Bangladesh foreign exchange reserves rise to $33.11bn at end-April

[Homo Sapiens]

Actually Bangladesh has been benefited a LOT over the last 2 decades because of concessions provided by EU to import their garments. Bangladesh doesn't grow cotton yet they sell its products most as compared to other South Asian rivals. This is only because Bangladesh was considered as a poor country compared to India,Pakistan hence EU provided them with concessions and larger import share. in their market. This is actual Bangladesh success story - a complete thanks to EU. Pakistani Govt dropped the ball in late 90s and looked where we stand today despite of huge cotton growing country.

EU doesn't give Bangladesh any special concession.The zero tariff export benefit is given to all the 46 LDC countries.Many other countries get similar benefit without not being part of LDC. China the biggest apparel exporter there is the 2nd strongest economy in the world. Vietnam and Turkey also a significant garments exporter there.They are not LDC. Stop hiding Pakistan's failure behind the LDC boogey. Just producing cotton is not enough to become a major exporter of garments. Labor cost, govt. policy support, electricity, port facilities all are important. These benefit overcome the cotton import cost done by Bangladesh. There are 45 other LDC, why they could not become 2nd largest exporter? Or cotton growing developing India or Uzbekistan? Bangladesh got plenty, readily available cheap female labor force to do the job. If I am not mistaken, female participation in Pakistani garments industry is very low.female do this job more skillfully at lower wage than man. Which Bangladesh harnessed. Pakistan's high labor cost(mostly male), frequent electricity blackout in factories, lack of govt. policy support is the reasons, garments could not flourish there. It has nothing to do with LDC benefit given by EU or not.If LDC concession is so big a factor, then why China is the biggest exporter there? Or Vietnam? Why Pakistan could nor replicate the success of exporting garments by non-LDC China or Vietnam inspite of having cotton?

 

[RIP Pak LAW]

Well - the success of Bangladesh in apparel sector is not 100% due to EU and US (GSP) quotas.

The private sector in Bangladesh started off in the apparel sector in the late 70's, when Korea was still involved in it. That was the inception. Pakistani and Indian entrepreneurs did try their hand at garments but could not succeed against Bangladesh because factories here are *much* larger, where economies of scale gives an advantage.

Average size of Pakistani or Indian factories (usually sweatshops in urban areas) are around 100 workers/sewing machines whereas Bangladeshi have around 400~500 workers/sewing machines. Plus Bangladeshi factories are usually also integrated meaning they have dyeing/washing plants in house, saving more time.

The other significant factors are a) significantly lower labor cost and, b) early involvement and continual ongoing quality control training by Korean and Taiwanese buyers.

See below, (dated stats, but labor is always cheaper in Bangladesh by at least a factor of half from any one country)

The Rana plaza incident in 2013 was a wake-up call that turned out to be a blessing instead of a curse. The outsiders who tried to benefit from the death of our workers were paid back in their own coin, as local apparel exports bounced back quickly with active safety initiatives by local private and public sectors which has been universally lauded by both importers and members of the press in developed countries.

There has been substantive improvements in worker and factory safety. I can confidently say that the 1600 factories involved in the apparel trade in Bangladesh are now safer than a majority of the factories in Asian countries in terms of regular safety audits in the following areas,

1. Fire Protection
2. Electrical Hazard Protection
3. Sound Building practices and codes

These practices will only improve exports as our safety standards are now equal to European ISO standards.

Well crux of the matter is, your country got more business than us because of EU concessions hence the larger factories in making with cheap labor force.

https://thefinancialexpress.com.bd/...ntial-imports-come-from-bangladesh-1517814982

 

[Bilal9]

Well crux of the matter is, your country got more business than us because of EU concessions hence the larger factories in making with cheap labor force.

https://thefinancialexpress.com.bd/...ntial-imports-come-from-bangladesh-1517814982

There is not going to be anymore concessions once Bangladesh graduates from LDC status. Once these concessions go away then what advantage will we have except quality, consistency and reliability?

Bangladesh has not gotten GSP status from USA either since Obama administration cancelled it as an excuse due to Rana Plaza. Our apparel exports to USA haven't slowed down though.

No one was stopping Pakistani entrepreneurs or govt. from claiming some kind of preferential quota for exports, but they weren't interested. This has always puzzled me. I have been to some export fairs where I met Pakistani officials (employees) at their stalls who either did not seem to be super-knowledgeable about their product (line of business) or interested in drumming up sales. I chalked these experiences up to be exceptions rather than the rule.

