80 million mobile sets in a poor BD, where the population is about 150 million.
Bangladesh Economy: News & Updates
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80 million mobile sets in a poor BD, where the population is about 150 million.
Remittance, forex reserve beat doomsayers
Remittance, forex reserve beat doomsayers
Rejaul Karim Byron
Foreign exchange reserve and remittance marked an important milestone in Bangladesh economy in 2009, beating the development partners' glum forecasts in the face of global recession.
In ten years, foreign currency reserve grew from $1 billion to cross the $10 billion mark this year for the first time.
Also remittance was about to touch the $10 billion mark last fiscal year, and is expected to cross the milestone this year. The country pulled in $1 billion remittance in November, which is highest ever for a single month.
The average inflow throughout the year paints a rosier picture.
Both foreign exchange reserve and remittance were broadly immune to the global recession that has been lingering for around two years now.
Surprised at the successes, experts also cautioned the government against any inflationary pressure that may be caused by the achievements in remittance and foreign exchange reserve.
A few years ago, Bangladesh received remittance of $2 billion to $3 billion annually. The amount crossed $5 billion in fiscal 2006-07. The remittance inflow was $9.68 billion in the last fiscal year with a growth of 22.42 percent. In the first five months of the current fiscal year the remittance growth was 24.48 percent. In November the remittance inflow was $1.05 billion.
Manpower export has dropped drastically in recent times -- around 9.81 lakh people went abroad in fiscal 2007-08 and the figure dropped to 6.50 lakh in 2008-09.
In the first four months of the current fiscal year, manpower export went down by around 47 percent and stood at 1.50 lakh.
Despite a fall in manpower export, remittance inflow increased, surprising many observers.
Former deputy governor of the central bank Khondkar Ibrahim Khaled said: "Anti-money laundering drive has helped increase remittance through official channels."
The World Bank predicted a fall in remittance inflow last fiscal year. In the current fiscal year the WB forecast a remittance growth of 12 percent to 15 percent.
Foreign exchange reserve in November crossed $10 billion for the first time and on June 30 the amount was $7.47 billion. The amount was $10.29 billion on December 22. On the same day last year the amount was $5.80 billion.
The main reasons behind the increase in foreign exchange reserve are a decline in import and the boost in remittance. Normally import increases every year but the trend is negative now.
Data shows that import fell by around 15 percent in the first four months of the current fiscal year compared to the same period last year.
Bangladesh Bank Governor Dr Atiur Rahman told The Daily Star: "Banking sector is much active now. And so remittance increased. Many exchange houses and bank branches opened in different countries to send remittance. With the cooperation of NGOs, the system of remittance delivery to the recipients has improved. Now we think of introducing payment through mobile phones."
World Bank senior economist Zahid Hossain said: "Continued big remittance inflows posed significant challenges to monetary policy with pressure on exchange rate to appreciate, in turn, risking the competitiveness of exports and incentives to remit."
He said Bangladesh Bank has made sure this does not happen by buying dollars and accumulating forex reserves. But this resulted in a surge in excess liquidity in the banking system, which BB did not sterilise initially.
"This was corrected recently by using reverse repo to siphon off a significant part of excess reserves held by the commercial banks. The BB actions helped maintain exchange rate stability and external competitiveness," the WB senior economist added.
He said the challenge now is to contain inflation at a modest single digit level without hurting growth of credit to the private sector.
Remittance, forex reserve beat doomsayers
Rejaul Karim Byron
Foreign exchange reserve and remittance marked an important milestone in Bangladesh economy in 2009, beating the development partners' glum forecasts in the face of global recession.
In ten years, foreign currency reserve grew from $1 billion to cross the $10 billion mark this year for the first time.
Also remittance was about to touch the $10 billion mark last fiscal year, and is expected to cross the milestone this year. The country pulled in $1 billion remittance in November, which is highest ever for a single month.
The average inflow throughout the year paints a rosier picture.
Both foreign exchange reserve and remittance were broadly immune to the global recession that has been lingering for around two years now.
Surprised at the successes, experts also cautioned the government against any inflationary pressure that may be caused by the achievements in remittance and foreign exchange reserve.
A few years ago, Bangladesh received remittance of $2 billion to $3 billion annually. The amount crossed $5 billion in fiscal 2006-07. The remittance inflow was $9.68 billion in the last fiscal year with a growth of 22.42 percent. In the first five months of the current fiscal year the remittance growth was 24.48 percent. In November the remittance inflow was $1.05 billion.
