Export Trend in Bangladesh

7/31/2019 Export Trend in Bangladesh

http://slidepdf.com/reader/full/export-trend-in-bangladesh 1/10

1 | P a g e

Shofiur Rahman, MBA Program, Dhaka University

As the report is exclusively related with the export trend of Bangladesh, so it will be ideal

to know something about the definition of export. Export is one of the most preferable

and conventional way to perform international business. In simplest word, export is

traditional buying and selling across the border of the country. In economics, an export is

any good or commodity, transported from one country to another country in a legitimate

fashion, typically for use in trade. Export is an important part of international trade. Its

counterpart is import. Export involve anything from transferring physical goods to

intangible services with a view to earning profit, sometimes it results from arbitrary

practice. According to the Encyclopedia of Britannica, export is To send or transport

goods abroad out of a customs territory; to sever them from the mass of things belonging

to one country with the intention of uniting them to the mass of things belonging to a

foreign country.

Brief idea about the Export of Bangladesh

Like many other third-world developing countries, Bangladesh relies quite heavily on

exports to provide for the needs of its densely populated nation. Today the economy of

Bangladesh has largely depends on the export position of the country. Before the

independence and after the independence the main source of budget fund came from the

export revenue and till now it is the major indicator of countries growth and economic

stability for its principle role in exchange rate determination and GDP. In over three

decades, Bangladesh has witnessed substantial growth in its export of goods and services.

The volume of export, the no of exporting countries and as well as the range of exporting

goods have widen substantially. Bangladesh has experienced not only a substantial

increase in the volume of exports but also important changes in the composition of those

exports; moving away from traditional items such as jute and jute products and towards

new manufactured products such as ready-made garments. Though the export of

Bangladesh is growing faster then many countries in South Asia. Its import over-lead the

effect of the export, so the trade deficit occurs, if we see the recent balance of payment of

Bangladesh it will be clear,



2 | P a g e


Table 1

Balance of Payments- current account [Annual Data]

Items2009-10

July-June

2010-11

July-June

% Changes

3 over 2

1 2 3 4

Trade balance -5155 -7328

Export f.o.b.(including EPZ) 16233 23008 41.74

Of which : Readymade garments 12497 17914 43.35

Import f.o.b (including EPZ) -21388 -30336 41.84

Services -1233 -2398

Receipts 2478 2570 3.71

Payments -3711 -4968 33.87

Income -1484 -1354

Receipts 52 119

Payments -1536 -1473

Of which : Official interest payments -215 -220

Current transfers 11596 12075

Official transfers 127 127

Private transfers 11469 11948 4.18

Of which : Workers' remittances 10987 11650 6.03

Source: Data collected from Bangladesh Bank website.

Notes – It is clearly reflected that exports receives are less than the import payments, sothere is trade deficit occur, it is also important to notice that the percentage [%] increasein import is greater than the [%] increase in export.



3 | P a g e

Shofiur Rahman, MBA Prog

Export Growth of Ban

Source: Bangladesh Bureau of Statis

In FY 2011-12 (July-Januar

that is 14.28 % more tha

However, under the busi

period of July 2011 to Febr

digit growth at the end of

hindered.

Snapshot of export ma

Table 1

Note – The table indicat

significantly during 3 de

compatibility in the world

0

200000

400000

600000

800000

1000000

1200000

1400000

No. of ProductNo. of Market

Total Export

ram, Dhaka University

ladesh

tics

y), Bangladesh earned USD 13924.6 million

n that of the same period of the previous

ess as usual scenario, despite the growt

uary 2012, it might be very difficult to maint

the fiscal year as the export from Banglad

ket and product

s that the diversity of product and mar

cades indicating the growth in export

arket.

1980

1993

2008-09

Trend in Export Trade(In product & market)

1972-73 2010-201125 18068 205

348 B 12500 B

export from

fiscal year.

during the

ain a double

sh might be

et increase

arning and

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

Growth620%202%

3492%



4 | P a g e


Figure 1

Note – The situation su

Immediately after the liber

and at the same time majo

goods were the associate cr

Bangladesh export by m

Figure 2

Note – within this decade

negative growth is experien


ggest the previous prime position of ju

tion jute industry consist almost 90% of the

source of budget and foreign currency. Te

teria of export.

jor goods during 1982-83

s jute industry hold their no-1 position b

ced in export of jute. Woven garments intro

leather

chemical good

rawjutes

Tea

others

wovengarments

frozen foods

jutegoods

te industry.

total export

and leather

t there is a

uce as a



5 | P a g e


potential criteria of export. Positive growth experienced in the industry of tea,

leather and frozen foods.

Figure 3

Note- during year 82-92 a major decline in the export of jute industry. The export

share decline 89% in 73 from around 20% in 1992. This is due to the poor control

and managerial efficiency of the jute industry. Ignoring to transfer it to the private

sector rather than operating with loss is one of the prime factors destroying this

sector, although the demand of the jute was constant globally.



