Economic growth has been respectable, the agricultural sector strong, inflation moderate, and balance of payments stable. Nevertheless, the economy faces several continuing problems, which, if not addressed sooner rather than later, could derail economic growth. Except in the energy and telecommunications sectors, the government has yet to pursue vigorously the pro-market reforms necessary for higher growth levels. Bangladesh s investment policies are friendly to foreign investment, but implementation of these policies has been a continuing problem. As a result, actual foreign investment has lagged well behind potential.
Labor is inexpensive, but productivity is low.
Infrastructure such as electric power, telecommunications, and water and rail transport is poor, even by regional standards. In particular, an old, congested, and corruption-ridden port at Chittagong exacts a heavy toll on the economy. The country's legal system is outdated and undermanned, leading to long delays in resolving cases. Many government officials view their role as more controlling commercial activity than stimulating it. Corruption is pervasive at all levels of officialdom.