Trade sector in Bangladesh

Bangladesh: Trade Policy and Integration

Trade Openness and Integration

Bangladesh launched a deep and wide-ranging trade reform strategy in the early 1990s. This included substantial reduction and rationalization of tariffs, removal of quantitative restrictions, move from multiple to a unified exchange rate system, convertible current account and an overall outward orientation of trade policy regime. As a result, the country’s trade integration, measured by the trade-GDP ratio, rose from 18% in 1990 to 43% in 2008.

Despite apprehensions that Bangladesh might lose out to exporters from China and India following the phase-out of the MFA quotas, its share in global apparel and textile exports has remained stable and export volumes have continued their robust growth. The country’s main markets are the EU and the United States and its imports are dominated in general by machinery and textiles, with China and India being the most important sources of imports. Bangladesh also has substantial unrecorded trade with its neighbor India. Labor exports are also important, with remittance inflows at about 9% of GDP.

The role of private sector driven export growth and diversification has been emphasized in Bangladesh’s PRSP, making export-led growth a key thrust of its poverty reduction and growth strategies.

trade graps

Economy of Bangladesh

The economy of Bangladesh is a rapidly developing market-based economy. Its per capita income in 2010 was est. US$1,700 (adjusted by purchasing power parity). According to the International Monetary Fund, Bangladesh ranked as the 43rd largest economy in the world in 2010 in PPP terms and 57th largest in nominal terms, among the Next Eleven or N-11 of Goldman Sachs and D-8 economies, with a gross domestic product of US$269.3 billion in PPP terms and US$104.9 billion in nominal terms. The economy has grown at the rate of 6-7% per annum over the past few years. More than half of the GDP is generated by the service sector; while nearly half of Bangladeshis are employed in the agriculture sector. Other goods produced are textiles, jute, fish, vegetables, fruit, leather and leather goods, ceramics, ready-made goods.
Remittances from Bangladeshis working overseas, mainly in the Middle East, is the major source of foreign exchange earnings; exports of garments and textiles are the other main sources of foreign exchange earnings. Ship building and cane cultivation have become a major force of growth. GDP's rapid growth due to sound financial control and regulations have also contributed to its growth; however, foreign direct investment is yet to rise significantly. Bangladesh has made major strides in its human development index.^[5]
The land is devoted mainly to rice and jute cultivation as well as fruits and other produce, although wheat production has increased in recent years; the country is largely self-sufficient in rice production.^[5][5] Bangladesh's growth of its agricultural industries is due to its fertile deltaic land that depend on its six seasons and multiple harvests.^[5]
Transportation, communication, water distribution, and energy infrastructure are rapidly developing.^[5] Bangladesh is limited in its reserves of oil, but recently there has been huge development in gas and coal mining. The service sector has expanded rapidly during last two decades and the country's industrial base remains very positive.^[5] The country's main endowments include its vast human resource base, rich agricultural land, relatively abundant water, and substantial reserves of natural gas, with the blessing of possessing the worlds only natural sea ports in Mongla and Chittagong, in addition to being the only central port linking two large burgeoning economic hub groups SAARC and ASEAN.

Bangladesh - An investment destination in South Asia ~

 Bangladesh is virtually located as a bridge between the emerging markets of South Asia and fastest growing markets of South East Asia and ASEAN countries. With the proposed concept of a "Bay of Bengal Growth Triangle" with its apex Chittagong port extending south-west to Calcutta, Madras and Colombo and the south-eastern arm extends through Yangon, to Thailand, to Penang with the third arm to Colombo, this region should have growing attention of the investment world. Bangladesh has the potential to be an entry port to the region, a potential small scale Singapore, for the region covering Bangladesh, Nepal, Bhutan, eight north-east Indian states (of Assam, Meghalaya, Monipur, Imphal, Arunachal, Nagaland, Mizoram and Tripura) and resource-rich northern Myanmar, a land locked region. Bangladesh is poised to become a regional hub where activities relating to assembling, manufacturing, trading and services, would be some of the areas that are picking up over the years. This geopolitico-economic location of Bangladesh indicates its history of being a nation of sea-farers, traders and suppliers.

Bangladesh is a developing democratic polity on the Westminister model; secular, but not a theocratic state. Bangladesh is a moderating influence in a consistently volatile and often mutually hostile South Asian scenario.

The current macroeconomic situation in the country is, by and large, stable, characterized by a manageable fiscal deficit and a quite low current account deficit. The stable macroeconomic situation is an outcome of a mixture of prudent monetary and fiscal policies that are being pursued. The external current account deficit has also been low. This reflects the continued high growth of exports, increased flows of remittances, moderate growth in money supply as well as that of imports.

