Types of Economic Systems 1, Traditional econo tem The traditional economic system is based on goods, services, and work, all certain established trends. It reli specialization, In essence, the tra types. f which follow Some parts of the world still function with a traditional economic system. It is commonly found in rural settings in second and third world nations, where economic activities are predominantly farming or other traditional income-generating activities, There are usually very few resources to share in communities with traditional economic systems. ither few resources occur naturally in the region or access to them is restricted in some way, Thus, the traditional system, unlike the other three, lacks the potential to generate a surplus. Nevertheless, precisely because of its primitive nature, the traditional economic system is highly sustainable. In addition, due to its small output, there is very little wastage compared to the other three systems, 2. Market Economic System: A market economy is an economic system where two forces, known as supply and demand, direct the production of goods and services. Market economies are not controlled by a central authority (like a government) and are instead based on voluntary exchange. An equilibrium between supply and demand which turns as soon as into a fluctuating market. Other characteristics: i) right to private property, Competition that drive down the cost of that good iii) choice of where to buy. iv) evolved from traditional economies v) Use of money and voluntary exchange, vi) Capitalism: Rent for land, wages for labour, Interest for capital and dividend for organisation an economic system where private entities or people own the means of production. Capitalism needs the forces of supply and demand in the market economy to distribute goods and services and set prices. Conversely, command economies are tied to socialism and communism, where the collective group owns the means of production. 3. Command Economy: A command economy is a key aspect of a political system in which a central governmental authority dictates the levels of production that are permissible and the prices that may be charged for goods and services. Most industries in command economies are publicly owned. In a command economy, the central government dictates the level of production of goods and controls their distribution and prices.Proponents of command economies argue that government control rather than private enterprise can ensure the fair distribution of goods and service 4. Mixed Economy: A mixed economic system is one that combines aspects of both capitalism and socialism. A mixed economic system accepts private property and permits economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims, According to neoclassical theory, However, efficiency mixed economies are less efficient than pure free markets. bbase conditions like equal information and rational market participants are required for which perfectly cannot be achieved in practical, Characteristics: + mix of free-market elements and socialistic elements; lies between pure capitalism and pure socialism. Private ownership of most factors of production and also government regulations. Mixed economies socialize select industries that are deemed essential or that produce public goods. + All known historical and modern economies are examples of mixed economies. + Most countries today, including the United States, have a mixed economy with elements of both market and command economies. Concepts of Development Developme Development is a process that creates growth, progress, positive change in economic, environmental, social and demographic component without damaging the resources of the environment. + Better life for everyone + Better life is meeting basic needs + Sufficient food + Clothings + Safe and healthy place to live + Affordable Education + Affordable treatment + Affordable other services: Justice,Traveling, Social securities etc. + Dignity and respect to all Growth: le Economie growth refers to the increase in the production of goods and services in an economy over a period of time. In the context of Bangladesh, economic growth is often discussed in terms of Gross Domestic Product (GDP) and improvements in living standards. Several perspectives define economic growth for Bangladesh: 1. GDP Growth Rate Bangladeshis economic growth is often measured by its annual GDP grow rte, which has been consistently high over the last few decades. A higher GDP reflects the country's in 1gcapacity in production, investment, and consumption. It is typically driven by sectors such as agriculture, manufacturing and services, especially the ready-made garment (RMG) industry and remittances, 2. Per Capita Income Growth Economic growth in Bangladesh also means an increase in per capita income, reflecting improved living standards. As the economy grows, individual incomes increase, reducing poverty and improving overall welfare. 3. Poverty Reduction A key aspect of economic growth in Bangladesh is its ability to reduce poverty. Growth in sectors like agriculture and small-scale industries has played a vital role in lifting millions out of extreme poverty. Bangladesh's growth has been inclusive, targeting rural areas and underprivileged groups. 