Manpower export has dropped drastically in recent times -- around 9.81 lakh people went abroad in fiscal 2007-08 and the figure dropped to 6.50 lakh in 2008-09.
In the first four months of the current fiscal year, manpower export went down by around 47 percent and stood at 1.50 lakh.
Despite a fall in manpower export, remittance inflow increased, surprising many observers.
Former deputy governor of the central bank Khondkar Ibrahim Khaled said: "Anti-money laundering drive has helped increase remittance through official channels."
The World Bank predicted a fall in remittance inflow last fiscal year. In the current fiscal year the WB forecast a remittance growth of 12 percent to 15 percent.
Foreign exchange reserve in November crossed $10 billion for the first time and on June 30 the amount was $7.47 billion. The amount was $10.29 billion on December 22. On the same day last year the amount was $5.80 billion.
The main reasons behind the increase in foreign exchange reserve are a decline in import and the boost in remittance. Normally import increases every year but the trend is negative now.
Data shows that import fell by around 15 percent in the first four months of the current fiscal year compared to the same period last year.
Bangladesh Bank Governor Dr Atiur Rahman told The Daily Star: "Banking sector is much active now. And so remittance increased. Many exchange houses and bank branches opened in different countries to send remittance. With the cooperation of NGOs, the system of remittance delivery to the recipients has improved. Now we think of introducing payment through mobile phones."
World Bank senior economist Zahid Hossain said: "Continued big remittance inflows posed significant challenges to monetary policy with pressure on exchange rate to appreciate, in turn, risking the competitiveness of exports and incentives to remit."
He said Bangladesh Bank has made sure this does not happen by buying dollars and accumulating forex reserves. But this resulted in a surge in excess liquidity in the banking system, which BB did not sterilise initially.
"This was corrected recently by using reverse repo to siphon off a significant part of excess reserves held by the commercial banks. The BB actions helped maintain exchange rate stability and external competitiveness," the WB senior economist added.
He said the challenge now is to contain inflation at a modest single digit level without hurting growth of credit to the private sector.
http://www.business-standard.com/india/news/b\desh-ahead-in-apparel-export/380946/
B'desh beats India in apparel export
Monday, December 28,2009
NEW DELHI: Bangladesh has overtaken India in apparel exports this year. For the first nine months, its exports stood at $2.66 billion, ahead of Indias $2.27 billion.
In 2008, both the countries were at the same level ($10.9 billion) with each having 3 per cent share of global apparel exports.
Indias exports volume is down 80 per cent this year for two reasons: One, the global economic downturn and increasing competition from Bangladesh, Vietnam and Sri Lanka. During the downturn, buyers looked for cheaper deals and Indian exporters were unable to compete on costs due to rising raw material and power costs. The second reason: Many domestic companies are setting up units and offices in Bangladesh to avail the benefits of duty-free access. Prominent among those who have set up units in that country are House of Pearl Fashions (two units) and Raymond (one unit).
Sudhir Dhingra, managing director of Orient Craft Exports, said, Bangladesh has a cost edge of 9-29 per cent across various products. The country has duty-free access to European markets and labour is cheap. It is more profitable to export from Bangladesh, than from India.
Deepak Seth, chairman of the House of Pearl Fashions, said the companys units in Bangladesh had been operating efficiently and profitably. The company would double its capacities for T-shirts and woven tops/bottoms in Dhaka in the next financial year.Seth said labour costs in Bangladesh were 50 per cent of that in India and there was no duty on imports to EU, Australia and Canada. The Bangladesh governments huge priority to the sector is another big draw. House of Pearls has units in Indonesia and Vietnam as well.
Orient Craft was planning a unit in Bangladesh a year ago but dropped the idea due to changed focus of business. There are no difficulties in setting up a unit in Bangladesh and we considered setting up a base there. However, we are focusing more on domestic markets now, said Dhingra.
Analysts and textile experts said it was not common for Indian companies to set up units in Bangladesh. There are distinct advantages of setting up units in Bangladesh but only a few big players have done it. Smaller players will not venture into setting up units in other countries, said Prakash Agarwal, vice president of consulting firm Technopak.
