BD’s economic growth hits record 8.15pc in FY19, PCI reaches $1909 overtaking India’s PCI $1785

[Michael Corleone]

Situation is changing about not staying in Bangladesh. However yaba is a big problem. So I wholeheartedly support the murder of drug dealers buy RAB.

Sometimes we need to clean the garbage of society in unconventional way. It's necessary to ensure the safety of the society!

I’m in this secret group of somewhat elite Bangladeshi youth, they say yaba is cheaper and easier to source than marijuana

 

[Bilal9]

Why is there tax on shipbuilding at all. Industries that are going to boost economy shouldn’t be taxed at

The concern is that it needs to be controlled otherwise all the imported stuff gets smuggled over to India where demand is much greater and they pay lot more.

 

[Maler]

Total External Debt Of Pakistan (Billion US $)-----------$106 billions

Total Public External Debt of Pakistan(Billion US $)-------------$73.7 billions---78.6% of GDP (Sep 2019)[

Shahzaz, do you really think Pakistani GDP is less than $100 billion??? If not, then how can $73.7 billion be 78.6% of Pakistan's GDP??? 78.6% must be more than $+200 billion.

 

[That Guy]

Total External Debt Of Pakistan (Billion US $)-----------$106 billions

Total Public External Debt of Pakistan(Billion US $)-------------$73.7 billions---78.6% of GDP (Sep 2019)[

Your calculations are WAAAAAAY off. 73.7 billion of 312 billion isnt 78.6%.

You're missing internal debt as well, which is higher than external debt.

 

[UKBengali]

One needs to be in Bangladesh to see the complete picture brother, watching stats and trends from the interweb are misleading. @UKBengali bhai would you agree with him?

IMHO - India had artificial growth before things slowed down, where service economy grew without any real basis from industrialization. Bangladesh industrial activity is quite robust AFAIK in different sectors (newest are home appliances, small electrics, motorcycles, cellphones), unemployment is quite low (yet). Our industries are export oriented or import-substitution types (export/import numbers will not reflect a whole lot).

@That Guy :

BD is totally different to what happened in Pakistan and Sri Lanka. Both those countries experienced a few years of much higher growth than trend due to taking out massive loans.
BD is growing at trend growth - 6% average last decade and 7% average this decade.

If we look at debt to GDP ratio for 2018, BD is at 28%, while Pakistan is at 73% and Sri Lanka at 84%.

As regards infrastructure spending, that has only kicked into gear in the last 5 years and has raised 6-7% growth into the 7-8% region and so not a massive stimulus to the underlying growth rate.
The government is also not investing in any "white-elephants" like empty motorways in Pakistan and empty ports in Sri Lanka. All the projects are there to benefit the economy to allow the growth to both sustain and grow faster.

Yes, the tax receipts are staying at a low 10% of GDP but this should gradually edge upwards due to imposition of new VAT law.

Exports were up 10% in the last fiscal and imports were up less than 2% - a very healthy sign.

Anecdotally the going rate these days in BD for an unskilled farm labourer is 7 US dollars(500 Taka) which is a sign of a very healthy domestic economy.

BD still needs to emphasise diversification(happening but not as quick as it needs to be) but it is by far the best run economy in S Asia and both Pakistan and India have been left behind and Sri Lanka is the new target.

 

[That Guy]

Now it is time for a beta-only industry for growth - like shipbuilding.

Govt. should seriously reduce duty on inputs for shipbuilding activity, like welding equipment and ship plates. Under back-to-back L/C facility of course.

This is what made the electronics and motorcycle manufacturing take off...



Zajakallah Khairan brother, wish you best of success and Allah's blessings...



One needs to be in Bangladesh to see the complete picture brother, watching stats and trends from the interweb are misleading. @UKBengali bhai would you agree with him?

IMHO - India had artificial growth before things slowed down, where service economy grew without any real basis from industrialization. Bangladesh industrial activity is quite robust AFAIK in different sectors (newest are home appliances, small electrics, motorcycles, cellphones), unemployment is quite low (yet). Our industries are export oriented or import-substitution types (export/import numbers will not reflect a whole lot).

A fair criticism, but I'd argue that official banking data paints a better picture of the economy than saying that Ahmed from next door bought a new car, so the economy must be booming.

