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The Problems and prospect of

Industrialism Process in Bangladesh

Abstract:

This study a�empts to study The Problems and prospect of Industrializa�on Process in

Bangladesh from the historical perspec�ve. Since the country like Bangladesh is

predominantly agriculture base and the limited industrial output and exports also arise

from the primary produc�on the country face a s�ff compe��on in the world market to

maintain and develop its terms of trade and balance of payment in its favor. The

economy is of much vulnerable as the industrial structure and output are not diversified

enough and hence suffers very o$en from the external shocks. This study, in this context,

a�empts to study the structural bo�leneck of the Bangladesh industry, its problems and

suggests some policy implica�ons thereby.

Define Industrialism

An economic and social system based on the

development of large-scale industries and marked by the

produc�on of large quan��es of inexpensive

manufactured goods and the concentra�on of

employment in urban factories.

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Problems Facing Industrialism in Bangladesh

The fi$y five years plan (1997 – 2012) Bangladesh iden�fied some major obstacles to

industrial development of Bangladesh as:

a) No development of entrepreneurship:

An entrepreneur is one who always searches for change, responds to it, and

exploits it as an opportunity. Can anyone be an entrepreneur? The answer is no.

But with access to capital, minimum educa�on facility and own crea�vity, many

intelligent, energe�c youth can be turned into a decent business people.

In our country, the term for an entrepreneur is a 'businessman,' which carries

with it a set of nega�ve connota�ons. The assump�on is that one goes into

business if one cannot be a banker, doctor, engineer, lawyer, professor or a

corporate worker. In movies, businessmen are portrayed as crude, immoral

people. In day-to-day life, a businessman is only considered successful if he can

achieve conspicuous display of wealth.

b) Low literacy rate and technical know – how:

The economy of the country is growing on average at 5% rate since 2001. ....

Basically it is due to more generic problem: lack of currency of.... Strengthening

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the support system (technical, know-how and opera�onal) for the public.... low

access to infrastructure, combined with very poor literacy in rural Bangladesh

c) Capital scarcity:

As the investment bank era ends, so too, some in the industry are saying, the era

of broad capital use for execu�ng trades comes to a close. For most buy side

traders in the ins�tu�onal equi�es space, there will be less capital available to

facilitate large block trades, industry experts say. And when it is used, they add, it

will be more expensive and employed more carefully.

d) Poli)cal instability and weak poli)cal will force:

Bangladesh emerged as a new country plagued with Constant poli�cal instability.

The widely popular Independence leader Mujibur Rahman won the Elec�ons in

March of 1973. In January of 1975, the Government declared a na�onal state of

emergency and parliament was replaced by a one-party rule with Him s�ll in

power. A paramilitary force was createdTo crush any possible poli�cal opposi�on

when among others a le$-wing leader, Siraj Sikder, was Killed. However, on

August 15, 1975 Mujib was Assassinated during a right-wing coup d’état. Officers

as wells one of Muja’s ministers, Chandler Mustaque Ahmed, led the group and

took Over as president. A$er a shortreign, Khandker Mustaque Ahmed was

overthrown byMajor GeneralZia ur-Rahman. He soon installed the chief jus�ce,

A. M. Sayem,as president.

e) Tendency of being rich in the name of industrialist without real industry’s:

It is only Bangladeshi people applicable for that those people use to the habits.

f) Bank default – A good neck for trading and looking bank money for so called

industrializa)on:

"The default no�ce was sent in June 2008 to your address. The bank considers

that this no�ce was served in accordance with the requirements of Sec�on 176(2)

of the Consumer Credit Act. - The Default Document is a system generated so we

are unable to reproduce it and supply you with a copy of the original no�ce. Is the

bank allowed to do this and would it be possible for me to fight this decision to

have the default removed? Surely the bank would have to keep copies of its

system produced le�ers and have to supply me with a copy to substan�ate the

Default.

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g) Industrialist become businessmen: Some reason

1. Calcula�ve people only.

2. When businessmen become bored of wielding the tricks of the trade...they

start learning the actual trade...this when they become industrialists.

3. By switching to manufacturing sector. There is no other way.

4. They start loo�ng and undercuLng their tax declara�on on a small scale and

later on do it in a big scale thereby progressing as an industrialist.

5. hard work and luck

6. First they acquire knowledge in trading later on shi$s to manufacturing

h) Corrup)on and non-transparency:

In 2001, Bangladesh was on the top of a corrup�on index, breaking the long �me

record of Nigeria as the most corrupt country in the world (Transparency

Interna�onal 2001). It maintained its top posi�on in 2002 also. I�ses�mated that,

due to corrup�on, the country received 50 percent less foreign direct investment

during 1999 (UNCTAD 2001). Corrup�on in the country ‘sport, according to the

American Chamber of Commerce (2001), costs the Bangladesh economy $1.10

billion every year. Due to unauthorized power supply, $1.00 billion worth of

industrial output per year is lost (The Independent2000). Corrup�on in all

government dealings with the public is widespread. The present Prime Minister

Khaleda Zia claimed inApril2000 that the previous Hasina government had

misappropriated $80.00 million during the purchase of MIG 29 fighter jets from

the Russian Federa�on (Daily Star 2000). The Parliamentary Standing Commi�ee

on Defense is inves�ga�ng allega�ons of kickbacks in another deal for the

purchase of frigates worth $100 million from South Korea (Transparency

Interna�onal2001).

Prospect of Industrialism in Bangladesh

A prospect of industrializa�on is related to the growth and development of the whole

economy. The ini�a�ves which have taken to boost the economy are certainly have

posi�ve effects to the industrializa�on process.

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Professor Simon Kuznets (Nobel Laureate in economics in 1971) defined a country

economic growth as “a long term rise in capacity to supply increasingly diverse economic

goods to its popula�on, this growing capacity based on advance technology and their

instruc�onal and ideological adjustment that it demands”. Bangladesh economy, the

crucial and logical transforma�on is on the way to take place and it highly prospec�ve

for accelera�ng industrializa�on. In Bangladesh, Labour force is increasing day by day

and the absorp�ve capacity of agriculture is limited. Due to a variety of soci-economy

factors, the scope of sustainable growth in agriculture. Over the last quarter of the

century, Bangladesh has gone through a slow process of structural transforma�on. The

share of agriculture and other reduce to 33% in 1995 from 58% in1972. On the other

hand the share of manufacturing sectors increasing from 9% in1973 to 11.4% in

1994/1995 that paved a prospec�ve way to industrialism

Concluding Remarks

The high level of underdevelopment in Bangladesh can largely be a�ributed to

deliberate government policies such as con�nua�on and strengthening of the highly

centralized colonial administra�ve and educa�onal system; na�onaliza�on of medium

to heavy industries including manufacturing, communica�on, u�li�es, banks and other

financial ins�tu�ons under the state corpora�ons with significant monopoly power;

and misalloca�on of resources resul�ng in poor physical and social infrastructure,

environmental degrada�on, and high levels of corrup�on. No modern society made any

economic progress without educa�ng its ci�zens and reforming its colonial

administra�ve structures. The laws of supply and demand create the most efficient

markets because compe��on requires a con�nuous reduc�on of inefficiencies for

survival. The lack of priva�za�on leaves li�le mo�va�on to lower costs for profitability.

Corrup�on and inefficiency of the public-sector disappear with priva�za�on and

compe��ve market opera�on that limits the scope of the governmen�omaintaining law

and order, regula�ng monopoly power, providing public goods,

anddealingwithexternali�es such as pollu�on and resource deple�on as wells dealing

with business cycles. Government does not interfere with the Market forces.