6 | P a g e


Figure 4

Note- woven garments and

as it holds almost 70% of

foreign currency. Jute in

criteria. Tea and leather ex

Bangladesh export by m

Figure 5

Jute Manufac

4%

Fish, shrimps

3%

Leather3%

Furnace Oil0%

Raw Jute2%

Ha


knitwear become the major export good for

he export amount of the country and a maj

ustry looses its previous position and be

port also experience negative growth.

jor goods during 2010-2011

ReadymadeGarment

77%

dicraft0% Tea

0%

Fertilizer0%

Others11% Readymade G

Jute Manufac

Fish, shrimps

Leather

Furnace Oil

Raw Jute

Handicraft

Tea

Fertilizer

Others

Bangladesh

or source of

come minor

arment



7 | P a g e


Note- During 2010-2011, r

position and as it holds alm

source of foreign currency.

position and become minor

growth.

Export direction [coun

In this portion we have disc

other word major exporting c

Chart 1

Note- As regard the destina

buyer which bought goods

as compared to Tk.19674.6 c

two years respectively. Duri

readymade garments (Tk.24

manufactures (Tk.113.9 cro

raw jute (Tk. 21.60 crore)

Germany. They purchased

review as compared to Tk. 1

2009-2010 and 2008-2009 re

2010-11 2009-1

USA

Netherlands

Turkey


adymade garments (woven garments& knitw

ost 76% of the export amount of the country

Jute and Leather industry decline compare t

criteria. The export of tea and fertilizer ex

ry wise export]

ussed the major importing countries from Ban

ountries of Bangladesh.

ion pattern of exports, the U.S.A. was the m

orth Tk. 26829 crore (21..5%) during the year

rore (22.5%) and Tk. 20634.3 crore (24.4%) in

g 2010-11,The principal items of export to th

37.10 crore), fish, shrimps & prawns (Tk.695.

re), leather and leather manufactures (Tk.64.5

. The second largest buyer of Bangladesh

oods worth. 19455.7 Crore (15.6%) during th

2412.2 crore (14.2%) and Tk. 12647.5 crore (1

spctively. The next important trading partner

0

1000

2000

3000

2008-09

Country wise export volume

Germany UK Franc

Italy Canada Spain

Belgium India

ar) retain its

and a major

its previous

erience zero

gladesh or in

st prominent

under review

the previous

U.S.A were

0 crore), jute

0 crore) and

i goods was

e year under

4.9%) during

as the U.K.

0

0

0

bdt crore





9 | P a g e


Recommendation:

Although Bangladesh has achieved a substantial growth rate in export, the commodity

concentration and also the market concentration has been the key concern for government

for the retention of that growth rate. Because the export products and market are notdiversified and export can be diminish with the decrease in need of certain product or as a

result of higher competition. So,

This excessive dependence on a few export items and markets reflects the

vulnerability of Bangladesh’s external sector. So export diversification and

market diversification continue to remain major challenges.

Domestic supply side constraints are major reasons for a narrow export base. To

realize Bangladesh’s potential export opportunities, supply-side constraints need

to be addressed immediately. Supply-side bottlenecks relate to infrastructure,

communications, ports, capacity in implementing export incentive regime,

functioning of export-related institutions, and proper governance.

Appropriate macroeconomic policies including price stability and an appropriate

exchange rate must be ensured. Bangladesh Bank, the central bank of Bangladesh,

must take appropriate steps independently in this regard. The government must

also contribute by playing a helping role to maintain the price stability. Prudent

fiscal policy, for example, would be helpful in this regard.

Adequate infrastructure must be built to facilitate the country’s exports. Sufficient

investments, both from internal and external sources, are vital to improve the

existing infrastructure facilities. Foreign direct investment can play a contributory

role in this regard. The government must create a favorable investment

environment by improving law and order situation and controlling corruption. Proper quality of exportable items must be maintained to meet foreign demand. Better

education and training to the workers and managers in the export industries,

establishment of more technical schools and colleges, import of improved technology

for export industries, and closed and regular product supervision can ensure the

quality of exportable items.



10 | P a g e


Close partnership between the Government and the business community is

crucial. Honest businessmen, who are really contributing to the economy, deserve

all kinds of cooperation from the government. A clear and constructive

understanding between these two groups can undoubtedly improve the country’s

export performance.

The government and the business community must work hard for export and

market diversification. Efforts must be made to increase the export of traditional

items. Frequent export fairs through the foreign missions can be helpful to

introduce new exportable items to foreign buyers. The search for new markets for

Bangladesh’s exports should be a continuous task for both the government and

businessmen.

Conclusion:

Despite the structural limitations of the Bangladesh economy, the export sector

performed well throughout the 1990s. The export-GDP ratio, import –GDP ratio and

trade-GDP ratio have increased over the years. The growth rate of export- GDP ratio of

Bangladesh was the highest during 1980-2002 among the SAARC countries. However,

the balance of trade of Bangladesh remained in deficit.

The striking features for the Bangladesh’s exports are commodity and market

concentration. This is the main concern. To address it, there is no alternative but to

initiate diversification and quality improvements. New markets for the country’s exports

must also be explored to secure more stability in the export sector. To reduce the

dependence on imported inputs for the readymade garments and knitwear industries,

Bangladesh must make massive investments in both yarn and fabric manufactures. This

would create forward and backward linkages; and current trade deficit would improve.

Documents

Export Trend in Bangladesh