Bangladesh News Bangladesh Economy & Development Thread

Isa Khan

Experienced member
Moderator
Messages
6,602
Reactions
22 9,778
Nation of residence
Bangladesh
Nation of origin
Bangladesh
Microsoft, the introducer of most widely used operating system Windows, today got Value Added Tax (VAT) registration from the National Board of Revenue (NBR), a development that will enable the revenue authority to get the tech company under its monitoring.

Microsoft is the fourth tech giant after Google, Facebook and Amazon that got registration from the VAT Commissionerate Dhaka South last month.

Microsoft Regional Sales Pte Ltd, Singapore registered for Business Identification Number on behalf of the leading American tech company, said SM Humayun Kabir, commissioner of VAT Commissionerate Dhaka South.

"We will now get returns from these tech companies and do auditing after the companies get registration," he said.

Kabir said the NBR was getting revenue as bank used to deduct VAT during payments to these companies by clients for taking services such as giving advertisement digitally.

"Now we will get a clear picture of how much revenue we are getting from the global technology companies," he said.

 

Isa Khan

Experienced member
Moderator
Messages
6,602
Reactions
22 9,778
Nation of residence
Bangladesh
Nation of origin
Bangladesh
The Walt Disney Company has decided to reinstate its production of branded merchandise in Bangladesh after more than eight years of pulling out of factories in the country, according to apparel industry leaders.

The company stopped its production activities in Bangladeshi factories in May 2013 following the Rana Plaza Building collapse that killed more than 1,100 people, mostly readymade garment workers.

‘The Walt Disney Company has decided to include Bangladesh in its Permitted Sourcing Country list with International Labour Standard audits,’ Bangladesh Garment Manufacturers and Exporters Association president Faruque Hassan told New Age on Friday.

Following the fire at Tazreen Fashion in November 2012 that killed 112 garment workers, the Walt Disney Company sent a letter in March 2013 to vendors and licensees to transition production out of the ‘highest‑risk countries’ like Bangladesh in order to reinforce safety standards in its supply chain.

After the Rana Plaza tragedy, Walt Disney was the first brand to complete stop production in Bangladesh.

It had announced that the company would consider permitting production in Bangladesh in future if factories agree to partner with the Better Work programme.

BGMEA president Faruque Hassan welcomed the timely move by Walt Disney in recognition of the all-out progress and transformation in the industry, particularly in areas of workplace safety, social standards and environmental sustainability.

He said that factories participating in the ILO’s Better Work Bangladesh programme would be entitled to become a vendor while they needed to participate in the Nirapon or RMG Sustainability Council along with specific remediation fulfilment criteria.

According to the BGMEA president, Bangladesh’s RMG industry has made unprecedented efforts and investment to ensure safety covering fire, electrical and structural integrity and a robust follow up of factory remediation to create a culture of safety while promoting the well‑being of the workers.

The entire safety transformation programme was supported and facilitated by the government, ILO, international brands, manufacturers and global unions in a transparent manner.

‘Through these actions and transformation, Bangladesh has well positioned itself as the preferred sourcing partner for conscious brands like Disney, which is committed to fostering safe, inclusive and respectful workplaces in its manufacturing facilities worldwide,’ Faruque said.

He said that around $500 million worth of business was shifted to Vietnam, India and Myanmar as Disney stopped its production in Bangladesh.

‘With the reinstatement of Bangladesh as a permitted souring country, we will be able to attract orders of more than $500 million,’ the BGMEA president hoped.

 

Isa Khan

Experienced member
Moderator
Messages
6,602
Reactions
22 9,778
Nation of residence
Bangladesh
Nation of origin
Bangladesh
Authority of Dhaka Mass Rapid Transit Limited (DMTCL) has begun functional test of metro rail inside the depot at Uttara.

“We will start its mainline test on viaduct in August,” Managing Director of DMTCL MAN Siddique told BSS here today.

He said that after the mainline test, the Mass Rapid Transit (MRT) Line-6 will introduce performance test after that it will go for integrated test.

“The country's first overhead communication system ‘metro train’ in the country undertaken by Prime Minister Sheikh Hasina, will start its commercial journey from next year,” the managing director said.

He said that construction of all metro stations is going on in full swing during the coronavirus pandemic with maintaining health guidelines strictly.

According to the project details, the first set of metro train will go for trial run on viaduct and after successfully completion of the trial run then it will go for commercial operation from Uttara depot to Agargaon next year.


It said the first phase of the country’s first metro rail project between Uttara and Agargaon became visible and its progress stood at 87.80 percent, while the overall progress from Uttara to Motijheel rose to 67.63 percent.

It said 14.50-kilometer railway line was installed from Uttara to Agargaon. The second set of metro train reached at the depot on June 3, while third and fourth train set left Kobe port on June 22 for Mongla, which will reach Mongla last week on this month.

The fifth set will start its journey from Japan on July 16, which is expected to anchor on September 17 this year.

Besides, platforms construction of Uttara North, Uttara Center, Uttara South and Pallabi stations were completed, while platform construction of Mirpur-11, Kazipara and Shewrapa stations is going on, it said.

The metro rail is projected to carry 60,000 passengers per hour by traveling the entire route of 21.26 km from Uttara to Motijheel-Kamalapur Railway Station in less than 40 minutes.

It said if the current pace of work continues by following safety rules during the ongoing coronavirus situation, the rail project might be completed within December 2022.

Although workforce usually engage in construction works before checking COVID-19 test and if they are found negative then they join works, the project details said.

The length of the metro rail route up to Motijheel was 20.10 km. But now it was extended to Kamalapur Railway Station by 1.16 km. As a result, the number of stations was also increased to 16.

In order to deal with the ongoing coronavirus pandemic, a 10-bed isolation center (Field Hospital) at the Gabtoli construction site and a 14-bed isolation center (Field Hospital) at Uttara Ponchoboti construction yard were constructed, Siddique said.

He said persons infected with COVID-19 were kept under home or institutional quarantine and if needed, they were admitted to a dedicated hospital.

 

Isa Khan

Experienced member
Moderator
Messages
6,602
Reactions
22 9,778
Nation of residence
Bangladesh
Nation of origin
Bangladesh
 

Isa Khan

Experienced member
Moderator
Messages
6,602
Reactions
22 9,778
Nation of residence
Bangladesh
Nation of origin
Bangladesh
The pandemic has caused most businesses to slow down in terms of sales, however, the bicycle manufacturers have lucked out. The demand for them has gone up significantly in foreign markets as more and more people are moving towards using a bicycle instead of public transport.

“One of our three factories have received export orders for more than 130,000 units in the last five months,” said a high official of Meghna Group. Similarly, RFL also expects around 25% growth in its sales.

This trend is likely to go up as market research reports estimate that the global market size for bicycles would reach US $62 billion by the year 2024. The European Union (EU) countries are one of the biggest markets for bicycles, where consumers buy around 18 million units a year.

This is the reason why Bangladeshi manufacturers are targeting the European markets for exports, especially to the UK, Germany, Italy and Netherlands. According to Eurostat, Bangladesh is the third-largest exporter of bicycles to the EU and the 8th largest exporter in the global market.

At present, there are three major exporters in the bicycle industry with Meghna Group being the largest among the lot, with three factories dedicated for assembly. Pran-RFL Group also exports its bicycles under the brand name--Duranta Bikes. Pran-RFL is relatively new in the market only having started in 2015 but has gained huge popularity in the domestic market.

The company has recently expanded its capacity, with its two factories in Habiganj having a combined capacity of manufacturing 600,000 units. The other major exporter is Alita Bangladesh, which is a Taiwan-based company in Chittagong Export Processing Zone. According to Bangladesh Bicycle Merchant Assembling and Importers Association (BBMAIA), the local market demands nearly 1.5 million bicycles a year with an annual growth rate of 30%.

One might wonder why China’s mighty manufacturing companies are not taking advantage of such a lucrative market. That is because the EU has imposed a high anti-dumping duty with an import tariff of up to 48.5% which was supposed to end in 2018.

