"Macroeconomic performance, stabilization and adjustment : the experience of Bangladesh in the 1980's."

Since the 1980s Bangladesh has been Contracting structural adjustment loans under the purview of policy-based lending of multi lateral donors. These loans were contingent upon fulfillment of stringent policy conditionalities. This study attempts an objective assessment of macroeconomic performance and the adjustment experience of Bangladesh in the 1980s. The macroeconomic performance of Bangladesh in the 1980s has been discouraging. Though, the fiscal and external gaps showed a decline during the adjustment period, other major objectives relating to economic growth, investment, public expenditures, inflation etc remained unfulfilled. Coupled with exchange rate depreciation, aggregate demand management policies failed to achieve real exchange rate depreciation. The expected results of the trade liberalization on the industrial sector in particular were not observed as the sector continued to stagnate, Financial sector reforms were initiated very late in the reform process reflecting a major sequencing problem. For a country such as Bangladesh state governance remains a fundamental constraint to rapid economic transformation.

The study represents an objective analysis of the country's macroeconomic experience and offers many important insights into the workings of the structural adjustment program in Bangladesh and points to future directions,