Bangladesh Economy: News & Updates

[eastwatch]

Per capita income goes up to $923 | The Daily Star

FRIDAY, MAY 17, 2013
Per capita income goes up to $923
Star Business Report

Per capita income rose by around 9 percent to $923 in the current fiscal year due to higher remittance inflow.The figure was $848 last fiscal year, according to Bangladesh Bureau of Statistics.

Higher earnings by expatriates have boosted the income of their relatives in the rural areas, resulting in a rise in the country’s per capita income, said Zaid Bakht, a research director at Bangladesh Institute of Development Studies.

In the first 10 months of the current fiscal year, Bangladesh received $12.30 billion in remittances, up 16 percent than the same period last year.

The latest figure from the state-run statistical agency is still short of the $1,100 needed to pull the country up to the middle-income bracket.

The nation aims to reach the status of a middle income country by 2021, according to the government’s perspective plan.

However, the World Bank said the required per capita income in 2021 would be $1,300, meaning a growth rate of 7.5 percent to 8 percent is needed every year.

 

[Banglar Bagh]

@eastwatch the current Labour Minister Engr. Khandakar Mosharrof Hossain has been very successful according to me. He is on the verge of uprooting the fraudulent private business of manpower export. This private manpower exporters are the prime reason for all the miseries of BD labours in foreign countries. They take huge amount of money from particularly the ignorant class of the society and send them away for jobs with very little salary. As such to make up for it our labours commit illegal works and often crimes. The current minister has been trying to send labours officially at a fraction amount to what the Baniyas used to take. Needless to say all the sh*tstorm he had to face for trying it. He is the only minister in this govt. whom I trust.

 

[eastwatch]

@eastwatch the current Labour Minister Engr. Khandakar Mosharrof Hossain has been very successful according to me. He is on the verge of uprooting the fraudulent private business of manpower export. This private manpower exporters are the prime reason for all the miseries of BD labours in foreign countries. They take huge amount of money from particularly the ignorant class of the society and send them away for jobs with very little salary.

As such to make up for it our labours commit illegal works and often crimes. The current minister has been trying to send labours officially at a fraction amount to what the Baniyas used to take. Needless to say all the sh*tstorm he had to face for trying it. He is the only minister in this govt. whom I trust.

You are very right about the bad practice of the private manpower companies. One correction, Engr. Kh. Mosharef Hossain is the Expatriate Welfare Minister as far as I know. He is really doing well and like Obaidul Quader this Minister also does not indulge himself in AL's dirty politics. This minister is almost begging other countries to hire labor from Bangladesh.

 

[eastwatch]

Surplus fund comes as economic relief - bdnews24.com

Surplus fund comes as economic relief
Staff Correspondent, bdnews24.com
Published: 17 May 2013 12:35 PM Updated: 17 May 2013 01:32 PM

Bangladesh registered a current account balance surplus of over $2.8 billion in the first nine months (July-March) of the current fiscal (2012-13).

This is seen as a comfortable zone for the country with no need to borrow money for regular transactions.

In case of debts, a government has to borrow money (from banks, private sectors or abroad) and repay.

During the same period last year there was a debt of $120 million. The account includes regular export-import and other earnings and expenditures.

Bangladesh Institute of Development Studies (BIDS) Research Director Zaid Bakht put the surplus to be an outcome of a good inflow of remittance and reduced trade deficit.

“It is mainly due to the positive inflow of remittance. It seems, the flow will sustain for the remaining three months (of the current fiscal).”

The apex bank’s balance sheet shows a $4.86 billion deficit in trading of goods in the first nine months (of the current fiscal). During the same period last year, the deficit was $6.75 billion.

This year, the deficit is almost 28 percent lower.

Zaid Bakht said, besides savings from imports, export expenditures came down too.

According to the balance sheet (FOB-based), export revenue gained 9.5 percent in the first nine months of the current fiscal compared to the figures in the last fiscal.

During this time (current year), over $19.35 billion was earned as export revenues and $24.22 billion as import expenditure – revenue gained by 9 percent and expenditures reduced by one percent compared to the same period last fiscal year.

