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The economic problems faced by Bangladesh


First of most, I would like to thank my lecturer Ms Oh whom guides me to do the assignment. I had developed done two questions out of this assignment. First question is about slow financial growth and second question is private sector. From this assignment I'll what the current economic growth in Bangladesh and what is private sector in addition to the elements. However, this demographic is fast changing and Bangladesh is seeing the growth of huge metropolises. Furthermore, private sectors consist of various type of business corporate such private limited companies, sole proprietorship, partnership, corporation, conglomerates etc. Some businesses, especially extraction and manufacturing but also others, have a significant impact on the environment.

You are required to identify a country which you think is experiencing slow Economic Growth. What are the monetary problems of this country facing?

Bangladesh is officially known as The People's Republic Of Bangladesh which is shown in the (appendix 1). It really is a rural nation state with most people living beyond the urban areas. Dhaka, the administrative centre, is one of the largest cities on the globe; with a population over 10 million. The machine of currency utilized by the country is the Taka (BDT). Their foremost industries are jute, sugar, paper, textiles, fertilizers, cigarette, cement, steel, natural gas, oil-refinery, newsprint, power generation, rayon, matches, fishing and food processing, leather, soap, carpet, timber, ship-building, telephone, and so on. Agriculture generates about one third of GDP, provides work of over 60% of the work force and accounts for about half the worthiness of export earnings. The assistance segment makes up about about 52% of value added, agriculture 31% and Industry 17%. Bangladesh import more than it exports. Aid and remittances from external works finance the external deficit. Exports of garments have enlarged significantly in recent years, but import growth has sustained unabated. Bangladesh has rare proven mineral resources, except deposit of enormous gas (Wiziq, 2009)



Bangladesh is one of the unfortunate countries of the world with a per capita income of US $ 300. Bangladeshs economy has grown by over 4. 5 per year in factual terms because the middle of 1970s. With residents growth of around 2% annually per capital incomes has risen by 2. 5% per year. Also employment has been not capable to maintain with increase in the work force. Poverty continuous to be widespread, with extra than 50% of the populace estimated to be living below the poverty line. Its people have a life expectation of 58 years. Mortality rate of the children under 5 in Bangladesh is one of the premiers in the world. About 60 percent of the kids experience moderate to severe malnutrition and the societies on the whole have problems with endemic health problems. Approximately 53 percent of the population is illiterate. The major economic problems which faced by the Bangladesh are inflation, price stability, stability of democratic institution, level of socioeconomic development, low unemployment of resources, economic performance etc. There is an financial indicator in (Appendix 2)



Higher price of products in international market happens from previous several years. The following are the explanations for higher price of products as well as decreasing the purchasing power of general people. Destructive activities of dishonest syndicates of the period of union (BNP-Jamat) government. Besides that, the investors aren't financing in the united states and showing signal that production will decrease in near future. For this reason, businessmen are not selling their products, storing products and creating scarcity of products to earn much more money. For instance, Production of rice is not as much as their expectation. Furthermore, Businessmen are not interested to import rice from abroad by investing plenty of money for the luck of confidence on caretaker government. Foundations are following a primitive institutional structure because care taker government has not taken any positive initiative to restructure institutional structures. Price of products has enlarged for the hindrance of supply. So, people are facing the problem of inflation.

Currency and Price Stability

The government has endeavored to regulate inflation. Since the 1990s the common inflation rate has been about 5. 6%, remarkably low related to the second half of the 1980s, when the rate was about 8%. Inflation averaged 7. 2% in fiscal year 2007, mainly due to rises in both food and nonfood prices. Among the main sources were domestic demand pressures, fed by higher incomes and strong monetary and credit evolution. However, after June of the same year, escalating international commodity prices, specifically for food, were dominant, driving inflation to 11. 4% (year on year) in January 2008. Near the end of fiscal year 2008 food prices diluted, thus allowing point-to-point inflation to drop to 7. 5% percent in May.