Much like with Pakistan (during the NS era), and India (during most of the 21st century), BD's economic growth is rising due to construction and FDI, as well as cheap loans. None of these are healthy indicators. There is no net positive long term job creation in BD, just like in India for the last few decades, despite positive growth (especially with India posting +7% gdp growth), nor did quality of life actually increase for the poor and middle class all that dramatically, despite having good growth (instead, the wealth gap widened dramatically).

For the most part both Modi and Imran Khan knew this, and tried (are trying) to enact massive economic reforms, which has cost their respective nation's economies to slow down dramatically, as reforms always hurt short term growth. Where as Shiekh Hasina is still convinced that she will be just fine without reforms, so long as fdi from china and mainly india keeps coming into bd.

 

[JohnWick]

But struggle to pay debt. Thats the point of discussion.

Huh....Pakistan's economy is in safe hands.CPEC will be operational in 2027 and after that you can not even compare your economy with Pakistan.
As far as Defence is concerned we are a nuclear capable state have capability to vapourize any state.
Not like BD, a simple Muslim country with much more population than its area.

 

[That Guy]

@That Guy :

BD is totally different to what happened in Pakistan and Sri Lanka. Both those countries experienced a few years of much higher growth than trend due to taking out massive loans.
BD is growing at trend growth - 6% average last decade and 7% average this decade.

If we look at debt to GDP ratio for 2018, BD is at 28%, while Pakistan is at 73% and Sri Lanka at 84%.

The growth rate is suspect to me, it has always been as such, so quoting it doesn't really convince me of anything.

As well,debt to gdp is a very misleading figure, what actually matters is repayment, not the actual debt amount.

As regards infrastructure spending, that has only kicked into gear in the last 5 years and has raised 6-7% growth into the 7-8% region and so not a massive stimulus to the underlying growth rate.
The government is also not investing in any "white-elephants" like empty motorways in Pakistan and empty ports in Sri Lanka. All the projects are there to benefit the economy to allow the growth to both sustain and grow faster.

See, every nation says that their investing in sustainable projects that will pay off long term, BD is no exception here, so I don't actually buy that bd will be able to actually reap the benefits it claims it does from these infrastructure projects. While construction has increase massively in the last 5ish years, which you're right about, there was still major contruction going on before then as well.

Yes, the tax receipts are staying at a low 10% of GDP but this should gradually edge upwards due to imposition of new VAT law.

Will only work if the laws are enforced. The problem with south Asian nations as a whole has always mainly been enforcing tax laws, not the laws themselves.

Exports were up 10% in the last fiscal and imports were up less than 2% - a very healthy sign.

Can I get a source on this, because from what i know,other than textile,BD's exports have either remained stagnant or declined, the same with imports.

Anecdotally the going rate these days in BD for an unskilled farm labourer is 7 US dollars(500 Taka) which is a sign of a very healthy domestic economy.

BD still needs to emphasise diversification(happening but not as quick as it needs to be) but it is by far the best run economy in S Asia and both Pakistan and India have been left behind and Sri Lanka is the new target.

BD, while it is doing better than India and Pakistan, has not left behind either of the later two.

I maintain that BD's growth is artificial, and that it will eventually come back to bite BD hard. With the war bearing its end in Afghanistan, and with India sooner or later getting out of it's current economic slump, they both will grow passed BD.

Now, I WILL say that, and o have also maintained this for a long time now,BD will likely be the first developed country, out of the three,and that's entire due to its geographical location, relatively good population control, and geopolitical importance.

 

[UKBengali]

The growth rate is suspect to me, it has always been as such, so quoting it doesn't really convince me of anything.

As well,debt to gdp is a very misleading figure, what actually matters is repayment, not the actual debt amount.

You can say what you like as regards growth, what matters is that it has been accepted by major orgs(IMF, ADB etc) and unskilled farm labourers are getting 7 US dollars a day. If BD was much behind the region, then an unskilled farm labourer would not be earning this kind of salary.

Debt to GDP: No it is not when the countries are in very similar stages of development.
Anyway BD government paid 1.2 billion US dollars to external lenders in 2017-2018 as opposed to around 7 US billion dollars for Pakistan. Budgets of both countries are similar and BD spends way less on defence compared to Pakistan( US 4 billion in BD to US 10 billion for Pakistan)

See, every nation says that their investing in sustainable projects that will pay off long term, BD is no exception here, so I don't actually buy that bd will be able to actually reap the benefits it claims it does from these infrastructure projects. While construction has increase massively in the last 5ish years, which you're right about, there was still major contruction going on before then as well.

