Bangladesh Economy: News & Updates

[Zabaniyah]

Bangladesh eyes $20b in New Year

Retaining its position as the 2nd largest RMG exporter

Bangladesh enters 2013 with a firm footing as the world's second largest garment exporter, raising hopes for a new wave of business despite turbulent times in parts of the globe.

The World Trade Organisation declared Bangladesh as the second largest RMG exporter after China in 2010-11 when the country's export grew 43.36 percent year on year to $15.66 billion in spite of global recession in 2007-2008.

Bangladesh retained its position in the following fiscal 2011-12 by exporting garments worth $19.09 billion. And the outlook for the current fiscal is set to exceed $20 billion.

Bangladesh now claims 4.8 percent of the global RMG trade of $412 billion.

According to McKinsey & Company, an international management consulting firm, Bangladesh's apparel exports will reach $36 billion by 2020.

Some key market players believe that the country's potentials are even greater.

But all these prospects appear to have been shaken by one fire tragedy in late November at Tazreen Fashions Ltd, where 112 workers were killed. This single incident exposed inadequate fire safety and poor working conditions that still exist in many factories.

The incident was widely covered worldwide mainly because of Bangladesh's position as the number two apparel exporter. The buyers are now pressing factory owners to improve working conditions, hike wages of workers, and ensure labour rights and other compliance issues.

Following the event, many international non-governmental organisations campaigned for restricting purchase of Bangladeshi garments until the garment makers here ensure workers' safety and labour rights.

The apparel sector may face some hurdles this year unless the issues of proper working environment, better wages and labour rights are resolved.

Exporters here still remain hostage to large-scale buyers, who always try to pay the lowest possible rate for apparel items. The garment makers need to persuade these buyers to pay more so that they can address the compliance issues at home.

In order to retain its position, Bangladesh has to ensure adequate supply of gas and power, make available industrial lands, combat corruption, improve infrastructure and port efficiency, ease traffic congestion and develop skilled manpower.

Several factors such as availability of cheap labour, quota facility, cash incentives against export and entrepreneurial skills have helped the RMG sector grow since the country's entry into the global market. Bangladesh enjoyed quota-free status till 1985.

Following the imposition of quota restriction by the USA and the EU, Bangladesh with enough manpower utilised its allocated quota to the full compared to neighbouring India, Pakistan, Sri Lanka and Nepal.

Bangladesh managed to supply garment items to international buyers at competitive prices without having two important basic requirements -- cotton and machinery.

Now, Bangladesh is not only a supplier of basic garment, but also a major destination for high-end apparel items.

The strength of the country's apparel sector is well understood through its ability to supply high-end items to famous global brands such as Hugo Boss, Adidas, Puma, Tommy Hilfiger, G-Star, Diesel, Ralph Lauren, Calvin Klein, DKNY, Nike, Benetton and Mango. Currently, more than 30 percent of the total RMG export is high-end products.

The primary textile sector also saw a wave of investments for increasing demands for fabrics.

The sector with a total investment of over 4.5 billion pound is now capable of supplying 90 percent of fabrics for the knitwear sub-sector and 40 percent of fabrics for the woven sub-sector.

It took three decades of hard work for the country's garment sector to achieve its position today.

The journey started in 1978, with a shipment of 10,000 pieces of men's shirts worth 13 million Franc to a French company by Reaz Garments Ltd.

Desh Garment Ltd, the first fully export-oriented garment factory of the country, entered the global market the following year.

In 1980, South Korean Youngone Corporation formed the first joint-venture garment factory with a Bangladeshi firm, Trexim Ltd.

The number of garment factories in the country rose to 587 in 1984-85. With the arrival of many international buyers, the figure jumped to around 2,900 in 1999.

In 2005, Bangladesh with an increased number of production units became one of the 12 largest apparel exporters in the world.

Now, the country has more than 5,500 woven garment factories, 1,700 knitwear factories and 1,300 spinning, finishing and dyeing factories.

At present, the sector employs 3.5 million workers, 80 percent of whom are women.

