Overview
9 The People's Republic of Bangladesh is home to more than 150 million people concentrated on 144,000 sq Km. Over
40% of the population are children. Three-quarters of Bangladeshis live in rural areas. The country sits on the world’s largest
delta formed by Ganges, Brahmaputra and Meghna rivers, making it extremely vulnerable to floods, and cyclones.
9 The global financial crisis is another challenge that is testing the resilience of Bangladeshi people to recent adversities
such as the Cyclone Sidr in 2007 and the global food price crisis in 2008. Evidence shows that the food price crisis has sent
a substantial number of households back to poverty, after a decade of progress. The global financial crisis could compound
this situation through macro-economic pass-through channels such as remittances, exports of ready-made garment and
other agricultural exports (e.g. shrimp, jute and tea).
9 This case study is part of a series of WFP country case studies to elicit how the global financial crisis is manifested in
Bangladesh at macro-economic level as well as how the macro-level impacts are manifested on households’ living
conditions1. Rapid qualitative information was collected from March 22 to April 4, 2009 through 40 focus group discussions.
This case study aims at completing the findings of a nation-wide representative household survey jointly undertaken by
WFP, UNICEF and the Government in November-December 2008, to assess the impacts of the global food price crisis on
households’ food security and nutrition.
Recent Developments
9 In the past decade, Bangladesh has made impressive economic and social progress towards achieving some of the
Millennium Development Goals (MDGs), despite repeated natural disasters and external shocks. Bangladesh has met the
MDGs for gender parity in education and has made impressive progress towards achieving universal primary enrolment.
According to the Bangladesh MDG mid-term report of 2007, the net enrolment ratio in primary education was 87%. The
average GDP growth over the last six years was over 6%. Although poverty fell from 57% of the population in 1990 to 40%
in 2005, challenges remain in eradicating extreme hunger and malnutrition.
9 Indeed, recently, the global food and fuel price crisis in 2008 and the Cyclone Sidr in 2007 have tested the resilience of
the Bangladeshi people. A nation wide survey conducted by WFP, UNICEF and the government in December 2008 to
assess the impact of high food prices on the population revealed significant food insecurity (one in four Bangladeshi) and
increased severe (stunting, underweight and wasting) malnutrition rates.
9 The global financial crisis could compound this situation. The economy is indeed increasingly exposed to global shocks
as a result of increased openness to the global economy. The contribution of trade (export and import) increased
significantly since 2001 from 33.4% of the gross domestic product (GDP) to 43.4% in 2008.
Macro-Economic Effects of the Global Financial Crisis
9 Bangladesh is affected by the global financial crisis through the reduction of remittances, migration, ready-made
garments and agricultural exports (shrimp and tea). The economy is heavily dependent on migrants’ earnings in the Gulf
countries and Western countries. Bangladesh is in the fifth position among the top remittance recipient countries in the
world. The contribution of remittances more than doubled from 4% in 2001 to 10% of GDP in 2008. Exports take up 20%
of the GDP. Exports of ready-made garments (RMG) represent 80% share of total exports. Almost half of the exports go
to the Europe, while 25% goes to the United States.
9 The volume of trade decelerated by 5.3% between July-December 2008 against an increase of 3.4% during the same
period in 20072. A further decrease of 7.1% was observed in January 2009, compared to January 2008. Export orders of
RMG fell by 5% in January and 17.6% in February 2009, with lagged effects on actual RMG exports expected 3-4 months
later. Fish exports decreased by 16% on average in July-December 2008 compared to July-December 2007. Jute exports also
decreased by 17% over the same period and by 19.8% in January 2009 compared to January 2008.
9 Migration decreased by 40% in January-March 2009 compared to the same period in 2008. Cancellation of 55,000 work
visas to Malaysia in March 2009 is adding to concerns about the increasing number of deportees, which nearly doubled to
8,000 in February 2009. Although remittances are still high at trend levels, there are signs of deceleration since February
2009, with a drop of remittance flows by 8.7% compared to January.