Trade war buoys apparel industry in Bangladesh and Vietnam

[UKBengali]

Well all I am saying is lot of things with BD remain on "wait and see" mode.

Remember that things done now are important for the scenario unfolding 3 - 5 years later on the ground (given how business lag and cycles work). And the "now" has lot of problems that for political reasons are not being addressed in BD (unlike Vietnam which addressed them 10 - 20 years ago).

We both know about Vinfast right? For something like that, you can show me what VN govt charges as excise duty rate. Then I can quote you what the level is for Indian automotive industry. But when we come to Bangladesh, it will truly shock you as to the level (and why it is kept at that level).....hint: its 3 figures %!

It is all part of a scheme by their politicians to keep labour pool in only one industry (RMG) so its easily controlled and extracted from and bargained with. This self-inflicted lack of diversification is major problem that will only grow in BD (along with commensurate investment into optics propaganda like "women labour participation" and "micro-credit"). Already there is real household income decline for example:

https://opinion.bdnews24.com/2017/12/18/where-did-the-benefits-of-economic-growth-disappear/

You ever seen such in Vietnam during past and current growth phase? Let's be honest here. This is precisely why there is no true "advantage" being gained in BD case when its political party self-ticks (rather than genuinely humbly achieves and keeps going) the traditional industrialisation benefits (for political purposes)....and futher helped by there being less than 100k foreigners (and much much less when you subtract Indians visiting ancestral areas) visiting the country each year to give any real 3rd party fact check (unlike say proper industrialising countries). I mean is it really that good to have more woman in the labour force if real household income (something waaay more important) is declining? Macroeconomic policies and pragmatic results matter!...not cherrypicked numbers taken out of context (esp for cross comparison with other countries)!

You have to remember that Vietnam has one party rule, but that party puts the country first. In BD....the party puts itself first (and puts country near last...and only regarding things that helps the party). That is a very key distinction (and it counters very hard the narrative some BD people here like to shout that mono-party "stability" is good for BD). It for example shows in all I said so far, plus the ease of doing business in Vietnam compared to BD (and the fact BD is stagnating and BD govt not concerned in any pragmatic way to improve it, since it would mean loosening grip of its tentacles on its business people/bribing/propaganda chains):

https://en.wikipedia.org/wiki/Ease_of_doing_business_index#Ranking

So much butt-hurt can be seen in this post.

@Viet would much rather listen to IMF, ADB, Economist etc than a random poster on PDF on the state and prospects of the BD economy.

 

[Tanveer666]

You have to remember that Vietnam has one party rule, but that party puts the country first. In BD....the party puts itself first (and puts country near last...and only regarding things that helps the party).

More or less this

BD trends are not good if you look at the actual capital goods import levels right now (that were promised/projected 3 years ago).

Where'd you find the stats, if i may ask?

 

[Nilgiri]

More or less this


Where'd you find the stats, if i may ask?

https://wits.worldbank.org/Default.aspx?lang=en

Imports (big 3 south asia capital goods):

https://wits.worldbank.org/CountryP...roduct/UNCTAD-SoP4/country/PAK;IND;/show/line

As you can see Bangladesh is about keeping pace with Pakistan.

(6 billion import in 2013, 8 billion in 2015 for BD)...which is not really the levels needed to indicate massive transfer of capital goods like would be required to get 10's of billions of RMG production from China that many project in their feelz-fantasy ( given roughly 5:1 ROI iirc in RMG).

Exports (to illustrate some correlation to total capital good production):

https://wits.worldbank.org/CountryP...roduct/UNCTAD-SoP4/country/PAK;IND;/show/line

BD only exports 300 mil of capital goods....it thus doesnt have a very large capital good production capability (as underdeveloped it is in India for example already).

There is some good info here too, but the interface is bad (but you can experiment if you have some time/interest):

https://comtrade.un.org/

Combined with very little of the current (most recent published) capital good import increase is coming from RMG sector demand:

https://defence.pk/pdf/threads/capital-machinery-import-surges-37-last-fiscal.511312/#post-9748869

It simply nowhere near commensurate with the projection being made to go 3 times / 4 times etc (of current 30 billion level) more into the juicy "transfer" from China RMG export of 160 billion USD.