Then, the EU has extended the anti-dumping duties for a further five years to avoid market distortions and to keep the number of imports under check while Bangladesh is currently enjoying duty-free export benefits that have facilitated the performance of bicycle exports. In the last fiscal year, Bangladesh earned $73.22 million which is an increase from the previous year’s $70.59 million.

According to the bicycle exporters’ estimation, Chinese bicycles could cost significantly lower (about 10% to 20%) than the Bangladeshi cycles in the European markets and they could also cater with a much shorter lead time. This is due to a number of factors, one being a high cost of production as the majority of the raw materials of the bicycles are imported from various countries.

The import duties of the raw materials range from 10% to 25% which leads to a higher price for the consumers. The duty of spare parts is even higher, parts such as brakes, gears, chains have an average duty of 55%, there are a few items being made locally such as the bicycle frame, tyre, rim and spoke.

This high cost of production is reflecting on the number of sales as the manufacturers are having a difficult time competing with foreign competitors in the domestic market. Currently, the Bangladeshi domestic market is dominated by India and China, with 70% of the bicycles being imported to meet the local demand.

Even though the local manufacturers are doing well in exports, they have a long way to go in the domestic scene, for which a number of measures can be taken into consideration.

A reduction of import tariffs while maintaining minimum quality standards for the domestic market can help reduce the gap between the domestic and export markets. The congestion in the ports and delay in the delivery of imported parts also causes the bicycles to become costlier and less competitive, which suggests that more investments are required in the backward linkage industries in the light-engineering sectors.

If Bangladeshi manufacturers can overcome these obstacles, the export market will not only be limited to a few countries. The Asian market is growing at a very steady rate, which can be a definite potential market for the local manufacturers.

 

Isa Khan

Experienced member
Moderator
Messages
6,602
Reactions
22 9,778
Nation of residence
Bangladesh
Nation of origin
Bangladesh
Dawn Global has recently announced the launch of the Asian Growth Cubs exchange traded fund (ETF), the first active thematic ETF to focus on public equities in emerging and frontier growth markets, including Bangladesh.

"When people read about how well the Bangladeshi economy is doing, they now will have a way to invest into the story,” said Rahat Ahmed, founding partner and CEO of Anchorless Bangladesh.

“It is great because the country can be on top of the mind when people are looking to allocate capital, and it benefits the market with increased liquidity and demand," he added.

Cubs, which is listed on the New York Stock Exchange, offers investors actively managed exposure to four other large, fast growing markets — Indonesia, Pakistan, Philippines, and Vietnam.

Including Bangladesh, these five economies have individually grown GDP faster than 6% a year in US dollars since 2000; Bangladesh and Vietnam have compounded GDP for 40 consecutive years.

Yet these markets remain inaccessible to most foreign investors due to little or no ETF coverage or American Deposit Receipt listings, Dawn Global said in a press release.

“Most emerging market investors focus in Asia on China and India, yet there is a compelling long-term secular growth story in five Asian countries with a combined population of more than 860 million people, expected to grow to 1 billion by 2035, and with attractive demographics,” said Maurits Pot, founder and CEO of Dawn Global.

The average age is 28 in these markets with a burgeoning middle class and accelerating digital adoption, he added.

Dawn Global is re-inventing the conventional approach to emerging markets equities investing by positioning Cubs as an actively managed, content driven, thematically designed, regionally diversified ETF.

“The passive, index-driven emerging market ETF asset class is concentrated on six countries — the BRICS, Korea and Taiwan — overlooking the attractive and sizable opportunity in the next generation of emerging and frontier growth markets,” Pot further said.

“The index driven market-cap weighting approach risks skewing portfolio construction to current size, not future growth potential. Instead of grouping emerging markets into a single product, we intend to give investors the option of which specific markets they have exposure to, through regionally diversified products,” he added.

Dawn Global believes active investment management is required to identify the most compelling growth companies in these nascent markets as well as to mitigate company and governance risk.

The investment process involves top-down company screening and bottom-up company analysis to identify the most compelling investment opportunities.

Cubs’ high conviction, diversified portfolio is reviewed quarterly and rebalanced twice a year, through equal weighting across all securities to mitigate single country and single company risk. The portfolio is geared towards tomorrow’s economy, with a bias towards healthcare, telecom media technology, consumer goods, and financials, the press release adds.

Exchange Traded Concepts, an ETF platform provider, is the investment adviser and Kingsway Capital Partners Limited (KCPL) is the investment sub-advisor to the fund.

Dawn Global is the sponsor to the fund and an appointed representative to KCPL. Foreside Fund Services LLC, a provider of investment management services, is the distributor of Cubs.

Dawn Global, London and Jersey, is dedicated to active thematic ETF investing in the next generation of emerging and frontier growth markets — investing today in the economies of tomorrow.

It offers institutional investors, multifamily offices, investment and financial advisors long-term geographic and growth diversification accessed via public markets.

It focuses on growing companies that are leaders, enablers, and beneficiaries of emerging and frontier market growth trends.


Dhaka-Kuakata 244km railway project.

 
Last edited:

Isa Khan

Experienced member
Moderator
Messages
6,602
Reactions
22 9,778
Nation of residence
Bangladesh
Nation of origin
Bangladesh
Mongla Port, the second largest sea harbor of the country, witnessed at least 970 foreign ships docking in the 2020-21 Fiscal Year breaking all previous records in its history, said an official.

The ship mostly contained car, coal, fertilizer cement clinker, LPG carrying vessels, ceramic materials, various raw materials and equipment of Ruppur nuclear plant and railway line project etc.

In 2019-2020 FY, MPA witnessed at least 903 foreign ships docking while 912 in 2018-2019 FY, 784 in 2017-2018 FY and 623 in 2016-17 FY.

“The record touched a milestone in the yearly statistics in the last seven decades after the establishment of the port near the Bay of Bengal in 1950,” said deputy secretary of Mongla Port Authority (MPA) Md Makhruzzaman.

The port has been playing a vital role in the country's economic development since 2009 as some very important initiatives were taken by the then government, he said.

The port turned into a losing sea port in the years from 2001 to 2008 because of many problems. In February, 2007-2008 fiscal year, only seven foreign ships anchored at the port.

A total of thirteen development projects and seven ADB programmes were implemented from 2009 to 2020 involving Taka over 2000-crore aiming to enhance the ability of Mongla Port, Makhruzzaman said.

The official, however, said the MPA has already ensured different facilities for the port users to get speedy and quality services.

The facilities include capital dredging at the Pashur River, purchasing 42 containers and cargo handling machinery and setting up a modern channel at Pashur River to arrive and discharge foreign ships round the clock.

Chairman of Mongla Port Authority Rear Admiral Mohammad Musa told BSS that the government has taken many initiatives to enhance the ability of Mongla Port.

“The MPA sees the record ship due to intervention and epoch-making planning of Prime Minister Sheikh Hasina, special direction of the shipping ministry, cooperation by Mongla Port users and hard work by the employees of the organization,” he said.

Number of foreign ships arriving is increasing day by day as industrialization boosted up centering Mongla Port and Rampal Power Plant. Investors are importing different production materials like machineries, cement clinkers, cars, fertilizers and equipment for industrialization.

The MPA has earned a profit of Taka 226 crore in 2016-17 FY while Taka 276 crore in 2017-18 FY, Taka 329 crore in 2018-19, Taka 338 crore in 2019-20 FY, and Taka 340 crore in 2020-21 FY, he said.

In 2007-08 FY, a total of 7.5 lac ton cargos were handled at the port. It has increased at least 119.45 lac tons in the 2020-21 FY, he said, adding that dredging was completed at Rampal Power Plant area, Food Silo area and Outer berth in the Pashur River.

A total of 43,959 TUH containers were handled and at least 14,474 cars were unloaded in the 2020-21FY, he added.

In line with the ‘Vision-2021’ envisaged by the government, all the projects are being implemented to attract foreign companies to operate in economic zones as well as ensure balanced development of every region of the country.

