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Shahid Yusuf - Developing the nonfarm sector in Bangladesh: lessons from other Asian countries, Parts 63-340

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title Developing the Nonfarm Sector in Bangladesh Lessons From Other - photo 1
title:Developing the Nonfarm Sector in Bangladesh : Lessons From Other Asian Countries World Bank Discussion Papers ; 340
author:Yusuf, Shahid.; Kumar, Praveen
publisher:World Bank
isbn10 | asin:0821337262
print isbn13:9780821337264
ebook isbn13:9780585383866
language:English
subjectRural industries--Bangladesh, Economic forecasting--Bangladesh, Bangladesh--Economic conditions, East Asia--Economic conditions.
publication date:1996
lcc:HC440.8.Y87 1996eb
ddc:338.095492
subject:Rural industries--Bangladesh, Economic forecasting--Bangladesh, Bangladesh--Economic conditions, East Asia--Economic conditions.

Page i

WORLD BANK DISCUSSION PAPER NO. 340

Developing the Nonfarm Sector in Bangladesh

Lessons from Other Asian Countries

Shahid Yusuf
Praveen Kumar


The World Bank

Washington, D. C.

Page ii


Copyright 1996

The International Bank for Reconstruction

and Development/THE WORLD BANK

1818 H Street, N.W.

Washington, D.C. 20433, U.S.A.


All rights reserved

Manufactured in the United States of America

First printing October1996


Discussion Papers present results of country analysis or research that are circulated to encourage discussion and comment within the development community. To present these results with the least possible delay, the typescript of this paper has not been prepared in accordance with the procedures appropriate to formal printed texts, and the World Bank accepts no responsibility for errors. Some sources cited in this paper may be informal documents that are not readily available.

The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility whatsoever for any consequence of their use. The boundaries, colors, denominations, and other information shown on any map in this volume do not imply on the part of the World Bank Group any judgment on the legal status of any territory or the endorsement or acceptance of such boundaries.

The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the Office of the Publisher at the address shown in the copyright notice above. The World Bank encourages dissemination of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without asking a fee. Permission to copy portions for classroom use is granted through the Copyright Clearance Center, Inc., Suite 910, 222 Rosewood Drive, Danvers, Massachusetts 01923, U.S.A.

The complete backlist of publications from the World Bank is shown in the annual Index of Publications ,which contains an alphabetical title list (with full ordering information) and indexes of subjects, authors, and countries and regions. The latest edition is available free of charge from the Distribution Unit, Office of the Publisher, The World Bank, 1818 H Street, N.W., Washington, D.C. 20433, U.S.A., or from Publications, The World Bank, 66, avenue d'Ina, 75116 Paris, France.


Cover photo courtesy of The World Bank/Kay Chernush.


ISSN: 0259-210X


Shahid Yusuf is lead economist in the World Bank's Eastern Africa Department. Praveen Kumar is a consultant to the department and a professor at the University of Maryland.


Library of Congress Cataloging-in-Publication Data


Yusuf, Shahid, 1949

Developing the nonfarm sector in Bangladesh: lessons from other Asian countries / Shahid Yusuf, Praveen Kumar.

p. cm. (World Bank discussion papers; 340)

Includes bibliographical references.

ISBN0-8213-3726-2

1. Rural industriesBangladesh. 2. Economic forecastingBangladesh. 3. BangladeshEconomic conditions. 4. East AsiaEconomic conditions. I. Kumar, Praveen, 1960-. II. Title.III. Series.

HC440.8.Y87 199696-32298
338.095492dc20CIP

Page iii

CONTENTS
Forewordv
Abstractvi
Acknowledegmentsviii
Summaryix

1. Imperatives & Models1

2. Macroeconomic Trends in Bangladesh5

3. What Drives Growth?8
Gross Domestic Savings9
Gross Domestic Investment10
Foreign Direct Investment10
Public Finances11
Human Capital11
Health13
Message from Indicators13

4. Pattern of Development14
How Does Bangladesh Compare?15
Devising a Strategy for Agricultural Intensification18

5 Choosing Appropriate Technologies21

6. Other Lessons from Comparative Experience24
Lesson 1: Take Advantage of Location24
Lesson 2: Promote Exports27
Lesson 3: Develop Infrastructure28
Lesson 4: Encourage Local Government Entrepreneurship29
Lesson 5: Preparing for Industrialization31

7. Rural Industry in Bangladesh32
Rural Infrastructure34
Mechanical and Biochemical Technology38
Neighborhood Effects39

Page iv

8. Rural Industry & Export-Led Growth41
Possibilities for Foreign Investment41
Domestic Hurdles43
Financing of New Enterprises47
Niche Exporting49

9. Growth Poles53

10. Concluding Observations60

Tables and Charts64
Bibliography88
Map (IBRD 24206R)96

Page v

FOREWORD

Future growth of the Bangladeshi economy will be strongly influenced by the performance of the rural sector. Both the expansion of agricultural output and the development of the non-farm sector will play important roles, with the latter contributing more substantially to employment and potentially also to agro-based and manufactured exports. This study, which was prepared in connection with our ongoing work on Bangladesh's non-farm sector, explores the structure and dynamics of the rural economy in a comparative framework. It explores recent and potential sources of growth, in the process, providing a valuable spatial perspective on development processes. The study concludes with a wide-ranging policy agenda that gives due attention to the part that local governments can play through institution building, sound administration, resource mobilization, and entrepreneurship.

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