However, the deficit in the services sector increased from over $2.19 billion in the first nine months of the previous fiscal to $2.34 billion in the first nine months of the current fiscal year.

The services sector deficit is calculated on the basis of insurance, travel and other related fields.

The apex bank said of over $11.02 billion coming in as remittance from July-March in the 2012-13 fiscal. Last year, during the same period, the amount was over $9.44 billion.

Calculating all, there is a $1.57 billion surplus in these nine months. Last year (in the nine months), the excess amounted to $779 million.

Upon analysis, it shows that an increase in foreign aid and investment made a positive impact on the economic health of the government.

During these nine months in the current fiscal, the country received $1.05 billion in foreign direct investment (FDI). During the same nine months in the previous fiscal, the amount was $198 million.

Simultaneously, investment (portfolio investment) in the capital market amounted to $180 million – which was $198 million in the last fiscal.

Overall, the surplus in the current fiscal amounted to over $3.94 billion in the first nine months of the current fiscal. In the last fiscal, there was a debt of $419 million.
_________________________________________________________________________________

@idune and all other posters, please come out with a good theory why this repressive AL govt should bring about a $2.8 billion trade surplus only in 9 months? It is a miracle, isn't it? If goes along this line the yearly surplus this fiscal will surpass $3.7 billion.

So, please send your valuable opinion on this economic issue that can be understood and enjoyed by others.

 

[eastwatch]

GDP growth falls to four-year low | The Daily Star

FRIDAY, MAY 17, 2013
GDP growth falls to four-year low

Bangladesh’s GDP growth came down to 6.03 percent in the current fiscal year, the lowest in four years, due to low investment and deadly political unrest, according to provisional estimates.
The economic growth is much lower than the government’s target at 7.2 percent.

The growth in economic expansion is, however, higher than the forecasts of development agencies who said the rate would hover between 5.5 percent and 5.8 percent. The estimates were made on the basis of available data of the first nine/ten months of the current year and the trends for the rest of the months.

The country has scored 20 basis points less than the last fiscal year’s growth, according to Bangladesh Bureau of Statistics. The final GDP achievement went down last fiscal year to 6.23 percent, which was 6.32 percent in the interim.

However, economists were not surprised at this year’s growth rate.

Zaid Bakht, a research director at Bangladesh Institute of Development Studies, said: “We had forecast long ago that the target would not be achieved this fiscal year due to political instability and low investment.”

“It’s, however, encouraging that the growth remains over 6 percent,” he told The Daily Star, giving credit to the steady growth in exports and better implementation of the annual development programme by the government.

The economist said remittances also helped indirectly keep the growth at a much higher level, which boosted domestic demand. However, the final estimates would show whether the country would be able to retain the provisional figure, Bakht said.

“It will depend on the political situation in the rest of the months of the current fiscal year. Hassan Zaman, chief economist at Bangladesh Bank, said: “The 6 percent growth outcome is not a surprise and is very close to what Bangladesh Bank had forecast back in December.”

“On one hand, it is higher than the Indian and developing country average projected growth of between 5-5.5 percent, but at the same time we know that had the domestic investment climate not deteriorated since January, we could easily have achieved our last ten years average of 6.2 percent growth.”

The economist said the focus should now be on setting a realistic growth target for the fiscal year of 2013-14 in the upcoming budget and collectively ensuring the stability that is required for investment and growth to take place.

The World Bank had said in April that weak exports and investments resulting from the impact of the euro-area crisis, domestic supply constraints and intensified strikes and unrest underpin the growth slowdown.

In the current fiscal year, the agriculture sector grew by 1.18 percent, down from 2.46 percent last year, according to the statistical agency.

The manufacturing sector lost 0.02 percentage points to grow at 9.34 percent this year. Electricity, gas and water supply made a fall, as their growth altogether declined to 8.57 percent from 12.03 percent last year.

In the services sector, the wholesale and retail trade sub-sectors saw a decline in growth by 0.94 percentage points to 4.69 percent. The construction, transport and real estate sectors rose slightly.

