Export Import Performance of Bangladesh

7/23/2019 Export Import Performance of Bangladesh

1/35

Assignment

On

An Analysis into the Export Import Performance ofBangladesh in perspective of South Asian Countries

Course title: International BusinessCourse code: BUS-322

Submitted to:

Mr. Bashir Ahmed BhuiyanAssociate professor

Department of Business AdministrationLeading University, Sylhet

Submitted by:

Name Roll

Zaber Arbab Chy 0901010018

Md.Maidul Islam 0901010017

Nigar Parbin 0901010019

Rehnuma Tahura 0901010027

Shanu Uddin Rubel 0901010054

Nabila Samad 0901010049

Pintu Chandra Dev 0901010046

Section: ADepartment of Business Administration

Leading University, Sylhet

Submission Date: September 6, 2011


2/35

Letter of Certificate

I am extremely pleased to declare that the following group of students hasbeen given with the topic An Analysis into the Export ImportPerformance of Bangladesh in perspective of South Asian Countriesforwriting an assignment. They have reviewed all the relevant literature andhave surveyed the assigned organization for collecting of both primary andsecondary data. I have supervised them throughout the preparation of the

paper.

I also certify that the paper is an original one and has not been submittedelsewhere previously for publication in any form.

I believe they will try to do their best in all phase of their live.

Mr. Bashir Ahmed BhuiyanAssociate professorDepartment of Business AdministrationLeading University, Sylhet


3/35

6th

September, 2011

To,

Mr. Bashir Ahmed Bhuiyan

Associate professor

Department of Business Administration

Leading University, Sylhet

Subject: Letter of Submission

Dear Sir,We were given the topic An Analysis into the Export Import Performanceof Bangladesh in perspective of South Asian Countries for writing anassignment for presentation and collection of primary and secondary data.To do so, we sought the relevant information in books, journals, and theassigned organization.

We tried to collect all possible information and make this paper acceptableto all but there can be still existing mistake. So we like to request you toconsider if any fault is found in paper. Lastly, we would like to request you

to accepted our paper and permit us to present it before the panel of experts.

Thank you in advance for your assistance and advice in this connection.

Yours obediently

Name Registration no

Md. Maidul Islam 0901010017Zaber Arbeb Chy 0901010018Rahnuma Tahura 0901010027Shanu Uddin Rubel 0901010054

Nigar Parbin 0901010019Nabila Samad 0901010049Pintu Chandra Dev 0901010046


4/35

Acknowledgement

We are very lucky that we have got lots of support or cooperation from

various people while we were preparing this report. At first we express our

respected our teacherMr. Bashir Ahmed Bhuiyan, Associate professor of

Leading University, Sylhet for giving us such an opportunity to prepare an

assignment on topic An Analysis into the Export Import Performance of

Bangladesh in perspective of South Asian Countries which is a great

chance to increase our knowledge about training sector, particularly

effectiveness of training.

We are also thankful Mr. Bashir Ahmed Bhuiyan and our classmate who

helped us directly and indirectly to prepare this report.


5/35

Executive Summary:

Not the single country in the world cant fulfill their internal demand with its own

production so they need to involve in foreign trade. All country in the world exchangestheir product through import & export and fulfills their demand. On the other hand they

also earn foreign money by international trade and contribute their economy. Bangladesh

also makes their economic structure strong through import & export. This paper attempts

to provide synopsis of Import Export performance of Bangladesh in perspective of South

Asian countries. In this assignment we will also discuss about the trade policies of

Bangladesh which make the import & export system more facilitate as well as we will try

to focus on the products that are exchange in south Asian countries. In this paper we will

discuss the opportunity of import & export in Bangladesh, and what kinds of problems

they are facing.


