Thanks to the leadership of Prime Minister Khaleda Zia and her four-party alliance government, the economy of Bangladesh has made a mark in the world, especially in South Asia, during the last four years. This achievement is deemed remarkable in view of the fact that the economy of the country was in a deplorable condition when Zia’s government took over power a little over four years ago.
Her nationalist government not only gave a sense of direction to the economy, but also initiated a number of welfare-oriented programs to help the poverty-stricken people of the country. The hapless millions have, by now, begun to throb with the vigor of increased economic activities as well as to be inspired by dreams of a better tomorrow.
It is owing to the successful building of an investment friendly ambience within the country that foreign investors have began to pour in from the advanced as well as developing countries of the world. Local potential investors too have said that they would invest competitively with the foreign investors provided they were given equal incentives.
Therefore, it is not for nothing that institutions like the World Bank, Asian Development Bank and European Union countries along with US, Canada, Germany, China, Japan and neighboring India have began to take renewed interest in Dhaka with offers of closer economic cooperation.
The rate of increase in the Gross Domestic Product (GDP) reached 5.26 percent in fiscal 2002- 2003 from 4.42 percent in fiscal 2001-2002. In fiscal 2003-2004, growth of GDP rose to 6.27 percent, which happens to be the highest rate hitherto.
According to the provisional projection of the Bangladesh Bureau of Statistics it would be possible to achieve a GDP growth rate of 5.38 percent during 2004-2005, despite floods and excessive rainfalls and the consequent damage caused to the agricultural sector. There was encouraging growth in the industrial and services sector of the economy. If the domestic and external environment remains favorable, growth in GDP may exceed 6 percent during fiscal 2005-2006.
It may be mentioned that the per capita GDP and National Income has reached $445 and $470, respectively in fiscal 2004-2005.
The BNP government began its journey in 1991 with foreign exchange reserve of $88 crores. By the year 1995, the reserves rose to the highest levels in the history of Bangladesh to $345 crores. The reserve was more than $ 200 crores when the BNP government left power following more than 300 days of general strikes by the then opposition parties.
On the other hand, when the Awami League government, which had started off with more than $200 crores in reserves, left only $100 crores in foreign exchange reserves at the time of its exit from power.
The alliance government took some realistic steps as a result of which conditions improved and the country’s foreign exchange reserves began to rise. By the year 2003-04 the foreign exchange reserves rose to the highest levels in preceding seven years to the level of $ 2.7 billions. The foreign exchange reserves continued to rise in 2004/05 fiscal and reached $3 billion by May 2005.
The growth in exports earning was negative in fiscal 2001/02. Following corrective measures taken by the government, export growth reached 9.4 percent and 16.1 percent during fiscal 2002/03 and 2003/04 respectively. The figures continue to rise in 2004/05 and rose by 12.5 percent by March 2005.
The present government took over power amid political and economic instability of the world in October 2001. In September that year, there was a terrorist attack in US, crashing the US stock market, the Afghan War and prolonged economic slump. Even in the face of these odds, there was no deficit in the export earnings of Bangladesh. In the following year, the target of Bangladesh’s export earning was $5,950 million while the actual earning was $5,986 million. There was 100.61 percent achievement against the target. In the year 2002/03 the export earning target was $6,405 million while the actual earning was $ 6,548 million. This marked a 9.39 percent rise in the export earnings during that year. During the following year 2003/04 the targeted export earning was $7,439 million while the actual earning was $7,603 million.
This comprised the highest export earning record, which was 16.10 percent greater than that of the previous year’s earning. In view of the global free trade situation and the trend of exports and duty free market etc, the target was set at $8,566 million during the year 2004/05. During the first ten months of that year, exports worth $6,974 million were achieved which formed 81.42 percent of the target which was 19.65 percent greater than the exports made during comparable period in the previous year.
In the following period beginning from Jan. 1, 2005, the rise in export appeared to be encouraging despite phasing Multi Fiber Agreement MFA quota system, worldwide economic slump, the devastating floods of 2004, strikes and political instability in Bangladesh.
The government has taken practical, liberal and investment friendly steps and strategies to face up to the challenges of globalization and free-market economy after it took over power on Oct. 10, 2001. As a result, successes have been achieved in the field of industrialization and local foreign investments.
Brief descriptions of steps taken by the government in the fields of industrialization and investments:
Bangladesh reached a more effective and competitive stage compared to neighboring countries in matters of foreign investments owing to reductions in investment expenses. The highest rate of growth of 8.6 percent in industrial sector was reached in 2004/05. The contribution of private sector investment in 2004/05 was 18.55 percent. Actual foreign investment during the calendar year 2004 was $660.80 million. The amount of Capital Machinery import by the present government was 119 percent greater than that of the previous government during its 5 years tenure. Industrial loans rose by 61 percent during the first four years of the rule of the present government compared to the previous five years.
Employment opportunities for 14-lakh people were created in the projects registered by the Board of Investment alone. Export earnings rose by $1.05 million during the current fiscal year. Investment proposals totaling $12 billion are being processed at the moment.
During the year 2002/03 some 42 percent of the total allocations (nearly 6 percent of the GDP) was earmarked for poverty alleviation program. In the revised budget of 2003/04 it was raised to 48 percent of the total resources (7 percent of GDP) was allocated for poverty alleviation. In the budget of 2004/05 some 51 percent of resource allocation (8 percent of GDP) was apportioned for this sub-sector. Some 54 percent of the budgetary allocation (9.4 percent of the GDP) for 2005/06 will be spent for poverty alleviation programs. Bangladesh, meanwhile, has already achieved the UN declared Millennium Goals in the shape of making safe drinking water available for the people and removing gender inequality in the field of primary education. Primary education for 97 percent children of the country has already been achieved. The rate of primary education in Bangladesh happens to be the highest among the developing countries. Bangladesh has already been categorized as a medium level country by the UNDP in its Human Development Report 2003/04 as per its Human Development Index (HDI).
The present government has also earned praise from national as well as international quarters for taking special care for women and children of the country. Allowances for distressed women have been increased remarkably and accommodation facilities for working women and the socially handicapped women and girls have also been made. All steps have been taken to bring the women to the mainstream of the workforce in the industrial and service sectors. Children are being phased out of hard-labor jobs including those in the ready made garments sub sector.
Programs have also been established for giving assistance to backward children and to give them opportunities for schooling. Scholarships and stipends have been introduced for them throughout the country and to ensure proper future for them and to prepare them for increased responsibilities.
With an ever-increasing family income, women and children of the society now appear more optimistic for their future than ever before.