At most some more incremental cpl billion each year transfer (of RMG production) helped along with LDC quota 0-tariff preference (basically a blank check to BD to produce all it can in basic RMG given guaranteed buy) continuing in EU for a good chunk more years after LDC graduation (to help with "transition" to non-LDC).

This is why BD needs to diversify fast and hard....because that is nowhere near enough (just their services import from India more or less growing at that level).

But of course all of this is simply "butthurt"! You must just believe in BAL (it even sounds like Baal lol) no matter what...because they are doing a few % better on "power/infra" than the dreaded BNP! Its obviously the exact same situation that the Asian Tigers experienced in their "stability"....nothing to do with multi-approach pragmatic policy/basic reform implementation at all!

@GeraltofRivia @bluesky @Marine Rouge @hellfire @Major Sam

 

[American Pakistani]

Peace does not just come by with a wish to visit by your PM. Many homework is to be worked out to establish a working relationship with your neighbor.

Pakistan's PM has already forward the hand of peace towards your bharat mata. It is upto them, but they are busy in lynching Muslims, and killing Kashmiris in IOK.

Do you think it is proper to make a tart answer to a proposal and with such a disdain? If you talk about myself I am used to accepting disdain from others because I could not be equal to them in education, money or family status.

I was talking about your general Bengalis not you on personal level.

But, provided a good leadership is there a country has an almost unlimited prospect to grow. So, it is not wise to disdain other countries so easily. For a nation, it is necessary that it surmounts its weak emotion to achieve a better future for its citizens. BD is going through this process, but Pakistan has lost its opportunity by thinking wishful macho. To me, this machoism is essentially a DHOBI culture which is pulling you down.

Only this piece of crap advice only comes from bengalis. Hence why I used the example that a dhobi can only help others become dhobi. A Bengali will always want a Pakistan which is as weak and subordinate and a satellite of a third world nation bharat as Bangladesh is currently. We both countries are in complete different leagues, you a satellite state of third world while Pakistan a regional power along with the state that has a master status among you. For Pakistan, there is no compromise on that status, whether peace is acheived or not. Can a Bengali criticize it's country, leaders, historic decisions, etc? Never...you go against the will of your govt and you are known as rajakar, pakistani, terrorist, etc.

By the way, what happened to that $33 billion US money? Already eaten up by your macho military, is not it?

Hence why I referred your kinds as troll even worst than Indians. 33 billions US money was never US money but CSF (coalition support fund)of a peanut. Pakistan lost 123 Billion $ but got only 33billion. Furthermore Pakistan never charged a dime for shipping routes, air routes, roadways, border crossings, seaports, dry ports, security, highway usage, etc etc. Had we charged like NDN, then it would be 20 times of what they actually gave.

 

[GeraltofRivia]

https://wits.worldbank.org/Default.aspx?lang=en

Imports (big 3 south asia capital goods):

https://wits.worldbank.org/CountryP...roduct/UNCTAD-SoP4/country/PAK;IND;/show/line

As you can see Bangladesh is about keeping pace with Pakistan.

(6 billion import in 2013, 8 billion in 2015 for BD)...which is not really the levels needed to indicate massive transfer of capital goods like would be required to get 10's of billions of RMG production from China that many project in their feelz-fantasy ( given roughly 5:1 ROI iirc in RMG).

Exports (to illustrate some correlation to total capital good production):

https://wits.worldbank.org/CountryP...roduct/UNCTAD-SoP4/country/PAK;IND;/show/line

BD only exports 300 mil of capital goods....it thus doesnt have a very large capital good production capability (as underdeveloped it is in India for example already).

