Bangladesh: A 55-year journey towards economic development, peace, and stability II

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Dr. Syed Mehboob

Senior Research Editor

The News Lark, political and economic analyst   

Bangladesh is the second-largest textiles and clothing manufacturer after China. The industry generates more than 85 per cent of the country’s export earnings and employs around four million women and men. The main markets for these textile exports are the EU  and the US. Bangladesh plays a central role in German initiatives like the Textiles Partnership and the Green Button certification mark,and also in relation to the Act on Corporate Due Diligence in Supply Chains.

As one of the world’s least developed countries (LDCs), Bangladesh still enjoys tariff-free access to markets within the EU. However, the country is set to lose this status in 2026, at which point trade preferences will end. This means that, in addition to facing stiffer price competition, Bangladesh will also be vying for business with other competitors (for instance, Viet Nam). The country will also have to comply with tougher standards on human rights, labour rights, environmental protection, and good governance if it wants to continue exporting its goods to the EU without having to pay full customs duty on them.

The economy of Bangladesh is considered to be a major developing mixed economy As the second-largest economy in South Asia,Itseconomy is the 34^th in the world in nominal terms, and 25^th by purchasing power parity. Bangladesh is seen by various financial institutions as one of the Next Eleven. It has been transitioning from being a frontier market to an emerging market. . Bangladesh is a member of the South Asia Free Trade Area (SAFTA)  and the World Trade Organization. In fiscal year 2024–2025, Bangladesh registered a GDP growth rate of 3.49%, the slowest in recent years.^[ Bangladesh is set to graduate from the group of least developed countries and will join the group of developing countries in November 2026.Industrialization in Bangladesh received a strong impetus after the partition of India due to labour reforms and new industries.Between 1947 and 1971, East Bengal generated between 70% and 50% of Pakistan’s exports. Modern Bangladesh embarked on economic reforms in the late 1970s, which promoted free markets and foreign direct investment. By the 1990s, the country had a booming ready-made garments industry.  As of 16 March 2024, Bangladesh has the highest number of green garment factories in the world with Leadership in Energy and Environmental Design ( LEED)  certification from the United States Green Building Council (USGB),  where 80 are platinum-rated, 119 are gold-rated, 10 are silver, and four are without any rating.As of 6 March 2024, Bangladesh is home to 54 of the top 100 LEED Green Garment Factories globally, including 9 out of the top 10, and 18 out of the top 20. As of 27 April 2024, Bangladesh has a growing pharmaceutical industry with 12 percent average annual growth rate. Bangladesh is the only nation among the 48 Least Developed Countries that is almost self-sufficient when it comes to medicine production, as local companies meet 98 percent of the domestic demand for pharmaceuticals. Remittances from the large Bangladeshi Diaspora became a vital source of foreign exchange reserves. Agriculture in Bangladesh is supported by government subsidies and ensures self-sufficiency in food production.Bangladesh has pursued export-oriented industries. Bangladesh experienced robust growth after the pandemic with macroeconomic stability, improvements in infrastructure, a growing digital economy, and growing trade flows.Tax collection remains very low, with tax revenues accounting for only 7.7% of GDP. Bangladesh’s banking sector has a large amount of non-performing loans or loan defaults, which have caused a lot of concern.The private sector makes up 80% of GDP. The Dhaka Stock Exchange and Chittagong Stock Exchange are the two stock markets of the country. Most Bangladeshi businesses are privately owned small and medium-sized enterprises (SME), which make up 90% of all businesses.

Bangladesh was the second poorest country in 1971 making the country’s transformation over the fifty years in 2020 made one of the greatest success stories. Since then, poverty has been cut into half and literacy rate rose from 40% to 80%. Enrolment in primary school is now 100%. Bangladesh invested in human capital, Education, Health and Industrial Development and now is reaping its fruits in terms of phenomenal economic growth. It is continuously investing in energy, inland connectivity, urban projects, transport facilitation etc. The government had set up Export Processing Zones (EPZs) to stimulate export economy. In 2022, Bangladesh had the second largest foreign reserves in South Asia. The resources boosted government’s spending capacity and a big chunk investment had gone into power sector. In 2022 it achieved the target of 100% electrification. One of the major anti- poverty drives of Bangladesh is Ashrayan project which aims to eradicate homelessness by providing free housings. The poverty rate came down from 80% in 1971 to 44.2 % in 1991 to 12. 9% in 2021. The government is setting up hundred special economic zones (SEZs) to attract Foreign Direct Investment (FDI) and to generate ten million jobs to further fight against poverty and unemployment. The Bangladesh Investment Development Authority (BIDA) and the Bangladesh Economic Zones Authority (BEZA) had been established to help investors in setting up factories.

 Population:  169.8 million (2023)

GDP                           : US$ 455 billion (nominal 2024)

                                      US$ 1,619 billion (PPP 2024)

GDP per Capita: $ 2,640 (Nominal 2024)

GDP per Capita: US$ 9,416 (PPP 2024)

GDP Ranking

Nominal 2024: 35^th

PPP 2024    : 25^th

Labour Force: 65 million

Population below poverty line : 18.7%

Main Industries: Textiles, Pharmaceuticals, Electronics, Ship-building, Automotive, leather, jute, glass, paper

Exports: US$ 60.5 billion (2023-24)

Export Partners

Export goods: cotton textile and knitwear, jute, glass, paper

Imports: US$ 70.1 billion (2023-24)

Import Partners

FDI : US$ 22.8 billion

Import Items

Textiles and Textile Articles, Machinery and Mechanical Appliances, Electrical Equipment, Mineral Products, VegetableProducts, Metal & metal products, Chemicals & Allied Products, Vehicles & Aircraft are its main export items.

Pakistan Bangladesh Statistics US $ Million

It is in the larger interest of the region and the people of both countries that both countries should move towards strong and strategic long-term relations. People of Pakistan are waiting for the visit of His Excellency Tarique Rahman, Honorable Prime Minister of Bangladesh, to give a very warm welcome.