Bangladesh: Commodity-wise Import Payments (Jul-Apr)

[rainbowrascal]

Bangladesh import payments of first 10 months (july-april), FY21 and FY22

Source: Bangladesh Bank

 

[Homo Sapiens]

Thanks to our low private car ownership, our petroleum import bill is just $6 biliion out of $74 billion total import for first 10 months of this fiscal year. For India, corresponding figure is $119 billion and for Pakistan $17 billion. India spends $119 billion despite the fact that, one-quarter of their petroleum need comes from domestic sources and they mostly buy crude oil and refine domestically unlike Bangladesh which mostly import refined petroleum which costs more. If India had to import most of its petroleum refined like Bangladesh then it's petrolium inport bills would have crossed $200 billion. India's merchandise imports is $495 billion. Think about that.

Now, many Indians and Pakistanis mock Bangladesh for low car ownership and doubt it's economic growth for this reason, but the advantage of our low car ownership is that, we are spending just 8% of our total import bill on petroleum while they are spending 25% of their total import bill on petroleum. This is helping us to maintain balance of payment.

We are burning this 6 billion Dollar worth of imported petroleum on high return economic activities like running Bus, Truck, Tractors etc. while they are burning their imported petroleum on private car and motorbike mostly.

Bangladeshi consumers need to pay up to 500 percent import duty on car, means that, private car is out of reach for middle class people. Even motorbikes are 2-3 times pricy in BD than India. But we are reaping benefit for this low private motorization on a much more important areas of economy.

 

[UKBengali]

Thanks to our low private car ownership, our petroleum import bill is just $6 biliion out of $74 billion total import for first 10 months of this fiscal year. For India, corresponding figure is $119 billion and for Pakistan $17 billion. India spends $119 billion despite the fact that, one-quarter of their petroleum need comes from domestic sources and they mostly buy crude oil and refine domestically unlike Bangladesh which mostly import refined petroleum which costs more. If India had to import most of its petroleum refined like Bangladesh then it's petrolium inport bills would have crossed $200 billion. India's merchandise imports is $495 billion. Think about that.

Now, many Indians and Pakistanis mock Bangladesh for low car ownership and doubt it's economic growth for this reason, but the advantage of our low car ownership is that, we are spending just 8% of our total import bill on petroleum while they are spending 25% of their total import bill on petroleum. This is helping us to maintain balance of payment.

We are burning this 6 billion Dollar worth of imported petroleum on high return economic activities like running Bus, Truck, Tractors etc. while they are burning their imported petroleum on private car and motorbike mostly.

Bangladeshi consumers need to pay up to 500 percent import duty on car, means that, private car is out of reach for middle class people. Even motorbikes are 2-3 times pricy in BD than India. But we are reaping benefit for this low private motorization on a much more important areas of economy.

What is your opinion on BD eventually setting up a car industry?

 

[BananaRepublicUK]

Thanks to our low private car ownership, our petroleum import bill is just $6 biliion out of $74 billion total import for first 10 months of this fiscal year. For India, corresponding figure is $119 billion and for Pakistan $17 billion. India spends $119 billion despite the fact that, one-quarter of their petroleum need comes from domestic sources and they mostly buy crude oil and refine domestically unlike Bangladesh which mostly import refined petroleum which costs more. If India had to import most of its petroleum refined like Bangladesh then it's petrolium inport bills would have crossed $200 billion. India's merchandise imports is $495 billion. Think about that.

Now, many Indians and Pakistanis mock Bangladesh for low car ownership and doubt it's economic growth for this reason, but the advantage of our low car ownership is that, we are spending just 8% of our total import bill on petroleum while they are spending 25% of their total import bill on petroleum. This is helping us to maintain balance of payment.

We are burning this 6 billion Dollar worth of imported petroleum on high return economic activities like running Bus, Truck, Tractors etc. while they are burning their imported petroleum on private car and motorbike mostly.

Bangladeshi consumers need to pay up to 500 percent import duty on car, means that, private car is out of reach for middle class people. Even motorbikes are 2-3 times pricy in BD than India. But we are reaping benefit for this low private motorization on a much more important areas of economy.

Here is why cars will never take off in Bangladesh:

1. Size and density means most highways will be tolled to give priority to commercial vehicles.

2. Literally no space for parking!!

3. Weather conditions makes cars high maintenance. Just too much wear and tear.

4. Our EPZs are being built in a planned way - meaning workers will not need to commute by car.

5. In India seeing family of four on a motor bike is a common occurrence due to the wife not working. In Bangladesh both spouses work - need individual transport. Two bikes more practical than one car.

