The history of the economy of Bangladesh is not as wide as the history of western economy, but is a remarkable one. Despite Bangladesh inherited a narrow industrial base when it became independent in 1971, within 40 years of liberation of the country it has achieved an impressive growth rate in the GDP (Gross Domestic Product) which is increasing day by day. In recent Publication of World Bank -"Global Economic Prospects 2011: Navigating Strong Currents", they predict that Bangladesh will enjoy an upward trend in GDP in near future i.e. 6.1 and 6.3 percent increase respectably in 2011 and 2012, which is .03 percentage higher than that of the previous year.[i] Where the total export figure of the country were only US$ 348.33 million in 1972-1973[ii] (immediate year after the liberation of Bangladesh in 1971), it is now at US$ 14763.8 million, amounted by the Bangladesh Bank in the year 2009-2010[iii]. Premature time of this country’s economy mainly depend on a single sector i.e. Jute Manufacturing sector (90% of the total export amount)[iv], but it is diversified in this days by various sectors, for instance- Ready Made Garments (77.1%), Jute Manufacturing (4.2%), Fish, Shrimps and Prawns (3.7%), Leather and Leather Manufacturers (2.8%) etc[v].
The sectors that contribute to the economy of Bangladesh can be categories in three major sectors, depending on their contribution to the GDP of Bangladesh, -
· Agriculture (18.7%),
· Manufacturing & Industry (28.7%) and
· Services (52.6%). (2009 est.)[vi]
From traditional low cost manufacturing Bangladesh is determined to move up the value chain, and to develop knowledge based, high technology and modern industries. This is the economic necessity of today. And that is why BOI (Board of Investment) of Bangladesh categories the sectors of industries broadly so that people can gain knowledge about different types of industries more precisely. Following are the description of Industries according to BOI.
Power Industry: Bangladesh is steadily climbing up the development ladder. Energy and power needs to act as a key medium in helping Bangladesh in this endeavor. Industries are being automated and the country is gradually moving from a labor-intensive economy to a capital intensive one. Electricity and power are vital to the nation at such a stage. At present, 47% of the total population of Bangladesh is enjoying the electric facilities where the demand for the electricity is 5,800 MW and maximum generation capacity is 4606 MW. Shortage of 1194 MW is found in the year 2010. But government projected to increase the supply of electricity in 2015 to 12,601 MW and projected demand will be then 9,812 MW which dictates there will a surplus of 2,789 MW. Public and private sector produces 63% and 37% of electricity respectively. Public sector produces electricity through Bangladesh Power Development Board (BPDB), Ashuganj Power Station Company LTD (APSCL) and Electricity Generation Company of Bangladesh (EGCB). On the other hand, private sector produces power through small independent power producers and rental that government buys at a constant price. The government has given top priority to development of the sector considering its importance in the overall development of the country. The government has set the goal of providing electricity to all citizens by 2021. To ensure the goal Government of Bangladesh takes some steps to make this industry a lucrative investment opportunity to private and foreign investors. In this circumstances Government of Bangladesh propose some financial incentives to both private and foreign investors.
ICT and business services: ICT and business services in Bangladesh are a vibrant sector supported by an enthusiastic culture and a government committed to providing a pro-business climate for all investors. Industry ranges from inbound call centers to the latest in Web 2.0 software development. Over 400 IT companies are now thriving in the country supplying to local and international markets worldwide. The market was worth US$27m in 2006 which is 110% higher than previous year (US$12.6m in 2005). To create a business environment that is conducive to the IT industry, complete with infrastructure and environmental management facilities the government is establishing a dedicated ICT Park at at Kaliakoir near Dhaka.
Garments and Textile Industry: The Garment and Textile industry of the country remains the strongest root of its economy. Approximately 3.1 million Bangladeshis are employed in this industry, of which 80% are women. In FY 2007-08, a total of 56997.0 crore Taka worth garments were exported. The figure reached 67246.9 crore Taka, as the “Annual Review of Export Receipt (2009-2010)”. The Textile industry is made up of several small and large-scale, private and public companies. The United States is the biggest garment importer for Bangladesh, with 18457.4 crore taka (27.45% of total export through garments) in imports in FY 2009-10. Other major importer countries are- U.S.A.