4, Human Capital Development Economic growth in Bangladesh is linked with human capital development. Investments in education and healthcare are seen as essential to sustain long-term growth. Programs like improving literacy rates, gender equality, and healthcare access contribute to a more skilled and productive workforce. 5. Industrial Growth For Bangladesh, economic growth is heavily dependent on its industrial growth, particularly in the textile and garment sectors, which dominate exports. Growth in light manufacturing industries helps expand employment and foreign exchange earnings. 6. Sustainable and Inclusive Growth In the Bangladesh perspective, sustainable economic growth means ensuring that environmental factors are taken into account, given the vulnerability of the country to climate change. Economic growth needs to be inclusive, benefiting all sections of society and ensuring that economic disparity is reduced. 7. Infrastructure Development The focus on infrastructure, such as transportation, energy, and telecommunications, is critical for Bangladesh’s economic growth. Developing this infrastructure supports business activities, reduces costs, and enhances the country’s global trade competitiveness. 8. Export-Led Growth Bangladesh's economic model has largely been based on export-led growth, primarily driven by the garment industry. Economic policies encourage boosting exports, diversifying industries, and improving global market access. 9. Foreign Direct Investment (FDI): Economic growth in Bangladesh is also characterized by its ability to attract FDI. As the country seeks to diversify its economy, foreign investment in sectors like information technology. pharmaceuticals, and electronics plays a significant role.In summary, economic growth in Bangladesh is defined by a combination of rising GDP, poverty reduction, huma I development, industrial expansion, and a focus on sustainability. These cclements shape how economic progress is understood and pursued in the country. Economie Growth The Bangladesh economy has been able to recover from the adverse effects of corona virus pandemic. Before pandemic, the GDP growth was 7.88 percent in FY 2018-19 which fall to 3.45, percent in FY 2019-20. GDP growth has been rebounded and stood at 6.94 percent in FY 2020- 21 and 7.10 percent in FY 2021-22. But, due to Russia-Ukraine crisis, the economic growth in FY 2022-23 has been hampered. According to the provisional estimate of BBS, the GDP growth is expected to be 6.03 percent in FY 2022-23. Gross Domestic Product (GDP) Gross domestic product (GDP) is the standard measure of the value added created through the production of goods and services in a country during a certain period. How to caleulate GDP GDP can be calculated in three ways: using the production, expenditure, or income approach. All methods should give the same result. ‘+ Production approach: sum of the “value-added” (total sales minus the value of intermediate inputs) at each stage of production. + Expenditure approach: sum of purchases made by final users. + Income approach: sum of the incomes generated by production subjects. GDP = private consumption + gross private investment + government investment + government spending + (exports - imports). Nominal GDP (or "Current GDP") = face value of output, without any inflation adjustment. Real GDP (or "Constant GDP") = value of output adjusted for inflation or deflation. It allows us to determine whether the value of output has changed because more is being produced or simply because prices have increased. Real GDP is used to calculate GDP growth. Gross Domestic Product (GDP) of Bangladesh at Current Prices According to the provisional data of BBS, GDP at current market prices is Tk. 44,39,273 crore (US$ 454 Billion) in FY 2022-23, up by 11.77 percent of the previous fiscal year. The per capita GDP increased to Tk. 2,59,91 FY 2022-23 which was Tk. 2,31,861 in previous fiscal year. On the other hand, per capita national income in FY 2022-23 stood at Tk. 2,70,414 up from Tk. 2,41,047 in the previous fiscal year. In US dollar, per capita GDP and GNI stood at USS 2,657 and US$ 2,765 respectively in FY 2022-23 compared to US$ 2,687 and US$ 2,793, respectively in FY 2021-22.Method of GDP Estimation Bangladesh Bureau of Statistics (BBS) is the organization responsible for estimating GDP in Bangladesh, Following the internationally agreed System of National Accounts (SNA) framework, various countries estimate GDP. Three methods/approaches are used to calculate Gop: (i) production approach, ) income approach and iii) expenditure approach, However, Bangladesh prepares GDP based on production and expenditure approach. Production based estimate of GDP encompasses 3 broad sectors which are i) agriculture, industry and i) service. Moreover, overall GDP of Bangladesh was consist of 15 sectors in 2005-06 base year. The broad agriculture sector consists of two sub-sectors namely, i) agriculture and forestry and (ii) fishing. Similarly, the broad industry sector comprises (i) mining and quarrying, (ii) manufacturing, (iii) electricity, gas and water supply and iv) construction sector. The broad service sector includes the collective outputs of the, i) wholesale and retail trade; repair of