Chapter-1: Introduction

Drivers of economic Growth is a paper which presents the overall scenario of macroeconomic
situation of the country and progress of the socio-economic sectors.. It contains the latest data
and information of FY2017-18.

The Review is divided into different sections. The first section presents overall scenario of the
macroeconomic condition. It describes in details the country’s macroeconomic fundamentals
including gross domestic product, savings and investment, price, wages and employment, fiscal
and monetary management and external sector. An explicit description of sector wise analysis
has been depicted. As productive sector of economy agriculture, industry, power and energy,
transport and communications have been delineated to this section. Moreover, state owned
enterprises have been included here. In the last section, various activities and programmers of
some special prioritized sectors of the government such as human resources development,
poverty alleviation, private sector, environment and climate change development have been
described.

I hope that this paper will be treated as an important informative and referral document to the
readers, researchers, planners, academicians, policy makers, students and many others who are
interested in looking into the economy of Bangladesh.

Finally, I thank to all concerned for providing valuable data and information that make this
publication more comprehensive.

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Chapter-2: Background
Bangladesh is steadily maintaining economic growth. The country achieved in average 6+
percent growth rates for more than one decade. From FY2015-16, Bangladesh has achieved GDP
growth rate of more than 7 percent over three consecutive years. In FY2017-18, GDP growth
stood at 7.86 percent which was 7.28 percent in the previous fiscal year. Continuing the earlier
trend, the average per capita national income increased to US$1,751 in FY2017-18, up by
US$141 from the previous fiscal year.

Immediately after assuming office in 2009, the government had taken initiatives to graduate
Bangladesh to a middle income country by 2021. For this purpose ‘Vision 2021’ was
formulated. This decision made Bangladesh known to the world as a new identity. In FY2017-
18, Bangladesh has achieved all the eligibility criteria to graduate to a ‘developing country’ from
a ‘least development one’. Continuing this trend, it is expected that the country will be graduated
to a middle income country by 2021 and a developed country by 2041.

With a view to increasing revenue income, the government is implementing planned tax
management programmes including legal and administrative reforms. From FY2019-20, online
Value Added Tax system will be introduced. This sort of reform initiatives has contributed to
ensuring the transparency and accountability in financial management along with improved
public service delivery. Keeping aligned with the development objectives of the government, the
size of the budget for FY2017-18 has been increased by 17.12 percent to Taka 3,71,495 crore
compared with the revised budget of the preceding fiscal year. At the same time, the revised
Annual Development Programme (ADP) has been increased to Taka 1,48,381 crore, up by Taka
37,681 crore from the previous fiscal year. Due to the prudent monetary and fiscal policies, the
government has been able to contain inflation within 5.8 percent. Export earnings and foreign
exchange reserves have increased regularly. At the end of FY2017-18, foreign exchange reserve
reached US$ 32.9 billion

Along with economic development, Bangladesh has achieved a notable development in social
sectors. Bangladesh has already achieved hunger, poverty and health sector related goals as well
as targets and indicators of Millennium Development Goals (MDGs). Currently, the government
is working for implementing the goals and

2
targets of Sustainable Development Goals (SDGs). The scope and allocation for social safety net
programme is being extended every year. In order to bring efficiency and effectiveness of social
safety net programmes, Bangladesh follows the life cycle approach of social safety net. As a
result; rate, incidence and depth of poverty has been reducing regularly. According to
‘Household Income and Expenditure Survey, 2016’ poverty rate is 24.3 percent which was 40
percent in 2005. In the 7th Five Year Plan (2016-2020), it has been targeted to reduce poverty
rate to 18.6 percent by 2020.

Bangladesh has achieved a significant progress in human resources development, private sector
growth and environment and climate change development. At present, the enrolment rate at
primary level is 97.97 percent. It is noted that girls’ enrolment rate is slightly higher than boys’
enrolment rate. On the other hand, the dropout rate at primary level has been decreased to 18.8
percent, whereas it was 50.5 percent in 2007. Mother and child mortality rates have also been
reduced gradually. Average life expectancy is now 72 years. The government has established
‘Bangladesh Investment Development Authority’ in order to encourage both private and direct
foreign investment. The government is seriously concerned about impact of climate change and
gives the highest importance to the issue of tackling climate change induced disasters.
Bangladesh is a pioneer among the developing countries in creating ‘Climate Change Trust
Fund’ of its own fund. Various projects and programmes are being implemented under this Trust
Fund.

