Economic Growth of Bangladesh after Independence-The Revolution

Name: Md Sakif Al Wasee

Roll: 2016941033

Department of Public Administration

Abstract:

Bangladesh got their independence in 1971. After the independence they don't have a stable
economy. It took a lot of time to stabilize it. So the Economic Growth of Bangladesh is very
important for us. They faced many ups and downs. In this paper, survey, chart, graphs,
descriptive and qualitative methodology has been used by the scholars or authors. The scholars
shared their own view of economic growth by emphasizing different sectors of market. One of
the scholars thinks that foreign aid affected a lot in the economic growth of Bangladesh. And he
also focused on 4 different government periods of Bangladesh .On the other side of the coin the
other author emphasized on labor efficiency, arable land, food grain availability, national savings
etc. Scholars also emphasized on the contribution of NGOs for the socio economic development
of Bangladesh. NGO was one of the savior of Bangladesh when they needed them most. The
data, statistics and analysis says that Bangladesh earned the highest amount of money from the
garments sector in recent years. So I can say that garments sector is one of the prime mover for
the socio economic development of Bangladesh. There are a lot of reasons behind the economic
growth of country. A country can't be developed by her own. It needs assistance from others. So
basically there are a lot of reasons behind the economic growth of Bangladesh which will be
discussed. This paper aims to review the economic growth of Bangladesh.

Keywords:
Economic Growth, Government, Production, NGO, Garments, Poverty.
Introduction:
The economic growth of Bangladesh didn't start in a day. It took a long time. The main purpose
of this topic is to spread the history of the economic growth of Bangladesh. The economy of
Bangladesh was very fragile right after the liberation war. Government took some policies to
build the economy again. The poverty rate was very high then. Bangladesh as it emerged from
the war of independence in 1971 included the highest rural population density in the entire
world, an annual population growth rate between 2.5 and 3 percent, chronic malnutrition for
perhaps the majority of the people. Then this country experienced some new entrepreneurs,
administrators, managers, engineers etc. They were short of essential food grains for their
people. Bangladesh had a large workforce but then they didn't know to train them. Maximum
workers are illiterate and unskilled. The liberation war also causes thousands of damages in road,
bridge, railroad bridges etc. So it took some time to increase the GDP of Bangladesh. The main
motive of this topic is to highlight the reasons of the economic growth of Bangladesh after the
independence. In the last 49 years of the revolution what just happened to the economy of
Bangladesh, we can call it revolution in Bangladesh's economy. And that's why I chose The
Economic Growth of Bangladesh.

Foreign Aid was always impacted in the economic growth of Bangladesh. It helped a lot in the
economy of Bangladesh. Bangladesh received about $56.5 billion foreign aid from the donor
countries during 1971-2012 periods. Bangladesh receives foreign aid in 3 forms. Food aid,,
commodity aid and project aid. Foreign Aid always brings the positives signs for the economic
growth of Bangladesh. Bangladesh also has the good amount of reserve gas which also helped
them to economic growth. Bangladesh has achieved self sufficiency in food grain production.
Bangladesh started utilizing their arable lands. Remittance effected a lot in the economic growth
of Bangladesh. Bangladesh emphasizes on the illiteracy rate reduction a lot which is a good
factor for the economic growth. Then if I talk about the socio economic development of
Bangladesh. Then the NGOs did a tremendous job in the economic growth of Bangladesh. They
worked a lot on the rural development. They helped the farmers by providing them loans. Brac,
Grameen Bank etc did a great work which helped Bangladesh in their economic growth. And
finally the garments industry. Garments sector plays a vital role in the economic growth of
Bangladesh. Bangladesh earns a lot of money through garments industry. It helped Bangladesh
to shine herself in front of the world. So basically this paper aims to talk about the reasons
behind the economic growth of Bangladesh.

Methodology:

The paper has been designed to examine some important aspects of economic growth of
Bangladesh after independence. This is a secondary research paper. In this paper, survey, chart,
graphs and qualitative methodology has been used by the scholars or authors. The data has been
collected from the various reliable sites. The analysis has been completed from different
perspective. The whole paper is very descriptive.