The country's 60 percent RMG products enter the EU, 23 percent goes to the USA, 4.8 percent to Canada and 12.1 percent to other destinations worldwide.

According to data of Export Promotion Bureau, the RMG sector's contribution to the country's export was 3.9 percent in fiscal 1983-84, which now stands at nearly 80 percent.

The country's banking and financial institutions, and insurance and services sectors are largely dependent on the RMG sector.

BRAVO Bangladesh eyes $20b in New Year

 

[kobiraaz]

Ok. Bangladesh rules in textile industry! Our Ship building and medicine industry is also flourishing. I want to know what other optiones we have? If we want to become a developed nation within 2050, what other industries should we develop taking all available resources and geography in consideration?

 

[damiendehorn]

Ok. Bangladesh rules in textile industry! Our Ship building and medicine industry is also flourishing. I want to know what other optiones we have? If we want to become a developed nation within 2050, what other industries should we develop taking all available resources and geography in consideration?

Thanks, a really good question all Bangladeshi's should be asking. I think apart from the above, we need to focus on "white" goods, automotive products, small to medium engineering industries etc. Just take a look at things that are imported and see if it can be produced/assemble at home cheaper or more efficiently.

The best thing to do is look at how other similar nations such as Malasyia, Vietnam, Taiwan, etc have evolved their industrial base and see what we can learn, we need to focus on becoming a export orientated nation.

Lastly, we should not neglect the service sector such as banking, tourism, software dev, etc.

 

[Hammer-fist]

Thanks, a really good question all Bangladeshi's should be asking. I think apart from the above, we need to focus on "white" goods, automotive products, small to medium engineering industries etc. Just take a look at things that are imported and see if it can be produced/assemble at home cheaper or more efficiently.

The best thing to do is look at how other similar nations such as Malasyia, Vietnam, Taiwan, etc have evolved their industrial base and see what we can learn, we need to focus on becoming a export orientated nation.

Lastly, we should not neglect the service sector such as banking, tourism, software dev, etc.

1. We have not tapped our tourism potential and can gain tourists from east Asia including the Chinese and others.

2. In terms of banking as the 3rd biggest Muslim country we can be a centre of Islamic investment, even more so than Malaysia.

3. Pharmaceuticals is another industry we are working on.

4. Electronic consumer goods e.g. WALTON BD.

5. I also recommend being a centre of education, which will increase our soft power especially if we can get students from other Asian countries.

We already have the Asian University for Women in Chittagong.

Plus there's much more.

 

[Luffy 500]

Ok. Bangladesh rules in textile industry! Our Ship building and medicine industry is also flourishing. I want to know what other optiones we have? If we want to become a developed nation within 2050, what other industries should we develop taking all available resources and geography in consideration?

We have been lingering around textile for way too long IMHO. 20 years is a long time to move on from Light eng to Heavy hich tech eng. We should move up the value addition ladder in this sector like "taxtile machinaries (in JV with advance countries), high value dyes & fabrics with progessive R&D.

IMO we should go for highly state regulated capitalist policy (like E.asia) by overwhelmingly investing our resources in certain sectors that have good potentials. It will also need huge investment in quality education (something that is missing) & setting up of large research facilities (both public & private):

Steel & metallurgy: Steel & metal processing will help us have many more spill over industries in the high end sectors.

Ship building: One major industry that we can really invest our resource into. It is a sector that demads very advance technology, cheap labor & huge capital. It will give rise to some major heavy industrial sectors & compliment the steel industry. If we can make our own ship engine in 15 years time, it can be considered a success in terms of value addition.

Agro-machinery industry: can be off shot of heavy industry

Agro-processing: The one that has the most potential in BD.

Electronics: Should be heavily backed since we already have a decent base of electronics industry here. More Companies like Walton should be encouraged. Big conglumerates like Square, jomuna, beximco & boshundhara can be encouraged to venture into such sectors.

Man-power export: Semi-skilled man-power export can always be an option if we can add value to their skills through technical training. Gov policies should be such that the remittence send should be directed to productive purposes.