3
Chapter-3: Review of past and recent situation
3.1.MACROECONOMIC SITUATION

The Bangladesh economy has been able to maintain sustained economic growth. The economy
grew at a rate of 7.86 percent in FY2017-18, satisfactorily up from 7.28 percent growth in
FY2016-17. The per capita national income reached US$1,751 in FY2017-18, up by US$141 a
year earlier. Continuing the declining trend since FY2013-14 year-on-year inflation in FY2017-
18 slid down to 5.78 percent. With a growth rate of 14.78 percent revenue receipt in FY2017-18
also remained at satisfactory level. Exports registered an increase of 5.81 percent and import
increased by 25.23 percent in FY2017-18. Remittances inflow rebounded by 17.33 percent. Due
to deficits in the current account, the surplus in capital and financial account left the overall
balance of the Balance of Payment (BoP) account in deficits. Despite deficit in BoP foreign
exchange reserve still remained steady. At the end of 30 June 2018 foreign exchange reserve
stood at US$32,916 million which is sufficient for maintaining 6 month import payment. During
the period, exchange rate broadly remained stable. Private sector credit grew at 16.95 percent.
The GDP under the Medium-Term Macroeconomic Framework (MTMF) has been projected to
grow at the rate of 7.8 percent in FY2018-19 which is expected to be achieved through the
implementation of prudent fiscal management, effective application of cautious monetary policy,
appropriate management of expenditure, and sound implementation of the reform activities

3.2.FISCAL POLICY AND FISCAL MANAGEMENT

The main goal of fiscal policy is to extent revenue area through strengthening revenue earning
activities and expenditure management. With a view to develop Bangladesh as a middle income
country by 2021 through poverty alleviation and socioeconomic development of the people the
government is trying to ensure macroeconomic stability and conducive environment for
sustained higher level of growth. According to the guidance in the 'Public Money and Budget
Management Act 2009' the government is conscious to maintain the budget deficit within
sustainable level. The trend of revenue mobilization shows that the revenue-GDP ratio is on the
rise, albeit the pace of growth is slow. In FY2017-18, the total revenue mobilisation by NBR
stood at Tk.2, 06,400.19 crore against the target of Tk.2, 25,000 crore. In FY2017-18 revenue

4
mobilisation by NBR was 20.24 percent higher than the outturn of the previous fiscal year. The
collection of income tax witnessed 22.35 percent growth compared to that of previous fiscal year
reflecting progress in direct tax collection. The government expenditure as percentage of GDP
has been on the increase. government expenditure increased to 17.45 percent in FY2017-18 from
14.41 percent in FY2016-17. The utilisation of ADP stood at 95 percent in FY2017-18.
Currently, the larger portion of ADP is financed from domestic sources. Aid flow witnessed
slightly reduction in FY2017-18 than previous fiscal year

3.3.EXTERNAL SECTOR

Growth of global trade volume is expected to reach 4.2 percent in 2018, which was 5.2 percent in
2017. Growth is expected to maintain almost steady securing 4.0 percent growth in 2019. Export
earnings increased to 5.81 percent in FY2017-18 compared to the last fiscal year. On the other
hand, import payments increased to 25.2 percent in FY2017-18 compared to previous fiscal year
because of higher domestic demand. During FY2017-18, the current account of balance of
payment shows a deficit for high growth of imports. Import expenditures have boosted up
massively because of increasing private investment and implementation of mega projects.
However, the increase in foreign direct investment, medium and long term loans inflow of the
capital and financial accounts contributed to ease the effect. As a result, foreign exchange reserve
remained stable and reached at US$32.9 billion at the end of FY2017-18, which allowed slight
depreciation of the exchange rate against US dollar. The process of reducing import tariff rate of
Bangladesh is still continuing in FY2017-18 in order to increase the efficiency of the indigenous
industries and ensure consistent with the process of world-wide tariff reduction. Bangladesh has
been playing an important role on bilateral and regional agreements. Till June 2018, Bangladesh
has signed five Regional Trade Agreements (RTAs) of which three are Preferential Trade
Agreements (PTAs) and the remaining two are Free Trade Agreements (FTAs

