Question

Describe "Bangladesh" Investment spending. ( Describe it 1 paragraph why it's happened ) - (2000 - 2019)

Answer 1

In the decade since 2004, Bangladesh averaged a GDP growth of 6.5%, that has been largely driven by its exports of ready made garments, remittances and the domestic agricultural sector. The country has pursued export-oriented industrialisation, with its key export sectors include textiles, shipbuilding, fish and seafood, jute and leather goods. It has also developed self-sufficient industries in pharmaceuticals, steel and food processing. Bangladesh's telecommunication industry has witnessed rapid growth over the years, receiving high investment from foreign companies. Bangladesh also has substantial reserves of natural gas and is Asia's seventh largest gas producer. Offshore exploration activities are increasing in its maritime territory in the Bay of Bengal. It also has large deposits of limestone.[40] The government promotes the Digital Bangladesh scheme as part of its efforts to develop the country's growing information technology sector.

Bangladesh is strategically important for the economies of Northeast India, Nepal and Bhutan, as Bangladeshi seaports provide maritime access for these landlocked regions and countries.[41][42][43] China also views Bangladesh as a potential gateway for its landlocked southwest, including Tibet, Sichuan and Yunnan.

As of 2019, Bangladesh's GDP per capita income is estimated as per IMF data at US$5,028 (PPP) and US$1,906 (nominal).[44] Bangladesh is a member of the D-8 Organization for Economic Cooperation, the South Asian Association for Regional Cooperation, the International Monetary Fund, the World Bank, the World Trade Organization and the Asian Infrastructure Investment Bank. The economy faces challenges of infrastructure bottlenecks, bureaucratic corruption, and youth unemployment.Despite global financial meltdown and global recession starting in 2008, Bangladesh has been
able to post a GDP growth rate of over 6% per annum over the past three years, in fact recording
6.7% in 2010-11. The projected growth rate for 2011-12 is close to 7%, despite the ongoing Euro
Zone economic crisis.
At the same time, Bangladesh has performed very well on the social front, already achieving
several MDG social targets. On this front, the country has done better than most of the other
SAARC member countries including India. Women’s educational and social status has generally
improved significantly, although a lot of work is still needed to attain a fully satisfactory level,
particularly in respect of the disadvantaged and downtrodden segments.
On environmental sustainability, Bangladesh has been using its own limited resources
purposefully within the framework of Bangladesh Climate Change Strategy and Action Plan
(BCCSAP) adopted in July 2009, Bangladesh Climate Change Trust Fund (BCCTF) financed
from national budgetary allocations (US$300 million allocated over the past three years) and
Bangladesh Climate Change Resilience Fund (BCCRF) financed through contributions of
Development Partners (so far about US$170 million received) as well as other relevant policies,
programmes and Acts. Bangladesh is also very active in the UNFCCC and other international
fora dealing with environment and climate change. While highlighting its own perspectives,
Bangladesh works with and speaks for LDCs and climate vulnerable countries. We also work
with SIDS and Africa on common issues and play an active role within the framework of G77
and China. Bangladesh has participated actively, within the framework of G77 and China as
agreed by all concerned, in the negotiations relating to the formulation of the Rio+20 Summit
Declaration.
Bangladesh has been trying to promote an integrated approach, involving all the three pillars of
sustainable development, as indicated above, with the human beings at the centre of the state.
Indeed, the ultimate goal is an inclusive society in which human dignity will be ensured for every
citizen.
I wish to express our gratitude to Sheikh Hasina, Hon’ble Prime Minister of the People’s
Republic of Bangladesh (GoB) for her guidance and encouragement. We are thankful to Mr. Abul
Maal Abdul Muhith, GoB Minister for Finance, Air Vice Marshal (Rtd.) A K Khandker, GoB
Minister for Planning, Dr. Dipu Moni, GoB Minister for Foreign Affairs, and Dr. Hasan
Mahmud, GoB Minister for Environment and Forests for their keen interest in relation to theBangladesh has made remarkable progress over the past two decades, lifting millions out of
poverty and sustaining expanding levels of economic growth. These achievements have been
realized despite major internal and external challenges, including global economic downturns,
natural disasters, and periods of political uncertainty. Reaching the Government of Bangladesh’s
ambitious goal of becoming a middle income country by 2021 – the country’s 50th year
anniversary – will require annual growth rates of between 7.5 and 8% (World Bank 2012). This
growth must be inclusive of poor households and women if Bangladesh hopes to raise income
levels and end extreme poverty.
Expanding levels of economic growth has led to a rise in Bangladesh’s gross national income
(GNI) at 2005 Purchasing Power Parity (PPP), increasing by 79% from $985 GNI per capita in
2000 to $1,768 in 2010. Nonetheless, Bangladesh remains a low-income country, with millions
