Current Conditions: Enterprise Development

The Bangladesh economy is not expanding fast enough to significantly reduce the number of people living in poverty. From 2000 to 2004, the economy grew at an average annual rate of 5.8%. According to most economists, the economy needs to grow at least 7% to 8% a year for the country to pull itself out of poverty and create jobs for the estimated two million job seekers who enter the labor force each year.

Making Great Strides in Agriculture
Bangladesh has more than doubled food grain production over the last 30 years. In addition, it has diversified agriculture by expanding into higher value added products, such as fruits, vegetables, poultry, dairy, and fish. Still, the sector performs at well under its capacity. It employs over 60% of the labor force but contributes only 21% of the Gross Domestic Product (GDP).

Making Exports Competitive
In industry, labor-intensive garment factories provided a tremendous boost to the economy in the past decade. They now account for more than 2 million jobs and $6.6 billion of the $8.8 billion in annual exports. However, the phase-out of preferential access to developed country markets in January 2005 means that Bangladesh now faces growing competition in this sector from other developing countries.

In Bangladesh there are ample opportunities for new exports. Leather goods, light engineering, plastic products, electrical/electronic devices, specialty products show good potential in export markets.

Bangladesh has the potential to obtain a share of the world information and communication technology market. Bangladesh meets the minimal requirements in terms of telecommunications infrastructure, labor costs, and government policies. However, more must be done to make Bangladesh competitive. Furthermore, the Government should take a long-term approach to marketing Bangladesh's capacity internationally.

USAID's Response