Pharmaceuticals:U being a doctor, I am sure U know bro ,that it is a very high tech industry when it comes molecular innovation, something in which US, EU & Japan have the major share of the pie. S.korea & china is just starting to get on with it & may be India will follow suit as the R&D is both time consuming, high tech, business risk & demands huge investment. What we do in Pharmaceuticals is make generic drugs(already innovated drugs) & being an LDC we enjoy patent waver till 2016 (see TRIPS). Chances r high that it will get extended beyond, otherwise it will be a disaster for our healthcare, Pharmaceutical sector.We can copy patented drugs & export them that should not be the case under TRIPS full implementation. We can-not innovate but only formulate. It is still not a sector that can lead us to a export-oriented growth. But our accomplishment is no way something to look down upon. We r one of the few developing countries that meets 98% of the our demand by domestic production & also export to other developing countries. It will take time for us to go the next level.

But for all that to happen political stability is the most thing something which some future predictors here seem to forget.

 

[Zabaniyah]

Fuel prices hiked again


Kerosene, diesel by Tk 7, petrol, octane by Tk 5 a litre

The government yesterday increased prices of diesel and kerosene by Tk 7 a litre, and octane and petrol by Tk 5 a litre to reduce its subsidy burden.

The price of diesel and kerosene has been raised to Tk 68 a litre, and the prices of octane and petrol have been increased to Tk 99 and Tk 96 a litre, Nazmul Ahsan, deputy secretary of the energy ministry, told The Daily Star.

The new prices take effect from today.

The government increased fuel prices by Tk 5 a litre the last time on December 30, 2011.

This is the first fuel price hike in the last one year. The Awami League-led government has so far increased fuel prices five times, including the latest one, since it came to power in December 2008.

Despite the latest increase, the government will have to give subsidy on diesel and kerosene by Tk 11.77 and Tk 12.15 a litre.

The latest rise will help the government, which plans to spend Tk 8,500 crore in fuel subsidies, save up to Tk 2,500 crore, said energy ministry officials.

Raise your hands, and say: WEEEEEEEEEEEEEEEEEEE..........

 

[KRAIT]

Raise your hands, and say: WEEEEEEEEEEEEEEEEEEE..........

Will, WEEEEEEEEEEE Will, ROCK YOU.

 

[DarkPrince]

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try uwa uwa uwa

 

[Luffy 500]

@Loki , the most anguishing pathetic aspect of this is that all this is done to profit a few families operating the quick rentals. This regime is well set on destroying whatever is remaining of this state. They want to take down the whole country with them.

 

[Zabaniyah]

@Loki , the most anguishing pathetic aspect of this is that all this is done to profit a few families operating the quick rentals. This regime is well set on destroying whatever is remaining of this state. They want to take down the whole country with them.

But! But! Daily Star says that the AL is ahead of BNP according to a recent survey!

AL still ahead of BNP in votes, but narrowly
AL still ahead of BNP in votes, but narrowly

We are doomed

The survey also reveals that AL enjoys a good support among the poor and the middle class. It also has a huge rural following.

The number one factor seems to be the low food prices which has helped the majority of the rural population, who are either marginal farmers or landless and have to buy food.

Improvement and expansion in rural education, road network, proper fertiliser distribution, expansion of social safety network and fewer crimes are likely to be the other reasons for the government's strong show in rural areas.

Factors such as Padma bridge graft, railway scam or Hall-Mark scam, which had a big negative impact on urban voters, did not affect the opinion of the rural people.

Does anyone see something wrong here, or is it just me?

 

[Luffy 500]

Well its daily farting star after all. its living up to its reputation of ethically bankrupt journalism.

The number one factor seems to be the low food prices which has helped the majority of the rural population, who are either marginal farmers or landless and have to buy food.

Improvement and expansion in rural education, road network, proper fertiliser distribution, expansion of social safety network and fewer crimes are likely to be the other reasons for the government's strong show in rural areas.

The time they published it (4 jan 2012) fuel prices was already increased 3/4 times by then.