There is some good info here too, but the interface is bad (but you can experiment if you have some time/interest):

https://comtrade.un.org/

Combined with very little of the current (most recent published) capital good import increase is coming from RMG sector demand:

https://defence.pk/pdf/threads/capital-machinery-import-surges-37-last-fiscal.511312/#post-9748869

It simply nowhere near commensurate with the projection being made to go 3 times / 4 times etc (of current 30 billion level) more into the juicy "transfer" from China RMG export of 160 billion USD.

At most some more incremental cpl billion each year transfer (of RMG production) helped along with LDC quota 0-tariff preference (basically a blank check to BD to produce all it can in basic RMG given guaranteed buy) continuing in EU for a good chunk more years after LDC graduation (to help with "transition" to non-LDC).

This is why BD needs to diversify fast and hard....because that is nowhere near enough (just their services import from India more or less growing at that level).

But of course all of this is simply "butthurt"! You must just believe in BAL (it even sounds like Baal lol) no matter what...because they are doing a few % better on "power/infra" than the dreaded BNP! Its obviously the exact same situation that the Asian Tigers experienced in their "stability"....nothing to do with multi-approach pragmatic policy/basic reform implementation at all!

@GeraltofRivia @bluesky @Marine Rouge @hellfire @Major Sam

I cannot say with confidence without a detailed analysis but I am guessing what blocks Bangladesh industry from upgrading and diversifying is that the profit margin is so slim for the local manufacturers that it is only sufficient for them to keep going, but not sufficient to expend and upgrade. The workers are paid too little so there is too little economical value retained and cycled into general Bangladeshi economy. Upgrading into a more value adding industry is a challenge for all developing countries I guess. That being said, Bangladesh is still seeing good growth in apparel industry and that trend should continue for a few more years.

I guess the situation for the countries that are catching up through the low value RMG manufacturing is that there are many other countries (ie African countries) that are competing for the work with low wage/tax breaks, which gives the investors a lot more bargaining power. compared to the time when the Asian tigers raised when the choices were relatively limited, it will be a bit harder to raise wage, retaining economical value locally and expanding into other high value industries.

 

[Nilgiri]

I cannot say with confidence without a detailed analysis but I am guessing what blocks Bangladesh industry from upgrading and diversifying is that the profit margin is so slim for the local manufacturers that it is only sufficient for them to keep going, but not sufficient to expend and upgrade. The workers are paid too little so there is too little economical value retained and cycled into general Bangladeshi economy. Upgrading into a more value adding industry is a challenge for all developing countries I guess. That being said, Bangladesh is still seeing good growth in apparel industry and that trend should continue for a few more years.

I guess the situation for the countries that are catching up through the low value RMG manufacturing is that there are many other countries (ie African countries) that are competing for the work with low wage/tax breaks, which gives the investors a lot more bargaining power. compared to the time when the Asian tigers raised when the choices were relatively limited, it will be a bit harder to raise wage, retaining economical value locally and expanding into other high value industries.

Yep this is why BD needs to focus on improving its business environment as much as possible to attract more quality foreign investment. The RMG model is saturated at capacity...and is not got enough real (capital buffer reinvestment etc) inertia needed to breakaway into middle income etc.

 

[Mage]

Yep this is why BD needs to focus on improving its business environment

You need to wait a couple of years.

This issue is being raised very vocally nowadays.

 

[Nilgiri]

You need to wait a couple of years.

This issue is being raised very vocally nowadays.

Hey we have all the time in the world dont we?

 

[Mage]

Hey we have all the time in the world dont we?

You need time to fix a thing.

When you guys were building metro rails and It parks in the 80's BD was begging foreign countries for aid. Things are not gonna change very fast. If BD can climb 20-30 places in 2 years, that's good enough. Even with this pathetic ease of doing business rating, BD exports are still likely to get close 45 billion USD this year. Not comparable to Vietnam, but not that bad either.

 

[Nilgiri]

If BD can climb 20-30 places in 2 years,

Ok lets see! First need to get past this election and post-election environment, whatever that all will be like.

 

[Hellfire]

You need time to fix a thing.

