Virtual Bangladesh : Economy : Aid and Trade

Since independence in 1971, Bangladesh has received more than $22 billion in grant aid and loan commitments from foreign donors, about $15 billion of which has been disbursed. Major donors include the World Bank, the Asian Development Bank, the UN Development Program, the United States, Japan, Saudi Arabia, and a number of West European countries. As of 1991, the United States had provided more than $3.3 billion in food and development assistance. Food aid provides food, promotes production, and helps stabilize prices. Other US programs target family planning and health, agricultural development, and rural unemployment. In 1991, the US forgave Bangladesh $293 million of development assistance debt.

Bangladesh historically has run a large trade deficit, about $1.5 billion annually during the late 1980s. This was financed largely through foreign assistance. The balance of payments swung into surplus in 1990-91 because of increased exports of garments and depressed domestic demand for imports. In recent years, remittances from workers in the Middle East have been Bangladesh's most important source of foreign exchange earnings. The US trade balance with Bangladesh has been negative since 1986, due largely to imports of ready-made garments.

Aid and Trade Indicators

	1997	1998	1999 1/
Total Exports FOB	4,406	5,161	5,313
Exports to U.S. 3/	1.679	1,846	N/A
Total Imports CIF	7,162	7,524	7,515
Imports from U.S. 3/	259	318	N/A
Trade Balance	-2,756	-2,363	-2,202
Balance with U.S. 3/	1,420	1,528	N/A
External Public Debt 4/	15,025	15,855	16,234
Fiscal Deficit/GDP (pct)	4.5	4.2	5.3
Current Account Deficit/GDP (pct)	2.4	3.6	4.2
Debt Service Payments/GDP (pct)	1.0	1.0	1.0
Gold and Foreign Exchange Reserves	1,719	1,751	1,522
Aid from U.S. 5/	73.6	77.0	153.0
Aid from All Sources 6/	1,481	1,419	1,502

1/ The Bangladesh fiscal year is July 1 to June 30.
2/ Percentage change calculated in local currency.
3/ Figures are for the calendar year.
4/ Medium and long-term.
5/ Figures are for the U.S. fiscal year (October 1-September 30).
6/ Disbursements.