The 20-day tournament starts on Sunday with 16 teams playing 54 matches in five cities and eight venues across the cricket-mad South Asian country.
A military bugle heralded the arrival of Prime Minister Khaleda Zia along with her son Arafat Rahman of the Bangladesh Cricket Board, to cheers and applause from the crowds in the stadium.
The teams entered the field under flood lights in alphabetical order accompanied by a military band.
Sports Minister Fazlur Rahman said the tournament was Bangladesh's biggest ever sporting event.
"Bangladesh is now ready to host World Cup Cricket and we are committed to cricket," he said.
"I hope our youth and organisers will strive to turn this pride into success," said Zia in her inaugural address, as colourful balloons rose up into the sky.
Malcolm Speed, chief executive of the International Cricket Council, said: "I hope that the feats of these international players will inspire local youngsters to try and follow in their footsteps."
Lawmakers of the Bangladesh's 300-seat Parliament ended Tuesday's session earlier than scheduled to join the opening ceremony.
Australia will hope to defend their title after beating South Africa in the 2002 title.
"We are confident of retaining the title, but our biggest challenge may come from the (Indian) subcontinent teams," said manager Brian Freedman.
The Bangladesh Cricket Board said tickets had sold out despite initial fears of a poor response to the junior tournament.
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