Manufacturing & Industry
Many new jobs - mostly for women - have been created by the country's dynamic private ready-made garment industry, which grew at double-digit rates through most of the 1990s. By the late 1990s, about 1.5 million people, mostly women, were employed in the garments sector as well as Leather products specially Footwear (Shoe manufacturing unit). During 2001-2002, export earnings from ready-made garments reached $3,125 million, representing 52% of Bangladesh's total exports. Bangladesh has overtaken India in apparel exports in 2009, its exports stood at 2.66 billion US dollar, ahead of India's 2.27 billion US dollar.
Eastern Bengal was known for its fine muslin and silk fabric before the British period. The dyes, yarn, and cloth were the envy of much of the premodern world. Bengali muslin, silk, and brocade were worn by the aristocracy of Asia and Europe. The introduction of machine-made textiles from England in the late eighteenth century spelled doom for the costly and time-consuming hand loom process. Cotton growing died out in East Bengal, and the textile industry became dependent on imported yarn. Those who had earned their living in the textile industry were forced to rely more completely on farming. Only the smallest vestiges of a once-thriving cottage industry survived.
Other industries which have shown very strong growth include the chemical industry, steel industry, mining industry and the paper and pulp industry.

world trade

Textile sector
Bangladesh's textile industry, which includes knitwear and ready-made garments along with specialized textile products, is the nation's number one export earner, accounting for 80% of Bangladesh's exports of $15.56 billion in 2009. Bangladesh is 2nd in world textile exports, and China which exported $120.1 billion worth of textiles in 2009. The industry employs nearly 3.5 million workers. Current exports have doubled since 2004. Wages in Bangladesh's textile industry were the lowest in the world as of 2010. The country was considered the most formidable rival to China where wages were rapidly rising and currency was appreciating. 

After massive labor unrest in 2006 the government formed a Minimum Wage Board including business and worker representatives which in 2006 set a minimum wage equivalent to 1,662.50 taka, $24 a month, up from Tk950. In 2010, following widespread labor protests involving 100,000 workers in June, 2010, a controversial proposal was being considered by the Board which would raise the monthly minimum to the equivalent of $50 a month, still far below worker demands of 5,000 taka, $72, for entry level wages, but unacceptably high according to textile manufacturers who are asking for a wage below $30 On July 28, 2010 it was announced that the minimum entry level wage would be increased to 3,000 taka, about $43.
The government also seems to believe some change is necessary. On September 21, 2006 then ex-Prime Minister Khaleda Zia called on textile firms to ensure the safety of workers by complying with international labor law at a speech inaugurating the Bangladesh Apparel & Textile Exposition (BATEXPO).

L-12 to 14-JUL-12
CEMS-Global's TEXTECH series of Exhibition now also being organized in Sri Lanka and Indonesia along with the Bangladesh edition, has been serving the Textile & Apparel sector of Bangladeshfor over a decade, is the Oldest & Biggest Textile Garment Technology & Machinery Expo of Bangladesh. CEMS- Global presents its 13th edition - 13th Textech Bangladesh 2012 International Expo. Textech will be agreat B2B platform and a unique networking opportunity to further promote your Company / Product / Machinery & Technology in Bangladesh. For the past 12 years, Textech has been providing a perfect one-of-akind and one-stop solution to the visitors and platform for the exhibitors to interact directly with the buyers / importers for a perfect buyer - seller meet and a strong under-one-roof market place for the entire Textile & Garment industry of Bangladesh, which is seeing investments of US$ 2 Billion in the sector, and exports of Textile & Apparel surpassing US$ 14 Billion to over 100 countries of the World.
Venue: Bangladesh-China Friendship Conference Centre, Dhaka, Bangladesh

Visitor Registration Dhaka International Yarn & Fabric Show
Date: 11-JUL-12 to 14-JUL-12
Dhaka International Yarn & Fabric Show will be a marketplace for textile business as well as presenting the latest fabrics and trends. The DIFS will be fully equipped with all ranges of textile products enhanced with the latest technology, will set a new definition of smart fabrics in order to satisfy the growing demand of the buyers. This exhibition will be held four days from 11 to 14 Jul, 2012 at Bangabandhu International Conference Centre in the Bangladesh.
Venue: Bangabandhu International Conference Centre, Dhaka, Bangladesh

