OutsourcingJoin now to read essay OutsourcingThe 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 countrys 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 Bangladeshis. 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 governments revenue collection contributed to the containment of expansion in public sector borrowing.
The Bangladesh government’s implementation of the provisions of the MISA and the NRI were part of the impetus for it to act in a balanced and responsible manner. As in all countries of the past, stability in the currency and monetary relations of the central Bank of Bangladesh was a major objective by it. After the success in making the decision of the international financial authorities to support it in its operations, the Bangladesh Ministry of Finance provided the support of the Central Bank of Bangladesh for a complete overhaul of capital-intensive banking and asset-backed securities and central banks. As such, the finance of finance, especially capital raising, in the state-owned banks could take up to 15 years. Such changes also help to reduce costs in all economic segments of business.
In a bid to achieve that objective, the capital-rich central bank initiated a comprehensive programme to manage the financial, credit, financial inclusion and interdepartmental activities in the state, to prevent any further deterioration in fiscal, monetary and structural conditions. The programme includes, without limitation, increasing investment in credit expansion, further support in foreign exchange processing, increasing trade between Bangladesh and other member countries of the Organisation for Economic Co-operation and Development (OECD) and developing the Bank’s monetary policy in the event of major turbulence during this period in the financial sector. Further, it considers the establishment of the independent central bank of Bangladesh – the MSC and BIS.
The objective of the MSC and BIS was identified as: to consolidate and consolidate the state-owned banks. The MSC should take action to provide a national solution to the banking, financial inclusion and interdepartmental issues of the state. The framework in place within this framework is a plan for the consolidation of the banks as part of the Central Bank of Bangladesh by the local governments and in line with the national capital laws: a comprehensive strategy for consolidation and consolidation of all the banks in the state and international finance.
The banking policies of the central bank of Bangladesh are based on a program, under the supervision and cooperation of the MSC and BIS, to consolidate the banks as of February 2009 by adopting the framework formulated and implemented in the MSC and BIS. The central bank’s plan to consolidate banks and interdepartmental business takes into account the need for increased national capital, financial inclusion and interdepartmental activities of the state: strengthening the financial integration and interdepartmental functions of the state. In the case of banks or interdepartmental firms within the state in which they maintain a presence, these transactions should be taken together with the relevant local authorities. The regional-level banking system should be reformed to better cope with cross-border activities in and out of the state. For those businesses that operate in this sector, the central Bank of Bangladesh will undertake to strengthen the supervision and cooperation between local authorities to carry out the business and operational requirements of the state. Such reforms will enhance the efficiency and fiscal sustainability of the private sector and the economy in the state.
The MSC and BIS implemented several measures for consolidation of the state’s banks through the acquisition and consolidation of the state’s assets using the latest developments internationally and in international-level cooperation. The capital-rich central bank of Bangladesh, as well as the local governments, should adopt such policies, by ensuring that the banks are consolidated on an equal and reciprocal basis with the regional authorities for the consolidation of the non-state financial sectors.
All banks that do business in the state in such a manner are also to be treated as members of the International Association of Bankers and Financial Administrators of India. The Central Bank and Interdepartmental Banks of India should apply these rules of trade to consolidate banking assets according to their terms, to ensure that they do not impede or prevent trade. In addition, they will also be subjected to appropriate economic measures to protect national financial interests, such as appropriate lending. Finally, MSC and BIS would implement the appropriate lending regimes to promote economic and financial convergence and stability for all banks
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.
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