Only in the last 5 years was massive loans taken out from Russia(12 billion US dollars) and China(7 billion US dollars). The Russian loan is commercial while the Chinese loans are soft. All other loans BD takes out are very soft.

All major infrastructure projects have happened in last 5 years - Padma Bridge, Roopur Nuclear Plant, Dhaka Metro etc.
Feel free to name a single multi-billion dollar infrastructure project that started before 2014 if you know of one.

It does not matter what other nations say as BD is fiscally very conservative and does not engage in ANY "white-elephants". The few proposed never saw the light of day.

Will only work if the laws are enforced. The problem with south Asian nations as a whole has always mainly been enforcing tax laws, not the laws themselves.

True but with the digital age upon us it will be easier to collect extra revenues

Can I get a source on this, because from what i know,other than textile,BD's exports have either remained stagnant or declined, the same with imports.

Sure...


https://www.thedailystar.net/busine...xport-growth-of-bangladesh-in-fy-2019-1768774

BD, while it is doing better than India and Pakistan, has not left behind either of the later two.

I maintain that BD's growth is artificial, and that it will eventually come back to bite BD hard. With the war bearing its end in Afghanistan, and with India sooner or later getting out of it's current economic slump, they both will grow passed BD.

Now, I WILL say that, and o have also maintained this for a long time now,BD will likely be the first developed country, out of the three,and that's entire due to its geographical location, relatively good population control, and geopolitical importance.

In terms of per capita income it has left behind both countries.
Remember only just over 10 years ago it was much behind both

Why is there tax on shipbuilding at all. Industries that are going to boost economy shouldn’t be taxed at

This will all change:

https://tbsnews.net/economy/govt-eyes-4bn-export-earning-shipbuilding

"With a $4bn annual export earnings target in five years, the government has drafted a policy for the shipbuilding industry to provide a range of facilities for entrepreneurs, including bank loans at a 4% interest rate.

The loan, which has to be repaid in 20 years, comes with a five-year moratorium.

At present, bank loans for the industry come with a two-digit interest rate but the Ministry of Industries feels it needs to come down to 4%."

"The formation of a Tk5,000 crore special fund for the shipbuilding industry was also proposed in the draft of the Shipbuilding Industry Development Policy 2019. "

Another motor to the BD export basket will soon come online. This will be a major impetus to diversifying away from garments.

@Bilal9

 

[mmr]

You can say what you like as regards growth, what matters is that it has been accepted by major orgs(IMF, ADB etc) and unskilled farm labourers are getting 7 US dollars a day. If BD was much behind the region, then an unskilled farm labourer would not be earning this kind of salary.

Debt to GDP: No it is not when the countries are in very similar stages of development.
Anyway BD government paid 1.2 billion US dollars to external lenders in 2017-2018 as opposed to around 7 US billion dollars for Pakistan. Budgets of both countries are similar and BD spends way less on defence compared to Pakistan( US 4 billion in BD to US 10 billion for Pakistan)





Only in the last 5 years was massive loans taken out from Russia(12 billion US dollars) and China(7 billion US dollars). The Russian loan is commercial while the Chinese loans are soft. All other loans BD takes out are very soft.

All major infrastructure projects have happened in last 5 years - Padma Bridge, Roopur Nuclear Plant, Dhaka Metro etc.
Feel free to name a single multi-billion dollar infrastructure project that started before 2014 if you know of one.

It does not matter what other nations say as BD is fiscally very conservative and does not engage in ANY "white-elephants". The few proposed never saw the light of day.




True but with the digital age upon us it will be easier to collect extra revenues




Sure...


https://www.thedailystar.net/busine...xport-growth-of-bangladesh-in-fy-2019-1768774





In terms of per capita income it has left behind both countries.
Remember only just over 10 years ago it was much behind both




This will all change:

https://tbsnews.net/economy/govt-eyes-4bn-export-earning-shipbuilding

"With a $4bn annual export earnings target in five years, the government has drafted a policy for the shipbuilding industry to provide a range of facilities for entrepreneurs, including bank loans at a 4% interest rate.

The loan, which has to be repaid in 20 years, comes with a five-year moratorium.

At present, bank loans for the industry come with a two-digit interest rate but the Ministry of Industries feels it needs to come down to 4%.:

"The formation of a Tk5,000 crore special fund for the shipbuilding industry was also proposed in the draft of the Shipbuilding Industry Development Policy 2019. "

Another motor to the BD export basket will soon come online. This will be a major impetus to diversifying away from garments.