6/35

Table of Content:

Topic Page No.Chapter-1 : 1-4

Introduction 2Objective of the Study 3

Scope of the study 3

Limitation of the Study 4

Chapter-2: An Overview about the Import

& Export of Bangladesh

5-10

Bangladesh Trade Overview 6

Bangladesh Trade History 7

Bangladesh trade Strategies 7-8

Import Restrictions 9Import Duties 9

Future Trade Agenda 10

Chapter-3 : Product & Country wise

Analysis of Import & Export

11-22

Bangladesh Imports Commodities &Partners

12

Bangladesh Exports Commodities &Partners

13-14

Import Export performance of Bangladeshin perspective of South Asian Countries

15-16

Share of Bangladeshs Exports & Importswith Neighboring Countries in her TotalExports & Imports

17-22

Chapter 4:Problems & Challenges facing

by Bangladesh

23-25

Challenging Issues for Bangladesh 24

Most Problematic Factors of Bangladesh 25

Chapter 5: Recommendations &Conclusion

26-28

Recommendations 27

Conclusion 28

References 29


7/35

Chapter-1


8/35

Introduction:

The policy of trade liberalization & free market economy in the 1980s has created both

challenges and opportunities for Bangladesh economy. The creation of the World Trade

Organization has created new way of enjoying the comparative advantage for

Bangladesh. At the same time, the globalize trade scenario has opened up the structural

limitations of Bangladesh economy, which needs immediate attention through the

formulation of appropriate policy and action.

Bangladesh continues to suffer from a low-growth, high-poverty syndrome. However,

Bangladesh has a large labour force willing to work for low wages resulting in a very

competitive position for labour intensive manufacturing exports. It has a large number ofentrepreneurial businessmen who are able to develop and run small and medium scale

enterprises. It has a sufficient amount of natural gas reserves which can potentially

provide low cost energy for a downstream industrial structure. With amicable and

mutually beneficial regional cooperation, Bangladesh can be an ideal location for huge

foreign direct investments, which can serve as a huge market for goods and services in

the South Asia. Bangladeshi international trade is extremely small relative to the size of

its population. The population density of Bangladesh is high and availability of land is

limited, which results in a continuing pressure a food supply. For that reason government

have import foods from other country to fulfill its internal demand. Bangladesh import

rate is more then its export rate which constraining the domestic development efforts. The

Bangladeshi government struggles to attract export-oriented industries, removing red tape

and introducing various financial and tax initiatives.


9/35

Objective of the Study:

Primary objective: - Our primary objective is to know about the Export & ImportPerformance of Bangladesh in perspective of South Asian Countries.

Secondary objective: -

To know about the Trade policy of Bangladesh. The Opportunity of Export & Import business in Bangladesh. The problems & barriers that we are facing in case of Import & Export. Contribution of Export & Import of Bangladesh is based on perspective of South

Asian region.

Scope of the study:

The scope of the study is described in the following:

This assignment gives us a vast verity of knowledge about the policy & procedurethat are use in Export & Import.

It also gives us a scope to gather knowledge about kinds of products & servicesare Exported & what kinds of products Import from foreign country.

Through this assignment we gather idea about the opportunity of Bangladesh incase of Import & Export business.

We also learn through this assignment that why Import & Export relationship isimportant in South Asian countries.

It provides idea about the competition that Bangladesh facing through Exportingproduct in South Asian countries.

It also makes us a scope to know about the Problem that Bangladesh face in doingExport & Import business.


10/35

Limitation of the Study:

Though a very comprehensive and a well organized report has been tried to be produced

but there are still some limitations present here.

Inexperienceabout practical work.

Because of sensitiveness, the department does not want to disclose information about

the technical information, which led to the shortcomings of this assignment into some

extent.

The authorities of Export Promotion Bureau (EPB) are so busythat they could not give

us sufficient time for discussion.

There is a lack of available data regarding the assignment topic in Internet.


11/35

Chapter-2: An Overviewabout the Import & Export

of Bangladesh


12/35

Bangladesh Trade Overview:

Bangladesh economic growth over the last half decade is more than 6 percentages and

fastest real trade growth country rank 13th out of 152 countries (WTI 2008) is emerging

economy in South Asia. The real export growth is more than 9 percent higher than all

other south Asian countries except India (WTI 2008). Bangladesh export share to GDP

was 10 percent in 2004 which was the lower than India, Pakistan, Sri Lanka, even

Cambodia just higher than some least developed Countries in Africa. The export share to

