Bangladesh's Graduation from LDC Status

"Bangladesh's graduation from LDC status is a testament to its remarkable progress in

economic and social development over the past several decades. It is a milestone
achievement for the country and a source of pride for its people.”
-Antonio Guterres, UN Secretary-General.

Developing countries are those countries which have low standard of living, underdeveloped
industrial sector and human development index are lower than other countries but these are
working for development in various fields using their overall skills, action plan and have
potential for improvement in near future
In 1972, former US Secretary of State Henry Kissinger called Bangladesh a bottomless
basket'. But today that bottomless basket country has emerged as one of the world's most
developed examples. In the post-independence period, Bangladesh has been able to bring
about major changes in various fields including eradication of poverty, economic growth,
reduction in birth rate, reduction in maternal and child mortality, increase in life expectancy,
increase in per capita income, and with these changes, Bangladesh is on the verge of
transitioning from a LDC to a less developed country.
Conditions and process of achieving in developing countries:
➢ In 1975, Bangladesh was first listed as Least Developed Countries (LDCs).
➢ On March 16, 2018 Bangladesh achieved the initial qualification to become a developing
country from a low middle income country and was finally listed as a developing country
from a least developed country on February 26, 2021.
➢ Three factors are considered in the transition from least developed to developing countries.
These are per capita income, human resource index and economic risks index.
The value of the conditions and Bangladesh:
According to the criteria of the United Nations Economic and Social Council (ECOSOC),
2021, to be a developing country –
➢ The per capita income of a country is 1222 dollars, while that of Bangladesh is 1827
dollars (UN).
Per capita Human Economic
➢ Although Bangladesh needs 66 income resource index risk index
points or more in the human
1230 USD 66 or More 32 or less
resource index, it has 75.3
points.
➢ Although the economic risk index needs to have 32 or less points, Bangladesh's point
is now 27.2. As such, Bangladesh has passed all the three indices.
Advantages and disadvantages of Bangladesh becoming a developing country
Advantages/Benefits:
➢ If Bangladesh becomes a developing country from a less developed country, the
importance of Bangladesh will increase in the world or various international
organizations.
➢ The bargaining power will also increase on their behalf in various international forum.
➢ Opportunities to join various regional and sub-regional blocs will be created.
 ➢ The development will result in preferential access to foreign loans.
➢ Can get preferential trade benefits called GSP Plus by meeting EU conditions on human
and labor rights, environment and good governance.
Advantages as well as disadvantages are not less, it must be dealt with a firm hand.
Disadvantages/challenges:
If Bangladesh transition to a developing country,
➢ Bangladesh will not get loans at concessional interest like before. It will gradually have
to go for a mixed financing where it will have to take foreign loans at high interest
rates.
➢ The funding that Bangladesh receives from the developed world to address the risks
of climate change will also be stopped.
➢ Bangladesh has to pay .01 % donation to the UN as it is a member of LDC. When it
will be a developing country, the levy rate will be .1 %.
Recommendations for tackling the challenge:
➢ Activities of the different LDC transition countries should be followed as an example.
➢ Ensuring the greater participation of women in the workplace.
➢ Emphasis must be placed on the program to transform the population into human
resources.
➢ Maintain the progress of socio-economic development.
➢ Adopting various programs such as bilateral agreement (PTA), free trade
agreements (FTA) and taking steps to remove non barrier tariff.
In time of-pandemic, Ukraine-Russia war and global economic recession- transition from
LDCs requires us to work more broadly to prepare ourselves to meet the social, economic and
environmental development challenges. At the same time, the international community must
reconsider its commitment to real structural transformation in LDCs. LDCs will need sustained
assistance to double global trade. Otherwise, we will lose more than we gain in transitioning
from least developed to developing and from developing to developed countries on the world
map. The goal of the government is to make the country a developed and prosperous state by
2041. And to fulfil that goal, the government should work sincerely in meeting the challenges
and renegotiate the terms with the international community.

Index & Conditions 2018 2021

Per capita income - 1230+ USD 1276 1827
Human resource index - 66+ 73.2 75.3
Economic risk index - 32< 25.2 27.2

Reference:
1. UNECOSOC
2. United Nations Group
 Public Pension Scheme
“We have introduced the pension scheme so that every person of the country can lead better
life,”- HPM Sheikh Hasina

In her 2008 election manifesto, Prime Minister Sheikh Hasina, pledged to introduce a universal
pension system nationally to ensure old-age protection under a sustainable and well-structured
social security framework. In line with this, in 2015, the National Social Security Strategy
Paper formulated by the government proposed to develop a comprehensive integrated
participatory pension system. As a result, the government has decided to introduce universal
pension facility, which is a commendable step. After completing the necessary formalities,
essential law was introduced in the National Parliament and was passed by the Parliament on
24 January 2023. The much-awaited program was inaugurated on 17 August 2023.
Some Public Pension Scheme Rules, 2023:

• All working citizens between the ages of 18 to 50 can participate in the universal
pension system.
• Pensioners will enjoy pension benefits for life, i.e., till death.
• Bangladeshis working abroad can be included in it.
• Employees working in government and autonomous organizations will remain out of
the public pension system for the time being. The government will decide about them
in future.
• Citizens can open pension accounts based on National Identity Cards.
• Initially this procedure will be voluntary, but later it will be made mandatory.
• Citizens will be considered eligible for monthly pension subject to continuous
contribution of at least 10 years.
• There will be a separate pension account for each citizen, this account will remain
unchanged even after changing jobs.
• The government will carry out the expenditure of pension authorities and other related
institutions.

Bangladeshi citizens of all professions between the ages of 18 to 50 can participate in the
scheme according to their National Identity Card. In other words, national identity cards are
required to be a part of the universal pension scheme. However, there is an exception for
expatriate Bangladeshis, who do not have a national identity card, they can register their
passport if they want, but in that case, they must collect the national identity card and submit
its copy as soon as possible. The government has announced a total of 6 schemes. However,
four schemes have been launched for now.

These are named-

➢ Probasi scheme for Bangladeshis working aboard.

➢ Pragati scheme for private job holders.
➢ Surokkha scheme for self-employed persons.
➢ Samata scheme for low-income people.
 Scheme Name Monthly Fees
Probasi scheme 5000-10,000 tk
Pragati scheme 1000-10,000 tk
Surokkha scheme 1000-10,000 tk
Samata scheme 500 tk
Main objectives:
➢ Ensuring financial security of the working population in old age thereby keeping their
standard of living above the poverty line.
➢ To increase the saving propensity of low-income people and ensure their welfare by
bringing them under a sustainable and structured social safety net.
➢ Encouraging capital accumulation by consolidating small savings and converting
them into investments contributing to the economic development of the country.