Germany 11104.6 Crore (16.51%)
U.K. 6787.0 Crore (10.09%)
France 5653.0 Crore (8.41%)
Netherlands 4938.5 Crore (7.34%)
Life Science: The pharmaceutical sector in Bangladesh has developed fast. Originally set up to supply for local needs as a manufacturer of patent medicines, the industry now exports drugs to highly regulated markets. Expansive international companies have established operations in the country as they seek to grow, promote exports, drive down manufacturing costs, and undertake research and development into reverse engineering of patented medicines. The market was worth $590 m in 2007 and growth has averaged 12% per annum since 2002[vii]. The industry is heavily centralized. Some 85 firms are involved in producing drugs, but the top ten enjoy a 70% share. The two largest, Beximco and Square, have a 25% market share[viii]. In 2007 drugs worth $35.9 m were exported to 65 different countries, a fourfold increase in value since 2003[ix]
Agribusiness: Approximately 20% of Bangladesh’s GDP comes from Agriculture, making it the largest producing economic sector. About 60% of the Bangladeshis work in this sector. It primarily produces jute, rice, white, tea, tobacco, pulse, sugarcane and tomato. Agricultural holdings are small in the country. Farmers are increasingly using modern machinery, with the help of cooperatives. One of the main objectives of Bangladesh’s government is to fulfill food requirements of the nation.
Frozen Foods: Frozen food is the second largest export sector of the economy. The massive natural resources available in Bangladesh make this sector particularly promising for investors looking to supply in international as well as in domestic markets. The Public Sector Corporation and the private organizations have setup about 145 numbers of shore based export oriented fish processing plants around Bangladesh. These plants produces Fresh Water shell On (FWSO), Ser Water shell On (SWSO), Peeled and Deveined (P&D), Peeled and Undefined (PUD), shrimp products under the most hygienic and sanitary condition under the supervision, control and guidance of foreign trained handling & processing experts. Export earnings from shrimp 2009-10 2633.8 crore Taka and Export earnings from fish 2009-10 576.8 crore Taka which is in total 87.4% higher than the previous year. It is a matter of concern that biggest importer (USA) of our Frozen Food industry lessen more their import of Frozen Goods in recent year. They decrease 312.7 crore taka import in 2010 where it was 495.7 crore taka in 2009. So, the Bangladeshi government should take steps to prevent this situation.
Ceramics: The global ceramics industry is worth in excess of US$ 10bn. Bangladesh is perfectly positioned to expand rapidly in this sector with its high quality: cost ratios and creative human resource base. It is found from a bank research that there are nine ceramic tableware manufacturing companies in the country with a total capacity of nearly 24,000 tons a year as of 2008, of which an average of 48 percent is being exported and the remaining 52 percent is used in the domestic market[x]. Government should come forward to fetch the industry in the global market by more widely as the demand of this industry in the global market is increasing rapidly.
Electronic: The electronics industry in Bangladesh mostly produces consumer items. Home appliances includes televisions, radios, DVDs and CD players, refrigerators, air conditioners, ovens, electronic fans, blenders etc. are being assembled to a large extent. The high skill, low cost labor resource of the electronics sector in Bangladesh offers companies great returns on investment. In recent years, European and Asian electronic firms have established technical collaboration with their Bangladeshi counterparts to produce some electronic goods at competitive prices. Growing domestic demand and international market access are some key attractive issues to the investors. In the economies like Malaysia, Singapore, Korea and Thailand, electronics contribute a major portion in the GDP. Now it is high time to think more intensely about this industry.