GDP has been increasing over the year but not very significant. The export share to GDP

in 2007 is 17 percent (Export Promotion Bureau 2008). However, Bangladesh launched

comprehensive trade reforms in the early 1990s that included substantial reduction oftariffs, removal of quantitative restrictions, and moves from multiple to a unified

exchange rate and from a fixed to freely floating exchange rate system to increase its

export performance. Nonetheless, the economy is still saddled with one of the least

liberal trade policy regimes in the world, reflected in its rank near the bottom (140th out

of 152 countries) on the latest Trade (MFN) Tariff Restrictiveness Index (TTRI) (WTI

2008). The MFN applied simple tariff average of 14.14 percent in 2007 is lower than its

late 1990s average of 21.8 percent and similar to the regional mean, which however is

lower compared to India. The garments export industry is allowed duty free import of

raw materials. The maximum tariff rate has declined from a high of 300 percent in the

late 1990s to just 25 percent in 2007 (WTI 2008). The country has liberalized its banking

and telecommunication sectors. Although, Bangladesh did not make any commitment in

financial sector under GATS but the rate of liberalization in the financial sector has been

quite rapid. This is a sector where Bangladesh has limited export but very crucial for

countrys economic development. However, the low overall GATS commitment suggests

ample room for greater future multilateral commitments to services liberalization.


13/35

Bangladesh Trade History:

Bangladesh is a poor country featuring negative trade balance since its independence in1971. The countrys economy experienced vast improvement in the 1990s. However,

foreign trade in South Asian region still is an area of concern.

The value of imports doubled between 1971 and 1991 as compared to the value of

exports. The trade deficit has declined considerably owing to an increase in exports since

1991. A closer look at the trade statistics of the country reveals that in 1989-90, imports

exceeded exports by 120%. This percentage came down to 56% in 1996 and 62% in

1997. The economy of Bangladesh was once riding on jute, its major produce. In the late

1940s, its share of the world jute export market was 80%, which came down to 70% in

the 1970s. Unfortunately, the trend of polypropylene products across the globe led to a

setback for the jute industry of Bangladesh.

Bangladesh trade Strategies:

The government has taken following strategies to boost export:

Simplification of export procedures and strengthening export-led co-operation through

reducing regulatory role of the government;

Rationalization of the value of Taka to make the export trade more attractive;

Creation of an Export Promotion Fund (EPF) for strengthening the export activities;

Encouraging establishment of backward linkage industries through utilization of locally

available raw materials;

Participation in international trade fairs, single country exhibitions and specialized fairs

and sending business delegations abroad for expansion and consolidation of existing

markets and creation of new markets;


14/35

Expediting BMRE of existing wet-blue producing tanneries and converting them into

finished leather producing and exporting units;

Accelerating expansion of improved traditional and semi-intensive methods of shrimp

cultivation for enhancing export off

Allowing import of high quality foundation-tea for blending and establishing the brand

name of Bangladesh tea through marketing;

Taking measures to improve quality, increase production and expand market of

exportable agricultural products;

Undertaking activities for increasing export of computer software, engineeringconsultancy and services;

Expediting steps for export of labor intensive electronic and engineering products

keeping in view the market requirements in the USA and other developed countries;

Promoting export of electronic components and engineering items to various countries;

Providing appropriate financing facilities for production of components of electronic

and engineering items for marketing on consignment basis;

Expanding the list of products under crash programme beyond 4 products (toys, luggage

and fashion items electronic and leather goods) and including 8 more items such as

diamond cutting and polishing, jewelries making, stationery articles, silk, gift items, cut

artificial flower & orchid, vegetables, engineering consultancy & services for export;

Organizing commodity-wise trade fairs of international standard in the country;

Developing and expanding infrastructural facilities for export trade; and

Creating product-development councils for important products.


15/35

Import Restrictions:

The government has moved to reduce the number of items on its list of banned imports

and has eliminated the need for import licenses. However, some products are still banned

from importation, including certain maps, obscene materials, socially or religiously

offensive items, all types of wastes, and substandard or rejected goods, as well as all

imports from South Africa or Israel.

All commercial importers are issued pass books in which their import authorizations are

validated. The issuance of a pass book is a formality for items not on the controlled or

restricted lists. Pass books are valid for 12 months.

Import Duties:

Despite some recent reductions, tariffs in Bangladesh remain high, averaging over 50

percent. At the recommendation of the World Bank, Bangladesh has placed a 100 percent

tariff ceiling on most goods, with the intention of bringing the ceiling down to 60 percent.

