Economic Liberalisation and Growth in Bangladesh: The Role of Foreign Private Investment

Bangladesh, a relatively younger member of the world community of independent nations, is the third largest country in South Asia in terms of area, population, and total GNP (next to India and Pakistan). The near-homogenous community of 120 million people is a potentially attractive market for many consumer products. But the country suffers from an image problem in the foreign business community that affect its programmes of economic development. Poverty and natural disaster is the only stereotypical image of Bangladesh that the world community seems to be aware of. The foreign media still find much interest in the news items of ‘human and ecological disasters’ in Bangladesh (Wright 1994). However, the country has achieved some positive economic results in recent years and progressing steadily towards its goal of economic growth. Some achievements1 include inter alia: increase in real GDP growth (5.7 per cent in 1997 compared to 5.3 per cent in 1996 and an average of 4.3 per cent during 1992–95 and 4.1 per cent during 1985–90), export growth (on an average of 21.6 per cent during 1992–96), gross capital formation (16.9 per cent in 1996 compared to an average of 13 per cent during 1991–95 and 12.7 per cent during 1985–90) and a low inflation rate (2.7 per cent in 1996 compared to 4.5 per cent during 1990–95, and 9.8 per cent during 1985–90).