Visitor Registration International Fabrics & Accessories Sourcing Fair Dhaka
Date: 16-JAN-13 to 19-JAN-13
International Fabrics & Accessories Sourcing Fair 2013 (IFA Sourcing Fair)Being held concurrently with the largest apparel technology tradeshow of Bangladesh, Garmentech Bangladesh 2012, International Fabrics & Accessories Sourcing Fair- Dhaka is a platform conceived to address the apparel fabrics and garment accessories sourcing needs of the Bangladesh clothing and knitwear manufacturers and exporters. International Fabrics & Accessories Sourcing Fair- Dhaka will have on display latest fabric collections from domestic and overseas fabric manufacturers and distributors along with the hot collections of trimmings and embellishments.
Venue: Bangabandhu International Conference Centre, Dhaka, Bangladesh

Visitor Registration Yarn & Fabrics Sourcing Fair
Date: 16-JAN-13 to 19-JAN-13
Yarn Fabrics & Accessories Sourcing Fair is going to be a vibrant expo dealing with niche items. It will be organized by dual organizers namely, ASK Trade & Exhibitions Pvt Ltd and Zakaria Trade & Fair International is a division of Zakaria Enterprises of Bangladesh. This outstanding garment and textile expo will be a 3days event, which will be expecting a lot of exhibitors and visitors. The expo is an annual exhibition of Bangladesh.
Yarn Fabrics & Accessories Sourcing Fair will be exhibiting trendy and modern fabric collections, by eminent national manufacturers. The Yarn fabrics will be literally aiming to invite, fabric manufacturers and distributors both national and international to come and showcase their all new red hot collections of trimmings and embellishments.
Venue: Bangabandhu International Conference Centre, Dhaka, Bangladesh

Visitor Registration Dhaka Textile & Garment Machinery Exhibition
Date: 31-JAN-13 to 03-FEB-13
Dhaka Textile & Garment Machinery Exhibition is a unique opportunity to further promote your company in Bangladesh and with National & International Garment, Textile Machinery / Accessories Manufacturers / Suppliers & Related service under one roof. The Exhibition will be held at Bangabandhu International Conference Centre.
Venue: Bangabandhu International Conference Centre, Dhaka, Bangladesh

trade sector

 Bangladesh trade makes WRAP commitment

DAKHA – Worldwide Responsible Apparel Production (WRAP) has signed a memorandum of understanding with a trade body in Bangladesh as part of a plan to improve labour standards and lawful and ethical manufacturing in the country.
THE second Showcase Bangladesh will be held at Exchange Trade Centre International at Dataran Merdeka for three days beginning July 13.
The showcase, featuring 70 exhibitors, is expected to be the largest, if not the most important exhibition, to be held there since the centre  opened in April.

Bangladesh will be bringing its main players in the banking and finance sector, garment manufacturers, tour and hotel operators as well as suppliers of food and agricultural produce.

Former Bangladesh-Malaysia Chamber of Commerce and Industry (BMCCI)  president and chairman of the fair organising committee Syed Moazzam Hossain said the nation had lots to offer Malaysia since both share a long history of trade ties.

Among others, it is the second largest garment exporter in the world after China and sends large consignments to Europe, the United States and India.

"We grow cotton, have the skilled workers, and manufacture products with low prices but of high quality," said Syed.

Food products made there are also  halal, making its exports of beef and fish an attractive option for  Malaysian halal importers.

"We have signed free trade agreements with almost all developed countries making our exports duty-free. Currently Malaysian exports to Bangladesh stands at  US$1.8 billion (RM5.76 billion)  while our exports to Malaysia is US$43 million. This   trade exhibition is to bridge the disparity between the export value," he said.

Present at the press briefing to launch the showcase were Bangladesh High Commissioner A.K.M Atiqur Rahman and  BMCCI president Syed Nurul Islam.

The exhibition is organised by the governments of both countries and  the Malaysia South-South Corporation Berhad, which was represented at the briefing by its general manager Ng Su Fan.

Deputy Prime Minister Tan Sri Muhyiddin Yassin and International Trade and Industry Minister Datuk Seri Mustapa Mohamed are expected to attend the opening which will also be attended by Bangladesh'

The Union Finance Minister, Mr Pranab Mukherjee, said on Saturday that trade relations with Bangladesh are improving and India will take adequate measures to correct the imbalance, if any.

“The overall relation, including trade, is improving with Bangladesh and there is a need to improve trade relations as India exports more than it imports from that country,” Mr Mukherjee said, inaugurating a car pass project between India and Bangladesh at the land customs station at Petrapole in North 24 Parganas in West Bengal. The bilateral trade between India and Bangladesh grew by 45 per cent to $5.099 billion in 2010-2011 (July-June period), against $3.507 billion corresponding period in 2009-10.

In 2010-11, India's exports to Bangladesh stood at $4.586 billion, while its imports from that country were just about $ 0.512 billion.

India's move to allow a large number of items to enter from Bangladesh at zero duty taken last November will help correct the trade imbalance between the two countries to some extent, Mr Mukherjee said. 

world trade