A value-added tax (VAT) of 10 to 20 percent and additional fees, typically adding up to

15 percent of the cost and freight value, are also applied to imports.

Duties are reduced to 2.5 percent for installation of imported machinery in less developed

areas. Duties are also reduced to 2.5 percent for capital machinery and factories which

use 70 percent or more indigenous materials and for imported machinery for export-

oriented industries. Exemptions from duties and the import sales tax are available for a

variety of goods.


16/35

Future Trade Agenda:

Future trade liberalization program needs to focus on (a) reduction in the dispersion and

average level of protection, (b) promotion of services export, (c) reduction of the reliance

on limited number of goods through diversification of exports, (d) promotion of more

efficient handling of custom and border procedures, and (e) a more efficient duty

drawback system.


17/35

Chapter-3

Product & Country wise

Analysis of Import & Export


18/35

Bangladesh Imports Commodities:

Here are the major import commodities of Bangladesh:

Machinery and equipment Chemicals Iron and steel Textiles Foodstuffs Petroleum products Cement Pharmaceutical product Electronic products

Bangladesh Imports Partners:

The following were Bangladeshs import partners as of 2008:

China: 15.8% India: 15.7% Kuwait: 8.1% Singapore: 7.6% Japan: 4.4%

Every year Bangladesh has to Import different types of food & row material to fulfill its

internal demand. The Imported commodities of Bangladesh are Machinery and

equipment, Chemicals, Iron and steel, Textiles, Foodstuffs, Petroleum products,

Cement etc. Those commodities are Import from China, India, Kuwait,

Singapore, & from Japan. Among those Import partners China is first because it provide

15.8% commodity of our total import. Then the second position is captured by our

neighbor country India. Bangladesh Import from India about 15.7% commodity of total

Import. The 3rd, 4th, 5th position is hold by the Kuwait, Singapore, & Japan. From this

analysis we found that in terms of import Bangladesh prefer India rather than other

countries of south Asian subcontinent. To make the Bangladesh self dependent country


19/35

Government takes different types of policy to reduce Import. Government now support &

encourage private business development. It also provides subsidy to agriculture &

Industrial sector to make them efficient & Productive.

China 15.8%

India 15.7%

Kuwait 8.1%

Singapore 7.6%

Japan 4.4%

Figure 1.1: The Chart shows percentage of Import Partners

Bangladesh Exports Commodities:

Here are the major export commodities of Bangladesh:

Garments Frozen fish and seafood Raw Jute Jute goods Leather Knitwear

Leather Chemical products Tea


20/35

Bangladesh Export Partners:

The following were Bangladeshs export partners as of 2008:

United States: 24% Germany: 15.3% United Kingdom: 10% France: 7.4% The Netherlands: 5.5% Italy: 4.5% Spain: 4.2%

The major countries to which Bangladesh are exporting are USA, Germany, UK, France,

Italy, Netherlands, and Japan. The USA is the main destination of our export

commodities which is 24% of the total exports. The second and third positions are held

by Germany and UK which constitute 15.3% and 10% respectively. Bangladesh doesnt

choose any subcontinent countries for exporting major products. The principle items

exported to these countries are readymade garments, frozen foods and home textiles.

Without them it also Export Raw Jute, Jute goods, Leather, Knitwear, Chemical products,

Tea etc. In foreign market there is a good demand for our garments products, frozen

foods, Jute goods & Tea. In 2009 fiscal year only from the Garments sector Bangladesh

earn $12.3 billion.

USA 24%

Germany 15.3%

UK 10%

France 7.4%

Netherland 5.5%

Italy 4.5%

Spain 4.2%

Figure 1.2: The Chart shows percentage of Export Partners


21/35

1.1 Trend analysis of Total Import Export & Foreign Remittance

earning (2007-11):

$0

$5

$10

$15

$20

$25

$30

$35

2007-2008 2008-2009 2009-2010 2010-2011

Total Export( in billion)

Total Import( in billion)

Foreign Remitence

earning( in billion)

In the above trend analysis shows the total Export, Import & Foreign Renitence earningsfrom 2007-2011 fiscal years. From the trend analysis we can see that from 2007 to 2011the total Export is gradually increasing but total Import is increasing more dramaticallythan Export. And we also see several up & downs in case of Foreign Renitenceperformance from 2007-2011 Fiscal year.

