NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, July 17, 2012

Bangladesh has positioned itself in global community as a forward-looking nation, with firm footprint on path of steady, accelerating growth and development towards rapid poverty elimination and eventual prosperity. Bangladesh has achieved fairly steep decline in poverty over the past two decades from 57.0 per cent in the 1990s to 31.5 per cent in 2011. According to the latest projections of the Planning Commission, poverty will come down further to 26.4 per cent in FY 2012-13. The dynamism of Bangladesh’s developing economy has by now attracted notice and attention of global markets and development institutions, and is expected to touch the middle income country group per capita GNI (gross national income) threshold in the near term. Besides lowering income poverty, Bangladesh has made remarkable progress towards attaining the Millennium Development Goals (MDGs), particularly in the area of education and health.

This sharp decline in poverty in Bangladesh stems largely from buoyant employment growth in farm and non-farm micro and small enterprises at grassroots level, underpinned by steady GDP (gross development product) growth, averaging around 6.0 per cent annually in real terms. Around 6 million micro and small and medium enterprises (SMEs) accounting for 75 per cent of the domestic economy now account for 90 per cent of industrial employment in Bangladesh. Grassroots-level entrepreneurship in newer areas of non-cereal agricultural farming including horticulture, floriculture, spices, oil seed and lentils are providing further new employment opportunities in rural areas. Credit facilities at subsidised interest rate of only 4.0 per cent is available for production of maize, oil seeds, spices and lentils from Bangladesh Bank refinance line. The government and central bank in Bangladesh have been proactively promoting farm and non-farm micro and small enterprises in the country, with financing and marketing/technical support delivered through different agencies. Civil society initiatives in the form of microfinance institutions and non-financial NGOs (non-governmental organizations) have also been active in these areas. As outcome of such initiatives, rural Bangladesh is now abuzz with output activities catering to export demands as well as buoyant domestic demand.