You mean the Forex belongs to remittance account and export income account are directly going to import bill account without not getting recorded in total Forex account in the ledger of Bangladesh bank and not showing in the graph?

I am no financial whiz - I was just making a general observation. When a country is progressing from non-industrialized to industrialized, my hunch would be that you'd need to spend on infrastructure (which is expensive). Hence your Forex reserve growth would plateau. But again - I am no finance maven or expert on 'export income' or 'import bills'.

 

[Skies]

I am no financial whiz - I was just making a general observation. When a country is progressing from non-industrialized to industrialized, my hunch would be that you'd need to spend on infrastructure (which is expensive). Hence your Forex reserve growth would plateau. But again - I am no finance maven or expert on 'export income' or 'import bills'.

Me neither. My question was also based on basic knowledge.

 

[TopCat]

Well crux of the matter is, your country got more business than us because of EU concessions hence the larger factories in making with cheap labor force.

https://thefinancialexpress.com.bd/...ntial-imports-come-from-bangladesh-1517814982

Bangladesh jus kept up with the technology. Most big garments uses German machine instead of Chinese whereas in Pakistan its mostly Chinese. We have the capacity and quality.

 

[RIP Pak LAW]

There is not going to be anymore concessions once Bangladesh graduates from LDC status. Once these concessions go away then what advantage will we have except quality, consistency and reliability?

Bangladesh has not gotten GSP status from USA either since Obama administration cancelled it as an excuse due to Rana Plaza. Our apparel exports to USA haven't slowed down though.

No one was stopping Pakistani entrepreneurs or govt. from claiming some kind of preferential quota for exports, but they weren't interested. This has always puzzled me. I have been to some export fairs where I met Pakistani officials (employees) at their stalls who either did not seem to be super-knowledgeable about their product (line of business) or interested in drumming up sales. I chalked these experiences up to be exceptions rather than the rule.

This is where, we dropped the ball. I already admitted it earlier. Else we have textile infrastructure, cotton fields, cheap man power, all the potential but perhaps not the will or realized when things are already too late for us.

Bangladesh jus kept up with the technology. Most big garments uses German machine instead of Chinese whereas in Pakistan its mostly Chinese. We have the capacity and quality.

That's not true. We have tech from US and EU since we were the first ones in the region to export textiles goods. Our sports textile are rated top in the world just one example is of World Cup footballs but ofcourse they are no match to garments when it comes to quantity.

 

[Neptune_]

Not any time soon with the rising oil prices .

Yup, looks like the income of our expatriates living in arab countries took a hit due to this constant fall of oil price. Either some of them lost their jobs or getting comparatively lesser money from what they used to get in the past. Hence decrease in remittance inflow.

 

[TopCat]

That's not true. We have tech from US and EU since we were the first ones in the region to export textiles goods. Our sports textile are rated top in the world just one example is of World Cup footballs but ofcourse they are no match to garments when it comes to quantity.

I cant say about the sports goods as we dont export any of them. I saw in PK tv where people were talking about the garments machineries which were mostly Chinese and cant compete. I had no hand on experience though.

 

[Neptune_]

Unlikely in the next few years.Import is rising faster than export now and remittance growth in insufficient to cover the gap and push upwards. Forex is stable at 32/33 billion for the last 2 years and likely to remain at this level for few more years.

Actually remittance folw has decreased over the past few years even though the number of expatriates living in foreign countries have significantly increased. Many have already said that remittance is actually coming in big numbers but its coming through illegal means like hundi or other method. That's gotta be stopped

 

[TopCat]

EU doesn't give Bangladesh any special concession.The zero tariff export benefit is given to all the 46 LDC countries.Many other countries get similar benefit without not being part of LDC. China the biggest apparel exporter there is the 2nd strongest economy in the world. Vietnam and Turkey also a significant garments exporter there.They are not LDC. Stop hiding Pakistan's failure behind the LDC boogey. Just producing cotton is not enough to become a major exporter of garments. Labor cost, govt. policy support, electricity, port facilities all are important. These benefit overcome the cotton import cost done by Bangladesh. There are 45 other LDC, why they could not become 2nd largest exporter? Or cotton growing developing India or Uzbekistan? Bangladesh got plenty, readily available cheap female labor force to do the job. If I am not mistaken, female participation in Pakistani garments industry is very low.female do this job more skillfully at lower wage than man. Which Bangladesh harnessed. Pakistan's high labor cost(mostly male), frequent electricity blackout in factories, lack of govt. policy support is the reasons, garments could not flourish there. It has nothing to do with LDC benefit given by EU or not.If LDC concession is so big a factor, then why China is the biggest exporter there? Or Vietnam? Why Pakistan could nor replicate the success of exporting garments by non-LDC China or Vietnam inspite of having cotton?