Import Export performance of Bangladesh in perspective of

South Asian Countries:

While examining Bangladeshs trade with her neighboring countries it should be kept in

mind that the intra-regional trade among the South Asian countries is very low. Until

1951, total intra-regional trade in South Asia as a percentage of the regions total trade

was in the double digits. Figure 2.1 suggests that even with a low intra-regional trade

Bangladesh is the single largest importer in South Asia. In 2003, Bangladesh accounted

for 36.4 percent of total intra-regional import. In contrast, Figure 2.2 indicates that, in

2003 Bangladeshs exports to the region accounted for only 2.3 percent of the total

regional exports.


22/35

Bangladesh 36.4%

India 12.8%

Sri Lanka 26.6%

Pakistan 7.1%

Nepal 14.5%

Maldives 2.6%

Figure 2.1: Country-wise Share (%) in Intra- SAARC Imports in 2003

India 77.2%

Nepal 5.4%

Pakistan 7.3%

Bangladesh 2.3%

Sri Lanka 7.5%

Maldives 0.3%

Figure 2.2: Country wise Share (%) in 1nter-SAARCE Exports in 2003


23/35

Share of Bangladeshs Exports & Imports with Neighboring

Countries:

Export &Import with Bhutan: Share of Bangladeshs Export with Bhutan isnot so good compare to the Import. From 1995-2002 Bangladesh dont Export

any goods or services in Bhutan. In 2003 & 2004 Bangladesh export 0.03% &

0.05% goods &services in her total export. From 1995-2004 Bangladesh regularly

Import goods & services from Bhutan, But the percentage of Import is gradually

decreasing over the last 10 years. In 1995 Bangladesh Import goods & services

from Bhutan about 0.13 % of her total Imports. In 1996 the percentage of Import

becomes half about 0.07 %. In 1997 Bangladesh Import from Bhutan 0.08% of

her total export. From 1999 to 2001 the Import percentage becomes same about

0.03%. Bangladesh Import 0.02% in the year 2002. And in 2003-2004

Bangladesh Import 0.01% of her total import.

0

0.02

0.04

0.060.08

0.1

0.12

0.14

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Export

Import

Bangladeshs trade with Bhutan

Export &Import with India: India is aneighbor country of Bangladesh. Amongthe South Asian country Bangladesh perform large share of trade with India. But

the share of Export is less than the Import with India. In 1995 Bangladesh Export

0.79% goods & services & Import 11.31%.In 1996 Export Increase to 0.91% &

Import Increase to 17.38%. In 1997 Export decreases to 0.59% & in this year


24/35

Import Increase to 19.69%. In 1998 Export decreases to 0.20%, which is the

lowest share of Export over the last 10 years. In this year Import also decrease to

14.82%. From 1999 to 2004 share of Bangladesh Export become gradually

increase, in 1999 Export become 0.31% where Import decrease to 12.37%. In

2000 Export increase to 0.35% & in this year Import decrease to 6.66% which is

half of previous year share. In 2001 & 2002 Export become 0.43% & 0.47% &

share of Bangladesh Import become 10.88% & 13.40%. In 2003 Bangladesh

Export 0.64% & Import 14.16%. In 2004 Bangladesh Import 11.24% & Export

1.27% in her total Export.

0

5

10

15

20

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Export

Import

Bangladeshs trade with India

Export &Import with Nepal: Bangladesh has a good trade relation with Nepal.Every year Bangladesh Export & Import goods & services with Nepal. In 1995

Bangladesh Export 0.03% commodity to Nepal & Import only 0.01% in her total

Import. In 1996 Bangladesh Import 0.11% & Export 0.25% of her total Exports.

