Bangladesh, its people and culture
Natural Resources Fisheries More than 80 percent of the animal protein in the Bangladeshi diet comes from fish. Fish accounted for 6 percent of GDP in FY 1970, nearly 50 percent more than modern industrial manufacturing at that time. Most commercial fishermen are low-caste Hindus who eke out the barest subsistence working under primitive and dangerous conditions. They bring a high degree of skill and ingenuity to their occupation; a few of the most enterprising ones are aided by domesticated otters, which behave like shepherds, swimming underwater, driving fish toward the fisherman's net (and being rewarded themselves with a share of the catch). Fish for local consumption generally are freshwater varieties. As of the end of 1987, prevailing methods for culturing shrimp in Bangladesh were still relatively unsophisticated, and average yields per hectare were low. In the late 1980s, almost all inland shrimping was done by capture rather than by intensive aquaculture. Farmers relied primarily on wild postlarval and juvenile shrimp as their sources of stock, acquired either by trapping in ponds during tidal water exchange or by gathering from local estuaries and stocking directly in the ponds. Despite the seemingly low level of technology applied to shrimp aquaculture, it became an increasingly important part of the frozen seafood industry in the mid-1980s (see Export Sectors, this ch.). The World Bank and the Asian Development Bank financed projects to develop shrimp aquaculture in the 1980s. Much of the emphasis was on construction of modern hatcheries. Private investors were also initiating similar projects to increase capacity and to introduce modern technology that would increase average yields. Industry Traditional Sectors The industrial sector produces around 10 percent of GDP, and long-term national strategies in the late 1980s did not anticipate a major increase in that percentage. The greatest need and the greatest opportunities remained predominantly in the agricultural sector. Eastern Bengal was known for its fine muslin and silk fabric before the British period. The dyes, yarn, and cloth were the envy of much of the premodern world. Bengali muslin, silk, and brocade were worn by the aristocracy of Asia and Europe. The introduction of machine-made textiles from England in the late eighteenth century spelled doom for the costly and time-consuming handloom process. Cotton growing died out in East Bengal, and the textile industry became dependent on imported yarn. Those who had earned their living in the textile industry were forced to rely more completely on farming. Only the smallest vestiges of a once-thriving cottage industry survived. At independence Bangladesh was one of the least industrially developed of the populous nations. Annual per capita consumption of steel and cement was only about one-third that of India, for example, and electric power consumption per capita was less than one-fifth. Ready-made Garments The ready-made garment industry in Bangladesh is not the outgrowth of traditional economic activities but emerged from economic opportunities perceived by the private sector in the late 1970s. Frustrated by quotas imposed by importing nations, such as the United States, entrepreneurs and managers from other Asian countries set up factories in Bangladesh, benefiting from even lower labor costs than in their home countries, which offset the additional costs of importing all materials to Bangladesh. Bangladesh-origin products met quality standards of customers in North America and Western Europe, and prices were satisfactory. Business flourished right from the start; many owners made back their entire capital investment within a year or two and thereafter continued to realize great profits. Some 85 percent of Bangladeshi production was sold to North American customers, and virtually overnight Bangladesh became become the sixth largest supplier to the North American market (see Foreign Trade, this ch.). After foreign businesses began building a ready-made garment industry, Bangladeshi capitalists appeared, and a veritable rush of them began to organize companies in Dhaka, Chittagong, and smaller towns, where basic garments--men's and boys' cotton shirts, women's and girls' blouses, shorts, and baby clothes--were cut and assembled, packed, and shipped to customers overseas (mostly in the United States). With virtually no government regulation, the number of firms proliferated; no definitive count was available, but there were probably more than 400 firms by 1985, when the boom was peaking. After just a few years, the ready-made garment industry employed more than 200,000 people. According to some estimates, about 80 percent were women, never previously in the industrial work force. Many of them were woefully underpaid and worked under harsh conditions. The net benefit to the Bangladeshi economy was only a fraction of export receipts, since virtually all materials used in garment manufacture were imported; practically all the value added in Bangladesh was from labor. Other Industries Not all industrial growth in Bangladesh was stimulated by anticipation of foreign sales. The national economy stood to benefit equally from domestic production that could eliminate the need for imports of one kind or another. A good example of import-substitution manufacturing was the pharmaceutical industry, a field that attracted both foreign and domestic investment in the first decade of independence, based on the large potential domestic market. The Drug Ordinance of 1982 introduced controversy and claims by foreign firms that they were victims of discrimination vis-a-vis local pharmaceutical firms. The foreign firms found that the ordinance restricted the kinds of drugs they could manufacture, import, and sell; specifically, foreign pharmaceutical firms could no longer manufacture drugs that Bangladeshi-owned companies were capable of producing. The difficulties foreign investors have encountered seem to have been limited essentially to this one industry, and even there the foreign firms already established have managed to cope more or less successfully. In 1988 one United States firm announced a decision to expand its Bangladeshi manufacturing operations by moving into production of highly specialized medicines with greater profit margins (see Medicinal Drugs and Drug Policy, ch. 2). Public sector corporations produced a substantial part of the country's paper and newsprint requirements, as well as carrying on sugar-refining operations at modest-sized mills in several parts of the country. They also produced about 100,000 tons of steel per year, 1 million tons of petroleum