What is your opinion on BD eventually setting up a car industry?

Extremely bad idea!!!

Assemble busses and commercial vehicles.

Stay away from cars.

 

[mb444]

Thank you

Bangladesh import payments of first 10 months (july-april), FY21 and FY22

View attachment 852909
Source: Bangladesh Bank

Thank you for posting this. None of these stands out at luxury items.

BD will have to ride it out just like every other country in the world.

 

[Homo Sapiens]

What is your opinion on BD eventually setting up a car industry?

Car industry should be build, but mostly for export. As a highly densely populated country, our focus should be to cover the entire country with good and efficient public transport. We should promote bicycles, Buses, trains, MRT, BRT, Water transorts etc. instead of personal cars.

 

[BananaRepublicUK]

Car industry should be build, but mostly for export. As a highly densely populated country, our focus should be to cover the entire country with good and efficient public transport. We should promote bicycles, Buses, trains, MRT, BRT, Water transorts etc. instead of personal cars.

Without a large home market - you are not going to get the economies of scale - required for such an expensive industry.

Most car companies make a loss - reliant on huge subsidies. Which is tolerable if you have a home market to protect.

 

[UKBengali]

Without a large home market - you are not going to get the economies of scale - required for such an expensive industry.

Most car companies make a loss - reliant on huge subsidies. Which is tolerable if you have a home market to protect.

Don’t forget that the pressure then to sell in the home market would be immense. Very few leaders would be able to say no to the clamour from both the industry and the public.

BD is best forgoing a car industry as there are plenty of others it could focus on.

It is not that large a country that it needs to do everything.

 

[mb444]

Here is why cars will never take off in Bangladesh:

1. Size and density means most highways will be tolled to give priority to commercial vehicles.

2. Literally no space for parking!!

3. Weather conditions makes cars high maintenance. Just too much wear and tear.

4. Our EPZs are being built in a planned way - meaning workers will not need to commute by car.

5. In India seeing family of four on a motor bike is a common occurrence due to the wife not working. In Bangladesh both spouses work - need individual transport. Two bikes more practical than one car.



Extremely bad idea!!!

Assemble busses and commercial vehicles.

Stay away from cars.

Car industry should be build, but mostly for export. As a highly densely populated country, our focus should be to cover the entire country with good and efficient public transport. We should promote bicycles, Buses, trains, MRT, BRT, Water transorts etc. instead of personal cars.

Cars can be utilised just as any other public transportations.

In major global cities fleet of taxis serve as lone means of mass transportation or complements other forms of public transports.

It would be no different for BD. Personal cars may not proliferate and I think globally this is going to be a thing of the past as autonomous driverless cars become a reality. Why would you want the hasstle of owning a car if you can hail a taxi quickly whenever you want. As an intermediate measure BD will see huge explosion of taxis.

Automative industry BD absolutely needs to acquire, it will need BD market to survive... no one has ever built an auto industry for export. It has huge logistical chain and gives birth to huge amount of associated industries and service. Having an auto industry will give BD a solid industrial base that we currently lack.

 

[Bilal9]

Bhaiera Akash-Kushum chinta korey luv nai.

Look at what other countries in the region (ASEAN Countries like Thailand, Indonesia and Malaysia) are doing (or not doing) in terms of Automotive industry manufacture.

Benchmarking will help, other countries have gone down this path before and made mistakes (like Thailand). Take a page from their mistakes and avoid them.

Some things the Thais did right is form collaborations with countries known for their excellence in Automotive manufacturing (like Germany), directly under their Ministry of Industry. We should open our eyes wide and take some lessons instead of throwing ideas back and forth from little experience. Just browsing Wikis will give you all sorts of information.

Thai-German Institute - Wikipedia

en.wikipedia.org

Should we start manufacturing parts only for export instead of assembling whole cars from CKD or SKD kits (like PHP in Chittagong is doing for Proton cars)? Should we do both? I think the former has better prospects.

You need to crawl before you can walk and making parts (or forged parts blanks) is a prerequisite for making cars.