In 1997 share of Exports decrease to 0.13% which is half of previous year &

Import increase to 0.15 %. From 1998-2000 Bangladesh dont Export any goods

or services to Nepal but Import goods & services from Nepal. In 1998 BangladeshImport 0.16% commodity from Nepal. In 1999 & 2000 Bangladesh Import very

less proportion of goods, In1999 it Import only 0.07% & in 2000 Bangladesh

Import only 0.01%. In 2001&2004 Bangladesh dont Import any commodity from

Nepal but in 2001 Bangladesh Export 0.02% commodity to Nepal. From 2002-


25/35

2004 Bangladesh Export very less share of commodity to Nepal, it about 0.01%

on the other hand Bangladesh Import only 0.02% commodity in 2002 & 2003.

0

0.05

0.1

0.15

0.2

0.25

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Export

Import

Bangladeshs trade with Nepal

Export &Import with Pakistan: As like Bangladesh Pakistan is also a Muslimcountry. In Pakistan there is a good demand for Bangladeshi products & thats

why Bangladesh finds out a excellent market for Export. Every year Bangladesh

trade with Pakistan a large share of commodity. In 1995 Bangladesh Export about

1.03% commodities & in this year Bangladesh Import 3.95%. In 1996 Bangladesh

Export 1.05% goods & services to Pakistan and Import 1.82%. In 1997 Export

decrease to 0.85%, in this year Import also decrease to 0.96%. Bangladesh Export

0.65% & Import 1.11% in the year 1998. In 1999 Bangladesh Export only 0.79%

of her total Export and Import 1.24% commodity to Pakistan. In the year 2000

Exported commodity become 0.91% and Import percentage become 1.40%.

Bangladesh Export very less commodity in the year 2001, its about 0.56%. In

this year Bangladesh Import1 28% goods & services. In 2002 & 2004 Bangladesh

Export 0.57% commodity. In the year 2003 Bangladesh Export to Pakistan 0.56%commodity. In 2002 & 2003 Bangladesh Import from Pakistan 1.24% & 1.22%

goods & services. About 1.25% goods & services are imported by Bangladesh

from Pakistan in the year 2004.


26/35

0

0.5

1

1.5

2

2.5

3

3.5

4

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Export

Import

Bangladeshs trade with Pakistan

Export &Import with Sri Lanka: Bangladesh has a good trade relation with SriLanka. Every year Bangladesh Export goods & services to Sri Lanka & Import

different types of commodity, but the share of export is very near to the ground.

Bangladesh government is trying their best to create a good quality market of

their commodity in South Asian countries and for that reason government trying

to facilitate the trade policy. Share of Bangladesh Import is greater than the share

of Export with Sri Lanka. In 1995 Bangladesh Export only 0.41% commodity to

Sri Lanka & Import 0.11%. In next year, 1996 Bangladesh Export share is less

than the previous year, its about 0.11% & in this year Bangladesh Import 0.15%

goods & services. In 1997 Bangladesh Import 0.20% goods & services but in this

Bangladesh Export only 0.12%. In the year 1998 Bangladesh Export very small

percentage of goods & services to Sri Lanka, this is about 0.03%. In 1998 &

Bangladesh Import 0.12% commodity from Sri Lanka. In 1999 & 2000 the

percentage of Export increases to 0.07% & 0.10%. In 1999 & 2000 the share of

Bangladesh Import become 0.12% & 0.13%. Bangladesh Import 0.12%

commodity & Export 0.06% commodity in 2001. In 2002 Export decrease to

0.04% & Import share also decrease to 0.01%. In 2003 the Export & Import share

become same, its about 0.09%. In 2004 Bangladesh Import 0.08% commodity

and Export 0.12% commodity to Sri Lanka.


27/35

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Export

Import

Bangladeshs trade with Sri Lanka

It is clearly evident that in terms of exports, South Asia has not been any significant

export destination of Bangladesh. In fact, over the last 10 years, there has not been any

major change in this pattern. In 1995, Bangladeshs exports to the South Asian region

accounted for only 2.3 percent of her total exports, which by 2004 came down to only 2

percent. In 1995 Bangladeshs imports from the South Asian region accounted for 15.5

percent of her total imports, which by 2004 declined to 12.6 percent. Among the South

Asian countries India has been one of the major sources of imports for Bangladesh. One

important aspect of Bangladeshs trade with India is that Bangladeshs informal border

imports from India have always been thought to be very high. Though there has not been

any comprehensive quantitative assessment on the informal border trade between India

and Bangladesh, it is pointed out by few studies that the informal and illegal trade

between India and Bangladesh could be as high as three quarters of recorded trade.

