Outsourcing

The Bangladesh government has taken initiatives to build an ICT-driven nation comprising of knowledge-based society. In view of this, a country-wide ICT-infrastructure is being developed to ensure access to information by every citizen to facilitate empowerment of people and enhance democratic values and norms for sustainable economic development by using the infrastructure for human resources development, governance, e-commerce, banking, public utility services and all sorts of on-line ICT-enabled services. To achieve these, all required laws and policies are in place. Government has identified ICT as a thrust sector.

From a mainly feudal agrarian base, the economy of Bangladesh has undergone rapid structural transformation towards manufacturing and services. The contribution of the agriculture sector to GDP has dwindled from 50 percent in 1972-73 to around 20 percent in 1999-2000. The agricultural sector is, however, still the main employment provider. The staple crop is rice, with paddy fields accounting for nearly 70% of all agricultural land.

Industrial production growth has averaged more than 6% over the last 5 years. The export sector has been the engine of industrial growth, with ready-made garments leading the way, having grown at an average of 30% over the last 5 years. Primary products constitute less than 10 percent of the country's exports; the bulk of exports are manufactured/processed products, ready-made garments and knit wears in particular.

Bangladesh, least developed country, largely an agrarian economy with around 24 million acres of cultivation land employing about 14.5 million cultivators. Manufacturing industries have grown around Dhaka and Chittagong based on agriculture input of jute, cotton, chemical and gas based industries.

GDP grew in the year 2001-02 at a rate of 4.5% and was projected to grow by 5.5% in the year 2002-03. In the year 2001-02 contribution of agriculture is 24.6%, industry 26.5% and the balance by services other sectors. It was noted that the share of industrial production in the GDP was growing indicating revival of the economy. Contribution of industrial sector increased from average 11.11% in the year 1999-2000 to 25% in 2001-02 and was poised to account for 30% in the year 2002-03. Conducive policies announced by the government for industrial development led to revival of the economy. Figure 1.1 shows the GDP growth from 1997-2003.

To overcome the slowdown in international trade, Bangladesh Government has taken several critical measures. The private sector has also put its best endeavours to face the situation. To face the severe global competition the local economy had to do cost cutting, improve productivity and efficiency. As a result of which there are signs of improvement in the overall economy. The foreign exchange reserves showed gradual improvement helped by strong growth in remittance inflows from expatriate Bangladeshi's. Inflation measured by the 12-month average increase in consumer price index stood at 2.39 percent in June 30, 2002 compared to 1.59 percent in June 30, 2001. Domestic credit grew by 12.87 percent in 2001-2002 against 17.65 percent expansion in the previous fiscal year. The increase in domestic credit during the current period was mainly on account of the private sector (13.95%). Growth in the government's revenue collection contributed to the containment of expansion in public sector borrowing.

Bangladesh’s exports during 2002-2003 were US$ 6.5 billion and imports during US$ 8.2 billion. Trade deficit declined from US$ 3.34 billion in 2000-2001 to US$ 2.64 billon in 2001-2002. Main exports items were woven garments, knitwear, jute goods, leather and leather goods, frozen food, tea and agro-based products. Hosiery and readymade garments accounted for 75% of the exports basket followed by frozen shrimps and fishes, jute and jute products, leather products, etc. IT products and services exports were growing at a rate of 30% however, the base was small of about US$ 50 million. This sector however was poised to achieve exports of US$ 2 billion by the year 2006. During FY 2001-2002 exports declined by US$ 473.8 million or 7.32 percent to US$ 5994.9 million against exports of US $ 6468.7 million during FY 2000-2001. Import payments also declined by US$ 715.4 million or 8.53 percent to US$ 7675.0 million during July, 2001-May, 2002 against imports of US$ 8390.4 million over the same period of the previous year.

Economic Trends

Economic Data