The exchange rate remained stable, but progression in monetary aggregates has started to increase. Available reports show that money growth fell in mid-fiscal year 2008, but subsequently picked up again, with broad and replacement money growth exceeding 17% in May 2008. The government has developed a culture of stability that is intensely supported by the international donor community. But due to volatility of the political process, there are almost no institutional safeguards that would strengthen a free of charge culture of stability.

Stability of Democratic Institutions

In principle, democratic institutions perform their functions. But the lack of a governmental culture of tolerance and compromise has prevented the proper functioning of democratic institutions. An integral essential impediment to the institutionalization of democracy is the concentration of power, whether in the hands of 1 or two party leaders, in the case of parties, or one or two offices such as the prime ministers office for the state of hawaii apparatus. In addition, political interference, patronage networks and widespread exploitation have weakened the foundations of these institutions. The major political parties and civic associations accept democratic establishments as the legitimate political order. The primary potential veto players are radical Islamist groups and parties that want to replace the democratic system with an Islamic state. The army, as an institution, has accepted the management of elected governments so far, although it wants to further its corporate interests and views itself as guardian of the state. A latent tension between your civil political societies and the military exists. This cause instability of democratic institution. (Infoplease, 2009)

Level of Socioeconomic Development

In the facial skin of uninterrupted period of high growth in recent years, socioeconomic development is not an unambiguous boon in most of the residents. Based on the latest figures, 40. 0% of the populace lives under the poverty line. UNDP figures indicate that 41. 3% of the populace lives on less than $1 a day, with 84. 0% living on less than $2 per day. Female economical doings makes up about 52. 7% of the economy, but females earn not even half the income of their male counterparts. Rural areas still lack basic health care conveniences and educational institutions. 30 % of the full total population continues to be thought to be undernourished. Only 39% of the populace had sustainable access to improved sanitation in 2004. Minorities and women are disproportionately afflicted by structural underdevelopment.

Low Unemployment of Resources

On the employment side, the overall employment intensity of economic growth, as well as the employment elasticity regarding GDP growth, is reported to be low and diminishing. With an employment elasticity of 0. 495 (during 1990s), and employment growth of 4. 4 percent (same as labor force growth), not counting current unemployment and under employment, the united states would need a GDP growth of 8. 89 percent per year. The lower the elasticity from the observed ones, the bigger would have to be the growth rate to soak up the surf. Alternatively, the transformation of the employment configuration has been from agriculture in the direction of the services sectors rather than into the manufacturing sector. Whatever employment has occurred is mostly in the informal sector; leading to non- formalization of the economy plus labor. It indicates the magnitude of employment tasks that Bangladesh is faced with low employment of resources. (Thedailystar, 2008)

Economic Performance

Bangladeshs monetary performance in fiscal year 2008 showed considerable resilience, although global economical challenges and domestic natural disasters. Two devastating floods and a cyclone, and a tidal wave, hit the country in the first half fiscal year 2008. The combined loss was expected at $2. 8 billion, or around 4% of GDP. Yet the countrys economy maintained a performance steady with earlier years. Inside the years under review, the momentum for growth sustained and international reserves increased despite severe import pressures. Overall GDP growth rates were high. The GDP growth rate was 6. 5% in 2007 2008. Rising inflation, high levels of underemployment, and budget and trade deficits continued the main concerns for the economy. Strong growth in overseas staff remittances has delivered a cushion to the external balance.

The financial growth and inspiring gains in several social indicators over the past decade point to Bangladeshs enormous potential. These achievements have been made despite poor governance, an adverse domestic political environment, scarcity of infrastructure and repeated natural calamities. However, these accomplishments can't be sustained for lengthy if the political leadership does not address deep-seated problems. There is certainly four issues warrant attention and action. First, a qualitative change in the political culture is required. The acrimonious politics, with utter disregard for national interests, has cost the nation dearly in recent decades. It is evident from days gone by two years (2007 and 2008) that reforms in major associations, including political parties, can facilitate this transformation. Constant efforts with clear objectives and well-devised strategies can bear results. This effort must be initiated from within, but external support is imperative because of its success. Secondly, political violence as well as militancy must be addressed comprehensively. The resources of extremism need to be determined and addressed, an activity as important in place of confrontation of the militants.

