Economic development is the increase in the standard of living of a nation's population with sustained growth from a simple, low-income economy to a modern, high-income economy. (http://www. google. com/url? q=http://en. wikipedia. org/wiki/Economic_development) Bangladesh is an economically developing country. We cannot develop our country because of some major economic barriers. Economic development of a country effected by many facts including political, economical, geographical, infrastructural, international economy system, scarcity of resources, Natural disaster, corruption, communication problem and so on.
Because of these problems we are backward in economic situation. Every problem has a solution, so attempt to point out the problem and ensure the solution according the pattern of the problem. Economic Growth and Development is what every country want for their wealth, but somehow still it is quite impossible for Less Economic Developed Countries, like Bangladesh, to gain economic growth and development, since there are many barriers to growth and development that hold back this developing country.
Common examples of the challenges are Unemployment, Poverty cycle, Natural Hazards, Poor economic condition, less infrastructural development, Political factors and International financial barriers etc. These are basically the challenges that act as a hindrance to economic growth or economic development. As like as many poor countries Bangladesh is known to have a poor economic and political system and through these this country facing a variety of challenges to growth. It is known that like most developing countries, Bangladesh has lacking infrastructure even though it is important to economic growth.
Infrastructure consists of the vital facilities and services. Natural hazards, international financial barriers are also responsible to drawback the economic development of Bangladesh. To be an economic developed country Bangladesh has to overcome these challenges. ECONOMY OF BANGLADESH AT A GLANCE |Currency |Bangladesh Taka (BDT) | |Fiscal year |1 July – 30 June | |Trade organizations |WTO, SAFTA, D8, WCO | |Statistics | |GDP |$228. 4 billion (2008 est. PPP) | |GDP growth |6. 5% (2008 est. ) | |GDP per capita |$ 1500 (2008 est.
PPP) | |GDP by sector |Agriculture (19%), industry (28. 7%), services (53. 7%) (2007 est. ) | |Inflation (CPI) |9. 61% (till March, 2010. ) | |Population |36% (2009 est. ) | |below poverty line | | |Unemployment |2. 4% (2008) | |Main industries |jute manufacturing, cotton textiles, garments, tea processing, | | |paper newsprint, sugar, light engineering, chemical, cement, | | |fertilizer, food processing | |External | |Exports |$26. 36 billion (2009-2010) | |Export goods |garments, textiles, jute and jute goods, leather, produce, frozen | | |fish and seafood | |Imports |$30.
205 billion (2009-2010) | |Import goods |machinery and equipment, chemicals, iron and steel, raw cotton, | | |food, crude oil and petroleum products, | MAJOR CHALLENGES OF ECONOMIC DEVELOPMENT OF BANGLADESH Bangladesh government is trying to manage its economic policies with little success. For the economic development the leadership of Bangladesh need to looked towards the developed world. Bangladesh is unable to convince the investors that Bangladesh is a safe and subtle country to invest their capital. Laws were amended to guarantee the preservation of the property of foreign investors.
At the same time the barriers to commerce such as corruption and labor unrest is must need to be removed. To avoided inflation, devaluation, Bangladesh government has to be careful to priorities it’s economic planning and implemented those in stages over a period of time. Bangladesh also needs to ensure a secure and sustained environment for gaining the confidence of the investors. Problem regarding labor unrest must be identifies and appropriate measures should be taken to solve those problems. Overpopulation is a challenge of economic development of Bangladesh: Overpopulation has a definite effect on a country’s economy.
First of all, when countries are overpopulated, the hardly have enough food to support themselves, never mind the hope of having a surplus to sell. This can contribute to a low GDP per Capita which is effect overpopulation has on the economy. In an attempt to save the people from the starvation, the government will most likely have to rely on foreign debt. This puts the country in debt at stretches the government’s already meagre resources. Furthermore, when a country is overpopulated, there is a high rate of unemployment because there just aren’t enough jobs to support the population.
This results in a high level of crime because the people will need to steal things in order to survive. Overpopulation does not just affect the standard of living, Governing an overpopulated country presents problems. The economy is stretched beyond belief. The government of an overpopulated country falls into constantly increasing debt, and cannot climb back up out of the hole they have dug. Corruption is a challenge of economic development of Bangladesh: Corruption is popularly defined as the abuse of public power for private benefit.