Literature Review:
Hossain,(2014) identified that Foreign Aid was one of biggest reason of the economic growth of
Bangladesh after the liberation war. Bangladesh received foreign aid three ways. They are: food
aid, commodity aid and project aid. Foreign Aid can be characterized as monetary help from one
country to another country. Bangladesh has experienced four different government periods after
the liberation war. So they had different experiences in this periods about foreign aid.
Bangladesh gets the foreign help from both the multilateral and bilateral donors. IDA, ADB and
Japan provided the major amount of Aid to Bangladesh. IDA and ADB provided these aid in
forms of loans. As a country, Japan is the biggest donor to Bangladesh as foreign aid. United
States and United Kingdom also contributed as bilateral donors. Japan provided 13.51 percent of
total loan. Where US and UK contributes 6.29 and 4.01 of total loan. If we analyze the effect of
foreign aid on labor growth, capital growth and GDP growth of Bangladesh after independence
then we will be able to find out the change. The labor growth of Bangladesh was (-0.29) at the
period of 1990-2001. In 2002-2012 after the assistance from foreign aid the labor growth
increases into (1.56). The capital growth of Bangladesh in (1990-2001) was (0.05) which
increases into (5.46) in the period of (2002-2012). The GDP growth of Bangladesh in (1991-
2001) was (0.23) which increases into (3.47) in the period of (2002-2012). So the effect of
foreign aid brought positive signs in the economic growth of Bangladesh on the period of 1991-
2012. Till now, Bangladesh depends on foreign assistance. After analyzing all the data we come
to know that Foreign aid contributes a lot into the GDP growth of Bangladesh after the
independence. This data concludes that foreign aid has positive impacts in the economic growth
of Bangladesh. Aid mobilizing and executing organizations of Bangladesh including public
administrations have limitation and constraints, mainly for helpless structure and planning,
corruption and political insecurity. The government must have to take initiatives to overcome the
problems and they have take steps to utilize the proper use of these foreign aids.

Helal & Hossain, (2013) identified that there are many reasons behind the economic growth of
Bangladesh after the liberation war. Bangladesh is one of the developing country of South Asia.
They are giving surprises in their economic growth after their independence. They could have
done better if they had the political stability. Labor is one of the main assets of Bangladesh.
Bangladesh has a huge population. And after the independence most of the labor was illiterate
and unskilled. But now the labors of Bangladesh are not burden anymore for them. Bangladesh is
now one of the biggest manpower exporting country in the world. Exporting manpower brought
them huge success. Foreign Aid also helped Bangladesh a lot in their economic growth. The
measure of cultivable land diminished from around 9 million hectares during the 1970s to around
7.6 million hectare in 2009 their economic growth. The population of Bangladesh also doubled
up after their independence. The arable lands were used making house, roads, factories,
industries etc. With the limited amount of arable land, the food grain production of Bangladesh is
quite good. Bangladesh has achieved self sufficiency in food grain production. The food
production rate of Bangladesh has increased than the population rate of Bangladesh. Bangladesh
also reached the standard food grain requirements which helped Bangladesh a lot in their
economic growth. Remittance is one of the important things in the economic growth of
Bangladesh. Remittance sent by our migrants increases the foreign exchanges services. It
contributed a lot in our economic development growth. The quick development in remittance
earning has been made conceivable by a fast increment in overseas migration. Bangladesh
achieved a splendid success in export earnings since her independence. Bangladesh exported
only US $357 million worth of goods and services in 1972 whereas it was around US $26 billion
in 2011. As a result, export share in GDP increased from a meager 5 percent in 1972 to 22
percent in 2011. The large increase in export earnings has been largely facilitated by export
of readymade garments. Bangladesh has made an enormous progress in education sector. They
succeeded to reduce the illiteracy rate in recent years. And Bangladesh is now doing
comparatively better than the South Asian countries. Primary level education is mandatory for
everyone. Reducing illiteracy rate also helped them a lot in their economic development growth.
Besides all this they took necessary steps in pure drinking and water sanitization. They
developed their communication technology which helped them to co operate easily with the
modern world. All of these factors helped them a lot in their economic growth after
independence.

Roy, Raquib and Sarker, (2017) identified that NGOs did an amazing job in the socio economic
development of Bangladesh after the independence. NGOshelped a lot to the least developed
countries. Bangladesh is no exception. NGOs appeared and helped those people who had not
have any foods, dress and health problems. NGOs helped those helpless peoples who were out of
money. NGOs helped poor peoples of this country to be self depended. Not only is the easing of
rural poverty yet in addition NGO plays numerable exercises to create an area insightful the
extreme social improvement it's regularly alluded as the inaccessibility of assets for meeting the
fundamental living standard. We know that the rural poverty can be measured on the basis of
rural households’ dependency on resources like land or labor, market accessibility and the
protection by society. There are two broad NGOs in Bangladesh who tried a lot to reduce the
poverty in the rural area of Bangladesh. They are trying to reduce poverty right after the
independence. They are 1. Grameen Bank 2.BRAC. Grameen Bank holds the top position among
them. Grameen Bank provided micro loans to the farmers in the rural area of our country without
any mortgage. It aims to reduce poverty in every area of Bangladesh. Grameen targets the
poorest people of the country and they emphasized on women. Woman has less access to the
financial alternatives in our country. So they provided 95% bank loans to the women. Grameen
Bank increases their GB family to provide their services in every corner of Bangladesh. Grameen
Bank came up with the unique loan system which was beneficiary for all. They created hope for
the poor people. They arrived at the door steps of the poor peoples. For their brilliant steps a lot
of people were started to be self dependent which helped a lot in the economic growth of
Bangladesh. BRAC was created in 1972. This is now the biggest NGO of the world. They set an
example for everyone around the world. BRAC opened schools in the rural areas for the kids
from poor families so that they can get quality education. They also hired teachers from the
villages who has taken special courses for the last 9 years with special qualification. BRAC
reached to those peoples who were extreme poor and help them with micro credit which consists
of different schemes. BRAC also took care of the health care. Even BRAC helped Bangladesh in
the natural disaster. They distributed a lot of foods, clothing and a lot of important materials in
the cyclone SIDR. So basically these things helped a lot Bangladesh in their economic growth
after independence. NGOs impacted a lot in the socio economic development of Bangladesh.