Question 2

Explain the many types of business organizations existing in the private sector.

A business is an organization made to afford goods, services, or both to consumers. They will be the units that perform the majority of the economic movement inside our economy. Most businesses eventually generate a profit. There are some businesses that exist to perform a function other than profit, such as cooperatives and non-profit organizations. The traditional classification of any business is an entity that brings together time, effort and capital in order to produce a profit. Businesses can either be privately owned or publicly owned by the government. Government usually standardizes business for a variety of purposes. This includes collecting corporate taxes. Also definite business pose a risk to the general public and so must be regulated. If they were left unregulated, they could, while carrying out their functions for profit, do everlasting harm to the surroundings. Others, such as drug companies and pharmaceuticals must be regulated so that safety and health standards can be sustained. Drugs must be monitored so that any that begin to cause thoughtful side effects are quickly removed the marketplace (Wikipedia, 2009)


Private sector encompasses of various businesses owned and managed by a number of private individuals or organizations. All of these range from the small company sector, partnerships, limited companies and public limited companies. Individuals can now get government awards to set-up their own corporate. This inspires growth within the tiny business sector. Balanced interest and expansion of the web, e-commerce and computer technology also have seen the growth of the private sector. At the same time, Unifications of companies in the banking and finance world give the chance for the business to offer more products to its customers but still compete. Furthermore, private sectors consist of various type of business corporate such private limited companies, sole proprietorship, partnership, corporation, conglomerates and so forth. An example of Malaysians private organization is Tanjong Private Limited Companies. It really is an investment holding company of several divisions involved with power generation, gaming, leisure and property investment. The Companys principal operating and reporting sectors comprise power generation and gaming, which include the numbers forecast totalisator (NFO) and racing totalisator (RTO) businesses. Its straight subsidiaries are Pan Malaysian Pools Sdn Bhd, Daya Mahsuri Sdn Bhd.

3. 1 Private Limited Companies

Private limited companies are viewed as firms under the law and share a few common characteristics with all corporations. However, private corporations are possessed and operated by a little group. For their structure, private limited corporations operate in a couple of limitations not imposed on public corporations. To be a corporation, a private limited company can be regarded as a definite legal entity from the people who form the corporation. This provides what is known in regulations as limited liability, or a shield for the personalities within the company against liability for obligations incurred by the organization. A private limited company is comprised by a little assembly, often members of an individual family that requirements to limit the influence of outsiders on its company. Because private limited companies are run by a minor group, they are usually not at the mercy of takeovers and other challenges faced by public companies. Unlike public corporations, private limited companies might not trade their shares on a stock exchange. They are also barred from offering shares for sale to the general public. Stockholders in a private limited company might not compromise their shares on the market without first offering them to other stockholders within the company for purchase. The number of members allowed within a private limited company is bound by regulation, frequently to no more than 50 because they're corporations under the law, private limited companies must pay auditors, hold conferences as other corporations do and share profits among all stockholders. They could be expensive to establish because of the regulations involved (Malaysiaco, 2007)

3. 2 Sole Proprietorship

A sole proprietorship is a kind of business entity that is owned and run by one person and where there is absolutely no legal dissimilarity between your owner and the business enterprise. The dog owner receives all profits at the mercy of taxation specific to the business enterprise and has unlimited accountability for any losses and debts. Every asset of the business is owned by the property owner and all debts of the business enterprise will be the proprietor's. Which means that the owner does not have any less liability than if indeed they were acting as an individual rather than as a company. It is a "sole" proprietorship in contrast with partnerships. A sole proprietor may use an occupation name or business name other than his / her legal name. In many authorities there are rules to permit the true owner of any business name to be ascertained. For instance, In america there is normally a obligation to file a doing business as statement with the neighborhood authorities within the United Kingdom the proprietor's name must be displayed on business stationery, running a business emails with business premises, and there are additional requirements (Wikipedia, 2009)