The act often consists of paying bribes to public officials by private beneficiaries as compensation for the abuse. Corruption is a double edged sword; it reduces both the volume and efficiency of investment and thus economic growth. Two broad presumptions can be made regarding the effect of corruption on the Economic development. • First, corruption distorts the sectoral allocation of investible resources by diverting resources from potentially productive sectors to unproductive sectors and thereby decreasing the overall output-generating capacity of the investment.
A good example of the phenomenon in recent times has been the acquisition of large volumes of loans by many entrepreneurs from banks by colluding with bank officials. These resources, sometimes obtained by fraudulent means, were often invested in unproductive sectors or activities and which contributed to the increase in non-performing loans and the eventual contraction of GDP during the recent economic crisis. Thus investments are made not on the basis of their rates of return but on the capacity of the entrepreneur to pay bribes.
• Second, bribes which are often the major part in any act of corruption increase the cost of production which ultimately gets reflected in a higher output price increase, reduction in demand and the eventual reduction in the incremental output capital ratio for the activity. Recovering the cost incurred in bribing officials by charging a higher output price is a very common phenomenon in the business world, although this would only be possible in a non-competitive market segment.
In these ways corruption reduces out investment quantity, and become major challenge of our economic development. Global Economic Recession is a challenge of economic development of Bangladesh: The late unfolding of the impact of the global economic recession affected the performance of the Bangladesh economy in the first half of the current fiscal with investment remaining sluggish, and exports-one of the key drivers of growth-faring poorly, posting a decline.
This was observed by the Asian Development Bank (ADB) in it latest quarterly Economic Update (QEU). The Manila based donor organization estimated the GDP growth rate at 5. 5 per cent in the current fiscal against the government estimate of 6 per cent. Remittances, the other major growth driver, held up well, but in this case the growth rate also declined, says the ADB report. Agriculture growth in the current fiscal is expected to be lower at 4. 1 per cent than the 4. 6 per cent growth in FY2009.
The ADB also pointed out that the global economic recession's greatest impact was on the country's industry and the decline in the export of RMG and other major export products significantly affected the industry's growth in the first half of FY2010. Exports declined by 6. 2 per cent in the first half of FY2010. Report said that a deceleration in income growth due to the global recession, As a result, the service sector growth is projected at 5. 9 per cent in FY2010, down from 6. 3 per cent in FY2009.
Due to current economic recession the economy of Bangladesh facing obstacle to growth, so it is one of the major challenges for our economic development. Illiteracy is a challenge of economic development of Bangladesh: Illiteracy means human capital is underdeveloped or the labor force is not skilled. This will deter investors since investors would not be too keen on investing in an economy with unskilled workers or the work received by this part of the labor force would generate low levels of income which would reduce their disposable income and in turn will make them financially vulnerable. Literacy Rate of Bangladesh
|Adult Literacy Rate, Male , % (UNESCO) |45 | |Adult Literacy Rate, Female, % (UNESCO) |31 | |Adult Literacy Rate, Total, % (UNESCO) |38 | |Youth Literacy Rate, Male, % (UNESCO) |58 | |Youth Literacy Rate, Female, % (UNESCO) |41 | |Youth Literacy Rate, Total, % (UNESCO) |50 | |Adult Literacy Rate = people over the age of 25. | |Youth Literacy Rate = people between the ages of 15 and 25. | Fig: Literacy scenario of Bangladesh. Literacy is strongly related to the economy through employment stability, unemployment, and income. Concisely literacy has great importance in the economic development of a country.
Literacy brings all the positive changes in variable factors of production as well as in infrastructure development; it also minimizes or may wipe out negativities. No one can deny the importance of literacy. It can be said that literacy is a pillar on which the major part of an economy stands, if the pillar is strong enough to hold the economy, the anomalies can be reduced very easily and the economy will multiply. And if the pillar of literacy is weak and fragile the anomalies may push the economy downward and the economy may fall down on all four.
For the better economic development it is more important to strengthen the pillar of literacy. Developed countries experiencing economic growth tend to have a highly literate and skilled workforce. Employers in these countries can compete in a global market because their employees possess the basic skills required to work in a knowledge-dependent, information-based workplace. But in the other hand the scenery of developing country like Bangladesh is totally opposite. So, from the literacy rate we can easily understand that illiteracy is a major challenge for our economic development.