3.4.AGRICULTURE

Bangladesh is predominantly an agricultural country where agriculture sector plays a vital role in
accelerating the economic growth. It is therefore important to have a profitable, sustainable and
environment-friendly agricultural system in order to ensure long-term food security for people.
Broad agriculture sector has been given the highest priority in order to make Bangladesh

5
selfsufficient in food. The government determined to develop the overall agriculture sector
keeping in view of the goals set out in the Seventh Five Year Plan and National Agriculture
Policy. Over the last few years, there has been an increasing trend in food production. According
to preliminary estimate of BBS, in FY2017-18, food grains production stood at around 413.25
lakh metric tons (MT). In the same fiscal year, the total internal procurement of food grains was
16.7 lakh MT against the target of 17.3 lakh MT. In addition, an amount of Tk.20,400 crore was
targeted to be disbursed as agricultural credit against that Tk.21,393 crore was disbursed till June
2018, which was 104.87 percent of the target. In order to scale up productivity, subsidy in
agricultural inputs was increased, as well as enhanced coverage and increased availability of
agricultural credit was ensured. Programmes have been launched to popularise the use of organic
and balanced fertilser to maintain soil fertility and productivity. Considering the importance of
increased productivity of agricultural products, an amount of Tk.6,000 crore was allocated in the
revised budget of FY2017-18 to provide subsidy on fertiliser and other agricultural inputs.

3.5.INDUSTRY

The contribution of Industry Sector to GDP is progressively increasing in Bangladesh.

According to BBS, the contribution of the broad industry sector to GDP has been estimated at
33.66 percent in FY2017-18 which was 32.42 percent in FY2016-17. Among the broad industry
sectors the contribution of the manufacturing sector is the highest. According to the GDP of
FY2017-18 the contribution of the manufacturing sector in real GDP is 22.85 percent which was
21.74 percent in FY2016-17. In fact the Government is persistently taking comprehensive
measures for developing and flourishing of all industrial sectors of the country such as
manufacturing industry and fuel industry for energy security, agriculture and forestry, mineral
extraction and processing industry, tourism and service industry, construction industry and ICT
based industry. In order to accelerate the pace of industrialisation of the country the government
announced the ‘National Industrial Policy-2016’. The importance and underlying objectives of
the Industrial Policy 2016 include sustainable and inclusive industrial growth through generation
of productive employment to create new entrepreneurs, mainstreaming women in the
industrialisation process and international market linkage. The government is continuing its
efforts to achieve this goal by providing loans and other ancillary supports through banks and
other financial institutions. As a result the volume of both distribution and recovery of industrial

6
loan are on the increase. The EPZs are playing special role in the process of promoting rapid
industrialisation and attracting foreign direct investment

3.6.STATE-OWNED ENTERPRISES

State-Owned Enterprises (SOEs) play an important role in shaping the economic development of
the country. The privatisation programmes of public sector are continuing for the development
of private sector. The contribution of SOEs to GDP, value addition, employment generation and
revenue earning are very important. During FY2016-17, the total operating revenue of all
existing SOEs was Tk.1,49,898.93 crore which increased by 5.32 percent from Tk.1,21,816.60 in
FY201213. However, factoring into the production cost, the amount of value addition increased
to Tk.23,255.69 crore during FY2016-17 which was Tk.22,525.54 crore in FY2015-16. In
FY201617, the SOEs earned a net profit of Tk.9,308.94 crore (after tax) and contributed
Tk.2,003.35 crore to the national exchequer in FY2017-18. According to the estimation of
Finance Division, the total Debt Service Liabilities (DSL) against 116 SOEs stood at
Tk.2,13,015.63 crore in FY2016-17. Up to June 2018, outstanding state owned commercial bank
loan against 30 SOEs stood at Tk.33,454.31 crore. Out of this, the classified loan stood at
Tk.321.31crore. Though the operating profit on total assets of SOEs was 3.46 percent in
FY2015-16, in FY2016-17 this profit decreased to 2.87 percent. The net profit on operating
revenue was 6.21 percent in FY201617. The rate of dividend on equity increased to 4.13 percent
in FY2016-17 compared to 3.51 percent in FY2012-13. Considering the turnover of assets, the
efficiency of resource utilisation during FY2016-17 slightly decreased compared to the level of
efficiency in the previous fiscal years.

