Economics and Finance

The surge in global commodity prices during 2006-08 coupled with the global financial crisis of 2008-10 presented a tremendous development challenges for South Asian countries. The huge loss of income from the terms of trade shock worsened macroeconomic balances, fueled rapid inflation and hurt growth. The global financial crisis is further worsening the situation due to falling economic opportunities and government revenues. South Asian countries need to accelerate reforms to avoid a serious down turn in economic activity, investment, exports and income.

The book depicts an analytical picture of the socio-economic transformation of the economy of Bangladesh, particularly of the agriculture and rural sector. Transformation is explained as improved conditions of life and living, through expanded access to income, health, education, energy, transportation services and protection against vulnerability. Public expenditure and policies to support development of infrastructure, technology, institutions, private initiatives of collective organizations, including NGO’s, and numerous individual ventures contributed to the transformation.

The global financial system, this book argues, is in turmoil. Financial liberalization has led to phasing out of regulatory mechanisms over the movement of huge sums involved in currency speculations, new financial products, offshore financial centers, secretive hedge funds and hot money flows to emerging markets. The result is a degree of volatility in financial markets which threatens the orderly running of notional economies.

In recent years issues concerning bilateral trade between Bangladesh and India have received heightened interest and come under close scrutiny. Bangladesh's trade deficit with India has been increasing at an accelerated rate in recent years. The deficit grew most visibly in the 1990s when Bangladesh started to liberalise at a rapid pace with the deficit in formal trade balance rising from 200 million to about a billion within the scope of last five years.