Political Instability is a challenge of economic development of Bangladesh: “Political instability” is defined as the tendency of a change, either by “constitutional” or “unconstitutional” means. We tried to find a high tendency of an executive collapse leads to a reduction of growth. Economic growth and political stability are deeply interconnected. On the one hand, the uncertainty associated with an unstable political environment may reduce investment and the speed of economic development. On the other hand, poor economic performance may lead to government collapse and political unrest.
One strong theoretical argument underlying this relationship is based upon the effects of uncertainty on productive economic decisions, such investment, production or labor supply. A high propensity of a change of government is associated with uncertainty about the new policies of a potential new government; economic agents may hesitate to take economic initiatives or may “exit” the economy, by investing abroad. Conversely, foreign investors prefer a stable political environment, with less policy uncertainty and less uncertainty about property rights.
Political environment hampers in Bangladesh through the hartal, strike, students politics, terrorism and so on . For this instable situation in our political environment domestic investors and foreign investors do not want to invest the money. Political environment is the great obstacle for investors to invest the money in Bangladesh. For this reason we are great hampered to develop the economic situation in Bangladesh. Political instability hampers the economic development because of this reason we are lacking behind . So we should have remove the political stability for the economic development in Bangladesh.
Natural Hazard is a challenge of economic development of Bangladesh: A natural hazard is a threat of a naturally occurring event that will have a negative effect on people or the environment. Bangladesh is now widely recognized to be one of the countries most vulnerable to climate change. Bangladesh is a disaster? prone country that is affected almost every year by some form of natural disaster, be it floods, torrential rains, erosion, or cyclones. Of the 508 cyclones that have originated in the Bay of Bengal in the last 100 years, 17 percent have hit Bangladesh, amounting to a severe cyclone almost once every three years.
Natural calamities, such as floods, tropical cyclones, tornadoes, and tidal bores occur almost every year, Natural hazards that come from increased rainfall, rising sea levels, and tropical cyclones are expected to increase as climate change, each seriously affecting agriculture, water & food security, human health and shelter. Floods are one of the most common hazards in the Bangladesh. Flood effects can be local, impacting a neighborhood or community, or very large, affecting entire river basins and multiple states. 15 November 2007, Cyclone Sidr struck the coast of Bangladesh.
All these natural hazards are responsible to destroying infrastructure, causing numerous deaths, disrupting economic activities, and affecting social conditions, especially in the poorer areas of the country. As natural hazards have negative impact of our economy so it is a major challenge for our economic development. Unemployment is a challenge of economic development of Bangladesh: [pic][pic][pic]Unemployment is a great concern in Bangladesh. Every year hundreds of thousands student are coming out from college and university.
Though it is one of the major responsibilities of the Government to provide job to those young generation but the Government is failed to meet the job demand among the large population. Only a tiny fraction of total jobless is managed by different government offices and private organization but a majority remain unemployed. Many students do not get job after graduation and they do not express their merit . Because of this reason they suffer frustration and they engaged corruption. Unemployment affects our economy in many ways. If more people are unemployed, less people pay taxes or have money for spending.
Spending money boosts the economy through taxes which is why everything is taxed. The taxed money adds up when everyone shops. Unemployment people do not contribution for development in Bangladesh. As unemployment is great challenge of our economy, so Government should take proper steps to reduce the unemployment for economic development in Bangladesh. Inflation is a challenge of economic development of Bangladesh: In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.
Over the past few decades, the nexus between inflation and economic growth have drawn extensive attention of macroeconomists, policy makers and the central bank of Bangladesh. Negative effects of inflation include a decrease in the real value of money and other monetary items over time; uncertainty about future inflation may discourage investment and saving, or may lead to reductions in investment of productive capital and increase savings in non-producing assets. e. g. selling stocks and buying gold. This can reduce overall economic productivity rates, as the capital required to retool companies becomes more elusive or expensive.