 

Isa Khan

Experienced member
Moderator
Messages
6,602
Reactions
22 9,778
Nation of residence
Bangladesh
Nation of origin
Bangladesh
Remittance inflows hit a record high of $24.77 billion in the just-concluded fiscal year 2020-21, thanks to the expatriate Bangladeshis for sending money amid the Covid-19 pandemic.

Expatriate Bangladeshis sent 36% more remittance in fiscal 2020-21 compared to the same period in the previous fiscal, when it was $18.20 billion, Bangladesh Bank data showed.

In the wake of the Covid-19 pandemic, the remittance inflow, one of the main barometers of the economy, dipped from March to May of 2020.

The inflow of remittances shows hit a record high in the current fiscal 2020-21 as the BB has taken measures to streamline the legal channels for encouraging Non Resident Bangladeshis (NRBs) to send money to the country, said BB Chief Spokesperson M Serajul Islam.

He said the recent flow of remittance indicates that it is gradually increasing and this trend is likely to continue in the fiscal 2021-22.

In FY21, six state-owned commercial banks – Agrani, Janata, Rupali, Sonali, Basic and BDBL – received $6.11 billion while one state-owned specialized bank- Bangladesh Krishi Bank- received $0.41 billion.

Of the state-owned banks, Agrani Bank received $2.82 billion, Janata Bank $0.95 billion, Rupali Bank $0.80 billion, Sonali Bank $1.53 billion and Basic Bank received $0.00223 billion. Besides, the expatriates have sent $18.14 billion through private commercial banks.


The use of solar power to run irrigation pumps is not new in the country. But a latest move offers something new and different to the farmers: sell your off-season idle electricity to the national grid and earn an income, too.

Bangladesh Rural Electrification Board (BREB) plans to install 2000 solar irrigation pumps under the project allowing farmers to sell their unconsumed electricity to the national grid when irrigation is no longer required.

The solar power-run pumps will replace the existing conventional diesel-run machines in 21 districts under a pilot project, said officials at the BREB.


They said the BREB’s move comes as part of the government’s long-term aim to gradually replace the existing 1.34 million diesel-run irrigation pumps with solar across the country.

In the first phase of the project, the Cabinet Committee on Public Purchase has recently approved four separate tender proposals of the BREB to install 1295 solar irrigation pumps at a cost of about Tk 157 crore.

“These pumps will be installed in the districts of Noagaon, Dinajpur, Thakurgaon, Gopalganj, Faridpur, Madaripur, Kumilla and Feni under different rural electricity cooperatives known as Palli Biduyt Samiti (PBS)”, according to a BREB document.

BREB officials claimed that under the new system, solar electricity will have a better utilization by transmitting the off-irrigation power to the national grid.

“We have calculated that farmers normally use pumps for 115-120 days of a year for irrigation, while the rest of the year the pumps remain off when solar electricity has no use”, said Shakil Ibn Sayeed, project director of the BREB.

“So, BREB will purchase this electricity from the farmers at bulk rate to ensure a better use of the unconsumed electricity”, he told UNB.

BREB officials informed that though they will install the solar irrigation pumps at BREB’s own cost under a hire-purchase arrangement, the farmers will finally be their owners by repaying in instalments over a 10-year period.

They said the BREB will bear 90 per cent of the cost and the farmers will only make 10 per cent down payment to own the solar irrigation pumps.

“BREB will provide 65 per cent as grants and remaining 35 per cent as loan “, said another BREB official adding that the distribution entity will build the required power transmission lines at its own cost to facilitate farmers’ sale of the electricity to the national grid.

Stakeholders in the renewable energy sector welcome the initiative, but want a more comprehensive plan to ensure optimum utilization of the solar system and also the irrigation pumps’ output under a national plan.

“Different organizations including Infrastructure Development Company Limited (IDCOL), BREB, and Bangladesh Agriculture Development Corporation (BADC) have been working on solar irrigation pumps in different ways at different places without any coordination”, observed Munawar Moin, Senior Vice President of Bangladesh Solar and Renewable Energy Association (BSREA).

He said if there is a coordinated and comprehensive plan with a long-term vision, the project will be more effective and useful to ensure the best use of the solar system and water from the pumps.

“There should be a zone by zone plan for the project,” he said, adding that each body should have their assessment of the total system.

BREB Officials said that under its current project, about Tk 10 lakh will be spent for each pump having solar panels and also three (3) horse power irrigation pumps and a transmission line. Of this, about Tk 7.5 lakh will be spent for solar panels and pumps while 2.5 lakh will be spent for building transmission lines to the national grid at 11 kV level.

The BREB will buy each unit of electricity a Tk 4.36, a bulk rate, applied in purchasing electricity from BPDB at the 11 kV level, they noted,

They added that if a farmer takes a system from BREB, it will not become an extra load on him to pay as he can pay in instalments from his earnings by selling electricity to the grid.

The BREB project director said that they are getting a huge response as 2400 farmers already applied for the irrigation pumps. But those, who can manage a clearance from upazila irrigation committee, will be eligible to get the pumps.

Statistics from a draft report of Sustainable and Renewable Energy Development Authority (Sreda) on National Solar Energy Roadmap 2021-41 show that so far 1872 solar irrigation pumps were installed across the country by different organizations.

Of these, BREB installed 40, IDCOL 1523, BADC 137, Barendra Multipurpose Development Authority (BMDA) 106, Rural Development Academy (RDA) 15, and other authorities 51 which have installed power generation capacity is 43.178 MW.


 
Last edited:

Isa Khan

Experienced member
Moderator
Messages
6,602
Reactions
22 9,778
Nation of residence
Bangladesh
Nation of origin
Bangladesh
The country’s export earnings in the just concluded financial year 202021 grew by 15.10 per cent to $38.76 billion from $33.67 billion in FY20 as the global economy started to recover from the shock of the coronavirus pandemic.

Although export earnings in FY21 increased by $5.08 billion compared with that in FY20, the earnings were still $1.77 billion lower than the pre-pandemic earnings in FY19, according to the Export Promotion Bureau data released on Monday.

Experts and exporters said that it was encouraging that export earnings achieved 15 per cent growth in FY21 but the earnings still remained below that of the pre-pandemic period.

They hoped that the country’s export earnings would exceed the prepandemic earnings in the financial year 2021-22.

Export earnings in FY20 declined by 16.93 per cent or $6.86 billion from $40.53 billion in FY19 as the Covid outbreak disrupted both the supply and demand sides.

The data showed that export earnings in June, the last month of FY21, increased by 31.77 per cent to $3.57 billion from $2.71 billion in the same month of FY20.

‘We are in a recovery shape and hopefully, the export earnings will exceed the amount of the pre-pandemic period in FY22,’ Policy Research Institute executive director Ahsan H Mansur told New Age on Monday.

Mansur said that Bangladesh’s readymade garment sector would have to develop its capacity to manage new orders as some buyers were moving to Bangladesh from Myanmar and India.

He recommended developing the backward linkage to attract orders based on man-made fibres and to increase the capacity of the Chittagong Port to tap into the post pandemic export potentials.

It will take a few more months to overcome the export decline caused by the pandemic as the economies of the major markets of Bangladesh — the United States and the European Union — are on a strong recovery track, he said.

Readymade garment export in FY21 grew by 12.55 per cent to $31.45 billion from $27.95 billion in FY20.

Export earnings from woven garments in the just concluded financial year 2020-21 increased by 3.24 per cent to $14.49 billion from $14.04 billion in FY20.

Earnings from knitwear export in FY21 grew by 21.94 per cent to $16.96 billion from $13.90 billion in FY20, the data showed.

Bangladesh Garment Manufacturers and Exporters Association president Faruque Hassan said that although RMG export increased by 12.55 per cent in FY21, the earnings were still 7.84 per cent lower than the pre-pandemic levels.

He hoped that the export earnings would reach the pre-pandemic level by October in FY22.

Export earnings from jute and jute goods in the just concluded fiscal remained the second highest export earning sector after readymade garments.

Earnings from jute and jute goods stood at $1.16 billion with 31.63-per cent growth from the earnings of $882.35 million in FY20.

