Jute was once the economic engine of the country. Its share of the world export market peaked in the Second World War and the late 1940s at 80% and even in the early 1970s accounted for 70% of its export earnings. However, polypropylene products began to substitute for jute products worldwide and the jute industry started to decline. Bangladesh grows very significant quantities of rice, tea, potato, mango, onion and mustard. According to FAOSTAT, Bangladesh is one of world’s largest producers of: Rice (4th), Potato (11th), Mango (9th), Pineapple (16th), Fruit, Tropical (5th), Onion (16th), Banana (17th), Jute (2nd), and Tea (11th).
Although two-thirds of Bangladeshis are farmers, more than three quarters of Bangladesh’s export earnings come from the garment industry, which began attracting foreign investors in the 1980s due to cheap laborer and low conversion cost. In 2009-10 fiscal years the industry exported US$ 12.6 billion worth of products where in 2002 the exported amount was US$ 5 billion. Recently Bangladesh has been ranked as the 4th largest clothing exporter by the WTO (The World Trade Organization). The industry now employs more than 3 million workers, 90% of whom are women. A large part of foreign currency earnings also comes from the remittances sent by expatriates living in other countries.
Jamuna Bridge: one of the longest bridges in the world
Obstacles to growth include frequent cyclones and floods, inefficient state-owned enterprises, mismanaged port facilities, a growth in the laborer force that has outpaced jobs, inefficient use of energy resources (such as natural gas), insufficient power supplies, slow implementation of economic reforms, political infighting and corruption. According to the World Bank, “among Bangladesh’s most significant obstacles to growth are poor governance and weak public institutions.” Despite these hurdles, the country has achieved an average annual growth rate of 5% since 1990, according to the World Bank.
Bangladesh has seen expansion of its middle class (world’s Fifty Forth largest, just below of Singapore & Vietnam), and its consumer industry has also grown. In December 2005, four years after its report on the emerging “BRIC” economies (Brazil, Russia, India, and China), Goldman Sachs named Bangladesh one of the “Next Eleven”, along with Egypt, Indonesia, Vietnam and seven other countries.
Bangladesh has seen a dramatic increase in foreign direct investment. A number of multinational corporations and local big business houses such as Beximco, Square, Akij Group, Ispahani, Navana Group, Transcom Group, Habib Group, KDS Group, Dragon Group and multinationals such as Unocal Corporation and Chevron, have made major investments, with the natural gas sector being a priority. In December 2005, the Central Bank of Bangladesh projected GDP growth around 6.5%. 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.
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 organizations.