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Economy

Despite sustained domestic and international efforts to improve economic and demographic prospects, Bangladesh remains one of the world's poorest, most densely populated, and least developed nations.
PTI | By HT Correspondent
UPDATED ON FEB 01, 2006 05:52 PM IST

Bangladesh is essentially an agricultural country. The vast majority of Bangladesh's inhabitants - almost 80 per cent - live in its rural areas, and 65 per cent of its labour force are involved in farming, particularly for food.

Agriculture contributes 22 per cent to Bangladesh's GDP. This does not include the unmeasured contributions of women farmers.

Nearly half of the Bangladeshi farming force is comprised of women, who play a major role in various aspects of food and rice production, and in nearly all aspects of food processing. More than half of GDP is generated through the service sector.

Despite sustained domestic and international efforts to improve economic and demographic prospects, Bangladesh remains one of the world's poorest, most densely populated, and least developed nations.

Once part of British India and then Pakistan, Bangladesh suffered from chronic economic neglect. The overall density, 891 persons per sq km in 2002 is much higher than that of other countries except for microstates such as Singapore.

Bangladesh supports a large rural population, with 21 per cent of the Bangladeshi people classified as urban in 1999. Throughout the 1980s, Bangladesh became highly dependent on foreign aid, although this brought little real change in the lives of its people.

Major impediments to growth include frequent cyclones and floods, inefficient state-owned enterprises, insufficient port facilities, a rapidly growing labour force that cannot be absorbed by agriculture, delays in exploiting energy resources (natural gas), insufficient power supplies, and slow implementation of economic reforms. Reform is stalled in many instances by political infighting and corruption at all levels of government.

The region that produced large quantities of agricultural goods, including most of the world's jute, received little investment in such basic items as transportation facilities and industrial plants. Bangladesh's gross domestic product was around at $46 billion in 1999.

Jute and tea, which are principal sources of foreign exchange, follow rice as the most valuable agricultural products. The nation produces about one-fifth of the world's supply of raw jute.

Other valuable agricultural products are wheat, pulses (leguminous plants, such as peas, beans, and lentils), sweet potatoes, oil seeds of various kinds, sugarcane, tobacco, and fruits such as bananas, mangoes, and pineapples.

At the time of independence, Bangladesh pursued a socialist economic policy. Despite its low GNP per capita, Bangladesh has done better in areas of human and social advancement than many other countries with similar income.

By 1977, all nationalised institutions were returned to their former owners, but this resulted in little substantial economic progress. Between 60 per cent and 75 per cent of Bangladesh's population are landless.

Although small, the industrial sector contributes significantly to Bangladesh's exports, providing employment and a market for cash crops.

Industry contributes 27 per cent of Bangladesh's GDP. Since the early 1980s, production of ready-made garments for the US and other markets has grown rapidly.

Facts:

GDP - Per capita: Purchasing power parity - $1,900 (2004 est.)
GDP - Composition by sector: Agriculture: 21.7%, Industry: 26.6%, Services: 51.7% (2004 est.)
Investment (gross fixed): 23.2% of GDP (2004 est.)
Population below poverty line: 35.6% (2004 est.)
Unemployment rate: 40% (includes underemployment) (1)
Budget: Revenues: $5.352 billion, expenditures: $7.55 billion, including capital expenditures of NA (2004 est.)
Agriculture - Products: rice, jute, tea, wheat, sugarcane, potatoes, tobacco, pulses, oilseeds, spices, fruit; beef, milk, poultry
Industries: Cotton textiles, jute, garments, tea processing, paper newsprint, cement, chemical fertilizer, light engineering, sugar
Electricity - production: 15.33 billion kwh (2001)
Electricity - consumption: 14.25 billion kwh (2001)
Oil - production: 3,581 bbl/day (2001 est.)
Oil - consumption: 71,000 bbl/day (2001 est.)
Natural gas - production: 9.9 billion cu m (2001 est.)
Natural gas - consumption: 9.9 billion cu m (2001 est.)
Exports - commodities: Garments, jute and jute goods, leather, frozen fish and seafood (2001)
Imports - commodities: machinery and equipment, chemicals, iron and steel, textiles, foodstuffs, petroleum products, cement (2000)

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