Hyundai made parts for Mitsubishi for years before they assembled their first mass-export car (Hyundai Pony) using Mitsubishi Engines and Transmissions)

Mitsubishi Motors - Wikipedia

en.wikipedia.org

Hyundai Pony - Wikipedia

en.wikipedia.org

Even Pakistan is doing both assembly and parts export and of course India is.

India does a massive amount of business supplying hammer-forged and ring rolled automotive part-blanks (prior to them being machined in US and EU) to global automotive suppliers in these countries. Truly massive scale of business.

It is true that they use older WWII era refurbished machines, but lower labor cost makes up for the profitability.

Hammer forging is very labor intensive, and there are many companies based in the Mumbai Pune industrial corridor and some areas in Gujarat doing this. Could this be done within Bangladesh? Of course - our labor cost in this sector is probably half (or even lower than) that of India.

@Joe Shearer dada probably has more knowledge about this sector in India than I do.

I say start with automotive and industrial forging like this first, then you can move up into the next step, machining this parts with CNC CAD/CAM machining centers for export or even manual lathes for low tolerance cheap local market supply (maybe for motorcycle parts at first). Common parts include those for transmissions e.g. helical/worm gears, bevel gears, engine parts e.g. crankshafts and piston arms etc.

Crankshaft forging in China

Bevel gear forging in China

 

[bluesky]

Bhaiera Akash-Kushum chinta korey luv nai.

Look at what other countries in the region (ASEAN Countries like Thailand, Indonesia and Malaysia) are doing (or not doing) in terms of Automotive industry manufacture.

Benchmarking will help, other countries have gone down this path before and made mistakes (like Thailand). Take a page from their mistakes and avoid them.

Some things the Thais did right is form collaborations with countries known for their excellence in Automotive manufacturing (like Germany), directly under their Ministry of Industry. We should open our eyes wide and take some lessons instead of throwing ideas back and forth from little experience. Just browsing Wikis will give you all sorts of information.

Thai-German Institute - Wikipedia

en.wikipedia.org

Should we start manufacturing parts only for export instead of assembling whole cars from CKD or SKD kits (like PHP in Chittagong is doing for Proton cars)? Should we do both? I think the former has better prospects.

You need to crawl before you can walk and making parts (or forged parts blanks) is a prerequisite for making cars.

Hyundai made parts for Mitsubishi for years before they assembled their first mass-export car (Hyundai Pony) using Mitsubishi Engines and Transmissions)

Mitsubishi Motors - Wikipedia

en.wikipedia.org

Hyundai Pony - Wikipedia

en.wikipedia.org

Even Pakistan is doing both assembly and parts export and of course India is.

India does a massive amount of business supplying hammer-forged and ring rolled automotive part-blanks (prior to them being machined in US and EU) to global automotive suppliers in these countries. Truly massive scale of business.

It is true that they use older WWII era refurbished machines, but lower labor cost makes up for the profitability.

Hammer forging is very labor intensive, and there are many companies based in the Mumbai Pune industrial corridor and some areas in Gujarat doing this. Could this be done within Bangladesh? Of course - our labor cost in this sector is probably half (or even lower than) that of India.

@Joe Shearer dada probably has more knowledge about this sector in India than I do.

I say start with automotive and industrial forging like this first, then you can move up into the next step, machining this parts with CNC CAD/CAM machining centers for export or even manual lathes for low tolerance cheap local market supply (maybe for motorcycle parts at first). Common parts include those for transmissions e.g. helical/worm gears, bevel gears, engine parts e.g. crankshafts and piston arms etc.

Crankshaft forging in China

Bevel gear forging in China

The way BD industrialization is going, there is little prospect BD will ever be industrialized. Industrialization needs Taka capital of the individuals and Dollar capital to import capital goods.

Hasina knows nothing about the relationship between industrialization and the economic development of a country. She visits developed countries and watch high rise buildings, good roads and bridges. She thinks this is what a country needs to develop.

Now, after coming back to Dhaka, she orders her people to build those she saw in Europe without understanding that all those beautiful structures were built with the wealth produced in the manufacturing factories inside the country.

Once a country develops well and moves up to a consumer society, it moves towards service and construction. But, Hasina fails to understand this. She thinks building a few civil engineering projects with dollars borrowed from abroad is the sure way of development.

The result is our people have to get jobs abroad and all those hunky punky projects will stop once BD defaults to repay the debts in time.

When BD will open its eyes, it will be already late. BD will be borrowing money then to pay back the arrears. There will remain no money to invest in the industries.