@Bilal9

Bd is lukcy they have 33 percent debt to gdp only. Hope BAL dont screw it up. Because once you screw that up its almost impossible to go back and fix it specially for third world south asian countries. Unless some one discover massive oil reserves these south asian countries with high debt will face music for years to come. India might have to start printing money from next year if the demand dont go up they already have 70 percent public debt. Pak and sri lanka have similar debt level more or less. Only nepal has lower debt like bd.

 

[bluesky]

Not that I concerns me in any way, but it seems clear that this is artificial growth. No new long term jobs are being created, taxation remains low with no real effort to grow it, and ex/im is also down. There is a lot of construction going on, but it seems to be more vanity projects (like NS' era in Pakistan), than anything substantial. The numbers down add up, as the growth mainly seems to be mainly linked to foreign investment, and construction. We've seem similar issues in other countries, like Pakistan, and Sri Lanka.

I fully expect BD's economy to take a major hit in a few years time. The next global recession is gonna hit BD extremely hard.

Dude @UKBengali, what is your reaction when someone describes your RSTP and other projects as vanity projects? The reality is these are not creating jobs and wealth. Industrialization can create jobs permanently and produce wealth. BD's so-called progress under Hasina Bibi is a kind of putting the cart in front of the carriage.

 

[Bilal9]

I’m in this secret group of somewhat elite Bangladeshi youth, they say yaba is cheaper and easier to source than marijuana

Marijuana (meaning CBD oil) is a lot less harmful to health (clinically proven) in the longer term. Same thing for Yaba is anybody's guess and wouldn't bet my life on it.

 

[UKBengali]

Bd is lukcy they have 33 percent debt to gdp only. Hope BAL dont screw it up. Because once you screw that up its almost impossible to go back and fix it specially for third world south asian countries. Unless some one discover massive oil reserves these south asian countries with high debt will face music for years to come. India might have to start printing money from next year if the demand dont go up they already have 70 percent public debt. Pak and sri lanka have similar debt level more or less. Only nepal has lower debt like bd.

It is not luck but all BD governments are fiscally very conservative.

Even taking out all these massive loans from Russia and China will mean that debt will only rise to 35% of GDP by 2030 at most.

 

[IceCold]

I am seeing some bad level **** shit on the thumb nail of this thread when I see it through the defense.pk app Mods need to look into this.

 

[Bilal9]

There is no net positive long term job creation in BD, just like in India for the last few decades, despite positive growth (especially with India posting +7% gdp growth), nor did quality of life actually increase for the poor and middle class all that dramatically, despite having good growth (instead, the wealth gap widened dramatically).

Well you are right. But just like Pakistan's CPEC in the pipeline, Bangladesh is also diversifying to increase its exports and making sure there are places for job creation that actually exist. All infra being built (roads, utilities, ports, export zones, mostly at or near coastal areas a la China) is to serve one goal, increase exports.

• There are almost 100 different export processing zones being built across the country, about a quarter of them are ready with road/utility infra complete and ready-made factory installations (modular buildings) ready as well. Bangladesh is not new at this, this has been happening for the last two decades, so we have a robust frame of reference. These will employ semi-educated semi-skilled youth, a large portion of them younger women.
• There are more then a dozen different IT parks being set up in satellite locations including Dhaka and Chittagong. These will employ educated middle class youth.

Huh....Pakistan's economy is in safe hands.CPEC will be operational in 2027 and after that you can not even compare your economy with Pakistan.
As far as Defence is concerned we are a nuclear capable state have capability to vapourize any state.
Not like BD, a simple Muslim country with much more population than its area.

I do appreciate the fact that being "a nuclear capable state have capability to vapourize any state" is a powerful capability, but without the basis of a strong economy that capability is temporary. The point is not to do one-shot activity like shooting off a few scud missiles like the Iraqis did (although nuclear deterrence has its merits). The point is having the capability to sustain longer term wars (and against larger enemies who have that capability). Let's not take this discussion off topic though.

"The formation of a Tk5,000 crore special fund for the shipbuilding industry was also proposed in the draft of the Shipbuilding Industry Development Policy 2019. "

Another motor to the BD export basket will soon come online. This will be a major impetus to diversifying away from garments.

This is a good point. There are several other export diverisification targets as well. Leather goods, Pharma and Home appliances come to mind.