High inflation may lead to shortages of goods if consumers begin hoarding out of concern that prices will increase in the future. Positive effects include a mitigation of economic recessions, and debt relief by reducing the real level of debt. If the money we have becomes worth less, in terms of the goods and services we are able to purchase with it, we will need to rearrange our budget. However, the primary reason that inflation affects the economy so negatively is the loss of value. For example, we still have the same amount of actual currency; we are not making more or less money at our job or splurging for excessive, unnecessary items.
Since it is worth less, we need to use more currency to purchase the same items we always have. The result is a snowball effect, because inflation affects our boss too, so the company cannot simply compensate us with additional currency to compensate for the loss of value. Inflation always hurts our standard of living. Rising prices means we have to pay more for the same goods and services. If our income increases at a slower rate as inflation, our standard of living declines even if we are making more. Inflation's main consequence is a subtle reduction in our standard of living.
Inflation doesn't affect everything equally. Gas prices can double while our home loses value. This makes financial planning more difficult. Inflation has another bad side-effect… once people start to expect inflation, they will spend now rather than later. That's because they know things will only cost more later. This consumer spending heats up the economy even more, leading to further inflation. This situation is known as spiraling inflation because it spirals out of control. HYPOTHESIS DEVELOPMENT With a view of fulfilling the objectives some relevant hypothesis have been formulated for this research:
1. HA: Overpopulation is a challenge of economic development of Bangladesh. 2. HA: Corruption is a challenge of economic development of Bangladesh. 3. HA: Global economic recession is a challenge of economic development of Bangladesh. 4. HA: Illiteracy is a challenge of economic development of Bangladesh. 5. HA: Political instability is a challenge of economic development of Bangladesh. 6. HA: Natural hazard is a challenge of economic development of Bangladesh. 7. HA: Unemployment is a challenge of economic development of Bangladesh. 8. HA: Inflation is a challenge of economic development of Bangladesh.
METHODOLOGY Sources and Collection of data The primary data of this research has been collected through questionnaire interview. For the Secondary sources different articles, research publications, and internet etc. has also been reviewed. Sample frame The sample frame of this study has been consisted of the people of Bangladesh. A total of 50 respondents have been conducted. The stratified probability sampling approach has been selected for this study. For collection of primary data survey was conducted in February 2010- March 2010. Analysis of Data For analysis of data Microsoft Excel have been used.
To entry data coding option has been used at the initial stage. Both Parametric and non-parametric statistical tools were used to derive a meaningful conclusion from the empirical data. The measure of dispersion, correlation, co-efficient, index numbers and regression analysis were applied. In addition, basic statistical techniques of different measures of central tendency has been used in analyzing data. HYPOTHESIS TESTING Table: Summary of the respondents of survey | | Questionnaire i. Overpopulation is a challenge of economic development of Bangladesh.
Strongly DisagreeNeither agree Agree Strongly Disagreenor disagree agree 1—— 2—— 3—— 4—— 5—— ii. Corruption is a challenge of economic development of Bangladesh. Strongly DisagreeNeither agree Agree Strongly Disagreenor disagree agree 1—— 2—— 3—— 4—— 5—— iii. Global economic recission is a challenge of economic development of Bangladesh. Strongly DisagreeNeither agree Agree Strongly Disagreenor disagree agree 1—— 2—— 3—— 4—— 5—— iv. Illiteracy is a challenge of economic development of Bangladesh.
Strongly DisagreeNeither agree Agree Strongly Disagreenor disagree agree 1—— 2—— 3—— 4—— 5—— v. Political instability is a challenge of economic development of Bangladesh. Strongly DisagreeNeither agree Agree Strongly Disagreenor disagree agree 1—— 2—— 3—— 4—— 5—— vi. Natural hazards is a challenge of economic development of Bangladesh Strongly DisagreeNeither agree Agree Strongly Disagreenor disagree agree 1—— 2—— 3—— 4—— 5—— vii. Unemployment is a challenge of economic development of Bangladesh
Strongly DisagreeNeither agree Agree Strongly Disagreenor disagree agree 1—— 2—— 3—— 4—— 5—— viii. Inflation is a challenge of economic development of Bangladesh. Strongly DisagreeNeither agree Agree Strongly Disagreenor disagree agree 1—— 2—— 3—— 4—— 5—— ix. Do you have any recommendation about this problem? …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….
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