Uddin & Jahed, (2007) identified that garments industry is dominating in the economy of
Bangladesh from the early 1990s. Garments industry is the biggest exporters of Bangladesh.
Garments industry not just helped only on export, they also helped to reduce the unemployment
by creating employment opportunities for the unemployed people. Garments needs a lot of
manpower nowadays garments are providing these opportunities. They also helped women to be
self depended by working on the garments. Most of the workers of garments are women. After
the independence of Bangladesh there were not many garments in Bangladesh. The first world
countries like USA, Canada, European Union they wanted to maintain to their business and
competitive edge in World market. In mid seventies the garments industry just started shining in
the Asia. And they were looking for trainable cheap labor. So they found Bangladesh as one of
the most suitable countries. Then the revolution of Garments industry started in Bangladesh.
There was only 7 seven garments in Bangladesh at 1977. It increases to 759 in 1990. And now
most of the garments industry has upto 100 machines. There also some industries who also has
more than 200 machines. Garments industry holds an important position in the economy of
Bangladesh. It is the largest exporting industry in Bangladesh. It achieved a prominent as far as
unfamiliar trade income, fares, industrialization and commitment to GDP inside a limited ability
to focus time. The business assumes a key function in work age and in the arrangement of pay to
poor people. More than two million people are directly and ten million people are indirectly
involved with this industry. This sector plays a significant role in the socio economic
development of Bangladesh. The garments export contributed 12.64 in the GDP of Bangladesh
in 2005-2006 which was only 5.87 in 1994-1995. Within 10 years it contributed more than
double. Bangladesh export garment export market concentrated in USA and EU till 2004-2005.
We always knew that Bangladesh has a huge amount of workforce. The Garments industry of
Bangladesh utilized it brilliantly. They turned the huge amount of man into manpower. But there
are some debates about the low wagers of labors. The labor sometimes complains about the low
wages of them. So basically the garments sector has a huge influence in the economy growth of
Bangladesh after the independence.

There are four articles above from different authors. They gave their important opinions on the
economic growth of Bangladesh. There are some similarities in their opinions. Author Mr.
Hossain and Mr. Helal both talked about the foreign aid. They agreed that foreign aid helped a
lot in the economic growth of Bangladesh. We can also find similarities between the three
authors from article three and Mr. Helal they talked about the poverty reduction and helping the
poor peoples. And the common thing between Mr. Jahed and Mr. Helal is they both talked about
the manpower of Bangladesh. They talked about how the manpower became assets and it helped
the economic growth of Bangladesh. Besides similarity there are some dissimilarity as well. Mr.
Hossain only talked about the foreign aid he didn't talk about how the foreign aid has been
utilized. On the other hand the two authors from second article discussed everything. The three
authors from the third article only talked about the NGOs they didn't include anything without
the NGOs for the socio economic development of Bangladesh. On the other hand Mr. Jahed
talked about the Garments industry, remittance, labor etc. Mr. Hossain missed the other aspects
economic growth besides foreign aid. Mr.Helal and Mr Hossain both missed the impact of
education sector, health sector, chemical sector, export and import sector etc. The three authors
from the third article highlighted only two broad NGOs of Bangladesh. They missed the other
NGOs who are working hard. And Mr. Jahed only highlighted the impact of garments sector in
the GDP of Bangladesh. He didn't mention much about the problems of workers.

Conclusion:
Bangladesh got their independence after a long 9 month war. They had a broken economy after
the war. It took almost 50 years to them to stand in front of the world. There are so many reasons
behind the economic growth of Bangladesh. Some scholars think that it's foreign aid who helped
the most. Some thinks that it's the manpower, export and many other things who helped the most.
And some thinks it's the NGOs, Garments sector who helped the most. But moreover I believe
that every sector has their own contribution for the economic growth of Bangladesh. Bangladesh
is still not powerful in economically but now they are in the right path. It won't take a long time
for them to be an economically powerful country in the world.

References:
1. Hossain, B. (2014). The effect of foreign aid on the economic growth of Bangladesh. Journal
of Economics and Development Studies, 2(2), 93-105

2. Helal, M., & Hossain, M. A. (2013). Four decades of economic development of Bangladesh:
An assessment. Journal of the Asiatic Society of Bangladesh (Hum.), 58(2), 335-362.

3. Roy, I., Raquib, T., & Sarker, A. (2017). Contribution of NGOs for socio-economic
development in Bangladesh. Science Journal of Business and Management, 5(1), 1-8.

4. Uddin, M. S., & Jahed, M. A. (2007). Garments industry: a prime mover of the socio
economic development of Bangladesh. The Cost and Management, 35(1), 59-70.