Reasons why universal pension facility is needed:

➢ Launching a universal pension scheme also supports the spirit of the SDGs and the
welfare aspirations of the current government.
➢ Public pension facilities can play an important role in our country as more than 85%
of the workforce is employed in the informal sector which does not provide any kind
of social security structure.
➢ The government will contribute to private-sector pensions, although the exact
proportion is yet to be determined.
➢ When the pension scheme is fully implemented, the government will reduce its
funding for many social safety net programs, such as old-age allowances added to the
pension fund.

Challenges and Ways to Overcome:

➢ Starting a universal pension scheme for such a large population would be huge task
and a lot of effort would be required to run the scheme efficiently.
➢ Our government expenditure has been increasing gradually even though the growth
in revenue generation has been less than proportionate. Due to inadequate resources,
the government is facing challenges to keep several schemes operational.
➢ It will be a difficult task for the government to provide funds in the first phase to start
the pension scheme. Therefore, funds should be provided in coordination with the
projects.
➢ Running the entire universal pension scheme in the current institutional and
technical arrangements will be quite challenging. Hiring the right consultants and
skilled manpower is very important here.

According to the provisions of Article 15(d) of the Constitution, the right to social security
means that citizens have the right to receive government assistance in the event of poverty due
to unemployment, disease or infirmity or old age or similar circumstances, Due to the increase
in the average life expectancy of the people in the country, it is necessary to bring the elderly
population under a sustainable and well-organized social safety net, as the dependency rate will
increase due to the decline of the working population in the future. Hence it is very necessary
to make provision for universal pension related matters.
 Eight Five-Year Plans
“I believe Eight Five-Year Plan will be very effective in achieving the desired development in
the country.” -HPM Sheikh Hasina

The five-year plan is an important policy document for a nation's national economic journey
and development for a specific period of time. The five-year plan usually sets out the state’s
national economic plan for at least five years, its objectives, reform initiatives, and
implementation strategy. During the 8FYP period Bangladesh needs to invest in green energy,
green building, green transportation and green agriculture. In the first phase of
implementation, the 8FYP will prioritize the ongoing efforts to reduce air and water pollution,
strengthen forestry management and implement the BDP2100.

8th Five Year Plan at a glance:

• Slogan: No one will be left behind
• Duration: July 2020- June 2023
• Adopted: 29 December, 2020
• Expenditure: The five-year plan will be required TK 64,95,980 crore.

GDP Growth projection under the 8FYP:

Particles FY21 FY22 FY23 FY24 FY25
GDP Growth 7.40% 7.70% 8.00% 8.32% 8.51%

Inflation projection under the 8FYP:

Particles FY21 FY22 FY23 FY24 FY25
Inflation Rate 5.4% 5.3% 5.2% 4.9% 4.8%

Expansion of employment under the 8FYP:

Particles FY21 FY22 FY23 FY24 FY25
Employment 21,60,000 22,30,000 23,30,000 24,20,000 25,30,000

Things that have been emphasized in the Eighth Five Year Plan:
➢ Awami League's election manifesto and plan-2041 is being taken as a guideline in the
five-year plan from 2020 to 2025.
➢ The main goal is to achieve the status of an upper middle-income country and eradicate
extreme poverty by 2030.
➢ GDP growth in job creation, equality to ensure equal benefits for all.
➢ Dealing with the adverse effects of climate change.
➢ Commencement of Delta 2100 Plan
➢ Acquire SDGs and adopt transition plans from LDCs.
➢ Accelerate rural development.

Challenges in implementations of the plan:

➢ Development and utilization of human resources.
➢ Coordination between different sectors, policies and organizations.
 ➢ Increase FDI by developing work environment and other facilities.
➢ Instability in the banking sector.
➢ Moving forward with the impact of the Covid-19 epidemic.
➢ Dealing with climate change.
➢ Bringing political stability.
➢ Challenges of transition to developing countries.

Roadmap of 8th Five Year Plan:

Indicators Target (2025)

Total GDP 566 billion USD
GDP growth (per year) 8%
GDP growth (at maturity 8.51%
Export Income 56.33 billion USD
Import Cost 83.88 billion USD
Inflation 4.8%
Average Life Expectancy 74 years
Poverty Rate 15.16%
Extreme Poverty Rate 7.4%
Expansion of Employment 1,16,70,000
Electricity Generated 30,000 MW

Not only the covid situation, this year's eighth five-year plan is important from another point
of view. Bangladesh is currently implementing the Sustainable Development Goals (SDGs)
and the government aims to turn it into a developed country by 2041. In line with these goals,
the necessary policy formulation and its implementation strategy should be assembled.
Otherwise, it will be difficult to promote to the desired position.
 The Economic Importance of Padma Bridge

"We have set a stark example in the world by constructing this huge bridge over such a big
river with strong current"-HPM Seikh Hasina

Transport and communication system is one of the elements for the development of any
country. The better the communication system of country, the faster the national development
of the county. The Padma Bridge is a multi-purpose road and rail bridge under construction on
the Padma River in Bangladesh. It is the largest project and bridge in the country.

From the information received from the Ministry of Road Transport and Bridges, various
information about the Padma Bridge project has been highlighted, which is available in
the Padma Bridge:
• The name of the Padma Bridge project is 'Padma Multipurpose Bridge Project'.
• The type of Padma bridge has two floors. This bridge is being constructed with concrete
and steel. (Which is the first in the world). The total cost of the Padma Bridge project
(on the main bridge) is Tk 32,605.52 crore.
• The river bridge project has cost Tk 8,707.81 crore.
• The Padma Bridge will have gas, electricity and optical fiber connectivity.
• Rail line is being laid on Padma bridge through span.
• The width of the Padma Bridge will be 59.4 feet or 18.10 m (total 72 feet), it will have
a four-lane road. Road divider in the middle.
• The length of Padma bridge is 6.15 km.
• The viaduct of Padma bridge is 3.18 km.
• The road connecting Padma Bridge at both ends (Jajira and Mawa) is 14 km.
• The Padma Bridge project has 12 km of river management on both banks. 81 viaduct
pillars of Padma bridge.
• The height of Padma bridge is 60 feet from the water level.
• Piling depth of Padma bridge is 383 feet.
• The total number of pillars of Padma Bridge is 42, span 41.
• There have been 6 pilings for each pillar. However, due to the complexity of the soil,
22 pillars have been piled up to 7. The total number of pilings of Padma bridge is 286.
• It was opened for traffic in 26 June 2022 but inaugurated on 25 June.