 

[animelive]

last time i went to badda, there were quite a good amount 15-20 storied building being made in the place. Great to see such development there as the place is infested with 3rd class kamlas ie: jubo/chatra league. Hopefully the place will host a more civilized lot in the upcoming years.

 

[eastwatch]

Private investment hits record low | The Daily Star

SUNDAY, MAY 19, 2013
Private investment hits record low
Political uncertainty and slow global recovery blamed
Rejaul Karim Byron

Private sector investment compared to GDP fell to a six-year low this fiscal year due to political uncertainty and a slow recovery in the US and Eurozone economies.

The amount declined by 1.05 percentage points over the last fiscal year and stood at 18.99 percent of gross domestic product in the current fiscal year, according to provisional estimates of Bangladesh Bureau of Statistics.

The ratio was 20.04 percent last year and 19 percent six years ago. However, the overall investment rose slightly due to a boost in public investment, but the share of private investment is higher, at 71 percent, in the total investment.

The estimates on investment were made on the basis of available data of the first seven/eight months of the current fiscal year and the trends for the rest of the months.

The investment-GDP ratio is already very low in Bangladesh and the fall in private sector investment this year has created concern among policymakers.

Finance Minister AMA Muhith at a pre-budget discussion on Friday said the investment-GDP ratio has been hovering around 24 percent and 26 percent and it has become difficult to increase it.
“We are continuously facing the problem related to investment. We have been thinking how investment can be increased,” the finance minister said.

Private sector investment is showing a downtrend as the investors have taken a cautious stance due to political uncertainty, Mustafizur Rahman, executive director of Centre for Policy Dialogue, told The Daily Star.

He said a big portion of the investment goes to the export oriented industries.
But the export oriented investment has slowed down substantially as the global recovery is faltering.

Rahman also said the domestic investment fell due to infrastructural weaknesses such as gas and electricity shortages.

Bangladesh Bank in its latest monetary policy gave enough space to the private sector investors. In the policy, the target for private sector credit growth was set at 18.5 percent for the period till June.

But the credit growth was gradually decreasing and came down to 12.72 percent this March, from 19.72 percent in the same month a year ago, according to BB statistics.

Capital machinery import fell by 18 percent in the first eight months of the current fiscal year although the amount went up by 22 percent in the same period last year.

Import of raw materials decreased by 5 percent during the period this year, whereas it increased by 12 percent last year, according to LC (letter of credit) settlement statistics.

A finance ministry official said investment has been slow since the beginning of the current fiscal year due to a weak demand in the EU and US markets.

However, public investment compared to GDP went up by 1.35 percentage points to 7.85 percent this year compared to last fiscal year.

The overall investment grew by 0.30 percentage point to reach 26.84 percent of GDP.

Mustafizur Rahman of the CPD said public investment rose as the utilisation of the government’s annual development programme went up.

 

[Rokto14]

Its really good to see you people posting the models and photos of these buildings.
But there is still a problem in Bangladesh, Energy and electricity.
And since there has been a lot of developments in Cox's Bazar and Chittagong area, has the BD government stepped up to improve the 2 Airports? If the 2 airports are not improved, I find there is no point building so many resorts and hotels. It would be a waste of money.

 

[Zabaniyah]

Its really good to see you people posting the models and photos of these buildings.
But there is still a problem in Bangladesh, Energy and electricity.
And since there has been a lot of developments in Cox's Bazar and Chittagong area, has the BD government stepped up to improve the 2 Airports? If the 2 airports are not improved, I find there is no point building so many resorts and hotels. It would be a waste of money.

Hotel demand in Bangladesh is always high. It is hard to find available rooms.

Those international hotel chains aren't building hotels here for no reason.

 

[Rokto14]

Hotel demand in Bangladesh is always high. It is hard to find available rooms.

Those international hotel chains aren't building hotels here for no reason.

Probably they think that Bangladesh is not a good place to invest at. I feel Bangladesh is one of the best places in Asia to do investment in. And whats the reason behind the hotel rooms not available? I heard one of the news last year that the tourism board in Bangladesh is stepping up to bring more tourist to Bangladesh.

