Bangladesh Studies
Bangladesh Studies
  • Home
  • Bangladesh
    • Foreword
    • Acknowledgements
    • Preface
  • Country Profile
    • Country
    • Geography
    • Society
    • Economy
    • Transportation and Communications
    • Government and Politics
    • National Security
  • Introduction
    • bangladesh studies>
      • Chapter 1 - Historical Setting >
        • EARLY HISTORY, 1000 B.C.-A.D. 1202
        • Islamization of Bengal, 1202-1757
        • European Colonization, 1757-1857>
          • Early Settlements
          • The British Raj
        • Pakistan Period , 1947-71>
          • Transition to Nationhood, 1947-58
          • The "Revolution" of Ayub Khan, 1958-66
          • Emerging Discontent, 1966-70
          • The War for Bangladeshi Independence, 1971
        • Birth of Bangladesh>
          • Early Independence Period, 1971-72
          • Fall of the Bangabandhu, 1972-75
          • Restoration of Military Rule, 1975-77
          • The Zia Regime and Its Aftermath, 1977-82
      • Chapter 2 - The Society and Its Environment>
        • Geography>
          • The Land
          • Climate
          • River Systems
        • Population>
          • Population Structure and Settlement Patterns
          • Migration
          • Population Control
        • Social System >
          • Transition to a New Social Order
          • Rural Society
          • Urban Society
          • Women's Role in Society
          • Social Classes and Stratification
        • Religion>
          • Islam
          • Hinduism
          • Buddhism
          • Christianity
        • Education>
          • The British Legacy
          • Education System
          • Religious Education
          • Education Planning and Policy
        • Health>
          • Disease and Disease Control
          • Health Care Facilities
          • Medical Education and Training
      • Chapter 3. The Economy>
        • Economic Context >
          • Historical Perspective
          • Economic Reconstruction after Independence
        • Managing the Economy>
          • Economic Policy and Planning
          • Government Budget Process>
            • Revenue Budget
            • Development Budget
        • Joint Ventures and Foreign Investment
        • Money and Banking>
          • Currency Fluctuation
          • The Banking System
        • Foreign Assistance >
          • Test Case for Development
          • Aid Dependence>
            • International Banks
            • United Nations
            • Foreign Governments and Private Donors
        • Agriculture>
          • Structure of Agricultural Production
          • Food Crops
          • Industrial Crops
        • Industry>
          • Traditional Sectors
          • Ready-made Garments
          • Other Industries
          • Mineral Development
          • Technological Advances
        • Foreign Trade >
          • Export Sectors
          • Balance and Terms of Trade
        • Transportation and Communications>
          • Inland Waterways and Ports
          • Road Transportation
          • Railroads
          • Civil Aviation
          • Telecommunications
          • Tourism
        • Problems and Prospects
      • Chapter 4 - Government and Politics>
        • Structure of Government>
          • Constitution
          • Legislature
          • Executive>
            • Presidency
            • Council of Ministers
          • Judiciary
          • Civil Service
          • Local Administration
        • The Ershad Period>
          • Achieving Stability, 1982-83
          • Emerging Opposition, 1983-86
          • Relaxation of Martial Law, 1986-87
          • More Opposition Pressure
        • Political Dynamics >
          • Local Elites
          • The National Party
          • Party Politics>
            • Awami League
            • Bangladesh National Party
            • Islamic Parties
            • Alliances
            • Workers and Students
            • Women in Politics
        • The Media
        • Foreign Policy >
          • South and Southeast Asia>
            • India
            • Pakistan
            • Other Nations
          • China and Other Asian Nations
          • The Islamic World
          • The Superpowers>
            • United States
            • Soviet Union
          • Western Europe, Canada, Australia, and New Zealand
          • International Organizations
      • Chapter 5 - National Security>
        • Armed Forces and Society>
          • Colonial Origins
          • Pakistan Era
          • The Liberation War
          • Postindependence Period
        • Organization of the Armed Forces>
          • Legal Basis
          • Recruitment
          • Mission>
            • National Defense
            • Intelligence and Security
          • Security Environment
          • Defense Spending
          • Foreign Acquisitions and Ties
        • The Three Services>
          • Army
          • Navy
          • Air Force
        • Auxiliary Forces >
          • Bangladesh Rifles
          • Ansars
          • Police
          • Village Defence Party
        • Public Order and Internal Security>
          • Violence and Crime
          • Insurgency in the Chittagong Hills
          • Criminal Justice
          • The Military in the Late 1980's
  • Bibliography
  • Glossary
  • About us
  • Contract us
MANAGING THE ECONOMY

Country boats on the Buriganga River; larger craft can be seen in the background
Courtesy Biman Bangladesh Airlines

Economic Policy and Planning After West Pakistani owners of industrial enterprises fled in 1971, the government of Bangladesh seized their plants as abandoned properties. The government suddenly found itself managing and operating more than 300 medium- and large-scale industrial plants, which represented nearly 90 percent of the value of all such enterprises in the new nation. It organized public corporations to oversee the major industries: jute, textiles, sugar, steel, paper and paperboard, fertilizer, chemicals, pharmaceuticals, engineering and shipbuilding, minerals, oil and gas, food and allied products, and forest products. With government control over major industries and massive inputs of foreign aid, the economy gradually returned to the levels of the late 1960s, but it was still among the world's poorest and least developed countries.

The main government institution responsible for coordinating national rehabilitation and development was the Planning Commission. Sheikh Mujibur Rahman (Mujib), the first president of Bangladesh, led the formation of the national-level Planning Commission, which prepared plans that directed economic priorities for five-year periods. The First Five-Year Plan covered the period July 1973 to June 1978. It was succeeded by a two-year plan, covering the period July 1978 to June 1980, which was followed by a year-long hiatus. The Second Five-Year Plan (1981-85) and the Third Five-Year Plan (1985-90) put the planning process back on track. The broad objectives of the Third Five-Year Plan were to reduce poverty, bring down the rate of population growth to 1.8 percent annually, increase exports by 5.9 percent and domestic savings by 10 percent, attain self-sufficiency in food production, and realize an annual growth of the gross domestic product (GDP-- see Glossary) of 5.4 percent. These ambitious goals went well beyond the previous actual performance of the economy.

Five-year plans are financed through the development, or capital budget, which was separate from the government's revenue, or administrative, budget. The Third Five-Year Plan envisaged a total outlay of more than US$12 billion, approximately 65 percent of which was destined for public sector projects. About 55 percent of the needed funds were to come from foreign sources, including private investment, the aid programs of international financial institutions, and bilateral donor nations. Foreign commitments in the early and mid-1980s were around US$1.7 billion per year (exclusive of external private investment, which in any case was not significant). The portion of the development budget to come from domestic sources (45 percent) represented a substantial increase from the 15 to 20 percent of earlier development budgets.

The Planning Commission translates the multiyear development plan into public investment through the Annual Development Programme. The commission also ensures that public programs and policies are in conformity with its long-term strategy through its project approval process and through its advisory position on the country's highest economic decision-making bodies, the National Economic Council and its Executive Committee. The National Economic Council in the late 1980s was chaired by the president of Bangladesh and included all government ministers plus the governor of the Bangladesh Bank and the deputy chairman and members of the Planning Commission. The Executive Committee of the National Economic Council made most of the decisions on major development projects and development issues in general. The committee included the ministers of key economic sectors (finance, planning, industries, commerce, and public works) and, according to the agenda, any other sectors concerned. A third organization involved in the planning mechanism is the Project Evaluation Committee, which monitors the progress of five-year-plan programs.

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