The Socio-economic importance of the Padma Bridge is understandable:

• Economic growth will increase to 1.23%.
• Poverty will be reduced by 1.9% and locally it will be reduced 2%.
• Within 31 years of construction, GDP will grow by 6,000 million and annual returns
will reach 300 million after 2032.
• The connectivity of the eastern region including the capital Dhaka with 19 coastal
districts of the south-west or a total of 21 districts will be strengthened or the internal
communication network will be strengthened. As a result, agriculture, industrialization,
urbanization and living standards of the region will increase which will lead to overall
development of the country.
• More than 20 million unemployed are expected to be employed.
 • Hundreds of crores of Tk. will be earned every year from tourism on both sides of the
Padma Bridge. On both banks, modern cities will be built in the style of Singapore and
Hong Kong.
• 9,000 hectares of land worth 156 million dollars will be freed from river erosion.
Besides, millions of people will be saved from the floods.
• Ferry service with 50% subsidy will be discontinued and toll collected will be fully paid
by the government. As a result, the government's revenue will increase by about 4,000
million dollars every year.
• There will be massive industrialization and urbanization on both sides of the bridge
which will keep the wheel of economy moving. Hi-tech parks including Sheikh Hasina
Weaving Village, Padma Water Treatment Plant, Olympic Village, Satellite City will be
set up at a cost of Taka 2500 crore.

Reasons for construction of Padma Bridge:

• Ensure that the bridge connects 19 districts of the southern region with the eastern
region including Dhaka.
• Marketing and expanding their products in the mainland of Bangladesh in a short period
of time, including improving the living standards of the people living in the south of
the country.
• To create opportunities for speedy supply of raw materials for production in the region
and to help increase production.
• To create opportunities for proper use of Mongla Port, the second seaport in the country,
like Chittagong Port.
• As the Padma Bridge and the connecting road are part of the Asian Highway Route AH-
I, it should be used properly.
• It will revolutionize the communication of South Asian countries including the internal
communication of Bangladesh.

What can happen around this bridge, where there will be industries, where there will be
agricultural land all these should be considered now. If necessary, it can be the administrative
capital here. The bridge will play an important role in regional connectivity between Asia and
Southeast Asia. This bridge will also play an important- role in making Bangladesh a developed
country in 2035-40. All in all, the future of Bangladesh will revolve around this bridge of
dreams.
 Bangabandhu Tunnel: The New Handicap of the Economy

"Infrastructure is the backbone of any society, and tunnels are the veins that keep it alive
beneath the surface."-HPM Sheikh Hasina

The tunnel built under the Karnaphuli River has been named 'Bangabandhu Sheikh Mujibur
Rahman Tunnel' as part of China's Belt and Road Initiative (BRI) to reduce travel time, reduce
traffic congestion and develop regional communication infrastructure under the Asian Highway
Network.

Tunnel Project at a Glance:

• In June 2014, a memorandum of understanding was signed with China for the
construction of the tunnel. On February 24, 2019, Prime Minister Sheikh Hasina
inaugurated the boring work of the tunnel.
• Estimated expenditure: 10 thousand 374.42 crores of Taka. Government of Bangladesh
will give 4461 crores of Taka.
• Road tunnel under Karnaphuli will be four lanes.
• The length of the tunnel will be 3.4 km.
• There is a total of 5.35 km approach road including 4.8 km at Anwara end.
• The depth of the tunnel from the riverbed will be 18 to 31 meters or at least 36 feet to
108 feet deep.
• Driven method of tunnel construction.
• Access Path: Two kilometers downstream of the Karnaphuli River on the south-west
side of Patenga in front of Navy Avenue.
• Exit Route: Through Karnaphuli Fertilizer Company and Chittagong Urea Fertilizer
Limited at Anwara end on the other side of Karnaphuli river.
• Honorable Prime Minister Sheikh Hasina inaugurated the first tube of the tunnel by
connecting it virtually on 26th November, 2022. The country's first tunnel was opened
under the Karnaphuli River in Chittagong on 28th October, 2023.

Reasons for construction of this tunnels:

➢ For Increasing market-access of goods, services and energy as well as removing non-
tariff barriers.
➢ For Facilitating, accelerating trade, investing in infrastructure development and joint
exploitation and development of minerals, water and other natural resources.
➢ For Connecting with Asian Highway.
➢ To develop Chittagong as 'One City' and Two Towns' like China's Shanghai.
➢ For Supporting the blue economy revolving around the Bay of Bengal.
➢ For Providing more support to Exclusive Chinese Economic and Korean EPZ in
Anwara Upazila.
➢ Development of existing road network along with seamless road connectivity in
Chittagong city.
➢ To further strengthen Chittagong commercial city as a transport hub.
➢ For Expanding communication and trade between the two banks of Karnaphuli.
 ➢ To reduce the traffic pressure from the two existing bridges over Karnaphuli.

Socio-Economic Aspects of Karnaphuli Tunnel:

• Economic development: It is estimated that this tunnel will add TK 36 million or
0.44 million dollars in direct value to the economy of Bangladesh every year.
• One city Two town: Through this tunnel, the Anwara Upazila of Chittagong will
be connected with the Chittagong main city, which is considered the commercial
capital of the country. The tunnel will essentially transform Chittagong into a 'one
city, two towns' model like Shanghai, China.
• Reducing distance: Transportation system with Cox's Bazar will be improved
through the tunnel. The distance will be reduced to about 30 km that saving money.
• Attracting tourists: According to a source from Bangladesh Bridge Authority, if
the Karnaphuli tunnel is fully functional, the distance from Chittagong city to Cox's
Bazar will be reduced by about 15 km, which will further reduce the time of tourists
as well as traffic congestion. Moreover, it will also help to further enrich the tourism
of Cox's Bazar.
• Creating Industrial zone: Apart from tourism, due to the Bangabandhu Tunnel,
special industrial development activities are also going on in Chittagong. According
to the Bangabandhu Tunnel Feasibility Test report, out of the 6055 acres of
industrial area in Chittagong city, 5,188 acres of land is west of the Karnaphuli river,
and only 867 acres is on the east bank.
• Transferring the area into business hub: According to a source from Bangladesh
Economic Zones Authority, more than 60 local and foreign companies have already
shown interest in investing about 280 million dollars in this economic zone. By
doing this, massive industrialization will happen on both sides of the entire
Karnaphuli river around the tunnel. It will simultaneously turn Chittagong into a
business hub and create massive employment for the people of Anwara and Patenga.
• Accelerating the GDP: According to the feasibility report of the tunnel, the tunnel
will directly contribute 0.166 percent to the country's GDP every year for the next
50 years.

