Bangladesh - Economy

Economy

Bangladesh is a developing nation. Goldman Sachs named it one of the "Next Eleven". Bangladesh gradually decreased its dependency on foreign grant and loan from 85% (In 1988) to 2% (In 2010) for its annual development budget. Its per capita income in 2010 was US$641 compared to the world average of $8,985. In December 2005, the Central Bank of Bangladesh projected GDP growth around 6.5%.

Bangladesh has seen a dramatic increase in foreign direct investment. In order to enhance economic growth, the government set up several export processing zones to attract foreign investment. These are managed by the Bangladesh Export Processing Zone Authority.

The insufficient power supply constitutes an obstacle to growth. According to the World Bank, "among Bangladesh’s most significant obstacles to growth are poor governance and weak public institutions." In April 2010, Standard & Poor's awarded Bangladesh a BB- for a long term in credit rating which is below India and well over Pakistan and Sri Lanka in South Asia.

One significant contributor to the development of the economy has been the widespread propagation of microcredit by Muhammad Yunus (awarded the Nobel Peace Prize in 2006) through the Grameen Bank. By the late 1990s, Grameen Bank had 2.3 million members, along with 2.5 million members of other similar organisations.

Bangladesh government is planning for construction of the largest deep sea port in South Asia at Sonadia Island. The 500 billion taka project will be completed in multiple phases and enable Bangladesh to service the whole region as a maritime transport and logistics hub. India, China, Bhutan, Nepal and other neighbouring countries will be able to take full advantage of the strategic location and Bangladesh’s LDC status for exporting their goods, which are manufactured in Bangladesh.

Furthermore, with $7.5 billion a new international airport will be constructed. The airport is being modelled on Thailand’s Suvarnabhumi Airport in size and capacity.

To ease the chaotic traffic congestion in the capital Dhaka the government plans to construct more expressways, freeways, and flyovers. There is a plan to build an overhead Rapid transit called Dhaka Metro, but the progress is slow and controversial because of contracts and agreements.

Recently the government of Bangladesh signed a deal with a Chinese company to provide high-speed modern DEMU trains and is also going to construct metro rail system and high-speed electric powered inter city rail network. More airports, bridge (such as the multi-billion Padma Bridge project) national highways are also being constructed to facilitate trade and regional development.