Assignment on Economical Background of Bangladesh

Bangladesh, as a newly born independent nation state, is an outcome of a great geopolitical quack in South Asian region and an outcome of two-fold separation within a quarter century (from India in 1947 and from Pakistan in 1971). The birth of Bangladesh in 1971 is not only a historical event of this region, but an outburst of the long-term socio-political and economic struggle of Bengali nation. The event of 1971 through which Bengalis can come forward with a nation-state, which is in fact, an event in which Bengalis could reach in its utmost level of success of its thousand-year-long existence for an identity as nation-state in the global arena. In this paper will discuss about the causes of the great liberation war, 1971 with the theoretical, philosophical, political and economic causes of liberation war. There are so many economical actors and factors behind this liberation war. This paper would explore the economical disparities.

Trouble started right at the inception of Pakistan in 1947. Almost immediately, East Pakistan claimed that as their population (55 percent as compared to 45 percent in the West) was greater, they were in a majority. Democratically, the Federal Capital, therefore, should have been in Dhaka and not in Karachi.

Since Karachi was the seat of the National Government; ministers, government officials and industrialists exerted immense influence on national and regional affairs. But the East Pakistanis were unable to extract the same kind of advantages, as they were a thousand miles away from the Capital. Moreover, the Capital initially attracted wealthy industrialists, businessmen, administrators, doctors and other professionals who had fled from India.

The location of the Capital, it was said, created great economic imbalance, uneven distribution of national wealth and privileges, and better jobs for the people of West Pakistan, because they were able to sway decisions in their own favor. Bengalis resented the vast sums of foreign exchange earned from the sale of jute from East, which were being spent on defense. They questioned how the expenditure for the Kashmir cause would be justified, when it could otherwise have been productively used to build dams and barriers to control floods, eradicate poverty and illiteracy, and supply food and shelter for the ever-growing population in East Pakistan. The people of the East believed that it was sheer regional prejudice that all white-collar jobs were taken by West Pakistanis.


Economic gap between East and West Pakistan in 1960s is often cited as a key reason for the secessionist movement led by Shaikh Mujib's Awami League and the creation of Bangladesh in 1971. This disparity has grown over the last 40 years, and the per capita income in Pakistan now stands at 1.7 times Bangladesh's in 2011, slightly higher than 1.6 as it was in 1971.

The economic disparity towards East Pakistan was the highest. No attempt was made to produce cotton in East Pakistan. Currency and economic control was fully under the central Government, private establishments, State Bank and Head offices of other banks, were situated in West Pakistan money was transferred without any restriction. The surplus savings were accumulated in West Pakistan. As a result, no capital could grow in East Pakistan. If we look at the economic history of 1947-71,the following picture reveals the fact:
Industries and factories were established in West Pakistan from the foreign currencies earned by East Pakistan.
East Pakistan could not spend according to earnings.
The foreign currencies earned from the sale of jute from East Pakistan, was spent in West Pakistan. Two-thirds of the testal foreign currency was earned from jute.
Only 10-15 percent of foreign aid and loan was spent for East Pakistan.
Of the total revenue,94% was spent for West Pakistan; as almost all the foreign missions were situated in West Pakistan, the income of that earning rose day by day.
The per capita income of West Pakistan was double of the income of East Pakistan.
7. Most of the industries and factories were under the ownership of the West Pakistanis and the income of these factories was spent in West Pakistan.