Secret of all garments producing country are the female participation in the labor force. The Mullah culture in Pakistan does not allow female to work or get educated. Pakistan has no future unless it changes its attitude towards women. Same goes for India as well.

 

[Bilal9]

This is where, we dropped the ball. I already admitted it earlier. Else we have textile infrastructure, cotton fields, cheap man power, all the potential but perhaps not the will or realized when things are already too late for us.

That's not true. We have tech from US and EU since we were the first ones in the region to export textiles goods. Our sports textile are rated top in the world just one example is of World Cup footballs but ofcourse they are no match to garments when it comes to quantity.

Pakistan's exports are much more diversified (i.e. sports items, cutleries, surgical instruments) however it lacks a single large-scale item like apparel where massive amounts of value addition can be gained.

Tech is not really a huge decider in exports from Bangladesh or Pakistan - yet.

Bangladesh's business circle is very connected with East Asian circles and followed the industrial examples of Korea/Taiwan and now China where apparel and shoes were initial basis of development using massive low cost manual labor value addition.

In a few years Bangladesh' export basket will heavily diversify to include kitchen implements, small electrical goods, toys, electronic items as China slowly transfers these industries to low-cost locations like Bangladesh. This process has already started in earnest. Pakistan can catch this export bandwagon too.

These basic export items have a lot more promise than say non-traditional exports like shipbuilding, where Bangladesh has made substantial inroads by the private sector, however low cost labor value-addition remains to be less of a convincing factor than other factors.

People are always going to need nonstick saucepans, hair-dryers, rice-cookers, cellphones and table/floor fans - no matter the income level.

 

[Black_cats]

Actually remittance folw has decreased over the past few years even though the number of expatriates living in foreign countries have significantly increased. Many have already said that remittance is actually coming in big numbers but its coming through illegal means like hundi or other method. That's gotta be stopped

You are right!!! For example if anyone like to send 1000 Canadian Dollar by moneygram it will give the receiver around 64,500 taka where as current exchange rate is 65.56 taka. On top of it you need to add 12 dollar as sending fee. But someone who is sending by hundi he gets 66,500 to 67,000 taka plus no sending fee. So which one you will choose? The one which is giving 2000 to 2500 taka more plus saving the sending fee!!!! That is exactly what is happening. At Danforth area of Toronto and Parc Extension area of Montreal is full of such hundi businessman and they even seats opening an office space. Some do business as travel agency,some as money exchanges company, Some are agent of Bangladeshi mobile money sending companies. All people are sending money through them despite knowing everything as they are getting good fees!!! and obviously based on trust!!!

If I am not mistaken these people charge around 10% of the money that people from Bangladesh try to transfer. For example for 5000 dollar transfer from Bangladesh they will keep 4500 dollar in Canada as the entire process is illegal. They are avoiding money sending fees, Government radar by not paying the tax that government deduct when someone send it from Bangladesh and avoiding paying income tax on it as mostly these are Black money!!!

But now biggest money laundering is happening by opening LC. Many inside Bangladeshi Government knows it. People transfer money abroad saying they are importing machinery, or something else but do not bring anything at all. As there is not much coordination between Bangladesh Bank, LC issuing bank and the customs no one is cross checking whether people are really bringing these machinates or not. As election is coming so people are transferring money in big number. Sudden spike in opening LC means that big money laundering is happening in Bangladesh.

 

[Mage]

Oh really, then why is this happening:



and more broadly:

View attachment 472685

@bluesky @Skies @Centaur @Chak Bamu @Major Sam

Last year they took 2 billion from Forex reserves to create a sovereign wealth fund. Since money sitting idle in bank isn't that useful.

 

[Black_cats]

Last year they took 2 billion from Forex reserves to create a sovereign wealth fund. Since money sitting idle in bank isn't that useful.

Don't waste your energy by feeding this Tamil troll!!!

This retard has no work other then writing essays and copy pasting same stuff again and again.

 

[Mage]

The graph shows that although FEX increases from 2016 to 2018, the trajectory is a falling trajectory. Also there is signification fall from 2017 to 2018.

This:
https://defence.pk/pdf/threads/bd-approved-sovereign-wealth-fund-of-10-billion.476459/