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General Economic Problems of Small and Medium Industries
1. A densely populated country with a high growth rate of population;
2. Primarily an agricultural country where its contribution in the GDP is about 54 per cent;
3. A rural based economy where 90 per cent of the people live in the rural areas;
4. With per capita income, rate of savings and the growth of GDP being one of the lowest in the world;
5. With industries still at an infant stage and major portion of exports consisting of primary and semi-processed goods while importing a large variety of finished goods;
6. With small and medium industries providing a large share of employment and consumer goods; and finally,
7. With constraints of economic development, that is insurmountable in the present state of the socio-economic conditions.
For the country’s economic development, vigorous and gigantic efforts need to be initiated. As regards the prospects of economic development, there are two predominant views existing in the country. One is the pessimistic and other is the optimistic view. The pessimistic view goes on to say that agriculture in Bangladesh can do very little for its economic emancipation. The population in the country is huge and growing at an alarming rate. Agriculture is unable to feed and provide resources for the development of the country. Whereas modern large-scale industries will take along time to develop and meet the requirements of the country, the small and medium industries would be the best way out. The optimistic view holds that agriculture still has growth potential and can provide resources for the future development of the country. In order to get the desired result from agriculture, industrial support by way of essential tools and inputs to irrigate, cultivate, fertilize, crop-care, and harvest are needed. Most of these could be produced by small and medium industries spread all over the country and with indigenous techniques which require less skilled workers.
It is interesting to note that both the views are agreed on one point that small and medium industries are essential to foster any economic development in the country.
In the world of continuous changes and modernization, one simple explanation for the death of famous handicrafts and cottage industries of Bangladesh is that this sector had simply failed to introduce new techniques and methods of production. It is really a paradox that the small and medium industries, though they have so much to do in developing the economy of the country, have still remained so neglected and uncared for. Is it because of its problems and careless treatment that this sector is in such a pathetic situation? Or is it just a part of a stagnant economy? Or is it because of the policy of the government not to do anything for it and let it go on its own?