3.7.POWER AND ENERGY

At present 90 percent people of Bangladesh have access to electricity facilities. There is

enormous demand for electricity, oil, gas and natural resources in agriculture, industry and
service sector as well as daily life of Bangladesh. In this context, the government is giving top
priority to the development of power and energy sector. The total installed electricity generation
capacity stood at 15,953 MW (excluding captive) of which the highest generation was 10,958
(28 May 2018) MW in FY2017-18. Besides, net electricity production was 57,276 million
kilowatt-hours in FY2016-17 which increased to 62,678 million kilowatthours in FY2017-18.

7
Out of total net generation, 49.59 percent power was generated by public sector. In addition, total
system loss of transmission and distribution of electricity substantially declined to 11.87 percent
in FY2017-18 from 15.73 percent in FY2009-10. At present, the total distribution line is
4,57,000 kilometer and total consumer is 30.3 million. Moreover, energy saving and
environment-friendly power generation systems have been introduced using renewable and
modern technology. According to Power System Master Plan (PSMP), the government has set a
target to increase installed electricity generation capacity to 24,000 MW by 2021 and 40,000
MW by 2030. On the other hand, natural gas met almost 71 percent of the country's total
commercial use of energy. A total of 27 gas fields have been discovered up to June 2018 from
which about 15.70 trillion cubic feet of gas has been produced cumulatively leaving recoverable
net at 12.11 trillion cubic feet. Besides, the country has a reserve of about 13.21 million metric
tonnes fuel oil. For ensuring the energy security, a plan to set up a new unit of the Eastern
Refinery has been undertaken. In order to meet the growing demands of natural gas and fuel oil
and to ensure the long term energy security of the country government is giving emphasis on the
fuel diversification

3.8.PRIVATE SECTOR DEVELOPMENT

Private sector plays an important role in economic development of Bangladesh through

production, investment and export. The government is working for the overall development of
investment environment for the purpose of increasing domestic and foreign investment which
relates to development activities. Now, the government is implementing different development
projects under Public-Private Partnership (PPP) model along with individual projects under
government and private sector. In FY2016-17 a total of 1,745 private projects were registered in
Bangladesh Investment Development Authority (BIDA) with a recommended amount of
Tk.18,52,618 million, which stood at Tk.20,72,925 million in FY2017-18 for 1,643 projects. In
2017, a total amount of US$2,151.6 million flowed as Foreign Direct Investment (FDI) in the
country which was US$2,333 million in 2016. In FY2017-18, a total of 62,678 million
kilowatthours of electricity was produced, out of which 50 percent had been generated by private
sectors. Bangladesh has achieved stable credit rating by Moody's (Ba3) and S&P (BB-) for the
ninth consecutive time. The government undertakes the schemes for the development of

8
information and communication technology and provides proper support both to the public and
private sector in this regard.

9
Chapter-4: Actions to meet the challenges faced by Bangladesh
and Recommendations

Definitely there are factors that are barricading the growth and development of the country. What
could the barricades be? Accepting the fact that Foreign analyzers and citizens of Bangladesh
could list as many as hundreds of factors hindering the growth and economic developments, but
all these factors can be put under the banner of 5 major factors. According to my view these
factors are:

1.Population;

2. Natural calamities & Environmental problems;

3. Political instability.

4. Inequality; and

5. Corruption;

The views of renowned authors and economists concerned on the studies of the economy of
Bangladesh expressed the similar opinion, pointed out the five above barricading factors along
with several others that can be integrated into these barricades, and proved that economical
reforms are possible through the solution presented at different stages while investigating and
studying the past and present economical situation. Models have been provided by economists
which are taken into considerations. The author of this paper work have represented such
references and solutions at the solution part to the each of the above barricades

POPULATION The population of Bangladesh has been one of the major problems to the
economical growth. Policies and programmes by GOB and NGOs have been constantly trying to
reduce the birth and growth rate.

