Standard & Poor’s, an USA based rating agency honored Bangladesh with a BB- for credit rating. This rating shows that the country h is below India but ahead of Pakistan and Sri Lanka in South Asia.
Bangladesh, with the help of the international community, has been trying to improve its economy for a while but it is still a developing country. However, the fact that it does not depend much on foreign loans and grants while submitting their annual budget shows that the economy of this country is slowly rising. The average per capita income of the world is $8,985 but the per capita income of Bangladesh in 2010 was only $641. Considering purchasing power parity, Bangladesh is economically the 44th largest country of the world.
Once it was the largest exporters of jute and jute-made products in the world. But due to the revolution of synthetic products, the demand of jute worldwide has taken a nosedive. Recent reports of FAOSTAT shows that Bangladesh is the 4th largest producer of rice, 11th largest producer of potato, 9th largest producer of mango, 16th largest producer of pineapple and onion, 5th largest producer of tropical fruits, 17th largest producer of banana, 2nd largest producer of jute and the 11th largest producer of tea.
About 67% of the Bangladeshi people spend their livelihood as farmers. But the ready-made garments industry has taken over approximately 75% of the total export earnings. Foreign investors are greatly interested to invest in this sector of Bangladesh because of the cheap labor available and minor conversion cost.
In 2002, the total exported ready-made garments and knitwear brought about US$ 5 billion. In the year 2009-2010, this number went up to US$ 12.6 billion. Currently, Bangladesh is the world’s second largest ready-made garment exporting country. About 4 million Bangladeshi people are working in this industry and 90% of these employees are women.
The country earns a lot of foreign currency through the remittance sent by emigrants working in other countries.
There are a number of hurdles in the path of the growth of the country’s economy. First of all, the political state of Bangladesh is not very stable. Strikes are often called by political parties and that causes the industries to shut down for multiple days at a time.
Secondly, the country is often hit the by various natural disasters, such as floods and cyclones.
The communication system across the country is still underdeveloped. Most major highways in the country are in a bad shape. The state owned industries are either defunct or mismanaged.
However, the country is slowly overcoming these obstacles. According to World Bank, Bangladesh has achieved a 5% annual growth rate since the beginning of the 90’s.
On the other hand, direct foreign investment has increased a lot over the last decade. Foreign investors are investing in Bangladesh’s ready-made garment sector, telecommunication, tea, pharmaceuticals, chemicals, natural gas, coal, hotels, and other industries.
Several Non-Governmental Organizations have been working hard to reduce the level of poverty in the country.
The introduction of micro credit system by Grameen Bank has been an exceptional achievement in Bangladesh. In 2006, Dr. Muhammad Yunus, the Former Director of Grameen Bank, was awarded the Nobel prize in Peace for implementing this system.