 

[eastwatch]

Probably they think that Bangladesh is not a good place to invest at. I feel Bangladesh is one of the best places in Asia to do investment in. And whats the reason behind the hotel rooms not available? I heard one of the news last year that the tourism board in Bangladesh is stepping up to bring more tourist to Bangladesh.

So, how our tourist deptt. will bring the unwilling tourists to visit a country like BD, where people keep on staring at the legs of swimmers in the sea, and there were cases of rapes?

Look at all the Muslim countries. Are there many tourists except in the Maldives?

In Indonesia westerners go mostly to Bali island where people are non-Muslims and are eager to welcome Christian tourists. In case of Malaysia, tourism is a little developed because the good number of non-Muslim Chinese and Indians there have a trait to welcome foreigners.

There is a tourist resort zone organized by Club Meridian in Trenganu State where even Malaysian citizens are not allowed to enter except those who work there.

I wonder what good steps our govt is willing to take, and how our people will change their very backward mindset that repulses western and Japanese tourists to visit that country?

Only a long sea beach is not sufficient to attract tourists. For the westerners it is not a sea beach, they may regard it as a sea desert. For, example, the Club Meridian beach length is hardly more than 400 meter. But, many westerners, specially, the honeymoon couples flood that resort in thousands throughout the year.

There are many other privately operated resorts in countries like Thailand and Malaysia. Private operators know the basic of tourism.

Privacy is also a thing that matters to a westerner. But, are we willing to allow the tourists any privacy?

 

[Banglar Bagh]

Abundance of Uranium: Prosperous Days Awaits Bangladesh.

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[BDforever]

Bangladesh Development Update: Slower, Yet Healthy Growth With Remarkable Development Progress

The Bangladesh Development Update April 2013 predicts that GDP growth in fiscal year 2013 is likely to fall to around 6 percent compared with 6.3 percent in fiscal year 2012. Cushioned by strong remittances and robust service sector performance, the country can still sustain this slower, yet healthy growth rate. Coupled with remarkable progress on achieving the Millennium Development Goals (MDGs), Bangladesh has the potential to capture at least 15 million jobs and reach the target of 8 percent growth in the medium-term. The outlook is heavily dependent on whether Bangladesh can successfully seize opportunities and manage risks.

Recent Economic Developments

GDP growth in FY 2013 to fall to around 6 percent from 6.3 percent in FY 2012: Weak exports and investments due to the euro-area crisis, domestic supply constraints and intensified unrest in the country are likely to have contributed to this slower growth.

Inflation has declined to 8 percent in March 2013 from a peak of nearly 11 percent in February 2012 reflecting declines in both food and non-food inflation. The 7.5% inflation target for FY13 is still achievable, if there is stability in global commodity prices, functioning of the domestic supply chain is not disrupted by political unrest and monetary caution is maintained.

External balance has turned positive, with a record increase in reserves to over US$ 14 billion by end of March 2013. This reflects the country’s strengths in attracting remittances and foreign assistance, and weaknesses in the form of depressed domestic demand leading to a decline in imports.

Financial development suffered, with Bangladesh slipping one point in the Financial Development Index and now being ranked 57th out of 62 economies. Corporate governance failures led to deteriorating stability of the banking sector and non-bank institutions, along with a lack of confidence in the capital market.

Prudent monetary management led to sustained growth and macroeconomic stability. Monetary growth rates have been on track for the first half of the fiscal 2013, however the shift toward monetary easing in the second half may be premature.

Development Progress

Progress on the Millennium Development Goals (MDGs) has been remarkable. Of the 28 MDG targets, 3 have already been achieved. Bangladesh is on track to achieving 11 MDG goals and needs to provide more attention to the remaining 14.

Bending the arc of poverty reduction, the number of poor in Bangladesh declined by 15 million during 2000-10 compared with only 2.3 million decline in the previous decade. Several non-consumption-based welfare measures also improved. Growth of labor income and lower dependency ratio were the main drivers of this impressive rate of poverty reduction.

“Bangladesh’s poverty reduction was almost twice as fast as that experienced by the rest of the world,” observed Salman Zaidi, Lead Economist.