3. 3 Partnership

A partnership can be an arrangement where individuals consent to work together in order to improve their interests. In most situations, a partnership that is formed between one or more businesses where the sole owners co-labor with others to accomplish and share profits or losses. Partnerships occur in many occasions regardless the sectors that an individual involves. A non-profit organization, for example, many partners is being organized to boost the chances of reaching their missions. Partnerships will have widely varying results and can present partners with special challenges. Levels of give-and-take, areas of responsibility, lines of authority, and principal goals of the partnership must all be negotiated. While partnerships stand to increase mutual interests and success, some are believed ethically problematic. When a politician, for example, partners with a formation in an organization to advance the business's interest in trade for a few benefit, a clash appealing may make the partnership challenging from the perspective of the community good. Developed countries often strongly standardize certain partnerships via anti-trust laws, to be able to prevent dominant practices and momentary free market competition. Among settled countries, business partnerships are often favored over corporations in taxation policy, since dividend taxes only occur on profits before they are simply distributed close to the partners. However, be contingent on the partnership structure and the rule in which it operates, owners of any partnership may come in contact with greater private liability than they would as shareholders of an organization. (Undp, 2009)

3. 4 Corporation

A corporation is a legal entity that is shaped under the laws of a State made to establish the entity as another legal entity having its own privileges and accountabilities distinct from those of its members. The structure of your corporation is complex. It is more exclusive to arrange this type of business set alongside the other two business entities. Corporate control lies with the individual that has rights of the very most shares of stock. If a single stockholder or a group of stockholders own at least 51% of the stock they can make decisions of the policies that will be offered. Corporations will come with an total annual meeting of stockholders and regularly scheduled meetings for the board of directors with proceedings kept to document their decisions. How big is the organization will affect how formally or informally it can operate. Smaller corporations might operate less officially, but nonetheless need to keep proper documentation. In those varieties of cases stock ownership is normally where the liability is limited to lest there was a fraud committed. For example, DiGi is a homegrown brand but is financially backed up by a foreign company, Telenor ASA from Norway, which holds more than 60% of the company portion. DiGi is the first company in Malaysia that introduced GPRS and EDGE technologies into the country. DiGi is famous and famous for its yellow man icon (Pip, 2008)

3. 5 Conglomerates

Conglomerates in business, a corporation formed by the procurement by one firm of several others, each which is engaged in an activity that generally differs from that of the original. The organization of such a corporation may wish to expand its field of businesses for a number of reasons: making additional use of existing plant facilities, refining its marketing position with a broader range of products, or decreasing the inherent risk in with respect to the request for a single product. There may also be financial advantages to be grown from the reorganization of others. For example, when retail conglomerates convey popular products, like Apple brand computers and iPods, they often select to be authorized resellers. Essentially, they are really inflowing into a partnership in which the manufacturer endorses the shop as an accepted source for purchasing its product. Other than that, Renong Berhad is Malaysia's largest diversified establishment with corporations involved with a wide range of industries covering financial services, infrastructure, media, hotel and property. It is defined as a Major Shareholder pursuant to Paragraph 1 0. 02(f) of the Kuala Lumpur Stock Exchange Listing Requirements. (Work, 2008)

Business is energetic globalization and business is the primary source of economical growth, employment creation and public returns that pay for national development programs. As significance, more and more business is likely to deliver in new areas and against an array of social medians.


This assignment contains two questions. First question is slow economical growth and second is private sector. Furthermore, from first question I had learned National, regional and extra-regional actors are the support of the conflicts. Therefore, the issue can't be left to a single group of actors, whether national, regional or international, for resolution. Infrastructure improvement, particularly road networks and electricity supply, for moving the united states forward both in the short and lasting. And from second question, trade is an economic system in which goods and services are exchanged for just one another or money, on the basis of their perceived worth. Every business involves some form of investment and a reasonable quantity of customers to whom its output can be sold at profit on the consistent basis. In today's borderless world, business resolutions can and do have a larger effect on people's welfare and the environment, than the decisions of all governments.

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