Light engineering: Light Engineering Sector is largely comprised of SMEs. This sector occupies a unique position in the economy of Bangladesh[xi]. The Light Engineering sector itself contributes nearly 2.15% to the GDP of Bangladesh. The product line of the light engineering sector is large and diverse. Machinery and spare parts produced by the entrepreneurs of the sector are supplied to various mills and factories such as jute, cotton, sugar, paper, textile, garments, fertilizer, tea plantation & processing industries, ferry, railways, power plants, construction sector, transport, pharmaceuticals, etc. It can be define as a supportive industry of other technical high volume productive industries. There is an apex body of Engineering Industry and Entrepreneurs of Bangladesh, was established in 1983-84 Bangladesh Engineering Industry Owners’ Association (BEIOA) in order to contribute continuously towards the development of light engineering sector of Bangladesh[xii].
Leather and Leather goods: Bangladesh has a long established tanning industry which produces around 2-3% of the world’s leather from a ready supply of raw materials. In 2008-09 total export of leather and leather goods was 2430.2 crore Taka which is 2.8% of the total export of the country. The leather goods which are export to different countries are- shoes, slippers, leather jackets, hand gloves, bags, purses, wallets, and belts. Most leather and leather goods export to Germany, Italy, France, Netherlands, Spain, Russia, Brazil, Japan, China, Singapore and Taiwan[xiii].
These are the major industries which generate the growth speed of the economy of Bangladesh. In the near future the dream of industrialization of Bangladesh will come true and the problem of unemployment, poverty, education, population will be sought out.
Endnotes
[i] “WB Projects Steady Economic Growth for Bangladesh”, Published in The Financial Express 14th January, 2011.
[iii] “Annual Review of Export Receipt (2009-2010)” Published by Bangladesh Bank.
[v] “Annual Review of Export Receipt (2009-2010)” Published by Bangladesh Bank
[vi] http://www.theodora.com/wfbcurrent/bangladesh/bangladesh_economy.html (SOURCE: 2010 CIA WORLD FACTBOOK)
[vii] IMS Quarterly Review, 4th Quarter 2007, quoted in “Bangladesh, Growth, Investment, Opportunity”, page 80, published by A T Capital Markets, 17 April 2008.
[viii] Reference 2, page 5, quoting Chowdhury, F. (2006) “A Strategy for Establishing the API Park”. Consultant Report for the Ministry of Industry, Government of Bangladesh, 2006.
[ix] Reference 1, page 81, quoting the Bangladesh Directorate of Drug Administration (DDA).
[x] http://ceramics.org/ceramictechtoday/business/ceramics-industry-in-bangladesh-experiencing-high-demand/ (Official website of The American Ceramic Society)
[xi] http://www.beioa.org.bd/ (Official website of Bangladesh Engineering Industry Owners’ Association)
[xii] http://www.beioa.org.bd/ (Official website of Bangladesh Engineering Industry Owners’ Association)
[xiii] http://www.bdsdf.org/forum/index.php?showtopic=1420 (Official website of Bangladesh Strategic & Development Forum)
References:
1. “WB Projects Steady Economic Growth for Bangladesh”, Published in The Financial Express 14th January, 2011.
2. Bangladesh bank annual Review, “Annual Review of Export Receipt (2009-2010)” Published by Bangladesh Bank.
3. IMS Quarterly Review, 4th Quarter 2007, quoted in “Bangladesh, Growth, Investment, Opportunity”, page 80, published by A T Capital Markets, 17 April 2008.
4. Reference 2, page 5, quoting Chowdhury, F. (2006) “A Strategy for Establishing the API Park”. Consultant Report for the Ministry of Industry, Government of Bangladesh, 2006.
5. Reference 1, page 81, quoting the Bangladesh Directorate of Drug Administration (DDA).
Websites:
2. http://www.theodora.com/wfbcurrent/bangladesh/bangladesh_economy.html (SOURCE: 2010 CIA WORLD FACTBOOK)
3. http://ceramics.org/ceramictechtoday/business/ceramics-industry-in-bangladesh-experiencing-high-demand/ (Official website of The American Ceramic Society)
4. http://www.beioa.org.bd/ (Official website of Bangladesh Engineering Industry Owners’ Association)
5. http://www.bdsdf.org/forum/index.php?showtopic=1420 (Official website of Bangladesh Strategic & Development Forum)