D K Nair, secretary general of Confederation of Indian Textile Industry (CITI), said some of the Indian companies had set up garment manufacturing units in Bangladesh, but it didnt mean much.
Medium and small exporters have not yet warmed up to the idea of setting up offshore units. It is difficult for smaller units to understand, invest and operate in a foreign location. The Indian players who have set up units there have not actually relocated. They still have units in India and, therefore, are not necessarily our competitors, said Praveen Nayyar, managing director of Delhi-based Dimple Creations Private Ltd.
The problem, Indian exporters said, was elsewhere. With fabric prices shooting up by 51 per cent in recent months, along with speculative activities in the cotton market, woes of exporters have multiplied.
We are not able to take re-orders as our costs have multiplied due to steep rise of raw material costs. We are not able to maintain our margins and are rendered uncompetitive. Orders once lost are not going to come back, Nayyar added.
B'desh beats India in apparel export
Monday, December 28,2009
NEW DELHI: Bangladesh has overtaken India in apparel exports this year. For the first nine months, its exports stood at $2.66 billion, ahead of Indias $2.27 billion.
In 2008, both the countries were at the same level ($10.9 billion) with each having 3 per cent share of global apparel exports.
Indias exports volume is down 80 per cent this year for two reasons: One, the global economic downturn and increasing competition from Bangladesh, Vietnam and Sri Lanka. During the downturn, buyers looked for cheaper deals and Indian exporters were unable to compete on costs due to rising raw material and power costs. The second reason: Many domestic companies are setting up units and offices in Bangladesh to avail the benefits of duty-free access. Prominent among those who have set up units in that country are House of Pearl Fashions (two units) and Raymond (one unit).
Sudhir Dhingra, managing director of Orient Craft Exports, said, Bangladesh has a cost edge of 9-29 per cent across various products. The country has duty-free access to European markets and labour is cheap. It is more profitable to export from Bangladesh, than from India.
Deepak Seth, chairman of the House of Pearl Fashions, said the companys units in Bangladesh had been operating efficiently and profitably. The company would double its capacities for T-shirts and woven tops/bottoms in Dhaka in the next financial year.Seth said labour costs in Bangladesh were 50 per cent of that in India and there was no duty on imports to EU, Australia and Canada. The Bangladesh governments huge priority to the sector is another big draw. House of Pearls has units in Indonesia and Vietnam as well.
Orient Craft was planning a unit in Bangladesh a year ago but dropped the idea due to changed focus of business. There are no difficulties in setting up a unit in Bangladesh and we considered setting up a base there. However, we are focusing more on domestic markets now, said Dhingra.
Analysts and textile experts said it was not common for Indian companies to set up units in Bangladesh. There are distinct advantages of setting up units in Bangladesh but only a few big players have done it. Smaller players will not venture into setting up units in other countries, said Prakash Agarwal, vice president of consulting firm Technopak.
D K Nair, secretary general of Confederation of Indian Textile Industry (CITI), said some of the Indian companies had set up garment manufacturing units in Bangladesh, but it didnt mean much.
Medium and small exporters have not yet warmed up to the idea of setting up offshore units. It is difficult for smaller units to understand, invest and operate in a foreign location. The Indian players who have set up units there have not actually relocated. They still have units in India and, therefore, are not necessarily our competitors, said Praveen Nayyar, managing director of Delhi-based Dimple Creations Private Ltd.
The problem, Indian exporters said, was elsewhere. With fabric prices shooting up by 51 per cent in recent months, along with speculative activities in the cotton market, woes of exporters have multiplied.
We are not able to take re-orders as our costs have multiplied due to steep rise of raw material costs. We are not able to maintain our margins and are rendered uncompetitive. Orders once lost are not going to come back, Nayyar added.
The dollar figures given above seem to be mistaken. These may be $12.66 and $12.27 respectively for the first nine months.
leonblack08
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Alhamdulilhah Good news.Hope this trend continues and we have stable political condition.
PlanetWarrior
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Give the incentives and all your neighboring businesses will look at setting up business in Bangladesh. More businesses means more taxes for the government and more stability for the people. Good going Bangladesh. Hope that you start looking at incentivising other business options 
manglasiva
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THIS is what the sub continent should do.. building business.
than wasting money on defenses
than wasting money on defensesLocal firms seek to shore up foothold in tyre business
Local firms seek to shore up foothold in tyre business
Bangladesh is missing out on opportunities to tap the rising local demand for tyres in absence of large manufacturers here.Photo: STAR
Sajjadur RahmanLocal manufacturers are coming up to tap growing opportunities in tyre business that now depends heavily on imports.
