Act of 1911, and some other outdated regulations.

DEPENDENCIES

Bangladesh has no territories or colonies.

BIBLIOGRAPHY

Alauddin, M., and Samiul Hasan, editors. Development, Governance and the Environment in South Asia: A Focus on Bangladesh. New York: St. Martin's Press, 1999.

Caf, Dowlah. Privatization Experience in Bangladesh, 1991-1996. Washington D.C.: World Bank, 1997.

Economist Intelligence Unit. Bangladesh: EIU Country Profile 2000. London: Economist Intelligence Unit, 2000.

Economist Intelligence Unit. Bangladesh: EIU Country Report. London: Economist Intelligence Unit, February 2000.

Government of the People's Republic of Bangladesh. <http://www.bangladeshgov.org> . Accessed August 2001.

Government of the People's Republic of Bangladesh. Ministry of Planning Statistics Division. <http://www.bangladeshgov.org/mop/ndb/index.htm> . Accessed August 2001.

The Independent (newspaper). <http://www.independent-bangladesh.com> . Accessed August 2001.

Moon, P. The British Conquest and Dominion of India. London: Duckworth, 1989.

Spear, Thomas. The Oxford History of Modern India. 2nd edition. Delhi: Oxford University Press, 1978.

Statistical Pocketbook of Bangladesh. Dhaka: Bangladesh Bureau of Statistics, 1998.

World Bank. Bangladesh: from Stabilization to Growth. Washington D.C.: World Bank, 1995.

World Bank Group. The World Bank Dhaka Office. <http://www.worldbank-bangladesh.org> . Accessed August 2001.

—Rafis Abazov

CAPITAL:

Dhaka.

MONETARY UNIT:

Taka (Tk). One Bangladeshi taka equals 100 paisa. Notes are in denominations of 1, 2, 5, 10, 20, 50, 100, and 500 taka. There are coins of 1, 5, 10, 25, 50, and 100 paisa.

CHIEF EXPORTS:

Garments, jute and jute goods, tea, leather and leather products, frozen fish, and seafood.

CHIEF IMPORTS:

Machinery and equipment, chemicals, fertilizers, iron and steel, textiles, raw cotton, food (mainly rice and wheat), crude oil and petroleum products, and cement.

GROSS DOMESTIC PRODUCT:

US$187 billion (purchasing power parity, 1999 est.).

BALANCE OF TRADE:

Exports: US$5.523 billion (1999). Imports: US$8.381 billion (1999).