During the dire time of COVID-19 outbreak, the construction of the tunnel has not stopped.
Many agree that the tunnel will help our country in reducing poverty and to increase
employment followed by a good impact in the economic development in the context of
globalization and regional connectivity. Consequently, the4 vision of our Honorable PM Sheikh
Hasina to make Bangladesh a develop and prosperous country will be realized.
 Smart Bangladesh: Prospects and Challenges

"Digital connectivity will be the key tool to build Smart Bangladesh. Smart citizens, smart
economy, smart government and smart society will be built on the basis of digital
connectivity,”
-Honorable Prime Minister Sheikh Hasina

When Prime Minister Sheikh Hasina declared the vision of "Digital Bangladesh", there were
very few people believed it would eventually come true. But after one decade, it is no longer a
dream, it's now a reality. Prime Minister Sheikh Hasina has announced another master plan on
December 12, 2022 to take Bangladesh towards the next step, which is "Smart Bangladesh":
"Smart" refers to the use of advanced technologies, such as the internet of things, artificial
intelligence, blockchain, big—data, robotics, drone technology, 3D printing and other cutting-
edge technologies to improve various aspects of society. The "Smart Bangladesh" ecosystem
will stand on four key pillars — Smart Citizen, Smart Government, Smart Society and Smart
Economy.

❖ The Smart Citizen goal will be to empower citizens of Bangladesh with a "digital first"
mindset driving campaigns and implementing widespread digital literacy programs.
These citizens will use digital technologies, such as mobile and internet, to access
information.
❖ Smart Government should implement 100 per cent paperless office and hyper
personalized service platforms across priority areas like healthcare, education,
agriculture, revenue management and public security. Although Bangladesh made a
good start of digitalizing government services by automating over 00 government
service, a serious jump is still needed in order to achieve the target of 2041.
❖ Smart Society refers to a civilization that uses technology and innovation to raise the
standards of living for its people. Citizens will adopt digital tolerance, ethics and values.
A cashless payment ecosystem, "Smart City" and "Smart Grid" will be integral
components.

❖ Smart Economy is significant considering that Bangladesh plans to make ICT one of
its revenue-generating pillars by 2041. It is estimated that by 2041, the overall ICT
economy's will be of 0 billion and at least unicorn startups will be dominant in
Bangladesh's market.

Action Plans for Smart Bangladesh-2041

"Vision 2041" is a strategic plan to transform Bangladesh into a developed country by 2041,
which marks the 70th anniversary of Bangladesh's independence. To achieve this goal, the
government of Bangladesh has developed the "Action Plans for Smart Bangladesh-2041,"
which outlines several key initiatives and strategies that will enable the country to become a
developed and prosperous SMART nation. Here are some of the key action plans SMART that
are part of the "Action Plans for Smart Bangladesh-2041 ":
1. Setting up Bangladesh as a knowledge-based economy and innovative nation.
2. Self-employment-based training activities to build an inclusive digital society.
3. Setting up Digital Leadership Academy to build a smart government.
4. Setting up Interactive School for Start-up Educators.
5. Preparing enterprise-based businesses as investment-friendly start-ups so that SME
sector contributes more on GDP.
6. Launching Bangladesh Knowledge Development Park.
7. Founding Center for Learning Innovation and Creation of Knowledge (CLICK)
8. Founding Agency for Knowledge on Aeronautical and Space Horizon
9. Self-Employment and Entrepreneurship Development (SED) Platforms
10. Generating government service and infrastructure-based entrepreneurs in the Service
Aggregator Training (SAT) model.
11. Bringing all digital services to a centrally integrated cloud
12. Initiating Data Security Act, Innovation Design and Entrepreneurship Academy (IDEA) Act
13. Digital Service Act, Agency for Knowledge on Aeronautical and Space Horizon Law,
and Digital Leader initiative.
 Cashless Society/ Paperless Bangladesh

The next step of digital Bangladesh is building a cashless society to ensure transparency,
accountability and mobility in financial transactions."
- Prime Minister's ICT Affairs Adviser Sajeeb Wazed Joy

A cashless society refers to a society where cash transactions are replaced with digital
payments, in a cashless society, people use electronic payment methods such as credit cards,
debit cards, mobile payments, and online banking to make purchases, transfer money, and pay
bills, rather than using physical cash.

Bangladesh moving towards a cashless society:

Among the many shifts we have experienced in the last almost 3 years, one that was most
welcome was the transition to cashless transactions -- an inevitable move that the Covid-19
pandemic accelerated sooner than we expected. The recent "Cashless Bangladesh, Smart
Bangladesh" campaign launched on 18 January, 2023 by the Bangladesh Bank is exactly the
kind of initiative we required to make the steady move to reducing cash dependency. The
campaign is set to introduce an interoperable Bangla QR Code among1200 small merchants,
to popularize making payments for goods and services using mobile banking applications,
mobile financial services (MFS) and payment service providers the project will first begin in
the Motijheel commercial area, and slowly be implemented across the country, is also testament
to the thorough planning and sustainable implementation of a necessary change.
The system now includes 10 banks, 03 mobile financial services (bKash, Mcash, and Rocket),
and 03 multinational payment service providers (Mastercard, Visa, and American Express or
Amex). Dutch Bangla Bank, Mutual Trust Bank, AB Bank, Eastern Bank, Islami Bank, United
Commercial Bank, City Bank, Bank Asia, Pubali Bank, and One Bank are among the banks.
To use the service, one must have an app from their bank, credit card, or mobile service
provider.

Factors driving the growth:

The increasing popularity of contactless credit cards, QR codes, and mobile financial services
(MFS) that provide solutions for the unbanked and micro-merchants and interoperability
among MFS providers are some of the factors driving the growth of digital payments.
Debit & Credit cards: According to Bangladesh Bank, year-to-date November 2021
transaction volumes at Point of Sales (POS) machines through debit, credit and prepaid cards
increased 23 percent compared to the same period last year.
Contactless cards: The pandemic also resulted in the swift adoption of contactless payments
across the globe. There are many factors for this uptake. Over half a dozen financial institutions
in Bangladesh are already issuing contactless credit cards.
Mobile Financial Services: MFS is another popular mode of payment in the country that is
accelerating digital payments. Since its inception in 2011, 29 banks have acquired MFS license.
Bangladesh has over 170 million cellphone subscribers and over 112 million internet
subscribers, and MFS has been the go-to solution in digital bill payments, online tax returns,
academic institution registration, digital health services, and online banking systems.
QR Codes: QR codes have also become a popular mode of payments today. Bangladesh Bank
opted for the merchant presented QR code transaction or EMVQRCPS. Bangla QR is a recent
initiative by the central bank to bring the micro-merchant sector under the fold of the formal
economy. As per central bank guidelines, daily transactions up to Tk 20,000 can be made
through Bangla QR.