Husain Tyre, which started production in 1996 with three-wheeler scooter tyres, makes more than 10 types, including light ones for small trucks and microbuses.
Gazi Group, a plastic product manufacturer, started producing automotive tyres three years ago. Now Meghna Group plans to enter the market soon.
Initially, we will make motorcycle tyres by June next year. We have already started producing tubes for motorcycle tyres, said Mizanur Rahman, chairman of Meghna Group.
Despite a growing use of automobiles here over the years, Bangladesh is missing out on opportunities to tap rising demand for tyres in the absence of large manufacturers.
On the other hand, Nepal and Sri Lanka, relatively small markets, produce tyres to meet their domestic demand.
According to Bangladesh Road Transport Authority, around 150 new motorised vehicles are added to city streets every weekday. A total of 2,18,000 new vehicles were registered in the last two and a half years.
Bangladesh spends Tk 1,000 crore to import up to 15 lakh tyres a year, according to importers, distributors and sellers.
Manufacturers, such as Husain and Gazi, are yet to pick pace and compete with giant Indian and Japanese tyre makers.
The market is dependent on imports, said Mohammad Muzahid, an executive committee member of the Tyre Merchants' Association and an importer of Indian Good Year tyre.
Although there is no exact data on the market share of imported and locally produced tyres, Humayun Kabir Liton, office secretary of Tyre Merchants' Association, said the use of local tyres is rising fast.
Local tyres will be able to grab a 10 percent market share in the next couple of years, said Liton, who has been in the business for nearly 15 years.
The tyre market has been growing fast, but local big companies did not make an entry to this sector as it requires large capital investments and consistent power supplies.
Years ago, two big names -- Rahimafrooz and Nitol -- moved to produce automotive tyres, but their plans did not carry through for high capital investment requirements and dependence on the import of raw materials.
When we took an initiative to produce tyres locally, more than seven years ago, the market was not as big as it is now, said Niaz Rahim, a director of Rahimafrooz Group.
"At the time, the investment cost was estimated at Tk 250 crore -- now it will be no less than Tk 400 crore for the same project," he added.
India's JK Tyre also tried to set up a joint venture to make tyres in Bangladesh several years ago.
Importers and sellers found the scarcity of raw materials in the country as an obstacle to producing tyres in Bangladesh.
Rubber, chemicals, carbon and yarn -- all have to be imported, said Humayun Kabir, another importer. The poor supply of power also discourages investors."
Bangladesh imports at least 60 percent of its tyre requirements from India, followed by China, Indonesia, Japan and Thailand, industry people said. Prices of tyres have also quadrupled in the past decade, riding on growing demand.
Niaz Rahim of Rahimafrooz did not rule out the possibility of a joint venture to manufacture tyres.
Zakir Husain, managing director of Husain Tyre, declined to comment on the country's tyre market.
Local firms seek to shore up foothold in tyre business
Bangladesh is missing out on opportunities to tap the rising local demand for tyres in absence of large manufacturers here.Photo: STAR
Sajjadur RahmanLocal manufacturers are coming up to tap growing opportunities in tyre business that now depends heavily on imports.
Husain Tyre, which started production in 1996 with three-wheeler scooter tyres, makes more than 10 types, including light ones for small trucks and microbuses.
Gazi Group, a plastic product manufacturer, started producing automotive tyres three years ago. Now Meghna Group plans to enter the market soon.
Initially, we will make motorcycle tyres by June next year. We have already started producing tubes for motorcycle tyres, said Mizanur Rahman, chairman of Meghna Group.
Despite a growing use of automobiles here over the years, Bangladesh is missing out on opportunities to tap rising demand for tyres in the absence of large manufacturers.
On the other hand, Nepal and Sri Lanka, relatively small markets, produce tyres to meet their domestic demand.
According to Bangladesh Road Transport Authority, around 150 new motorised vehicles are added to city streets every weekday. A total of 2,18,000 new vehicles were registered in the last two and a half years.
Bangladesh spends Tk 1,000 crore to import up to 15 lakh tyres a year, according to importers, distributors and sellers.