still living below the international poverty line of $1.25 per day and millions more living on less
than $2.00 per day. By 2010, over 43% of the population lived below the International Extreme
Poverty Line of $1.25 per person per day at 2005 PPP, compared to a poverty headcount of 58%
in 2000. To put this in perspective, in 2010 there were around 65 million Bangladeshis living in
extreme poverty – roughly the same population as the United Kingdom. Bangladesh also has a
large share of its population remaining just above the extreme poverty line and thus remains
vulnerable to external shocks and any adverse fluctuations in income or required spending. For
example, in 2010 some 50 million Bangladeshis were above the $1.25/day extreme poverty line
yet lived on less than $2.00 per day.
The governments of the United States, the United Kingdom, and other countries, as well as
international organizations like the World Bank have committed themselves to help eradicate
extreme poverty by 2030. Assuming no major shocks, continued economic growth at rates
similar to that recorded since 2000 could permit Bangladesh to reduce the prevalence of extreme
poverty to 2.4% by 2030. At the same time, one should bear in mind that in the current
international context, “extreme poverty” is defined relative to an extremely low poverty line –
the average of the poverty lines of the poorest countries in the world. This means that rising
above the $1.25/day line by no means entails escaping “poverty,” but simply becoming a bit less
poor than previously. Although reducing $1.25/day poverty to 2.4% by 2030 would represent an
historic achievement for Bangladesh, reaching the consumption level needed to do that would
still leave more than half the population living on less than $4 per day. In short, for
Bangladeshis to escape from “poverty” as viewed by the citizens of the donor countries will
require sustained and inclusive growth for decades – a marathon, rather than just a sprint to 2030.
As a result, policies and programs should keep both the long-term as well as medium-term goals
in mind.
The purpose of this analysis is to identify the binding constraints that deter households and firms
from making investments and taking risks that would significantly increase their incomes. The
analysis is not intended to dictate specific interventions, but rather to provide a framework that
will focus attention on the most pressing obstacles to development. The relative productivities of public and private investment in less developed countries
(LDCs) are obviously an important issue. The impact of public and private investment on
economic growth has attracted renewed attention in recent years. The worldwide shift
towards a growth strategy underscoring market forces and private sector leadership prior
to the ongoing global financial and economic crisis led to a curtailment of the public sector
from production and to a redefinition of its role in the development process in many
countries. Under the guiding principle, the public sector should concentrate its resources in
areas where it supports, rather than crowd out the private sector [see, Luis (1996)]. In
academic cycles, the macroeconomic impact of public and private investment on economic
growth was brought to center stage by Aschauer (1989a, b), who analyzed the impact of
public capital accumulation on US private investment and output empirically, and found a
sizable positive effect in both cases. Aschauer's work was followed by a rapidly growing
literature reexamined his results – the results of which remain controversial - from both
micro and macroeconomic perspectives [see, Gramlich (1994) for extensive review] and an
extension of his analysis to other countries [e.g., Berndt and Hansson (1992), Argimon et.
al. (1995)]. Rahaman et.al (2005) found that the marginal productivity of private and public
investment is different in Bangladesh. In addition, private investment plays a much larger
role in the growth process of Bangladesh.
This study adopted an approach suggested by Khan and Reinhart (1990) and Nazmi and
Ramirez (1997 and 2003). It revisits empirically the impact of public and private investment
on economic growth. The study develops a simple analytical model embodying the
distinction between public and private investment and implements it using aggregate
public and private gross capital formation data for Bangladesh during 1972-73 to 2010-11
period. The empirical implementation then followed a co-integration approach that makes
use of long-run and short-run analysis.
The key findings of the study concluded that there is a short-run and long-run relationship
between public and private investment and economic growth in Bangladesh. This implies
that public and private investment impact positively economic growth in the short and
long run process. In addition, it confirms that private investment is more effective in the
long run then public investment. The results of short run dynamics reveals that, the error
correction term (ECM) is negative and significant (-0.36), which means that 36% of the
disequilibrium will be adjusted annually and approximately after 3 (three) years short term
dynamics will reach at equilibrium level. It implies that the gestation period of most of the
public and private capital investment in Bangladesh is three years.