Country Profile - Bangladesh - Economy

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GDP:

US$ 50,929 million (Bangladesh Bank 2003)

GDP per head:

US$ 381

GDP Growth:

5.3% for 2003 (forecast for 2005 is 5%)

Consumer Price Inflation:

6.1% (2004)

Principal Exports:

Garments and knitwear, frozen seafood, jute goods and leather. Exports are dominated by garments and knitwear, currently 73% of export earnings.

Major trading partners:

Main destinations of exports in 2003 were: US (23%), Germany (13.6%), UK (9.7%), France (5.9%). Main origins of imports in 2003 were: India (15.4 %), China 11.3%), Singapore (10.8%), Japan (5.9 %), Hong Kong (4.5%).

Aid & development:

Bangladesh has made significant development progress since 1971, including becoming self-sufficient in food production, significantly reducing its population growth and improving in several social indicators including education. Donors consider there has been generally good macroeconomic management since this government came to power. The publication of an IPRSP (Interim Poverty Reduction Strategy Paper) in March 2003 led to the re-opening of discussions with the International Financial Institutions. In June 2003, the IMF approved a Poverty Reduction & Growth Facility (PRGF) package worth $490 million while the World Bank Development Support Credit (DSC) of $300 million, plus up to $250 million of World Bank projects. The World Bank approved a further DSC of $200 million in July 2004. Bi-lateral donors support a wide range of sectors. Work includes a six year primary education programme with Government supported by six bi-laterals, the EU, the ADB, World Bank, and UNICEF, and a joint Dutch/UK funded financial management reform programme.

Exchange rate:

The Bangladesh Central Bank announced a move from an exchange rate pegged to the US dollar to a managed floating exchange rate on May 31 2003 (a pre condition for an IMF Poverty Reduction Growth Facility (PRGF) loan). Since the float, the taka has remained stable.

Given the current situation in the region, those planning to visit Bangladesh should consult the Foreign & Commonwealth Office Travel Advice before confirming travel arrangements.

A Least Developed Country (LDC), Bangladesh emerged as a Sovereign State in 1971 after a fierce War of Independence with Pakistan.

Bangladesh is a parliamentary democracy, with its Government headed by the Prime Minister- with the President the constitutional Head of State. The country is surrounded on three sides by India and has a short land border with Burma on its eastern side. Its strategic location, at the mouth of the Bay of Bengal, is ideal for trade with South and South East Asia.

The economy is in transition. Industries like ready-made garments- responsible for nearly 80% of the country's export revenues- seafood, ceramics and pharmaceuticals and even software development have sprung up in the last decade. Almost 80% of employment remains in agriculture, however, where the flat and fertile land is among the most productive in the world.

Bangladesh has proven gas and coal resources, although there is a shortfall in power supply against peak demand.

The economy's biggest asset is its plentiful supply of very cheap labour. The UK is historically the largest investor in Bangladesh, with around 50 companies operating in the market. The British High Commission is aware of a further 100 or so companies who sell into the market through agents. SOURCE UKTI

Bangladesh's Relations with the UK

The relations between the UK and Bangladesh are wide-ranging and warm. There have been a number of high profile visits between the countries. The Prime Minister and Mrs Blair visited Bangladesh in January 2002. Previous Prime Ministerial visits were by John Major (1997) and James Callaghan (1978). The Prince of Wales visited in February 1997, and the Princess Royal in November 2000. From Bangladesh, Foreign Minister Morshed Khan met Foreign Secretary Jack Straw in London in May 2003.

In October 2003, the Commonwealth Parliamentary Association (CPA) held its annual plenary conference in Dhaka attended by a delegation of British MPs and members of the House representing the UK branch of the CPA.

The relationship has also been shaped by the approx 300,000 (2001 Census) people of Bangladeshi origin in the UK (mostly from the Sylhet region) who help to keep the ties between the two countries strong. Anwar Choudhury's (who is of Bangladeshi origin) appointment as the British High Commissioner to Bangladesh in May 2004 further highlighted this connection

UK Development Assistance

The Department for International Development (DFID) has one of its largest programmes in Bangladesh with a budget of £125 million for 2004/5/6.

Its main aim is poverty reduction and enhancing the livelihoods and basic services of the poor. A major share of the development assistance is used for human development and institutional strengthening with an increasing emphasis on governance. Recent new programmes focus on primary education and support to the most vulnerable communities. The 2004 floods were some of the worse seen on record in Bangladesh. Over 70% of the country was immersed in water and deaths were in their hundreds. DFID provided a relief package of £29 million to help the victims of the floods.

The current DFID country strategy for Bangladesh shows a particular concern for the poorest and most vulnerable groups. DFID seeks to promote better governance, more effective institutions and improved realisation of human rights, particularly for women. DFID also strives to ensure that wider UK Government and Bangladesh Government policies consistently support poverty elimination.

Trade and Investment with the UK

UK exports to Bangladesh up to November 2004 were £61 million, an increase of 20% on the same period in 2003. The main exports to Bangladesh are power generation equipment (10% of the total), general industrial machinery and dyeing, tanning and colouring materials. The UK has also been traditionally successful in the construction sector, especially bridge building and also in the consultancy and education sectors.

UK imports from Bangladesh had reached £600 million by November 2004, an increase of 13% on the same period in 2003. Ready made garments, which enjoy tariff free access to the EU under the Generalised System of Preferences Scheme (GSP), account for approximately 79% of all imports with seafood and textile yarn and fabrics being the most significant other sectors. The UK is historically the largest investor in Bangladesh with over 50 companies operating in the market.

Cultural Relations with the UK

Public / Statutory holidays

Human Rights

Bangladesh does not have a good human rights record. Bangladesh signed the UN Covenant on Civil and Political Rights in September 2000. She is also a signatory to the other five core human rights instruments. An independent website that focuses on human rights in Bangladesh can be found at:

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