Bangladesh is among the most densely populated countries in the world with the seventh large population of the world. Half of the GDP comes from service sector although two-thirds of Bangladeshis are farmers. More than three quarters of Bangladesh’s export earnings come from the garment industry. Cheap labor and low conversion cost attrated huge foreign investment in this sector.
The huge population and frequent natural calamity are two severe obstacle in economic countries economic growth. Also poor governance and weak public institutions, inefficient use of energy resources, insufficient power supplies, slow implementation of economic reforms, political infighting and corruption are significant obstacles too. Even though According to world bank despite of all these obstacles Bangladesh has shown steady economic growth of 4-5% annually (6.5% in 2006-2007), relatively low inflation, and fairly stable domestic debt, interest, and exchange rates.
Increased remittances by the Bangladeshis working abroad and expanding exports of apparels contributed to the growth performance. This is one of the major sources of foreign currency in Bangladesh (8.8% of GDP)
Recently Bangladesh has seen a dramatic increase in foreign direct investment. Telecommunications have shown remarkable improvements after the sector was opened for private investment. A number of multinational corporations, including Unocal Corporation and Tata, have made major investments, with the natural gas sector being a priority. Goldman Sachs referred Bangladesh as one of the next eleven emerging country and emphasis on the potential of future economical growth. Bureaucracy and red tape is still part of the investment problem but huge local market cheap labor and more export focused government policies encouraging more pro business environment.