Earnings from leather and leather goods export in FY21 grew by 18.06 per cent to $941.67 million from $797.6 million in FY20.

Leather footwear export increased by 19.03 per cent to $569.88 million in the just concluded financial year.

The EPB data showed that export earnings from home textiles grew by 49.17 per cent to $1.13 billion in FY21 from $758.91 million in FY20.

Home textiles became the third highest export earning sector of the country in FY21, the data showed.

Agricultural products, including vegetables, fruits and spices, fetched $1.02 billion with a 19.27 per cent growth in FY21.

 

Isa Khan

Experienced member
Moderator
Messages
6,602
Reactions
22 9,778
Nation of residence
Bangladesh
Nation of origin
Bangladesh
Bangladesh and Indian officials on Wednesday said they expect to commission the first unit of the joint-venture 1320MW Rampal Power Plant in December this year as scheduled.

"We expect the first unit of the plant to go on operation in December this year as per schedule . . . we are confident to meet the timeline," a Bangladesh power division official told BSS, a day after power secretaries of the two countries held a meeting virtually.

He said the first unit was designed to produce 660MW power while it was set to launch in December 2021 coinciding with the golden jubilee celebrations of Bangladesh's 1971 independence.


 

Isa Khan

Experienced member
Moderator
Messages
6,602
Reactions
22 9,778
Nation of residence
Bangladesh
Nation of origin
Bangladesh
TOA Corporation, a world-renowned Japanese engineering company, plans expansion of its operations in Bangladesh.

The 113-year-old company established its branch office in Bangladesh in 2020 as part of its expansion plan.

Since then, the company has remained engaged in land development works for Bangladesh Special Economic Zone Development under Foreign Direct Investment Promotion Project (FDIPP).

Known as the Japanese Economic Zone, it is a project under Japan’s Official Development Assistance (ODA)


Minori Bangladesh Limited, an arm of Japanese farming group Minori Co Limited, will take over non-performing Emerald Oil Industries Limited.

Minori Bangladesh has recently nominated Sidratul Mahabub Hasan as representative of the company to the Emerald Oil board after purchasing around 8 per cent shares of the company.


The Ministry of Industries has drafted the Agro-food Processing Industry Policy 2021 to attract investments in the agro-processing sector that remains largely ignored by entrepreneurs despite having huge prospects both in the domestic and international markets.


1625724929480.png
 

Isa Khan

Experienced member
Moderator
Messages
6,602
Reactions
22 9,778
Nation of residence
Bangladesh
Nation of origin
Bangladesh
1625846000502.png


An Italian flagged ship, IMKE, reached the Mongla port carrying three mobile harbour cranes from the German port of Rostok on Wednesday afternoon.

IMKE anchored at jetty no 9 of the port with three ultramodern mobile harbour cranes and 80 packages of its parts.

According to port sources, Tk120 crore has been spent for these mobile harbour cranes, weighing 1,332 metric tonnes, which is capable of simultaneously transporting 12-row container ships coming to the port.

Mongla Port Harbor Master Commander Sheikh Fakhar Uddin said, "A month ago, foreign ship IMKE left Rostok port in Germany for Mongla port carrying mobile harbour cranes. Within the next five days, these cranes will be unloaded and installed at the port by German engineers."

Earlier on 15 June, the port authorities had imported two more mobile harbour cranes, he added.

Rear Admiral Mohammad Musa, chairman of the Mongla Port Authority, said, "A Tk700 crore (approximately) project has been undertaken for modernizing and building the capacity of the port."

"As a part of this project, new equipment is being added to the facility -including Inner Bar dredging for capacity building - which is expected to expedite the efficiency of the port."

 

Isa Khan

Experienced member
Moderator
Messages
6,602
Reactions
22 9,778
Nation of residence
Bangladesh
Nation of origin
Bangladesh
Despite its failure to fully spend its budgetary allotment of the 2020-2021 fiscal, the government has decided to increase the allocation for the Ministry of Railways in the upcoming fiscal year intending to improve connectivity.

In the budget proposed for the 2021-22 fiscal on Thursday, Finance Minister AHM Mustafa Kamal set aside Tk17,542 crore for railways, some Tk1,216 crore more than the previous one.

It was proposed in the previous fiscal that the ministry get Tk16,326, but the amount was dropped down to Tk15,496 crore due to slow progress in the implementation of the mega projects.

Bangladesh Railway is currently implementing 36 projects, including three mega projects, to improve and modernize its services.

The three mega projects are the Padma Bridge Rail Link Project (PBRLP), the Dohazari-Cox's Bazar-Gundam Rail Link Project and the Bangabandhu Sheikh Mujib Railway Bridge Construction Project, on which over half of the total proposed allocation is supposed to be used.

Railways Minister Nurul Islam Sujan on Tuesday said that an additional six months would be needed to complete the Dohazari-Cox's Bazar-Gundam Rail Link Project.

“It will be possible to open the Mawa-Bhanga segment of the PBRLP to traffic in June next year. Meanwhile, the Dhaka-Mawa section is scheduled to be opened by June 2023 and the whole project will be implemented by June 2024,” he said.

“As we are getting a large allocation for the Bangabandhu Sheikh Mujib Railway Bridge Construction Project, we will try our utmost to utilize the funds properly,” he added.

AllocationFY22 (Proposed)FY21 (Proposed)FY21 (Revised)
Operation costTk3,984 croreTk3,885 croreTk3,508 crore
Development costTk13,558 croreTk12,491 croreTk11,988 crore
TotalTk17,542 croreTk16,326 croreTk15,496 crore

Project nameAllocation in FY22Deadline
Padma Bridge Rail Link ProjectTk3,823 croreJune 2024
Bangabandhu Sheikh Mujib Railway Bridge Construction ProjectTk3,580 croreDecember 2025
Dohazari-Cox's Bazar-Gundam Rail Link ProjectTk1,495 croreJune 2022


Highlights
  • JAT Holdings Bangladesh has a plan to set up a factory to produce coating under its own brand "White" and enhance research and development facility for wood coating by investing Tk12 crore.
  • JAT Holdings Bangladesh has started its journey in 2009 together with local business conglomerate Akhter Group.
  • The company distributed the wood coating under the brand name "Sayerlack", an Italian brand that provides wood finishes in the industry.
 

Isa Khan

Experienced member
Moderator
Messages
6,602
Reactions
22 9,778
Nation of residence
Bangladesh
Nation of origin
Bangladesh
The Chattogram Port Authority (CPA) has decided to step back from the Bay Terminal construction with the Indian Line of Credit (LoC III) tagged by tough credit terms, said a top CPA official.

Requesting anonymity, the official said the CPA is now in talks with the World Bank (WB) about funding for the project.

The international lender has primarily agreed to provide $350 million for breakwater construction and channel dredging for the Bay Terminal.

Meanwhile, Bangladesh continues negotiations seeking more funds for the main project.

Sultan Abdul Hamid, additional secretary (Development) at the Ministry of Shipping, said, "Negotiations are underway. We will be able to mention the size of World Bank funding after the final discussion."

In November 2018, Prime Minister Sheikh Hasina inaugurated the Bay Terminal project. But project implementation is yet to begin owing to a number of issues, including final feasibility study and funding.

Under the project, three terminals will be constructed at Halishahar in Chattogram, with the CPA building and operating one of them. The authorities now aim to begin construction next year and complete it by 2026.

Apart from funding by development partners, the government and the CPA will invest in the project. According to estimates by the World Bank, the CPA's spending would be $1,150 million.

In 2017, Dhaka signed the third tranche of the LoC with Delhi, and $400 million credit was laid down for the Bay Terminal project.

"But the credit terms are tough," said a CPA high official. "The LoC terms stipulate bringing in construction materials from India. Besides, projects with Indian credit must appoint Indian consultants and contractors, and implementations require the approval of the Indian authorities."

The official said, "These delay implementation. Already completed and ongoing work with Indian loans suggest that Indian contractors completely control construction." The World Bank or the Asian Development Bank (ADB) loans, in contrast, do not come with such strings attached.