However, such informal trade is mostly one way from India to Bangladesh. Therefore,

if such informal imports from India were taken into consideration, Indias share in

Bangladeshs total imports would rise considerably.


28/35

The outcome of the analysis points us to the fact that, apart from the imports from India,

South Asian countries have not been the major trading partners of Bangladesh. As far as

export destinations are concerned, Bangladeshs major trading partners are the EU and

US. On the other hand, apart from India, other major import sources for Bangladesh are

China, Singapore and Japan.


29/35

Chapter 4:

Problems & Challenges

facing by Bangladesh


30/35

Challenging Issues for Bangladesh:

The past decades boom in exports particularly the apparel sector is very significantto

countrys economic growth, but the recent GDP growth has not led to significant improvements in the living standards of most people and the social factors are still

challenging. Despite impressive economic growth and some reforms over the two

decades Bangladeshs business environment is still challenging. The key issues are:

Poor quality infrastructure particularly road networks and electricity supply.

The economy is not diversified and is highly dependent on the agricultural sector;

services and apparel only make up a small percentage of the economy.

High cost of finance and limited access to long term finance options.

Largely unskilled labor force, limited spending on education has led to a decline in

attendance and in the quality of education.

Political instability and safety risks, political, ethnic threaten to undermine stability.

Slow pace of reform due to government bureaucracy and lack of alignment of policies

at the various levels of government.

High levels of corruption, even within the judiciary, undermine investor confidence.


31/35

Most Problematic Factors of Bangladesh:

The chart shows the category of most problematic factor for doing business in

Bangladesh according to Global Competitiveness Report 2008-2009. Report shows thatthe major factor that create problem in doing business in Bangladesh is Corruption.

People also face problem in case of government bureaucracy, policy instability,

government instability, Inflation, Tax regulation etc. If Government can able to remove

those problems Bangladesh will become an ideal place for investment.

Chart 1.1: The Most Problematic Factors for Doing Business in Bangladesh


32/35

Chapter 5:

Recommendations &

Conclusion


33/35

Recommendations:

After analyzing this assignment we would like to suggest something about the Import &

Export. Bangladesh should go for the comprehensive and pragmatic policy to become amore competitive trading country such as-

o Broaden the countrys sources of economic activity, including by diversifyingexports particularly the agricultural commodities, to reduce external

vulnerabilities and promote growth.

o The government should provide supportive conditions that would facilitate theexpansion and diversification of exports.

o The government should continue to support the growth of domestic demand andprivate-sector led investment through a reduction in government activity, which

crowds out private investment.

o Significantly higher FDI inflows would be needed to support a higher growthenvironment in Bangladesh to compensate for domestic resource constraints and

to enable Bangladesh to benefit from associated knowledge and technological

spillover effects. The current ban on FDI inflows into the RMG sector also needs

to be removed in order to bolster Bangladesh's prospect for the post-ATC quota

era.

o Surrounded by increasingly competitive countries, Bangladesh must avoiddiscriminating against foreign investment or ownership. In this context, the

investment environment would become more attractive by reducing restrictionson foreign ownership both in manufacturing and service sector.

o Improving governance is crucial in every sector and to achieve for that requires aclear long-term vision as well as pragmatism in exploiting opportunities to

strengthen the overall framework o f public accountability.


34/35

Conclusion:

From the forgoing study we have got a clear picture of the situation of the Import and

Export performance of Bangladesh. Throughout the study we only focused on the Import& Export performance of Bangladesh in perspective of SAARCE countries. By making

this assignment we find that the share of Bangladesh trade is very low rather than the rest

of the world. We also find that among the South Asian country Bangladesh Import &

Export significantly with India. So Bangladesh should try to trade with other countries in

South Asian region in equal manner.

In this assignment we also tried our best to collect some information about the

problematic factor of Bangladesh. In the end of our study we have some

recommendations which might be very useful for improvement of the current position.


35/35

References:

Collect Information from Export Promotion Bureau(EPB)

Gather Information from different Import & Exportrelated web-site.

Collect data through Internet.

Documents

Export Import Performance of Bangladesh