Advantage cashless society:

Some of the advantages of a cashless society in Bangladesh may include:
➢ Increased efficiency: Because electronic payments are typically faster and easier to
process than cash transactions, both consumers and businesses can save time.
➢ Lowering business costs: Processing cash transactions can be costly for businesses
because they must invest in cash handling equipment, security systems, and personnel
to manage cash transactions. Electronic payments can be processed more quickly and
cheaply.
➢ Reduced crime and corruption: Because electronic payments can be easily tracked
and traced, criminals find it more difficult to launder money and engage in illegal
activities.
➢ Increased transparency and accountability: Electronic payments can help to reduce
corruption by making illegal activities easier to detect and trace.
➢ Improved economic growth: By making it easier for businesses to operate and for
consumers to make purchases, electronic payments can help to spur economic growth
➢ Improved transaction tracking: Electronic payments can help to improve transaction
tracking, making it easier to detect and prevent fraud.
➢ Better financial literacy: By providing consumers with access to financial education
and resources, electronic payments can help to improve financial literacy.

Bangladesh problems with a cashless society:

Despite the numerous advantages of a cashless society, such as increased efficiency,
convenience, and cost savings, there are a number of issues that must be addressed. Some of
the difficulties that may arise in a cashless society in Bangladesh include:
➢ Infrastructure: Bangladesh still lacks the infrastructure required to support a cashless
society. Many rural areas, for example, lack access to reliable internet or mobile
networks, making it difficult for individuals to access digital payment services.
➢ Limited access to technology: Many people in Bangladesh, particularly the elderly
and those living in rural areas, may lack access to smartphones or other digital payment
devices.
➢ Concerns about privacy and security: Digital payment systems rely on sensitive
personal and financial information, which may be vulnerable to hacking or theft.
➢ Lack of trust: Many people in Bangladesh may not trust digital payment services,
particularly those who have had negative experiences with them in the past. This lack
of trust can make it difficult for people to participate in a cashless society.
➢ Lack of government regulations: A lack of government regulations and oversight can
make it difficult for people to trust digital payment services, and may also make it
difficult for businesses to operate in a cashless society.

For the past few years, Bangladesh has gained significant momentum in developing a cashless
economy and achieving widespread financial inclusion. To make further progress, policy
reforms that create enabling conditions and evolve the regulatory environment, promote
innovation, allow open loop payments across the country's transit system, and incentivize
consumers and merchants to accept digital payments will be necessary.
 Importance of ICT/E-banking,
Use of IT in Banking Sector/E-banking

Science and Technology have made our life easier, comfortable and dynamic. Computer
technology has the analog system. Tremendous changes have been bought in our banking
sector.

Information Technology (IT)/E-banking: Generally using IT in the Banking sector is known

as E-banking where Transaction and Relationship between banks and clients grow through
electronic devices instead of paper documents.

Importance of ICT/E-banking:
The importance of ICT in banking sector has three directions. These are:
A) For the customer:
➢ Anytime Banking-Anywhere Banking: ATMs offer non-stop cash withdrawal,
remittances and inquiry facilities. Customers can transact form any of these branches
through computerized network.
➢ Remote Banking: Remote terminals at the customer site connected to the respective
branch through a modem enables the customer to make inquiries regarding his accounts
without having to move from his office.
➢ Self-inquiry facility: It offers facility for logging into specified self-inquiry terminals at
the branch to inquire and view the transactions in the account.
➢ Tele-banking: It is a 24-hour service through which inquiries regarding balances and
transactions in the account can be made over the phone.
➢ Electronic Banking: This enables the bank to provide corporate or high value customers
with a Graphical User Interface (GUI) software on a PC to inquire about their financial
transactions and accounts, cash transfers and cheque book issue etc.

(B) For the Bank: Banks applied IT to a wide range of back and front office tasks in addition
to a great number of new products. The major advantages for the bank to implement IT are:
1. Availability of a wide range of inquiry facilities, assisting the bank in business
development and follow-up.
2. Immediate replies to customer queries without reference.
3. Automatic and prompt generation of report and carrying out of standing instructions
on due date.
4. Fast and up-to-date information transfer enabling speedier decisions.

(C) For the employees: IT has increased their productivity through the followings:
1. Avoidance of duplication of entries due to existence of single-point data entry.
2. Accurate computing of time-consuming jobs such as balancing and interest calculation
on due dates.
3. Automatic printing of craving schedules, deposit receipts, pass book/pass sheet, freeing
the staff from time consuming jobs.

Uses of IT in the banking sector or E-banking:

➢ Automated Teller machine (ATM): An ATM is simply a data terminal with two input and
four output devices. A person can transfer money through ATM cards 24 hours.
➢ SMS Banking: SMS allows you to do some banking inquiries on your mobile from
anywhere under the mobile network coverage in a country.
➢ Tele Banking: One can transfer his transaction through mobile without going to bank. By
using telebanking one can have the following facilities:
✓ Money withdraws
✓ Money transfer from one account to others
✓ Payment utilities bills etc.
✓ Online Banking: Online banking is a term used to perform transactions, payments etc.
over the internet through a bank's secure website.
➢ Post Terminal Banking
➢ Alert banking
➢ IVR: Interactive Voice Response

Recommendations of E-Banking for Bangladesh:

1. Need to establish more ATM booths.
2. Banking problems should be solved quickly
3. The decision-making process should be faster.
4. SME section of banking should be more flexible.
5. Government should be pioneer to develop the ICT infrastructure.
6. Bangladesh Bank should insist the commercial and specialized banks to use the latest
technologies in banking activities.

Using technology in the banking sector expedites our daily work, reducing times and
sufferings. Today people need not to carry any bank cheque or cash money rather it is enough
to carry just a plastic card.
 Dollar Crisis/Forex Reserve & Banking Sector Role

“The ongoing dollar crisis is an unprecedented Challenge, but we are committed to taking all
necessary measures to safeguard financial stability and promote sustainable economic
growth.” – Bangladesh Bank

The increase in the price of the international currency against the currency of a country, the
crisis or the international currency in that country is known as the dollar crisis. The recent
global economic upheaval, the dollar crisis has reached its peak in every country in the world,
Bangladesh is no exception.