The CPA said it has notified the Prime Minister's Office and the Economic Relations Division (ERD) about its decision over not using the Indian LoC in the project.

Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), said Bangladesh should opt for the loans that are more favourable to it.

"Before availing the loan, credit terms such as interest rate, grace period and contractor appointment have to be discussed to reach a decision. If the terms have already been talked about, we should inform India about our preferences," he told The Business Standard.

The railway authorities will implement another project to connect the three terminals by railroads for container transportation. Besides, another separate project will be taken up for road transport to those terminals.

Of the three terminals, DP World, UAE and PSA Singapore will build and operate the remaining two on public private partnership, and Public Private Partnership Authority Bangladesh has already signed MoUs with them.
Previously, India's Adani Group, Saudi Arabia's Red Sea Gateway Terminal and South Korea's Oceans and Fisheries Ministry showed interest in the Bay Terminal construction.

Each of the terminals will have six jetties, which will be able to host ships with at least a capacity of 5,000 TEUs (twenty-foot equivalent unit).

Around 35 ships will be able to anchor at Chattogram at a time as the Bay Terminal will enable the country to handle an additional 50 lakh containers a year. The vessels will not have to wait for high tides to move around.

In the 2010 primary estimation, construction cost was at $2.1 billion, but it is likely to go up now.

 

Isa Khan

Experienced member
Moderator
Messages
6,602
Reactions
22 9,778
Nation of residence
Bangladesh
Nation of origin
Bangladesh
1626428273858.png

The MV Horizon-9 is seen nestled at the second jetty of the Matarbari power plant yesterday. The vessel, carrying 185 tonnes of machinery for the plant, was first to berth at the partially completed jetty. Photo: COLLECTED

A cargo vessel yesterday became the first to berth at the second jetty being constructed for unloading coal for the under-construction coal-based power plant at Matarbari in Moheskhali upazila of Cox's Bazar. The Panama-flagged MV Horizon-9 sailed from Singapore with 185 tonnes of machinery for the power plant, arriving at the outer anchorage at around 1:30am before eventually being berthed at 10:30am.

So from now on, the plant's authorities will be able to allow two vessels to berth at the same time. With this, as of yesterday a total of 18 vessels have been berthed at the two jetties in last six-and-a-half months. Earlier on December 29 last year, a vessel named as Venus Triumph carrying construction materials became the first to berth at the first jetty. Construction of the first jetty, meant for unloading fuel, was completed last year.

Around 75 per cent of the construction work for the 300-metre long second jetty, meant for unloading coal, has already been completed, according to sources close to the project. Abul Kalam Azad, project director (PD) of the 1200-megawatt Matarbari Coal-based Power Plant, said that since another vessel is scheduled to arrive within a couple of days, they decided to berth the small-sized MV Horizone-9 at the partially completed portion of the second jetty so that the next vessel won't need to wait for long.

Azad, also executive director of the Coal Power Generation Company Bangladesh Limited (CPGCBL), said around 175 metres of the second jetty has already been completed.
He hopes that the jetty would be fully constructed within this year. The state-owned CPGCBL is implementing the Tk 35,984 crore power plant project. Azad thanked the Chittagong Port Authority (CPA) for providing harbour operation services and successfully handling ships at the jetties since December last year.

CPA Captain Ataul Hakim Siddique, also harbour operation coordinator and project manager of the Matarbari Port Development Project, said berthing a vessel at the second jetty is a milestone for the construction of the future Matarbari Deep Sea Port since it would work as capacity building for the future port. The idea of the deep sea port in matarbari was conceived after the government started a coal-based power plant project in the area as a wider channel and port were required to bring in fuel for the plant.
Initially, only the construction of a coal jetty was planned but when the Japan International Cooperation Agency (JICA) started implementing the project, it saw the potential for a commercial port.

As part of the power plant project, an artificial channel that is 14.5 kilometres long, 250 metres wide and 18 metres deep has been constructed. In March 2020, the Executive Committee of the National Economic Council (Ecnec) approved the construction of a deep sea port in Matarbari involving Tk 17,777 crore. Of the estimated cost, JICA will put in Tk 12,893 crore and the rest Tk 2,213 crore will be borne by the CPA. The CPA on September 23 last year signed an agreement with Japanese firm Nippon Koei Joint Venture (JV) Company for engineering and consultancy services for the Matarbari Port Development Project.

Once the deep sea port comprising a 300-metre multi-purpose terminal and 460-metre container terminal is built, it will be able to accommodate large mother vessels with a draft limit of 18 metres. Vessels with upto 9 metres of draft can now berth at Chattogram port.

 

Isa Khan

Experienced member
Moderator
Messages
6,602
Reactions
22 9,778
Nation of residence
Bangladesh
Nation of origin
Bangladesh
1626601547311.png


Bangladesh Railway is planning to link Cox's Bazar directly with capital Dhaka via Chattogram to help the economy reap full benefit from the mega projects centering the beach town and port city.

It is examining a project of around Tk77,000 crore to convert the whole Tongi (Dhaka)-Dohazari (Chattogram) link into double broad gauge track to join the Dohazari–Cox's Bazar segment, work on which is now in progress.

When completed, Dhaka to Cox's Bazar will be 470 km by train. An earlier project of the Dhaka–Cumilla chord line bypassing Tongi, which could shave off 94km and two-hour travel time from the journey, was abandoned in the 90s.

However, the new project will have a component of Faujdarhat–Sholashahar chord line (a straight rail route across outer parts of an urban centre) to bypass the Chattogram Railway Station, which will save at least one hour.

Feasibility study completed

Md Abidur Rahman, director of the Technical Assistance for Survey Project to facilitate the preparation of Dhaka‐Chattogram‐Cox's Bazar Rail Project, told The Business Standard, "We have completed the survey work. Now the investment project is being prepared. Negotiations are ongoing with the Asian Development Bank (ADB) for funds. Once the financing is confirmed, the implementation of the original project will start."

The project tenure will depend on availability of funds, authorities said.

According to railway sources, rail communication with Rajshahi and Khulna will be established if the broad-gauge line of the railway is constructed in the eastern region. The western region of the country has a broad gauge rail communication system while the eastern region has metre gauge rail network.

On the other hand, the installation of broad-gauge lines in the east will also make it easier for Bangladesh to be connected with China, Pakistan, India and Myanmar through the Trans-Asian Railway connectivity.

The initiative to connect Cox's Bazar with Dhaka comes almost a century after the construction of the Sholashohor-Dohazari railway line in Chattogram in 1931 by the British-Indian government. The British could not proceed further toward Cox's Bazar at that time.

Cox's Bazar economic hub will be linked to Dhaka

The government is already implementing a huge mega-plan to transform Cox's Bazar to an economic hub like Singapore and Hong Kong. For this, a deep-sea port is being constructed in Matarbari. The Dhaka-Chattogram railway line will also be vital for the bay terminal and economic zones in Chattogram.

The railway project will support the government's mega plan by easing the rail communication with Dhaka and Chattogram.

Bangladesh Railway has already completed the feasibility study for the Tongi-Dohazari project, which will be done in eight segments. Twelve railway bridges will also be constructed along the line.

Besides, it will incorporate conversion of a new Inland Container Depot (ICD) including ancillary works and new rail link with the ICD from Pubail and Dhirassram railway stations.

Moheshkhali and Matarbari proposed power plants will be served by the rail track. Besides it will have carriage and wagon and loco workshop, fuelling facilities and depot for BG rolling stock, as well as, construction of a number of offices for railway services.

Railway bridges will be constructed over Tongi Khal, Balu, Shitalaksha, Arial Kha, Old Brahmaputra, Meghna, Chhoto Feni, Muhuri, Feni, Karnafuli, Matamuhuri and old Matamuhuri rivers.

Dhaka-Cumilla chord line neglected

The initiative to develop the railway line from Dhaka to Cox's Bazar via Chattogram has been taken on the current rail route at a huge cost. However, experts say if a chord line was constructed from Dhaka via Narayanganj-Cumilla, the distance of the railway line would be 94 km shorter. They say it would take two hours less time to transport passengers and goods from Dhaka to Cox's Bazar and also save a huge amount of money including fuel cost.

