Q. Discuss the economic performance / economic development of Bangladesh.

Answer: After recovering successfully from the wounds sustained in the devastating floods of 1998, the engine of growth has once again become energised. In December 1999 inflation rate in Bangladesh was 3.8% whereas in July 1999 it was 7.03%. It may be noted in fiscal year 1998-99 the rate was 8.91%. The Economists reviewed the economic condition and opined in positive that the rate of inflation has declined substantially over the last few months and they are expecting a further decrease in the coming months of 2000. Moreover successive bumper crop productions have made a considerable impression on the overall food situation and the Government expects that the trend would be sustained with an agriculture growth rate of 5.5 percent in the current fiscal. The country’s foreign exchange reserve has increased to 1.55 billion US dollars over the last few months as it is recorded on January 2000. The previous reserve was 1.52 billion dollars in June 1999. Economists have considered this increase as “too meager” and they believe the country would struggle hard even to pay three months’ import bills. They believe that this would leave the Government in dire straits if the country was faced with a crisis situation on account of natural calamities or any other emergencies. On other hand both local and foreign direct investment fell in recent times mainly due to the volatile political situation, poor infrastructure and port unrest. But the Government strongly believes FDI flows would increase further in the mid term. According to the statistics 6.4 billion dollars worth of foreign investment was attracted by the country in the last three fiscals. During the same period, amount of private investment is 3.43 billion dollars. In the last fiscal year (1998-1999) the amount of FDI was 807 million dollars. According to the Government’s forecast the economic growth for the current fiscal is determined at 5.5%. Some 0.4 million tonnes of Boro rice will be procured in the coming season while procurement targets for wheat and maize have been fixed at 0.3 million tonnes and 5000 tonnes respectively. Foreign aid disbursement at the end of the current fiscal is estimated to stand at 1.69 billion dollars against Bangladesh’s requirement for the year of 2.04 billion dollars. The aid demand was earlier roughly estimated at 2.03 billion dollars. On March 23, 2000 the cabinet approved the Draft Country Memorandum to be placed in the Bangladesh Development forum meeting in Paris April 13-14 with an overview of the country’s economic performance. The cabinet also endorsed a proposal for following UN- Certified System of >National Account 1993 to determine GDP and GNP, and taking 1993-94 as the base year, instead of 1984-85