Manufacturers, such as Husain and Gazi, are yet to pick pace and compete with giant Indian and Japanese tyre makers.
The market is dependent on imports, said Mohammad Muzahid, an executive committee member of the Tyre Merchants' Association and an importer of Indian Good Year tyre.
Although there is no exact data on the market share of imported and locally produced tyres, Humayun Kabir Liton, office secretary of Tyre Merchants' Association, said the use of local tyres is rising fast.
Local tyres will be able to grab a 10 percent market share in the next couple of years, said Liton, who has been in the business for nearly 15 years.
The tyre market has been growing fast, but local big companies did not make an entry to this sector as it requires large capital investments and consistent power supplies.
Years ago, two big names -- Rahimafrooz and Nitol -- moved to produce automotive tyres, but their plans did not carry through for high capital investment requirements and dependence on the import of raw materials.
When we took an initiative to produce tyres locally, more than seven years ago, the market was not as big as it is now, said Niaz Rahim, a director of Rahimafrooz Group.
"At the time, the investment cost was estimated at Tk 250 crore -- now it will be no less than Tk 400 crore for the same project," he added.
India's JK Tyre also tried to set up a joint venture to make tyres in Bangladesh several years ago.
Importers and sellers found the scarcity of raw materials in the country as an obstacle to producing tyres in Bangladesh.
Rubber, chemicals, carbon and yarn -- all have to be imported, said Humayun Kabir, another importer. The poor supply of power also discourages investors."
Bangladesh imports at least 60 percent of its tyre requirements from India, followed by China, Indonesia, Japan and Thailand, industry people said. Prices of tyres have also quadrupled in the past decade, riding on growing demand.
Niaz Rahim of Rahimafrooz did not rule out the possibility of a joint venture to manufacture tyres.
Zakir Husain, managing director of Husain Tyre, declined to comment on the country's tyre market.
Japan has a $25b textile import market. China exports more than $10b worth of textiles to Japan every year. Now, the Japanese big-name companies like Uniqlo, Okamoto and many others have either set up or are going to set up factories in BD. A specialized Japanese company for quality control, QTec, has also set up shop in Dhaka.
Once they start production, there is every possiblity that their Japanese rivals, too, will set up factories in order to survive in the cut-throat competition. I believe, Japan may import more than $3b worth of textiles from BD after 3 to 5 years from now. Japan's usual import 2 years ago was about $30m. But, in the last fiscal it imported $80m worth of textiles from BD. BD can expect a further expansion of export of this low tech product to the world market.
Once they start production, there is every possiblity that their Japanese rivals, too, will set up factories in order to survive in the cut-throat competition. I believe, Japan may import more than $3b worth of textiles from BD after 3 to 5 years from now. Japan's usual import 2 years ago was about $30m. But, in the last fiscal it imported $80m worth of textiles from BD. BD can expect a further expansion of export of this low tech product to the world market.
I would request MOD this thread to merge with following thread as there are already thread for Bangladesh economic news. Someone on purpose opened addition threads on same subject.
http://www.defence.pk/forums/economy-development/10487-bangladesh-economy-news-updates.html
http://www.defence.pk/forums/economy-development/10487-bangladesh-economy-news-updates.html
Great going Bangladesh!
The kind of policies that Indian government follows and the infrastructure in place need a total overhaul.
Time to learn a few things from Bangladesh.
To add, Indian textile companies too are investing in Bangladesh. Just goes on to show how conditions at home have been cripling our very own industries.
The kind of policies that Indian government follows and the infrastructure in place need a total overhaul.
Time to learn a few things from Bangladesh.
To add, Indian textile companies too are investing in Bangladesh. Just goes on to show how conditions at home have been cripling our very own industries.
TopCat
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Textile is the basic industry which built UK, Japan, Korea. This is the only industry which could bring the poorest out of the poverty line. 3 million poor women already employed by that industry and I hope for more. Our Jute also coming back. We are overwhelmed by extra orders this year. Golden fibre is back again...
TopCat
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Japan took a policy called China + 1. They are yet to decide who will be that 1 and Bangladesh is in forefront to that. Last week Japan government sent a list of recommendation to BD government regarding infrastructure and all for Japanese investment here.
I think we now have the world's biggest Textile and Shoe making factory in Bangladesh...
.