The British colonial government in India built the Dhaka-Chattogram railway line via Akhaura-Brahmanbaria to transport tea produced in Assam and Sylhet through the Chattogram Port. At that time Dhaka was not a very important city. For this reason, the British emphasized establishing railway lines to connect Kolkata with Assam.

After the partition of India in 1947, the importance of this route for tea exports began to decline. But no initiative has been taken to shorten the 321 km distance of this route from Dhaka to Chattogram in the 50 years after independence.

However, in 1980, the government completed a feasibility study for the establishment of the Dhaka-Cumilla chord line. But this plan was dropped in the 90's. If the project was implemented at that time, it would have been possible to save thousands of crores of taka in the last three decades.

After the railway division became a separate ministry in the government, former railway minister Mujibul Haque announced the establishment of a Dhaka-Cumilla direct railway line via Daudkandi instead of Dhaka-Laksam-Cumilla chord line in 2015. But no initiative has been taken to implement the plan in the last five years.

The government has taken the initiative to launch a direct train from Dhaka to Cox's Bazar on the existing railway line covering a distance of 470 km.

Shamsul Haque, professor of Bangladesh University of Engineering and Technology, said, "The big question is—why Bangladesh Railway is not giving priority to the Dhaka-Cumilla chord line. In the 80s and the 90s, several initiatives were taken to build the Dhaka-Cumilla chord line. But for unknown reasons it was not implemented. The only reason you can find behind this is the immaturity of the railway."

He added that many railway projects are being implemented at a cost of thousands of crores of taka. But this project is not being implemented.

"The Dhaka-Cumilla chord line needs to be constructed on an urgent basis to strengthen the rail link with Cox's Bazar, the economic hub of the future, and Chattogram, the current main economic center of the country," he said.

Railway Minister Nurul Islam Sujan said, "There must be a public demand for the Dhaka-Cumilla chord line. Why would we do this if there is no demand from the people? If it is logical and has a public demand, we would do it. It will be easier to take action if there was a continuous discussion over the issue."

According to Bangladesh Railway, another feasibility study is underway to set up a high-speed rail line from Dhaka to Cumilla/Laksam-Chattogram.

Besides, a feasibility study has also been initiated for the construction of Dhaka-Cumilla chord line. However, it is not on the list of the priority projects of the railways, a railway source said.

S M Salimullah Bahar, chief planning officer of Bangladesh Railway, said, "The existing railway line from Dhaka to Dohazari in Chattogram will be converted to broad gauge. We have already completed survey work. However, we have also taken a project to estimate the possibility of constructing a Dhaka-Cumilla chord line. We may take initiative to build the chord line in the future based on this estimation. However, the decision will be taken considering the future situation."


1626609990063.png


realme has recently taken another leap forward by fully manufacturing smartphone locally, branded as ‘Made in Bangladesh’, in their factory located in the country.

Operating since February last year, their products are assembled in Bangladesh using the SKD process, but realme C21 is the first realme phone which has been full made in Bangladesh using CKD manufacturing process, said a press release.

This is very big leap for realme and also a huge sign of prosperity, as another international brand is having their products fully made in Bangladesh, the release also said.

The realme C21 is made through strict quality checks to ensure the best quality of the phone.

After over eight months of research and testing, TÜV Rheinland and realme have jointly created the TÜV Rheinland Smartphone High-Reliability Certification.

The TUV Rheinland Smartphone High Reliability Certification process includes 23 tests, which mainly consists of ten daily use test scenarios, such as drop, wear, and tear, seven extreme environment test scenarios, including super extreme temperature, extreme humidity, voltage fluctuation, button life, static electricity, air pressure; and six component reliability test scenarios.

realme C21 is the first entry-level all-rounder with TUV Rheinland high reliability quality certification.

This phone boasts long battery life with 5000mAh massive battery and it supports reverse charging.

Powered by Helio G35 12nm Octa-core 64bits Processor, realme C21 features 13MP AI triple camera and instant fingerprint sensor.

It has a primary camera that adopts 13MP image sensor with large area, with f/2.2 large aperture that secures enough light and makes your pictures clearer and brighter.

In addition, C21 also supports PDAF that makes the focus more rapid and precise.

realme C21 is now available in the market at a price of Tk10,990.


1626612761445.png


Ms Sewtech Fashion Limited, a company of India, has signed an agreement with Bangladesh Export Processing Zones Authority to establish a readymade garments manufacturing factory in Chattogram EPZ with an investment of US$ 9.26 million.

Member (engineering) of BEPZA Mohammad Faruque Alam and director of Sewtech Fashion Limited Balagi Pavadai signed the agreement on Sunday at BEPZA Complex in the city on behalf of their respective organizations, said a press release.

Sewtech Fashion Limited is a sister concern of India’s largest apparel manufacturer company Shahi Exports Pvt Ltd.

It may be mentioned that BEPZA is receiving many investment proposals from both local and foreign investors even amid the pandemic.

This fully foreign owned company will produce 3.36 million pieces of ladies, kids and men’s woven tops annually. They will create employment opportunities for 3,393 Bangladeshi nationals.

Among others, member (finance) Nafisa Banu, secretary Md Zakir Hossain Chowdhury and general manager (investment promotion) Md Tanvir Hossain of BEPZA were present at the signing ceremony.

 
Last edited:

Isa Khan

Experienced member
Moderator
Messages
6,602
Reactions
22 9,778
Nation of residence
Bangladesh
Nation of origin
Bangladesh
Bangladesh’s mango export volume, 791 tons nearly trebled in 2020-21 financial year from that 279 tons in the previous fiscal.

This growth reflects one thing for sure that the country’s regulators, mango producers and exporters must have taken some steps in right direction, which resulted the significant increase.

Fiscal yearBangladesh's mango export (in tons)
2016-17309
2017-18231
2018-19308
2019-20279
2020-21791

But if one put the $1.5 billion global mango trade into perspective, Bangladesh’s export growth is still very insignificant when the country holds enormous potential as 7th biggest producer of the juicy edible stone fruit.

For many years, Bangladesh’s potential, however, remained largely untapped as the regulators wasn’t mindful of implementing good agricultural practices (GAP), a prerequisite for exporting mango to foreign markets.

Bangladesh’s South Asian and Southeast Asian neighbours such as India, Pakistan and Thailand have well captured many key export markets and mango have long been fetching hefty export earnings for these economies. Bangladesh’s export earning from mango in last financial year was only $50,000 whereas, the figure is as high as $101 million for Pakistan (world’s 5th biggest mango producer) and $137 million for India (ranked first in mango production in the world).

Earnings from mango exports in 2020-21
Thailand$734m
India$137m
Pakistan$101m
Bangladesh$50,000

Bangladesh planning big to earn more from mango

Now, Bangladesh doesn’t want to remain content with such low export volume of the fruit as some of the its sweetest and delicious varieties have long been grown in this country with its annual national output reaching nearly 1.5 million tons this year.

Ministry of Agriculture yesterday held a stakeholders meeting – with some of the representatives of the exporting firms of fresh mango and mango drinks joining it – to discuss how Bangladesh can further increase its mango exports in coming years.

Joining the virtual discussion, Agriculture Ministry Dr Muhammad Abdur Razzaque said his ministry stands ready to provide the exporters all supports and soon buying three machines, which exporters will be able to use for ‘vapour heat’ treatment (a prerequisite for mango export). Besides, he also promised of looking into the challenges the mango exporters face at the airport cargo village.

The minister and the ministry secretary both said they would soon roll out GAP at all stages of farm production so that mangoes produced, processed and packaged maintaining all sanitary, phytosanitary and quarantine protocols.

Mamunur Rashid, a British-Bangladesh Chamber leader, who is exploring prospect of more mango export from Bangladesh to the United Kingdom, told the meeting that India and Pakistan have placed them strongly in UK market as key mango exporting nations but, “still, in my estimation – we can have potentially a demand for 1,000 tons of mango from Bangladesh in the United Kingdom.”

