IV.

Economy

First as part of British India and then of Pakistan, the area now constituting Bangladesh suffered from chronic economic neglect. The region produced large quantities of agricultural goods, including most of the world’s jute, but received little investment in such basic items as transportation facilities and industrial plants. Much of the industrial investment, particularly in jute manufacturing, was made by West Pakistani-owned firms. After Bangladesh gained independence, the government took over most of the assets owned by West Pakistanis. Today most of these firms remain government-owned; a program to privatize them has made little progress.

Bangladesh’s vast reserves of natural gas, many just recently discovered, hold great potential for the country’s future economic development. However, the government’s reluctance to sanction gas exports to India and its reputation for rampant corruption have tended to discourage foreign investment. Foreign direct investment in Bangladesh has been minor relative to most other countries in Asia.

Bangladesh’s gross domestic product (GDP) was estimated at $60 billion in 2005. Agriculture contributed 20 percent of the GDP, industry (including manufacturing) contributed 27 percent, and services contributed 53 percent. In 2004 Bangladesh’s budget included $4.90 billion in expenditures and $5.58 billion in revenues.

A.

Labor

The civilian labor force of Bangladesh was estimated in 2005 to include 63.9 million people. Agriculture (including fishing) employs 62 percent of the workers, while 10 percent worked in industry and 24 percent in services. Unemployment and underemployment are significant problems in the country.

B.

Agriculture

Agriculture in Bangladesh consists mostly of subsistence farming on small farms. Per-capita output tends to be low. Rice, of which two or three crops can be grown each year, is the leading food crop in all areas and accounts for most of the cultivated area. Some 40 million metric tons were harvested in 2005, placing Bangladesh among the world’s leading producers of rice. High-yielding varieties of rice are cultivated as part of a government initiative to increase the country’s self-sufficiency in food grains. Other cereal crops, notably wheat, have grown in importance since the 1980s, and the area of land under wheat cultivation continues to increase. Pulses, an important source of protein in most Bangladeshi diets, are also cultivated. Other crops include various oilseeds (mainly for cooking oil), potatoes, sweet potatoes, sugarcane, bananas, mangoes, and pineapples.

The principal cash, or export, crop is jute (a plant used to make burlap and twine), grown throughout the annually flooded portions of the Ganges-Brahmaputra delta; the amount of jute harvested in 2005 was about 801,000 metric tons. Tea, also a valuable cash crop, is grown almost exclusively in the northeast, around Sylhet. Cattle and buffalo are numerous, raised for dung (a source of fuel), hides (for leather), and meat.

C.

Fishing, Forestry, and Mining

Aquatic animals provide a major source of animal protein in the Bangladeshi diet. Hilsa (a kind of herring) and prawns are among the principal commercial species. The amount of fish caught in 2004 was 2.1 million metric tons, mostly consisting of freshwater varieties. Most freshwater fish are raised in farm ponds throughout the country. The leading commercial types of trees are wild sundari, gewa, and teak. Bamboo is also an important forest product.

Natural gas production is the primary mining activity in Bangladesh. Extensive development began in the 1990s after vast reserves were discovered both onshore and offshore in the Bay of Bengal. Apart from natural gas production, mining and quarrying are of negligible importance in Bangladesh.

D.

Manufacturing

The manufacturing sector is made up principally of small-scale enterprises. The chief manufactures of the country are jute products (such as cordage and sacks), textiles, garments, processed food, beverages, tobacco items, and goods made of wood, cane, or bamboo. Large-scale factories process jute and sugarcane. Much of the nation’s heavy industry, including a small steel mill, is in the port of Chittagong.

E.

Energy

The greatest share of Bangladesh’s electricity, 94 percent in 2003, is generated in thermal plants using either coal, natural gas, or petroleum products. Most of the rest is produced by hydroelectric facilities, including a large installation on the Karnaphuli River. In 2003 Bangladesh consumed 16.2 billion kilowatt-hours of electricity.

F.

Transportation

The numerous rivers of Bangladesh and the marked seasonal fluctuation in their width and depth, as well as their frequent changes of course, greatly inhibit the development of an integrated road and rail transport system. Bridging the major channels is often not feasible economically, and reliance on ferry connections makes most long-distance overland travel exceedingly slow. However, the Brahmaputra was bridged in 1998, allowing more rapid road and rail transport from Dhaka to the western part of the country. Bangladesh has 239,226 km (148,648 mi) of roads, of which 10 percent are paved; the road network may be severely damaged by monsoon flooding. In 1999 there was only 1 vehicle in use for every 1,000 residents. The country is served by 2,855 km (1,774 mi) of operated railroad track.

Much of the country’s domestic freight and passenger traffic is carried on inland waterways. Commercially operated navigable routes in the rainy season total at least 8,000 km (5,000 mi), but shrink to some 4,000 km (2,500 mi) in the dry season. Small boats can navigate an additional 18,000 km (11,000 mi) in wet months. International freight traffic is handled at the ports of Chittagong and Chālna; the former leads in imports and overall value and the latter leads in exports.

Government-owned Bangladesh Airlines (Biman) provides international and domestic air service. The main international airport is at Dhaka.

G.

Communications

In 1998, 233 daily newspapers, including both Bengali- and English-language dailies, were published in Bangladesh, chiefly in Dhaka. The country also has many weekly and monthly periodicals. Radio Bangladesh and Bangladesh Television are under government direction. In 1997 the country had 50 radio receivers and 7 televisions sets for every 1,000 residents. In 2005 there were 8 telephone mainlines for every 1,000 people.

H.

Currency and Banking

The principal unit of currency in Bangladesh is the taka (64.30 taka equal U.S.$1; 2005 average); the taka is divided into 100 paisa. The government-run Bangladesh Bank handles central-banking operations. Some banks are government-owned, but there are many privately owned banks, as well as branches of foreign banks.

The Grameen (Village) Bank has pioneered innovative approaches to providing credit to the rural poor in Bangladesh. The bank’s successful approach has been used as a model in many other developing countries. Because the bank does not require collateral, it can extend credit to individuals who traditionally were excluded from the banking system. Borrowers, the majority of whom are women, use the credit to improve their standard of living through small-scale enterprises such as pottery, basket making, and textile weaving. The bank was founded in 1983 by university economics professor Muhammad Yunus, who was awarded the 2006 Nobel Peace Prize for his efforts. By 2006 the bank had more than 2,000 branches nationwide and had made loans to more than 6.5 million people, helping them break out of poverty.

I.

Commerce and Foreign Trade

The per-capita volume of Bangladeshi internal and foreign trade is low. Domestic trade in rural areas is conducted largely through thousands of periodic markets called hats. Since independence in 1971 the value of Bangladesh’s annual imports has usually been at least twice that of exports; in 2003 imports cost $8.7 billion, and exports earned $5.8 billion. The principal exports are jute products and raw jute; clothing, seafood, tea, and hides and leather goods are the other important exports. Imports include foodstuffs, basic manufactures, mineral fuels, machinery, and transportation equipment. Exports go mainly to European countries (especially Germany and Italy), the United States, Hong Kong, and Japan; imports come chiefly from India, European countries, China, Japan, Hong Kong, South Korea, Singapore, and the United States. Only a relatively insignificant number of tourists visit Bangladesh each year.