Prosperity shared in 2000-10 decade was far better than in the preceding ten years. Bangladesh has stable income distribution with positive consumption growth in all deciles. The country was among the 18 highlighted countries of the South with greater gains in Human Development Index between 1990 and 2012 than expected from their previous performance.

However, further depth and breadth in development is needed. Bangladesh continues to have the highest rate of poverty relative to its South Asian counterparts. Certain pockets of poverty lag far behind national average, such as urban slums, the hill tracts and coastal belts. Major challenges include, enrolling the last 10% of hard-to-reach children, enhancing quality of education, reducing gender disparity in tertiary education and addressing the threats of climate change.

Development Opportunities

Bangladesh has a historic opportunity to reach 8% growth. International investors are looking for low-cost manufacturing in Bangladesh, which has a rising share of working-age population. This growing and abundant force is currently under-utilized. Productivity of Bangladesh workers are at par with China in well managed firms with five-times lower wages.

Bangladesh can seize this opportunity to capture at least 15 million jobs. The challenge is to create conditions for faster growth of productive jobs outside of agriculture, especially in organized manufacturing and services. To begin the process of creating 15 million jobs over the next decade, the Bangladesh Economic Zones Authority (BEZA) has to dedicate 40,000 acres for economic zones, the PPP Office has to manage the tendering of infrastructure, the Bangladesh Bank has to reduce the cost of trade finance and the Board of Investment (BoI) as to promote the country to investors.

Outlook and Risks

The global growth is projected to increase in 2013. The outlook for Bangladesh depends on whether it can successfully seize opportunities and manage risks. Bangladesh has to diversify export products and markets to accelerate economic growth.

Some of the looming risks include the prospect of fragile recovery of the Euro area economies and the policy uncertainties in the US, along with possible backlash from recent compliance and labor safety issues, might affect the readymade garments (RMG) industry of Bangladesh. Uncertainties surrounding the reopening of traditional migrant labor markets in Middle East would hamper migration and remittance flows. An immediate hindrance to growth is the political complexity and frequent wide-spread violence of late in Bangladesh.

Time-bound opportunities for investment and job creation will slip away if Bangladesh is unable to act quickly. The risks identified are higher in the near-term.

“If the risks materialize, policy adjustments primarily through fiscal channels and exchange rate will be needed,” says Zahid Hussain, Lead Economist.

Finally, restoration of political stability will become the precondition for development to move forward.

source: Bangladesh Development Update: Slower, Yet Healthy Growth With Remarkable Development Progress.

currently BD hit $15 B foreign reserve and per capita income goes up to $923 (as of May 2013 info)

 

[eastwatch]

I am relieved by reading the WB report on the future of Bangladesh. Capitalism is the only way to make a country developed industrially. People of all the developed countries of today have suffered in the past when their countries were in the process of being developed.

This is the curse of capitalism. But without accumulating and then investing monetary capital a country cannot develop its industries. This is true for all the countries of Europe as well as the USA.

Europe stole capital from their colonies in Asia and Africa. Yet, people were so poor there that many poor had to migrate to the new world, USA. USA had cheap labors, but, yet, it used slaves for two centuries to accumulate capital to build an America that we see today.

The second phase of development is initiated by the capital accumulated through the industrial production itself. This creates new wealth and a part of which is recycled to build more industries and more infrastructures. This is how a country's economy keeps on growing.

Bangladesh remains an underdeveloped country in the very first phase of development. More than 26% of our production is saved and recycled to develop other industries. Because of this process of development we in our time are seeing so many pains being suffered by many of us who have no ability to survive on our own without becoming the unwilling slave labors in the sweatshop factories.

Our young daughters who work there would have remained underemployed as house keepers/maids in the towns and cities in a more inhumane conditions but without the fear of being killed by the fire and falling roofs.

I only hope the Tazreen fire and Rana Plaza collapse will be viewed in the future as a distinctive milestone which has created a condition where all the stakeholders have come to a conclusion that the safety and human rights of our workers must be guaranteed.

Sorry for this unnecessary and unsolicited long post.

 

[Rokto14]

Abundance of Uranium: Prosperous Days Awaits Bangladesh.

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Where is it located? And how is it found?