The ministry officials said each year Japan source over 7,000 tons of mango – some of it from South Asian countries but not from Bangladesh. They said, the Japanese envoy in Dhaka has recently expressed his keen interest in good mango varieties of Bangladesh and had said those can be exported to his country provided quality isn’t compromised.

Ashoke Madhab Roy, a former government secretary who is now involved in mango trade, said they’ve organized mango fair in Manchester and Londo recently and got very encouraging spot orders for the fruit.

What are the impediments?

Bangladesh Fruits, Vegetables & Allied Product Exporter’s Association President SM Jahangir Hossain was joined by some of his fellow exporter colleagues, explaining what are the key roadblocks in increasing the volume of mango export.

They said, Dhaka airport’s cargo village is in a mess where perishable products like mango and vegetables are not treated well. In air cargos, readymade garments get the priority while perishable product exporters have to count loss owing to incidents of consignment offloading.

They said in some countries i.e., India, it’s mandatory for air cargoes to keep at least a fourth of the space available for perishable export goods but in Bangladesh mango and other perishable items get little priority.

SM Jahangir Hossain said, with proper policy supports and facilities at airport and cargoes they will be able to export 5,000 tons of mango next year.

Though official figure shows Bangladesh exported nearly 800 tons of mango in 2020-21, he said it’s so far 1,240 tons till day and is expected to hit 2,000-ton mark in current mango season.

Traditional export destinations (Middle Easters countries, UK, Canada etc.), mangoes from Bangladesh is now also being exported to Scandinavian countries and also a first consignment of mango was exported to Switzerland last week.


Chinese company M/s Vanessa Enterprise Ltd has signed an agreement with Bangladesh Export Processing Zones Authority (BEPZA) for setting up a ladies intimate garments accessories company in Ishwardi EPZ with an investment of $41.77 million.

This fully foreign owned company will annually produce 299.52 million pieces of Bra Cup and PU Foam, said a press release from the Bepza.

The company will create employment opportunities for 4,028 Bangladeshi nationals.

Member (Finance) of BEPZA Nafisa Banu and Managing Director of Vanessa Enterprise Ltd Choi Chun Ho signed the agreement recently at BEPZA Complex, Dhaka on behalf of their respective organisations.

BEPZA is trying its best to attract foreign & local investment in the EPZ even during the Covid-19 pandemic.

Investment-friendly policies of the Government and favourable investment atmosphere of EPZs are encouraging various investors to invest in EPZs.

 

Isa Khan

Experienced member
Moderator
Messages
6,602
Reactions
22 9,778
Nation of residence
Bangladesh
Nation of origin
Bangladesh
1626936272799.png


Bangladesh’s export earnings from its agricultural products hit the one billion dollar mark for the first time in 2020-21, registering a nearly 20% increase from the previous fiscal’s figure amidst a protracted Covid-19 pandemic.

Agriproduct exports have witnessed phenomenal growth over the past 12 years – fetching the country $1,028 million in the last financial year. In sharp contrast, export earnings amounted to only $122 million in 2008-09.

Agriproducts’ contribution to total national export earnings has more than trebled over the past 12 years from just 0.78% in 2008-09 to 2.87% in 2020-21, according to statistics from the Export Promotion Bureau (EPB).

What’s driving this growth?

Year on year, the export volume shows a nearly 20% increase from $862 million in 2019-20 to $1,028 million in the last fiscal.

Of all subsectors, dry food registered the highest increase (46%) from $193 million in 2019-20 to $283 in 2020-21, while fruit export also increased by 18%.

But vegetable exports experienced a 27% decline from $164 million to $119 million.

Bangladesh’s agriproducts export basket has now a more diversified range of products, from ready-to-eat dry food confectionaries to fruits to vegetables, from tobacco to tea, and from cut flowers to spices.

Market sources are of the opinion that in recent years Bangladesh’s wheat import increased significantly, but not all of the flour, made out of the imported wheat, are being baked into confectionary products for domestic consumption only; rather, a good volume of ready-to-eat flour-made biscuits and bakery products are being exported mostly to some South Asian and Middle Eastern countries.

What’s the challenge to achieving further growth?

Exporters of vegetables, fruits and other perishable agriproducts strongly believe that Bangladesh can earn much more than $1 billion from agriproduct exports. They think the country's full potential has not been tapped yet.

They have said exporters often do not get enough policy support and cargo space available for their product shipments.

Exporters think they can export more vegetables, fruits and other agriproducts provided the government puts in place more processing and packaging facilities, packing house, hygienic cargo village, proper infrastructures at airports and more air cargo facilities.

Officials at the Ministry of Agriculture and Department of Agricultural Extension say the exporters need to improve product quality, ensure sanitary and phytosanitary measures and adopt good agricultural practices (GAP) to capture bigger shares in export markets.

 

Isa Khan

Experienced member
Moderator
Messages
6,602
Reactions
22 9,778
Nation of residence
Bangladesh
Nation of origin
Bangladesh
Bangladesh will remain the most resilient and continue to attract foreign direct investments (FDI) to live up to its image as a favourite place for global investors, despite the Covid-induced economic downturn. This inference can be drawn from a new report released by the US Department of State.

The US Department of State released the ‘2021 Investment Climate Statements’ on Wednesday that mentioned Bangladesh’s sustained economic growth over the past decade, a large, young, and hard-working workforce, strategic location between the large South and Southeast Asian markets, and the presence of a vibrant private sector.

The government's efforts in Bangladesh to improve the business environment in recent years show promise but implementation has yet to materialise, according to the report that analyses the investment climate in more than 170 global economies that are current or potential markets for US companies.

Bangladesh has made gradual progress in reducing some constraints on investment, including taking steps to better ensure reliable electricity, but inadequate infrastructure, limited financing instruments, bureaucratic delays, lax enforcement of labour laws, and corruption continue to hinder foreign investment, the report stated.

Slow adoption of alternative dispute resolution mechanisms and sluggish judicial processes impede the enforcement of contracts and the resolution of business disputes, as per the report.

Buoyed by a young workforce and a growing consumer base, Bangladesh has enjoyed consistent annual GDP growth of more than six percent over the past decade, with the exception of the Covid-induced economic slowdown in 2020, the report mentioned.

Much of this growth continues to be driven by the ready-made garment (RMG) industry, which exported $28.0 billion of apparel products in FY 2020, and continued remittance inflows, reaching a record $18.2 billion in FY 2020, as per the US report.

However, the country’s RMG exports dropped more than 18 percent year-on-year in FY 2020 as Covid depressed the global demand for apparel products.

The government of Bangladesh actively seeks foreign investment in sectors like agri-business, textile, leather goods, light manufacturing, power and energy, electronics, light engineering, information and communications technology (ICT), plastic, healthcare, medical equipment, pharmaceutical, ship building, and infrastructure.

Bangladesh offers a range of investment incentives under its industrial policy and export-oriented growth strategy with few formal distinctions between foreign and domestic private investors, as per the report.

Bangladesh’s Foreign Direct Investment (FDI) stock was $16.9 billion in 2019, with the United States being the top investing country with $3.5 billion in accumulated investments.

Bangladesh received $1.6 billion FDI in 2019. The rate of FDI inflows was only 0.53 percent of GDP, one of the lowest rates in Asia, according to the US report.

As a traditionally moderate, secular, peaceful, and stable country, Bangladesh experienced a decrease in “terrorist activity” in 2020, accompanied by an increase in terrorism-related investigations and arrests, the US government said.

The report, however, highlighted the “diminishing space for the political opposition, undermining judicial independence, and threatening freedom” of the media and NGOs.

Bangladesh continues to host one of the world’s largest refugee populations, more than one million Rohingya from Myanmar, in what is expected to be a humanitarian crisis requiring notable financial and political support for years to come.

International retail brands selling Bangladesh-made products and the international community continue to press the government of Bangladesh to meaningfully address worker rights and factory safety problems in Bangladesh, according to the report.