Reasons behind dollar crisis in Bangladesh:

• As the normalized of Covid situation from the middle of the year, the import
expenditures have started increasing in excess of the export income. LC has to be done
for especially import of heavy machinery, these create dollar crisis.
• Imports of food products and industrial raw materials also increased.
• Paying off the covid vaccine payment in dollar.
• As the seventy of the Covid•19 situation has eased in recent months, travel restrictions
are being eased m various countries, leading to more people traveling abroad that's why
the dollar demand has increased.
• Remittances and export earing’s have come down in the last few months leading to a
dollar crunch.

Impact or Dollar-Crisis:
• Bangladesh Petroleum Corporation (BPC) is unable to pay the oil import bill. The
company’s debt has reached 300 million dollars,
• Imports of luxury goods as well as many essential goods have decreased due to dollar
crisis.
• Decline in LC openings- a total of $56.36 billion LCS were opened till July 2023 which
is about 27 percent less than the same period of the previous financial year.

• F-commerce is also suffering due to dollar crisis. META's Authorized Agent- HTTP
pool has announced to restrict advertising activities on Facebook in Bangladesh.
• Car imports through Mongla port have decreased in the last one year due to dollar crisis.
According to the Mongla Customs Authority, the revenue collection has decreased by
about Tk 400 crore.

Government Steps to Prevent Dollar Crisis:

• In addition to supplying dollars to banks from foreign exchange reserves, import of
luxury goods was discouraged.
• Banks have been urged to increase remittances besides increasing their focus on
bringing in export earnings.
• The Ministry of Finance has ordered government employees and officials of state-
owned, autonomous, semi-government institutions, state-owned banks and financial
institutions to stop traveling abroad.
Central bank decision to solve dollar crisis:
• Reduction in dollar holding limit (NOP) of banks.
• Reduction of deposit limit as ERQ to half.
• Transfer of foreign currency funds of offshore banking units to domestic banking units.
• Bangladesh Bank has taken the initiative to rein in imports. A minimum cash margin
of 75 percent has been fixed for import credit for personal vehicles, electrical and
electronic goods used as home appliances. And the cash margin for non-essential goods
has been fixed at 50 percent.

Several more steps should be taken to prevent the dollar crisis:

1. In times of dollar crisis import of luxury and non-essential goods should be banned high
duties should be imposed.
2. Government needs to create separate find for import of fuel oil.
3. Incentives should be increased to hold the flow of remittances.
4. Strict steps should be taken to reduce hundi.
5. In the present scenario of the economy, the taka has to gradually depreciate against the
dollar and Import should be controlled. Also, negotiating to get flexible loans from
abroad should be given importance.

Purpose of Forex Reserve:

• Back up Funds
• Attracting FDI
• Good Image at the International Level
• Depreciation of Bangladeshi’s Currencies Checking

Major Sources of Forex Reserve:

• Export Sector
• Remittance
• Foreign Loans
• Investment
• Grants
Factors of the crisis of Forex Reserve
• Falling Remittance
• Dollar Crisis
• Trade Deficit

Forex Reserves
FY 2023 (Oct) 26.48
FY 2022 36.4
Fiscal Year

FY 2021 46.15
FY 2020 35.85
FY 2019 32.71
FY 2018 32.94
0 10 20 30 40 50
USD Billion
 Bangladesh’s Journey of Socio-Economic Development

“Economic growth without social progress lets the great majority of people remain in poverty while the
privileged few reap the benefits of rising abundance” - John F. Kennedy

Since gaining its independence in 1971, Bangladesh has experienced significant economic development over the
past few decades. The country has made remarkable progress in various sectors, including agriculture, textiles
and garments, manufacturing, and services. Government's relentless efforts in persuasion of building a poverty-
free prosperous Bangladesh through ‘Vision 2021’ transformed the country from an impoverished to a
developing one. At present the country is positioned among the fastest growing economies of the world. Here
are some key factors that have contributed to Bangladesh's economic development:

Poverty Reduction:
Bangladesh has made remarkable progress in reducing poverty. Through
2000 - 49%
effective policies and targeted interventions, the country has experienced a Poverty
significant decline in poverty rates, with millions of people lifted out of extreme Rate 2010 - 31.5%
poverty. According to the World Bank, the poverty rate has declined from around 2016 - 24.3%
49% in 2000 to less than 20% in 2023. The government has implemented various
2023 - 18.77%
poverty alleviation programs and initiatives to support the most vulnerable
populations.

Human Development Index:

The Human Development Index, developed by the United Nations Development Programme (UNDP), measures
a country's progress in terms of its citizens' well-being. Bangladesh has shown consistent improvement in its HDI
ranking over the years. As of the latest available data, Bangladesh's HDI value is 0.632, placing it in the medium
human development category. Factors such as improved access to education, healthcare, and income have
contributed to this progress. Investments in education, particularly the expansion of primary education and female
literacy, have played a pivotal role in enhancing the HDI.

Women Empowerment and Gender Equality:

Bangladesh has achieved notable success in promoting gender equality and 49.53% in Primary
women's empowerment. Women's participation in the labor force has increased Female Education
significantly, particularly in the garment industry, which has provided economic partipation
58% in Secondary
opportunities and contributed to their socio-economic advancement. Initiatives Education
such as the introduction of quotas for women in political representation,
58% in Germent
educational opportunities, and access to healthcare have resulted in increased workforce
female participation in various sectors. The country has made remarkable
progress in reducing gender disparities in education, workforce participation, and 38% in Labour market
political decision-making, leading to enhanced socio-economic development.

Achievements in Infrastructure and Connectivity:

Investments in infrastructure have played a pivotal role in Bangladesh's socio-economic development.
Development projects in transportation, energy, and communication sectors have improved connectivity within
the country. These developments have facilitated trade, improved connectivity, and boosted economic growth.
Here are some infrastructural developments in Bangladesh:

✓ Padma Multipurpose Bridge

✓ Dhaka Elevated Expressway
✓ Bangabandhu Sheikh Mujibur Rahman Tunnel
✓ Rooppur Nuclear Power Plant
✓ Dhaka Metro Rail
2022-23 - 2765
✓ Bus Rapid Transit Per
✓ Payra Thermal Power Plant Capita 2021-22 - 2793
✓ Sheikh Hasina International Cricket Stadium Income 2020-21 - 2591
in
✓ Chittagong-Cox’s Bazar Railway etc. Dollar 2019-20 - 2326
Economic Growth:
Bangladesh has maintained a robust economic growth rate over the past few decades. 2022-23 - 6.03%
The country's GDP growth has consistently exceeded 6%, and in recent years, it has GDP
been around more than 7%. According to Bangladesh Bureau of Statistics (BBS), the Growth 2021-22 - 7.25%
Rate
current GDP growth is 7.10%. This growth has been driven by sectors such as 2020-21 - 6.94%
garments and textiles, agriculture, and remittances from overseas workers.
2019-20 - 3.45%
Health and Education:
Bangladesh has made significant strides in improving health outcomes and expanding educational opportunities.
The government has prioritized healthcare, resulting in decreased child mortality rates, increased life expectancy,
and improved access to healthcare services. Bangladesh has scored the lowest in the
first-ever Health Inclusivity Index 2022 that measures progress in 40 countries 2022-23 - 76.44%
towards the provision of good physical, mental and social health for all. According Literacy 2019-20 - 74.91%
Rate
to the index, Bangladesh secured 30.8 points on a scale of 100 points. Furthermore,
the literacy rate in Bangladesh has been steadily increasing, with significant
improvements in both primary and secondary education. According to latest data, the literacy rate in Bangladesh
in 2020 was 74.91% which is 0.22% higher than 2019. The government has implemented measures to enhance
access to education, improve infrastructure, and reduce the gender gap in education.

Climate Resilience and Sustainable Development:

Bangladesh has made tremendous progress toward pursuing sustainable development and building climate
resilience as a low-lying deltaic nation vulnerable to climate change. The country has adopted a number of steps
to address environmental issues, such as encouraging the use of renewable energy sources, developing climate-
smart agriculture methods, and putting policies in place to lessen the negative consequences of natural disasters.
Bangladesh has also taken the initiative in international forums to push for international cooperation in the fight
against climate change.

Microfinance and Remittances:

Bangladesh has been successful in promoting microfinance initiatives, providing 2022-23 - 21.61
small loans to rural entrepreneurs and empowering women. Bangladesh is widely Remitta
recognized for its success in microfinance initiatives. The Grameen Bank, pioneered nce in 2021-22 - 21.03
by Nobel Laureate Muhammad Yunus, has provided small loans to millions of rural Billon
Dollar 2020-21 - 24.78
poor, particularly women, empowering them economically and socially.
2019-20 - 18.21
Microfinance institutions have played a crucial role in poverty reduction and fostering
entrepreneurship.
Additionally, remittances from Bangladeshis working abroad, particularly in the Middle East, have been a
significant source of foreign exchange inflows, contributing to the country's economy. Remittances in Bangladesh
averaged 1410.18 USD Million from 2012 until 2023, reaching an all-time high of 2598.21 USD Million in July
of 2020 and a record low of 856.87 USD Million in September of 2017.

Agriculture and Industry:

Agriculture plays a crucial role in Bangladesh's economy, employing a significant portion of the population. The
country has seen advancements in agricultural practices, leading to increased productivity and food security. The
number of incentives provided in the agriculture sector increased 15 times from BDT 6 billion in FY06 to BDT
90 billion in FY19 and it is gradually increasing.
FY2006-07 -
Additionally, Industry sector of Bangladesh economy has been gradually and Incentives 06 Billon
consistently expanding, with garments and textiles being the largest export Provided in
Agriculture
industries, over the few years. Some companies have also started production there. Sector FY2019-20 -
BEZA has 17,000 acres of land out of the total 33,500 acres of Sheikh Mujib Shilpa 90 Billion
Nagar.
Bangladesh's path to socio-economic growth serves as an example for other countries facing comparable
difficulties. The nation has made outstanding strides thanks to its dedication to reducing poverty, promoting
economic growth, promoting gender equality, developing its infrastructure, and building a more resilient economy.
Bangladesh has the chance to continue its transformational journey and establish a rich and just society for future
generations by building on its successes and utilizing its potential.
 Socio-Economic impacts of RMG sector in Bangladesh
The Ready-Made Garments (RMG) sector in Bangladesh has significantly contributed to the socio-economic
landscape of the country since its emergence in the late 1970s. This sector plays a pivotal role in shaping the
nation’s economy, employment opportunities, and social fabric. The impacts of the RMG industry in Bangladesh
are multi-faceted, affecting various aspects of society and the economy.
Bangladesh RMG industry has gone from strength to strength and has become a global hub for apparel sourcing.
At present, the industry consists of over four thousand factories. RMG exports from Bangladesh includes a wide
variety of knitwear & woven garments products such as shirts, trousers, T Shirt, denim, jackets, sweaters, etc.

History of the RMG sector of Bangladesh:

The apparel industry of Bangladesh started its journey in the 1980s Import •30th Position
and has come to the position it is in today. The late Nurul Quader
Export •42th Position
Khan was the pioneer of the readymade garment industry in
Bangladesh. How to produce readymade garments. With those trainees, he set up the first factory "Desh
Garments" to produce garments for export. At the same time, so many people also came forward and established
some of the first garment factories in Bangladesh. Following their footsteps, other prudent and hardworking
entrepreneurs started RMG factories in the country. Since then, Bangladeshi garment industry did not need to look
behind. Despite many difficulties faced by the sector over the past years, it has carved a niche in world market
and kept continuing to show robust performance.

Number of Garment Factory

1982 47
1985 587
1999 2900
2023 More than 5000

Bangladesh RMG Industry- A global hub for garments manufacturing and sourcing:
The main key factors which have a great influence on the RMG sector of Bangladesh are the following:

• Vast labor force.

• Skilled human resources,
• Technological upgrades,
• Government supports for textile and clothing,
• Special economic/export processing zones,
• Creation of textile and clothing villages,
• The incentive for use of local inputs,
• Duty reduction for the import of inputs/machines,
• Income tax reduction,
• And international supports like GSP, GSP+, duty-free access, etc.

Established Ecosystem: Around 1,430 textile mills are present in Bangladesh which includes 796 woven fabric
manufacturers with a capacity to produce 3,850 million meters of fabric per annum. In addition, Bangladesh has
240 dying, printing and finishing mills, which manufacturers 3,170 million meters of fabric per annum.

Favorable trade benefits: Bangladesh enjoys duty free access in 52 countries which includes the EU, Australia,
New Zealand, Norway, Switzerland, Japan, Iceland, South Korea, Canada, Chile, India (46 RMG products),
Turkey, China. Bangladesh is also a member of regional blocs SAPTA, SAFTA, APTA, BIMSTEC.

Eco-friendly factories: At present, six out of the top 10 eco-friendly platinum LEED (Leadership in Energy and
Environmental Design) certified factories worldwide are located in Bangladesh. In addition to having the highest
number of LEED-certified factories, Bangladesh is also home to the highest-rated LEED Platinum denim factory,
knitting factory, washing plant, and textile mill in the world.