motor vehicles, motor cycles and personal and household goods, ii) hotels and restaurants, ') transport, storage and communication, iv) financial intermediations, v) real estate, renting and business activities, (vi) public administration and defense, vii) education, iii) health and social work and ix) community, social and personal services In 2015-16 base year BBS restructured some of the existing sectors and includes new sectors for estimating the value addition of the new base year (2015-16) GDP. Currently, the total number of sector in GDP is 19. Development Status of Countries The World Bank uses gross national income (GNI) per capita for its measurements of development, and it has four different categories of economies: i) low-income economies.ii) lowermidlle-ineome economies iii) upper-middle-ineome economies iv) high-income economies According to the UN, a developing country is a country with a relatively low standard of living, undeveloped industrial base, and moderate to low Human Development Index (HDI). This index is a comparative measure of poverty, literacy, education, life expectancy, and other factors for countries worldwide. The index was developed in 1990 by Pakistani economist Mahbub ul Haq, and has been used since 1993 by the United Nations Development Programme in its annual Human Development Report. The HDI measures the average achievements in a country in two basic dimensions of human development: + A long and healthy life, as measured by life expectancy at birth. + Knowledge, as measured by the adult literacy rate (with two-thirds weight) and the combined primary, secondary, and tertiary gross enrollment ratio (with one-third weight). Development entails a modern infrastructure (both physical and institutional), and a move away from low value added sectors such as agriculture and natural resource extraction, Developed countries usually have economic systems based on continuous, self-sustaining economic growth and high standards of living. Least-Developed Countries (LDCs) or underdeveloped countries In low income countries, a term recurrently is used Least-developed countries (LDCs). Least-developed countries (LDCs) or less-developed countries are underdeveloped countries that face significant structural challenges to sustainable development. The UN's list of LDCs currently comprises 46 countries. Least-developed country criteria ‘The UN criteria for placing nations on its list of least-developed countries include the categories of income, human assets, and economic vulnerability: 1. GNI per capita index: Three-year average of gross national income (GNI) per capita. Income thresholds are $1,018, The graduation or graduated scale threshold is 20% higher ie. $1,222.5. Bangladesh has graduated in 2016 growing to a per capita GNI of $1410. Bangladesh gni per capita for 2022 was $2,820, a 9.73% increase Bangladesh gni per capita for 2021 was $2,570, a 11.74% increase Bangladesh gni per capita for 2020 was $2,300, a 4.07% increase Bangladesh gni per capita for 2019 was $2,210, a 9.41% increaseGNI per capita (formerly GNP per capita) is >> the gross national income, converted to U.S, dollars using the World Bank Atlas method, divided by the midyear population GN is the sum of i) value added by all resident producers plus any product taxes not included in the valuation of output iii) less subsidies plus Iv) net receipts of primary income (compensation of employees and property income) from abroad [GNI, calculated in national currency, is usually converted to U.S. dollars at official exchange rates for comparisons across economies, although an alternative rate is used when the official exchange rate is judged to diverge by an exceptionally large margin from the rate actually applied in international transactions. To smooth fluctuations in prices and exchange rates, a special Atlas method of conversion is used by the World Bank. This applies a conversion factor that averages the exchange rate for a given year and the two preceding years, adjusted for differences in rates of inflation between the country, and through 2000, the G-5 countries (France, Germany, Japan, the United Kingdom, and the United States). From 2001, these countries include the Euro area, Japan, the United Kingdom, and the United States.] 2. Human assets index (HAI): Human assets are calculated using five indicators, grouped into a health and education sub index. + Under-five mortality rate + Prevalence of stunting (spread of prevent from growing or developing properly.) + Maternal mortality ratio + Lower secondary school completion rate + Adult literacy rate + Gender parity index for lower secondary school completion 3. Economic and environmental vulnerability index (EVI): The economic vulnerability index measures structural vulnerability to economic and environmental shocks, with a high level of vulnerability, which indicates major structural impediments to sustainable development. The sub indices are ‘+ Remoteness and landlocked position + Merchandise export concentration + Share of agriculture, forestry and fishing in GDP * Instability of exports of goods and services «Share of population in low elevated coastal zones «Share of population living in drylands + Victims of disasters + Instability of agricultural production