Bangladesh is the eighth most populated country in the world, having a population above
160million people in 55.598 sq.mile, which gives a population density of almost 1000
people/kilometer. The estimated crude birth rate is 26/1000 and the crude death rate is 10/1000

10
population(2010 est.). CIA mentioned that the growth rate of population in the nation is 1.566%
(2011). If the population growth rate is not prevented, according to the steady growth
calculation, the population is expected to be more than 300million people by 2050.

Solution To Population Problem:- The government is doing the right thing by allocating
highest amount of budget to the education sector. If people are educated, they can understand the
problems of having large families. Educated and skilled people would be more oriented towards
career which would help containing population. Government has made primary education free
and has made education upto graduation level free of cost. Educating female population shall not
only help them in their emancipation but also make them aware of different factors which would
help to decrease population. The following has been supported by Haque(2006) in which he
proved that education of the population is directly linked with the drastic population boom. He
mentioned after calculation and analysis that women with urban residential background have
three-tenth less children compared to women residing in rural areas. Such is the effect of
education; people residing in urban areas are mostly literate as having the ability to achieve
tallest primary education, whereas in rural areas people can not. The use of contraceptives can
reduce the rate of population growth and criticalities related to birth. Family Planning
Department under GOB has been involved in relentless effort in popularizing four-member
family, husband-wife and their two children. Clinics ran by Family Planning Department and
NGOs are providing different types of contraceptives for free to slow the rate of population
growth. Such effort to increase the use of contraceptives among people has been successful in
declining the fertility rate from 6.78% in 1961 to 5.07% in 1983 and further to 2.98% in 1998
(Bangladesh Bureau Of Statistics, 2002). Educating the reproductive females on their diets and
carefulness during pregnancy to avoid premature birth is also offered free by GOB Family
agencies and NGOs. Recent MDG award to Bangladesh tells us about the progression made in
this field.

NATURAL CALAMITIES & ENVIRONMENT PROBLEM

Environment and natural calamities plays a vital role against the economical and infrastructure
development of Bangladesh. The disastrous effect of several cyclones and hurricanes are still
imparting pressure on the national economy.

11
Bangladesh is a land of different natural calamities such as floods, storms, droughts and erosions.
Estimated amount of 20.5% Bangladeshi inhabitants are flooded annually(Mirza, 2001). In 1998,
flood had devastation effect on the economy and the agriculture of Bangladesh, where 75% of
the land was submerged, loss of crops in 700,000 hectares cultivated land and infrastructure
damages were experienced(BBC, 1998). Re-building the infrastructures took years and financial
loans had to be realized from foreign communities. Flash flood occurs regularly, rendering
damages to crops, livestocks and makes million 30 people homeless. The loss of navigability of
rivers and sudden flow of water from upstream are main reasons for erosion and has been a
major problem for the inhabitants on the river bank.

How To combat and minimize the effect of Natural Calamities:- The geographical location of
Bangladesh is the top most reason for its natural disasters. Being one of the largest deltas of the
world and located confluencially with the Bay Of Bengal of the country’s three major river
systems; Padma, Meghna and Jamuna- flood, cyclones and tornadoes occur every year,
damaging lives and properties. Global warming is one of the reasons for continuous occurrence
of natural disasters in Bangladesh. The nation is playing active role and voicing its concern about
the issue. Foreign communities have pledged almost £2billion to combat global warming issues.
Countries like Bangladesh which are not much responsible for carbon emission and green house
effect are paying the price for irresponsible behavior of few industrialist nations. Minimizing the
level of carbon emission and global warming related issues can not be left to the Department Of
Environment(Environment Agency Under GOB) alone. Industrialists, while setting-up of
industry, and financial institutions, while financing any projects; must agree jointly to prevent
the effect of carbon emission and other industrial hazards to environment. The guideline known
as the ‘’Equator Principles’’ which has been followed as a model by 57 large private banks
around the globe as their contribution to prevent global warming and environmental hazards
through laying down voluntary set of standards for determining, assessing, managing social and
environmental risk in project financing stating in simple words, ‘’We will not provide loans
directly to projects where the borrower will not or is unable to comply with our environmental
and social policies and processes’’(Khan, 2010).