You nailed it. And personally, it is great to see Bangladesh pulling up. The challenges that we face in India, are similar to what Bangladesh is facing - of a very large and unsustainable population pulling on the resources that are proportionally 'meager' to fast-track and jump start the economy and improve the socio-economic indices.

Having said that, I do concede that I will continue to invoke Species for his 'Airborne Brigade with strong Air Defense Forces to break through and get a corridor' in Siliguri corridor.

 

[Nilgiri]

Makran coast will obliterate the curse of being land locked for Afghanistan and make it a maritime country. While land west of Indus was part of Afghanistan which British imperialist conquered and later made part of Pakistan which Afghan never recognized. So you can see, Pakistan is the reason, Afghanistan is handicapped. So what do expect from them? To love you unconditionally?

Wow you are a class A moron. Ever hear of Khan of Kalat?

@DESERT FIGHTER can you set this twit straight on some facts.

Edit: haha he deleted it.

 

[DESERT FIGHTER]

Wow you are a class A moron. Ever hear of Khan of Kalat?

@DESERT FIGHTER can you set this twit straight on some facts.

Edit: haha he deleted it.

What would a bangladeshi know about the States which merged into Pakistan:

Panjab divided into Ind-Pak

Bahawalpur state

Valaiyat of Swat

Emirate of Nagar

Khanate of Chitral

Emirate of Shigar

Khanate of Phulra

Emirate of Hunza

Nawab of Dir

State of Amb

The Talpurs of Sindh

The Mirs of Khairpur

Or Baloch States of Balochistan

British were in Balochistan for 49 years... and had the treaty of Balochistan/Quetta.

And never got bored of us Tribesmen ambushing them or storming their “forts” which still dot the remote frontier which was than part of the Great Game.

 

[TopCat]

Yep this is why BD needs to focus on improving its business environment as much as possible to attract more quality foreign investment. The RMG model is saturated at capacity...and is not got enough real (capital buffer reinvestment etc) inertia needed to breakaway into middle income etc.

Ya .. what a butt hurt guy... we just posted 20% growth in RMG this year. Lots of extra capacity already available to spare. Last year we allowed FDI in garments industry and big guys are already started investing. There are no room for small companies from China to invest in BD due to strict compliance regulation.
China still export 120 billion dollar worth of RMG. So hell ya, a lot of room still there to grow. 60 billion dollar is just a minimum expectation.

 

[Nilgiri]

Ya .. what a butt hurt guy... we just posted 20% growth in RMG this year. Lots of extra capacity already available to spare. Last year we allowed FDI in garments industry and big guys are already started investing. There are no room for small companies from China to invest in BD due to strict compliance regulation.
China still export 120 billion dollar worth of RMG. So hell ya, a lot of room still there to grow. 60 billion dollar is just a minimum expectation.

Hey wannabe-mongol with no IQ, where you pulling your numbers from lol?

https://www.dhakatribune.com/business/2018/07/05/rmg-exports-saw-8-76-growth-last-fiscal-year

You can see very clearly the growth rate now will never reach "20%".

The average for last 5 years is at around 7% (better years helped by base effect from a worse year previous to it). No more low base effect to help you like in 2002 - 2010 era....this is what I mean by saturation. But you idiots here keep thinking BD will "continue and compound" at the same low-base growth rate....you yourself tell me what BD would be exporting now if it continued the growth rate of 2002-2010 in the 2010 to 2018 period?...and what it actually is? @Marine Rouge

But yes lets listen to the great magnificent mongolian shaman iajdani instead of horse's mouth itself:

With the present growth rate, Bangladesh would not be able to reach the target of $60 billion export earnings by 2021, said Ahsan.

So yeah its going to be like your Walton STRONK prediction of 1 billion dollar export target getting pushed another 10 years "Big guys already started to invest" You crack me up dude.....just making up statements like your super successful Alladin skyscraper project that is proceeding right on track right? (once we actually let some reasonable time pass from the feelz-injection).

I am going to enjoy yet another year of BD posting a 2 billion FDI level (and mostly low quality crap that diversifies squat) coming up. Gotta love that stagnation!