 

[Anubis]

Fact is A.L was ahead of BNP by larger scale before,but the gap has reduced.....Hopefully they will loose the majority support by the time of the next election!!Personally I think the previous 'Tottabodhayok shorkar' was better!

 

[Gyp 111]

Financial Express :: Financial Newspaper of Bangladesh

The overseas employment sector witnessed a boom last year with 0.609 million workers going abroad despite Malaysian market being still inaccessible to Bangladeshi workers, reports BSS. "The sector witnessed a boom last year and we expect a substantial growth in manpower export soon as Malaysian government sent demand letter for recruiting workers from Bangladesh," Expatriates Welfare and Overseas Employment Minister Engineer Khandker Mosharraf Hossain told the news agency.

He said 2,043,615 workers went to different countries from January, 2009 to December 31, 2012 and remitted around $44 billion. This amount is $33 billion higher than the remittance received during the period of BNP-led four party alliance government. "The manpower export is expected to have a robust growth this year as Malaysia reopened its job market and the government explored various destinations for overseas workers," he said. Engineer Mosharraf said the government has sent 609,573 workers to 157 countries and received $14.175 billion remittance in 2012, adding "The number of workers going abroad would grow two-fold this year, as the government's efforts yielding positive results in exporting manpower to new destinations." "Malaysian government has sent demand letter for recruiting 10,000 workers initially from Bangladesh and more would be recruited this year," the Minister said. He, however, said the overseas employment sector achieved the success as Bangladesh made its strong presence visible in the international forums like Colombo Process, a regional consultative process on the management of overseas employment and contractual labour for countries of origins in Asia.

According to a ministry official, the government desperately tried to explore new destinations for its manpower by reducing migration cost and providing necessary training to workers and that got a positive response despite the prevailing global economic recession. He said the government is implementing various programmes including training courses on language, welding, electrical devices, pipe fitting, plantation, swing trade, rod binding, to turn the vast population of the country into human resource. The ministry official said Malaysia needs around 1-1.5 million foreign workers for its development work. Bangladesh is expected to send around 0.5 to 0.7 million workers to Malaysia.

 

[Gyp 111]

BAL and BNP both are not better for BD, we need a corruption free political team

 

[Gyp 111]

Forex reserve top $13b for first time | Business | bdnews24.com

Dhaka, Jan 7 (bdnews24.com)––The foreign exchange reserve crossed the $ 13 billion-mark for the first time on Monday, thanks to a robust growth of inward remittance as well as decreasing import payment.

The reserve rose to $13.04 billion on the day -- the first week this year-- setting a new record, according to the central bank statistics.

Kazi Sayedur Rahman, General Manager of the Forex Reserve and Treasury Management Department of Bangladesh Bank, told bdnews24.com that strong inflow of remittance, pledged foreign assistance, increase in export earnings and declining import trend played an important role to help fuel the reserve.

Bangladesh's foreign exchange reserves rose to $9.63 billion at the end of December 2011, which grew 32 percent to $12.75 billion by the end of December 2012.

In the year gone by, expatriate Bangladeshis set a new annual record for remittance, sending home a staggering $14.2 billion.

The remittances increased by about $2 billion within a gap of one year and the figure represented a 16.3 percent increase over 2011.

According to the central bank, the remittance sent by the non-resident Bangladeshis was $12.11 billion in 2011.

The central bank officials said that the foreign exchange reserve crossed the $12 billion mark for the first time on Oct 18 last year. Though the reserve had dipped in the first week of November after Bangladesh made two months' import payments to the Asian Clearing Union (ACU), the reserve surpassed the mark again on Dec 10.

Officials said that the current dollar reserve will be enough to offset the import costs for the next five months.

According to the Export Promotion Bureau (EPB), the export earnings increased by 4.36 percent in the July-November period from the same time last year.

Concurrently, import costs dropped by 6.75 percent in the July-October period which was 23.13 percent at the same time last fiscal.

Also, according to the Economic Relations Department (ERD) latest data, net foreign aid galloped by two times in the first five months (July-November) of the current fiscal.