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POLITICAL INSTABILITY

Political instability is probably a never ending problem for Bangladesh. The instability of politics
has imparted severe problems in education system, economy and poverty reduction.

One might ask the question that the country gained its independence just 41 years out of which
19 years were passed through unrestness, and the journey of the first democratic government
began just 21 years back, the country is still at the infant stage of democracy so a mature
democratic environment is a far cry. As stated by Ripan Kumar Biswas, freelance writer of New
York Times in 2008 ‘’There is no denying that things in Bangladesh today are not the way they
ought to be, let alone what they promised to be’’. He added, ‘’after 37 years, people of
Bangladesh are facing mortal challenges while they are remembering the supreme sacrifices and
gallantry of the country’s bravest and enlightened people but till now, is Bangladesh free from
any blueprint? Secularism, democracy, scarcity of essential livelihoods, freedom of rights even
tolerance, and communal harmony are being thrown overboard today’’. Country which follows a
democracy form of government are yet in the hands of politicians and business syndicate groups.
Political conflicts, inefficiency of local administration, taxation fraudulent, corruption at
government levels, cartel of business syndicates are barricading the country from prospering
ahead and achieve development as it was supposed to have. The complains of the nation’s
population and foreign conglomerates remains on the pace of prosperity and development,
regardless of constant effort and finances exerted in Bangladesh by International organizations
and foreign countries, in terms of loans and aids.

Solution To Political Instability:-

The malady of political instability has no easy way out of our society. Political instability is the
greatest threat to the economy of Bangladesh. Dynastic politics, inadequacies of the constitution,
mistrust among people, power hunger, etc. promoted political instability. When two main
political parties fight each other to come to power and form government, vicious cycle of
violence and conflict is created. Supporting the statement Khan(2010) showed three possible
ways out to overcome political instability (p. 204) and possible end to dynastic rivalries,
although it will take time. Firstly, the members and leaders of both political parties believe that
political instability can deem through execution of their rival, since such is almost impossible

13
and has fueled fierceness, realistically either of the party must get eliminated totally. Secondly he
suggested establishment of liberal democracy realizing that neither of the two parties can
eliminate each other. The third and the last suggestion said that the weakening of dynastic
loyalties can gradually deem the dynastic rule and end political instability. Doing so would
dissolve 60% of political instability. The Prime Minister of Bangladesh enjoys absolute power
which is guarded by the constitution. Reducing of Prime Minister’s power and diversifying few
to the opposition could reduce political tensions. The Prime Minister of Bangladesh enjoys
supreme power such compared to monarchs of the past. Minimizing the power Prime Minsiter,
political parties, judiciary, legislators and chief executives shall reduce the political
tension(Khan, 2010). Strong lawful action against any political leaders and government high
officials if found guilty through the amendment of the constitution shall raise fear in the minds of
dispute planners and executors.

INEQUALITY

Growth and equality are the important factors for the development objectives. There are different
logics regarding linkage between growth, income distribution and poverty. How much does the
growth benefit poor? Or does it increase the gap between the poor and the rich ? Are the
questions that are paradoxical to the economists. Using datas from 143 growth episodes, a
research at the Institute Of Development Studies under University Of Sussex(United Kingdom),
showed, supporting Dollar and Kraay(2000) preposition that the ratio of the poorest quintile’s
mean income to national mean income does not change systematically as a result of
growth(Eastwood&Lipton, 2001). According to UNESCAP, several cases exist where the rate of
poverty reduction is positively related to the rate of growth. Sometimes slow growth is
accompanied by a relatively high reduction in poverty or fast growth going hand-in-hand with
slower reduction in poverty. It has been well accepted that broad-based growth and low initial
equality are the two factors which are quite critical to accelerating progress towards the poverty
goal.