products, and gasoline pumps, radios, television sets, bicycles, paints and varnishes, cement, and industrial chemicals (see table 12, Appendix). Mineral Development Natural Gas One of the country's few mineral resources is natural gas, which is the basis for nitrogenous fertilizer production sufficient to meet the country's needs. Estimated national reserves range from 182 billion to 623 billion cubic meters. Deposits lie in more than a dozen different locations, six of which were producing in 1986. The country's gas production is concentrated in the northeastern part of the country (see fig. 9). Reserves also have been discovered offshore, but extraction is not yet cost effective. Total gas production in FY 1986 was 2.9 billion cubic meters, with production rising at least 10 percent per year. All production was consumed domestically. About 40 percent of production was used for generating power, nearly 40 percent for producing fertilizer, and the rest divided among industrial, commercial, and household uses. Even by conservative estimates of reserves and consumption trends, the supply was expected to be adequate for Bangladesh's requirements through the year 2030. Coal In western Bangladesh there are substantial proven reserves of coal, but they remained unexploited in the late 1980s, largely because of the absence of major prospective users in the area. The options of constructing a large coal-fired power station or exporting coal to India were being considered in the late 1980s. Petroleum Bangladesh holds unknown quantities of commercially exploitable reserves of petroleum, both on land and offshore. In December 1986, oil was discovered in the Haripur gas field, south of the city of Sylhet, in northeastern Bangladesh. Lucky Well Number Seven promptly went into production at the rate of several hundred barrels per day, the first commercial oil production in Bangladesh. The crude was shipped by rail to the Eastern Refinery in Chittagong, where it was combined with other lighter imported crude oil for refining. The Eastern Refinery had been operating at just 66 percent of capacity and processing 34,000 barrels of crude per day. The domestic addition did not in itself have much of an impact on energy use in Bangladesh, but it was a beginning that fed hopes for further development. In the late 1980s, the Bangladesh Oil, Gas, and Minerals Corporation was carrying on further test drilling in western Bangladesh as well as in the vicinity of the successful Haripur strike. The government formed a high-level committee under the minister of energy and mineral resources to formulate recommendations for stimulating oil exploration and extraction in Bangladesh. In 1987 the Soviet Union reportedly agreed to provide assistance for oil exploration, a broadening of its traditional cooperation in the field of power generation, transmission, and distribution. Electric Power Electric power is generated by a hydroelectric complex in the Chittagong Hills and thermal plants in Chittagong and several locations in central and western Bangladesh. In 1987 the government announced its intention to proceed with construction of its first nuclear power facility, having concluded that the country's long-term needs could not be met by continued reliance on natural gas reserves. They did not announce how the project would be financed, but West Germany was considered the most likely source. The country's total generating capacity was 1,141 megawatts as of 1986, and the proposed nuclear plant would add between 300 and 400 megawatts. Electric power outages and restrictions on peak-period consumption were a serious problem in the mid-1980s, resulting in substantial productivity losses for jute, textile, and other industrial concerns. Government and power board authorities worked out a strategy of planned brownouts and shutdowns, which were distributed geographically as equitably as possible to minimize economic disruption. Some industrial concerns adopted off-peak work schedules, operating their factories in the middle of the night instead of in the daytime. There were also substantial losses in the transmission and distribution of electric power, including many unauthorized hookups to the system. The urban distribution system found it difficult to persuade subscribers, including state-owned industries, to pay their bills. In contrast, the system of rural electrification cooperatives, established in the late-1970s with assistance from the United States and other donors, and gradually expanding since then, has demonstrated that it is possible to deliver electric power effectively to nonurban consumers. Rural electrification immediately transforms economic life: within weeks a profusion of consumer goods appears, night markets open (complete with tiny cinemas for audiences of fifteen or twenty people), and demand for electric irrigation pumps soars. Biofuels At the household level, Bangladesh is the prime example of a country in which biofuel supplies (chiefly for cooking) come from the agricultural sector. According to data gathered for FY 1986, 61 percent of biomass energy for fuel use comes from crop residues (jute sticks, rice straw, rice hulls, sugarcane refuse, and other waste products), 24 percent from animal dung, and the remainder from firewood, twigs, and leaves. The firewood typically comes from village trees. The importance of cereal straws means that household energy supply is highly sensitive to changes in agricultural practices and economics and that agricultural policies need to take this into account. The future availability of these fuels was becoming a critical issue in the mid- and late 1980s. Inevitably, new energy resources would have to come from commercial sources. The government and aid donors were struggling with the dilemma of how to provide these needed resources in a manner consistent with the rest of Bangladesh's strategy for long-term economic development and growth. Technological Advances The Bangladesh Space Research and Remote Sensing Organisation operates remote sensing facilities using both French and American satellites and applying meteorological and geographic data to such basic problems as water management, soil fertility, forecasting, and agricultural census work. In 1986 it became the first non-American organization ever to receive an award for excellence from the United States National Aeronautics and Space Administration, which provided training for Bangladeshi scientists and grants of equipment and technical assistance. The Bangladesh Atomic Energy Commission operates an experimental nuclear reactor and also conducts important agricultural research on seeds, parasites, storage of harvested crops, and irradiation.