With unprecedented support from the international community and the private sector, the Bangladesh garment sector has made significant progress on fire and structural safety, the US government noted.

Critical work remains on safeguarding workers' rights to freely associate and bargain collectively, including in Export Processing Zones (EPZs), it said.

The Bangladeshi government has limited resources devoted to intellectual property rights (IPR) protection and counterfeit goods are readily available in Bangladesh, as per the report.

Government policies in the ICT sector are still under development. Current policies grant the government broad powers to intervene in that sector, it mentioned.

Capital markets in Bangladesh are still developing, and the financial sector is still highly dependent on banks, said the US report.


Bangladesh has met, for the second time, all the three criteria for graduating from the Least Developed Country (LDC) and if everything goes right, will finally be graduated in 2026. The remarkable socio-economic development in the last decade has made Bangladesh eligible for this graduation. Graduation from the LDC group would mean relinquishing a wide-variety of preferences and privileges currently enjoyed by Bangladesh.

As an LDC, the facilities Bangladesh enjoys can be classified into three groups: (i) preferential treatment, (ii) development assistance & technical cooperation and (iii) general support and other forms of assistance. The most severe shock is supposed to be felt in the country’s flagship sector, the export oriented RMG industry: what will be the possible repercussion for LDC graduation on this sector?

In no sector will the implications of Bangladesh’s LDC graduation be felt more acutely, and in such impactful ways, as the RMG sector. Not only because the sector accounts for more than four-fifths of Bangladesh’s total export earnings, but also because RMG face tariff peaks in almost all key markets of Bangladesh. For example, tariffs facing Bangladesh’s apparels are, on average, about 12 percent in the EU and 16-18 percent in Canada. Accordingly, the depth of preference erosion will be significantly high in case of exports of RMG items from Bangladesh.

The Generalized System of Preferences (GSP) provides duty-free quota-free (DFQF) market access for Bangladesh. Under the “Everything but Arms” (EBA) initiative, the EU grants DFQF. The country may experience shortfall of 8-10% of its gross export revenue due to loss of DFQF which is almost $2.5 billion annually. RMG will face the largest part of this loss as it constitutes the lion’s share of the country’s total export.

According to the WTO Agreement on Subsidies and Countervailing Measures (SCM), Bangladesh will lose the flexibility to offer export incentives and subsidies to the exporters. In this context, the incentives the RMG industry is enjoying currently will no longer be available and that will pose pressure on the competitiveness and profitability of Bangladeshi companies.

After graduation, Bangladesh may get access to GSP+ facility in the European market. But it requires ratification of 27 international conventions (7 UN conventions on human rights, 8 ILO conventions on labor rights, 8 conventions on environment protection and 4 conventions on good governance) and two numerical criteria. Rules of origin (RoO) for preferential access of apparels exported by the LDCs tend to be highly LDC-friendly (e.g. only a single stage conversion requirement in the EU and a flat 25% domestic value addition requirement in Canada).

Graduation to developing country will mean that the RoO are going to be more stringent which will create new challenges for RMG sector. There will also be implications in the form of preference erosion currently enjoyed by Bangladesh as a member of regional trading arrangements such as the South Asia Free Trade Area (SAFTA), where India, for example, offers DFQF market access to the four LDC members for all products including the apparels or the LDC scheme run by China. Some competitors of Bangladesh are going for aggressive regional trading arrangements (RTAs), with serious implications for our RMG sector.

For example, the Vietnam-EU FTA will allow Vietnam, a major competitor of Bangladesh, duty free access to the European market. This will eliminate the preferential margin that Bangladesh currently enjoys vis-à-vis Vietnam, a developing country, in the EU market. Indeed, there may be a time, beyond 2027, when Vietnam’s apparels would have duty-free access to the EU market while apparels exported by Bangladesh would need to enter duty-paid (if the current scenario prevails).

RMG competitiveness will also be impacted by indirect factors. For example, LDC graduation will have implications arising from stringent compliance requirements under the trade-related intellectual property rights (TRIPS) of the WTO, as also from changes in the support from the enhanced integrated framework (EIF) and the various special and differential treatment of the WTO. The RMG sector has been benefited from the technical assistance and capacity building support received by Bangladesh as an LDC; these will no longer be available after graduation.

Meanwhile, minimum wages in the RMG sector will, justifiably, continue to rise at a time when the sector will be facing the challenges mentioned above. Cost of borrowing is rising already because of its recently acquired middle income country status; competing development demands and prevailing domestic resource mobilization performance could mean that fiscal space for the type of incentives that the RMG sector has been traditionally enjoying could shrink in future.

Bangladesh should design appropriate strategies and take the needed preparatory steps towards sustainable LDC graduation and sustainable transition of its RMG sector. For ensuring a sustainable and robust future for the RMG sector, aligned with the aspiration of Bangladesh for LDC graduation, all concerned stakeholders will have to do the needed homework and start preparing for the post-2026 future of the RMG sector.

To address the graduation challenges, RMG entrepreneurs and policymakers of Bangladesh has to make a collaborative effort. Government should concentrate on securing GSP+ facilities in the EU market by ratifying 27 conventions mentioned earlier. Economic diplomacy of the country needs to be strengthened to convince the EU authority to widen its import threshold. The country should diversify its preference effort beyond WTO. As Bangladesh has committed to achieving SDGs within 2030, it can approach to United Nations Conference on Trade and Development (UNCTAD) and Enhanced Integrated Framework (EIF) for more trade-related preference opportunities under SDG framework.

According to the Asian Productivity Organization, per hour labor productivity of Bangladesh is $3.4 which is lower than average productivity of other competing countries. It is important to strengthen productive & labor productivity of the country. Only five products, i.e. Shirts, Trousers, Jackets, T-Shirt & Sweater, constitute more than 73.17% of total RMG export. Bangladesh should diversify products base & add more value to final products with design and quality.

Bangladesh should play an effective role in the regional and sub-regional forums like BBIN, BCIM and BIMSTEC, etc. Bilateral Free Trade Agreement can be a critical tool for offsetting the pressure of preference erosion. The government should respond proactively to face the challenges of the fourth industrial revolution and leveraging the opportunities of new technologies.

A coordinated approach needs to be initiated by entrepreneurs, policymakers, buyers and development partners to design curriculum and start re-skilling the people. Strengthening institutions for facilitating factories, reducing the cost of doing business through building physical and soft infrastructures and improving the business environment are critical for attracting local and foreign investment which will create confidence among RMG industry stakeholders to face the challenges of LDC graduation. Bangladesh will need to pursue negotiations in various forum, jointly with other graduating LDCs, to secure their common interests in view of the emerging challenges.

LDC graduation poses both opportunities for rebranding the country and challenges of losing trade preferences. Responding proactively with proper policy instruments and business level strategy can help RMG companies face the challenges effectively. Responding to LDC graduation specific challenges with changing market behavior efficiently will help to make the RMG industry sustainable and spearhead the growth journey of Bangladesh to a developed economy by 2041.


The Asian Development Bank (ADB) in its Asian Development Outlook Supplement of July said Bangladesh's economic recovery will continue amid the second wave of Covid-19 much like the previous fiscal year, depending on exports and remittances.

ADB today released the supplement on the Asian economy from Manila.

It said the impact of the second wave could lead to 8.9 percent GDP growth of South Asia in 2021, which was 9.5 percent last April.

This reduced GDP growth of Asia in the complementary outlook is largely due to the slowdown in India's GDP growth.

In the outlook supplement, the growth prospects of other South Asian countries, including Bangladesh, have been kept the same as in April.

In April, Outlook predicted a growth rate of 6.8 percent in Bangladesh. However, when the report was released on April 26, Dhaka-based director Manmohan Prakash told reporters that it could be 5.5 to 6 percent.

And last June it was said GDP growth could reach 6.1 percent in 2021.

Today, the ADB said in the first 11 months of the last fiscal year, exports increased by 13.6 percent and remittances increased by 39.5 percent. On the other hand, revenue has increased by 12.9 percent in the first 10 months.

 
Last edited:

Follow us on social media

Top Bottom