Solution To Inequality:-

Solving inequality in the country, at the time, could be very complex and unwelcoming since the
GOB has to take tough and unpopular decisions in this regard. Proper formulation and

14
implementation of Monetary and Fiscal policy is very crucial to narrow the gap between rich and
poor. As we know Monetary policy which is a restrictionist or deflationary one may attempt to
reduce inflation but there might be the risk of worsening unemployment. And expansionist or a
reflationary monetary policy may attempt to reduce unemployment and stimulate national
economy but it may have the disadvantage of high inflation. Here government has to be very
careful regarding controlling the money supply in the economy.

CORRUPTION

Corruption is one of the major barrier to economical development of a nation. The cancer
‘’corruption’’ is a global problem, heavily in under-developed and developing nations.

Corruption in Bangladesh

Corruption is an old age problem. Klitgaard(1998) defined corruption as, C = M + D – A – S,

where C = Corrpution M = Monopoly D = Discretion A = Accountability S = Public Sector
Salaries

Corruption is the result of weak state management and it exists when individuals or organizations
have monopoly power over a good or service, discretion over making decisions, limited or no
accountability and low level of income. World Bank describes corruption as ‘’the abuse of public
office for private gains’’. James D. Wolfensohn, President of the World Bank in 1996, at an
annual meeting declared that to achieve growth and poverty reduction in developing countries ‘’
we need to deal with the cancer of corruption’’. A study on 69 developed and developing
countries in 2005 by Transparency International Global Corruption Barometer found that 75% of
the respondent said that political life affected by corruption in their countries are moderate or
large in extent, while 65% said it affects the business sector and another 58% said that corruption
is affecting their personal life directly (Vinay,2004).

The following steps can be identified as tools for reducing corruption in Bangladesh.

1. Education: If people are educated they would be able to know their rights and relevant laws.
If people are educated, there shall be no chance for a corrupt public servant to make them fool

15
and ask for bribes to get work done which falls their citizenship right. Surveys proved that
regions with a higher number of educated population has thwarted the corruption practice of
officials;

2. Reforms: Bringing reforms in the electoral process shall result in bringing down corruption.
Law must be introduced by the Election Commission allowing only clean people to participate in
the election and preventing tax evaders, loan defaulters, law breakers from running in the
election. Such practice shall ensure honest and clean people at the helm of power, who shall not
indulge themselves in practicing corruption. 56

3. Access to information and civil-society rights can bridge the gap between the government and
the public. Free flow of information can be effective to counter corruption. Making pros and
cons of public development, infrastructure development, programmes and policies available to
citizens, the officials involved would not resort to any corrupt practice in fear of public outcry.

4. Punishment: Government should make anti-corruption cell stronger and appoint impartial
administrator to investigate corruption committed by any politicians and officials, finding such
people guilty shall result straightly into imprisonment, wealth and properties seizure.

5. Formation of special team representing the foreign donors to observe the movement of the
donated funds for the development of the nation must be acquired to ensure its proper utilization
for which it has been intended. Such team should have ready excess into the government level
and right to questions, within the area of their interest. Such reformation shall reduce the
vulnerable rise of project values and the government require less amount in loans for
developmental purpose from the donors for each specific project which in turn shall result into
paying less interest amount, thus easing the economy of the country. The payback time period
shall also be reduced while requests for new loans can be made once the previous credit(s)
amount is paid back which shall also rapidest the infrastructure development.

16
Chapter-5: CONCLUSION

Bangladesh, since its independence has come a long way in terms of achieving economic
development. But in comparison other countries which are more or less the same age have
exceeded Bangladesh in economic development. Reasons for not achieving adequate growth in
the view of this author are

1. Population;

2. Natural calamities & Environmental problems;

3. Political instability.

4. Inequality; and

5. Corruption;

Bangladesh which is 8th most populated country in the world has found herself back footed due
to the burden of over population. The density of population is 1600 per kilometer tells the
magnitude of the problem. The limited resources should go to meet the basic needs of the
population or be used to build infrastructure which would pave the way for greater economic
growth- this dilemma has put Bangladesh Government at a vulnerable position. No doubt major
portion of the earnings is spent on the import of edibles. This has hindered the growth as
expenditure on capital goods as well as infrastructure development suffered a lot.