Qualified workforce: Abundance of young and qualified labor force with over 110 million of the population aged
below 40 and 75 million of the population aged below 24, Bangladesh has an abundance labor force.
Bangladesh's global market share:
Bangladesh's share in the global readymade garment trade more than tripled in the past 17 years as the country
cements its position as one of the largest suppliers internationally. In 2000, Bangladesh shipped garment items
worth $4.82 billion. It posted a meteoric rise in the past 22 years, elevating earnings to $45 billion last year.
Export destinations:
Three-quarters (76 percent) of Bangladesh’s product exports are to 12 countries including the United States and
Germany. Exports to each of these countries exceed $1 billion. Australia is the newest addition to this billion-
dollar club. According to the Export Promotion Bureau (EPB), the top 12 export destinations of Bangladeshi
products in the outgoing financial year are the United States, Germany, the United Kingdom, Spain, France, Italy,
the Netherlands, India, Japan, Poland, Canada and Australia. Among these countries, only the United States,
Germany and Poland saw a decline in exports. While other 9 markets have increased from 7 to 40 percent.
In the outgoing financial year 2022-23, a total of $55.56 billion worth of goods were exported from Bangladesh.
The top 12 export destinations and countries have exported products worth $42.04 billion. In the previous year,
exports to these markets were worth $41.10 billion. Exports to these countries increased by $1.93 billion in one
year.

Economic impacts of the Ready-Made Garments (RMG) sector in Bangladesh:

1. Contribution to GDP:
As of recent data by BIDA, the industry contributes around 16% of the country's GDP. In the fiscal year 2022-
2023, the RMG sector contributed 82% to Bangladesh's total export earnings, as reported by the Bangladesh
Export Promotion Bureau.
2. Foreign Exchange Earnings:
The RMG sector is the largest source of foreign currency earnings for Bangladesh. It accounts for a substantial
portion of the country's export income. According to data from the Bangladesh Bank-

FY 2022
Forex Earning in Garment
45.7
Fiscal Year

FY 2021 42.61
FY 2020 31.46
FY 2019 27.95
FY 2018 34.13
0 10 20 30 40 50
USD Billion

3. Employment Generation:
The RMG industry is the largest employer in Bangladesh, providing employment to millions of workers,
predominantly women. It is estimated that more than 2.562 million
Female •14.94 Lac- 58%
people are directly employed in the RMG sector, as reported by the
Bangladesh Garment Manufacturers and Exporters Association Male •10.68 Lac- 32%
(BGMEA).

4. Contribution to Industrial Growth:

The RMG sector has played a pivotal role in the expansion and development of related industries, contributing to
the overall growth of the country's industrial sector. It has stimulated growth in ancillary industries such as textiles,
dyeing, printing, and accessories, creating a more integrated industrial landscape.
5. Regional Development:
Concentration of RMG factories in certain regions has spurred regional development in places like Dhaka,
Chittagong, and Gazipur. This industrial clustering has led to the development of infrastructure and services,
fostering economic growth in these areas.
6. Technological Advancements and Skills Development:
The RMG sector has gradually adopted modern technologies for production, which has enhanced efficiency and
quality in manufacturing processes. It has also played a role in advancing the skill set of the workforce, improving
their technical expertise.
7. Attracting Foreign Investment:
Bangladesh's success in the RMG sector has attracted significant foreign investment. Foreign investors are drawn
to the country's competitive labor costs and potential for market growth. In recent years, foreign investors have
shown increasing interest in establishing or expanding their presence in Bangladesh's RMG sector.
8. Global Market Position:
Bangladesh has carved out a notable position in the global textile and apparel market Bangladesh gained a higher
share in the global readymade garment (RMG) trade last year, and retained its second position among apparel-
exporting nations. The country's share in garment trade rose to 7.90% in 2022 from 6.40% in 2021, according to
data released by the World Trade Organization (WTO).
9. Economic Stability and Development:
The RMG sector's stability and growth have contributed significantly to Bangladesh's economic development,
assisting in poverty reduction and providing avenues for economic resilience.
10. Impact on Small and Medium Enterprises (SMEs):
The growth of the RMG industry has had a positive spill-over effect on small and medium-sized enterprises
(SMEs) that provide supporting products and services to the garment manufacturing process. This development
has helped in diversifying the economic ecosystem, offering opportunities for ancillary industries to flourish.

The social impacts of the Ready-Made Garments (RMG) sector in Bangladesh:

1. Women's Empowerment:
The RMG sector has significantly contributed to empowering women in Bangladesh. Around 58.3% of RMG
workers are women, providing them with job opportunities and financial independence. Data from the World Bank
and the International Labor Organization (ILO) underline the substantial presence of women in the RMG
workforce, marking a significant shift in employment patterns and women's economic roles.
2. Changes in Gender Dynamics:
Reports from the Bangladesh Institute of Development Studies (BIDS) and various gender studies have observed
the transformative impact of women's employment in the RMG sector on altering traditional gender roles.
3. Rural-Urban Migration:
The growth of the RMG sector has triggered significant rural-to-urban migration. Workers migrate from rural
areas to urban centers where garment factories are predominantly located. Statistics from the Bangladesh Bureau
of Statistics illustrate that approximately 60% of RMG workers have migrated from rural areas, highlighting the
impact on urbanization trends.
4. Economic Mobility and Income Generation:
The RMG sector has contributed to economic mobility, especially for women from rural areas, providing
opportunities for income generation and socio-economic advancement. Findings from studies conducted by the
International Labor Organization (ILO) and various development agencies emphasize the positive impact of the
RMG sector in offering income opportunities to previously unemployed individuals.
5. Challenges in Working Conditions:
Despite the positive impacts, the RMG sector faces challenges related to working conditions. Issues include
workplace safety concerns, long working hours, and inadequate compensation. Reports from organizations like
the Accord on Fire and Building Safety in Bangladesh and the Alliance for Bangladesh Worker Safety have
highlighted challenges related to working conditions and safety in some garment factories.
6. Health and Education Challenges:
Some RMG workers face difficulties in accessing education and healthcare due to long working hours and low
wages. Studies conducted by organizations like UNICEF and the International Growth Centre have addressed the
challenges faced by workers in the RMG sector, hindering their access to education and healthcare.
7. Family and Community Dynamics:
The RMG sector has caused shifts in family structures and community dynamics, particularly as women become
earners alongside men, altering traditional family roles. Research conducted by the World Bank and various
sociologists has examined the impact of women's employment in the RMG sector on familial and community
structures in Bangladesh.

Proverty Rate
18.77%
49%
24.30%

31.50%
2000 2010 2016 2023