Bangladesh's Economic Growth and Development Challenges Examined
Bangladesh's economic progress and persistent challenges in development are highlighted.
Photo by Markus Spiske
Bangladesh has experienced significant economic growth in recent years, driven by its garment industry and remittances. However, the country still faces challenges related to poverty, infrastructure, and climate change vulnerability. The government is focusing on diversifying the economy and improving social indicators.
International partnerships and investments are crucial for Bangladesh to achieve sustainable development goals. Addressing income inequality and ensuring inclusive growth remain key priorities for the nation.
Key Facts
Bangladesh's economy driven by garment industry
Faces challenges in poverty, infrastructure, climate change
UPSC Exam Angles
GS Paper 3: Economy, Development
International Relations: Regional Connectivity
Environment: Climate Change Vulnerability
Visual Insights
More Information
Background
Bangladesh's economic trajectory is rooted in its liberation war of 1971. Post-independence, the nation grappled with widespread poverty and famine. The early economic policies focused on nationalization and import substitution, yielding limited success.
A significant shift occurred in the late 1970s and early 1980s with the adoption of market-oriented reforms, including privatization and export promotion. The garment industry emerged as a pivotal sector, fueled by preferential trade agreements like the Multi-Fiber Arrangement (MFA). Remittances from overseas workers, particularly in the Middle East, also became a crucial source of foreign exchange.
Over the decades, Bangladesh has transitioned from an aid-dependent economy to one driven by exports and remittances, albeit with persistent structural challenges.
Latest Developments
In recent years, Bangladesh has focused on diversifying its export basket beyond garments, with initiatives in sectors like pharmaceuticals, leather goods, and IT services. The government has invested heavily in infrastructure projects, including the Padma Bridge and Dhaka Metro Rail, to improve connectivity and reduce congestion. Bangladesh is also actively pursuing regional connectivity through initiatives like the Bangladesh-China-India-Myanmar (BCIM) Economic Corridor.
Furthermore, the country is grappling with the economic fallout from the COVID-19 pandemic and the Russia-Ukraine war, including rising inflation and supply chain disruptions. Future growth hinges on attracting foreign direct investment, improving governance, and addressing climate change vulnerabilities.
Frequently Asked Questions
1. What are the key economic drivers and challenges for Bangladesh, as highlighted in the topic?
As per the topic, Bangladesh's economic growth is primarily driven by its garment industry and remittances. However, it faces significant challenges related to poverty, infrastructure development, and vulnerability to climate change.
2. What are the recent developments regarding Bangladesh's economic diversification efforts?
Recent developments include focusing on diversifying exports beyond garments, with initiatives in pharmaceuticals, leather goods, and IT services. The government is also investing heavily in infrastructure projects to improve connectivity.
3. What is the historical background of Bangladesh's economic development?
Bangladesh's economic trajectory is rooted in its liberation war of 1971. Post-independence, the nation grappled with widespread poverty and famine. The early economic policies focused on nationalization and import substitution. A significant shift occurred in the late 1970s and early 1980s with the adoption of market-oriented reforms.
4. What are the pros and cons of Bangladesh's reliance on the garment industry?
The garment industry has been a major driver of economic growth and employment. However, over-reliance makes the economy vulnerable to global market fluctuations and labor rights issues. Diversification is needed for sustainable growth.
5. What are the key facts about Bangladesh's economy for UPSC Prelims?
Key facts include that Bangladesh's economy is driven by the garment industry, and it faces challenges in poverty, infrastructure, and climate change. Remember the sectors the government is trying to diversify into: pharmaceuticals, leather, IT.
Exam Tip
Focus on sectors for diversification and infrastructure projects.
6. How does Bangladesh's economic growth impact common citizens?
Economic growth can lead to improved living standards, increased employment opportunities, and better access to education and healthcare. However, it's important to address income inequality to ensure inclusive growth and that the benefits reach all citizens.
Practice Questions (MCQs)
1. Consider the following statements regarding Bangladesh's economic development: 1. The Multi-Fiber Arrangement (MFA) significantly boosted Bangladesh's garment industry. 2. Bangladesh's economic growth is solely dependent on the garment industry and remittances. 3. The Padma Bridge project aims to improve connectivity within Bangladesh. Which of the statements given above is/are correct?
- A.1 and 2 only
- B.1 and 3 only
- C.2 and 3 only
- D.1, 2 and 3
Show Answer
Answer: B
Statement 1 is correct as MFA provided preferential access to developed country markets. Statement 3 is correct as the Padma Bridge improves internal connectivity. Statement 2 is incorrect as Bangladesh is trying to diversify its economy.
2. Which of the following initiatives promotes regional connectivity involving Bangladesh? A) Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) B) Mekong-Ganga Cooperation (MGC) C) Trans-Pacific Partnership (TPP) D) Arctic Council
- A.Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC)
- B.Mekong-Ganga Cooperation (MGC)
- C.Trans-Pacific Partnership (TPP)
- D.Arctic Council
Show Answer
Answer: A
BIMSTEC is a regional organization that includes Bangladesh and focuses on promoting economic and technical cooperation among Bay of Bengal countries. The other options are not directly related to Bangladesh's regional connectivity efforts.
3. Assertion (A): Bangladesh is highly vulnerable to climate change impacts. Reason (R): Its low-lying geography and dense population make it susceptible to sea-level rise and extreme weather events. In the context of the above statements, which of the following is correct?
- A.Both A and R are true and R is the correct explanation of A
- B.Both A and R are true but R is NOT the correct explanation of A
- C.A is true but R is false
- D.A is false but R is true
Show Answer
Answer: A
Both the assertion and reason are true, and the reason correctly explains why Bangladesh is vulnerable to climate change. Its geography and population density exacerbate the impacts of climate change.