The corruption which has spread into the branches of all the system in Bangladesh could be one
of the most important barricading factors in the economic development of Bangladesh. It has
eaten up the society from the core. Politicians who are mainly responsible for cultivating
corruption are challenging the whole system. People have lost faith in administration and
judiciary and are well aware of that without resorting to unethical means nothing can be done in
this country. This ferocious claw of corruption has set up its claws in all the development work
of the country. As a result any development work undertaken has question mark. Moreover, FDI
is discouraged by the corrupt officials in the pretext of red tapes.

17
The growing gap between the rich and the poor created vulnerability in the country. Rich getting
richer and poor getting more poorer has put the middle class virtually non-existent. Such has
created a great social unrest. A country of 160 million people, having 30% population below the
poverty line and experiencing social and political understand clearly makes anyone understand
the gravity of the problem. The poverty has forced most on poor people to take work as a result
education, health, etc. have been put into the backseat. Huge number of population, mostly
children and women, are being exploited in all the fronts such as in workplace, home, etc. As
discussed earlier, below 2% of the population pays tax which tells us how limited country’s
internal resources are. Such has made the country dependant on foreign donors for infrastructure
development.

Bangladesh is widely known as the country of natural calamities. It is a common phenomenon

for the people of the country to fight floods, erosions, cyclones, draughts, etc. The continuous
occurrence of natural calamities cause widespread damage to crops as well as to the
infrastructure, putting the country into economic constraint. The population not being recovered
from one calamities finds themselves facing another. As a result they hardly make a recovering
and find themselves reeling in poverty.

Government and non-government effort have improved literacy in Bangladesh and has put its
name before Pakistan and Bhutan in south Asia. As we know, increase in literacy will be
immensely helpful in containing population, corruption and contribute significantly in the
improvement of standard of living. Knowledgeable people will not be carried away by empty
promises made by politicians as a result people will be benefited from the democratic system as
politicians would be answerable to the general public.

Finally, the author believes Bangladesh has got immense potentiality and if all these barricading
factors are taken sincere care of it would not be too long to see that the country, Bangladesh,
would become middle income nation.

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List Of References
AABEA. 2002. Review of the Tax System in Bangladesh A Prerequisite for Industrial Growth. Washington
DC

Akram, Khan & Hossain. 2006. Economic Analyses Of The Contemporary Issues In Bangladesh. The
University Press, Dhaka

Alesina and Rodrik. 1994. Distributive Politics and Economic Growth. Quarterly Journal of Economics

Bangladesh Economic Update. 2010. Growth, Tax, Inflation and Consumers. Centre For Research And
Action On Development, Dhaka

Bangladesh E-journal Of Sociology. 2011. Dayal Talukder and Love Chile. Estimation of Population and
Food Grain Production in Bangladesh by 2020: A Simple Moving Average Approach to a Time Series
Analysis

Asian Trade Hub. Bangladesh Tax. Income Tax At A Glance. Accessed from: <
http://www.asiatradehub.com/bangladesh/tax.asp>

Bangladesh Economic News. 2011. Remittance Flashes 17pc Growth In Feb. Accessed from:
http://bangladesheconomy.wordpress.com/2011/03/13/remittance-flashes-17pc-growth-in-feb/

Bangladesh E-Journal of Sociology. 2011. Estimation of Population and Food Grain Production in
Bangladesh by 2020: A Simple Moving Average Approach to a Time Series Analysis.
http://www.bangladeshsociology.org/BEJS%208.2%20Estimation%20of%20Population%20and%20Food
%20Grain%20Production%

BBC News. 1998. World: South Asia Bangladesh Floods Rise Again. Accessed from:
http://news.bbc.co.uk/2/hi/south_asia/157254.stm

Financial Express Newspaper. 2011. Fuel Price Hikes To Fuel Inflation. Accessed from:
http://www.thefinancialexpress-bd.com/more.php?news_id=137032&date=2011-05-27

Foreign Affairs. 2000. The Road From Serfdom: Amartya Sen Argues that Growth Is Not Enough.
Accessed from http://www.foreignaffairs.com/articles/55653/richard-n-cooper/the-road-from-serfdom-
amartya-sen-argues-that-growth-is-not-enoug

Other Common, Newspaper & Official Websites:

http://www.mof.gov.bd/en/

http://www.bbc.co.uk/

http://www.thefinancialexpress-bd.com/

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