Economic Development Essay

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Location Bangladesh is located in South Asia and shares borders with India to the west, the north and the east. To the southeast lies Burma. The southern shores are washed by the Bay of Bengal. Bangladesh occupies a fertile delta created by two of Asia's largest river systems, the Ganges and the Brahmiputra. Politics Bangladesh is one of the youngest nations in Asia. Until two and a half decades ago, it formed the eastern half of Pakistan; the western half lay over 2,000 km away, on the other side of India. In 1971, Pakistan's army attempted to subdue an East Pakistani movement for regional autonomy which led to a bloody civil war. India joined the war in early December of that year and, later that month, Bangladesh became an…show more content…
With its newfound political stability, Bangladesh has undertaken an ambitious program of economic reforms, and opened its doors to foreign investment. A large workforce, and low wages and costs make Bangladesh an attractive base for setting up manufacturing and assembling facilities. The present government has initiated several measures to stimulate economic growth. New businesses are being encouraged and there are generous tax incentives for exporters. Foreign-exchange restrictions have been eased. Overseas businesses are being wooed as foreigners are now allowed to own ventures wholly and are permitted to invest in the stock market. The mobilization of domestic resources is a key priority of the program. The results have been satisfactory. Economic growth has improved steadily since 1991. Inflation has been substantially reduced and the external current account balance has also improved. As a result of more rapid growth in the services sector, overall real GDP growth was 5.5 per cent in 1996, 5.9% in 1997 and 5.6% is the preliminary estimate for 1998. Encouraged by the government's policies of deregulation and financial sector reform, both private and public sector investments and national savings have increased steadily. Investment was equivalent to 12.1 per cent of GDP in 1992, 12.7 per cent in 1993, 14.6 per cent in 1994 16 per cent in 1995, 16.5 per cent in 1996 and 16.75 per cent in 1997. The national savings rate was 9.6 per cent of
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