Introduction Bangladesh is a rapidly developing country with a rapidly growing economy. Its economy ranks as 43rd largest economy regarding its PPP terms in 2010 and 57th largest economy regarding the nominal terms according to the IMF. By observing the economy of Bangladesh it is said that its economy is mainly market based economy. After liberation war Bangladesh had to suffer a lot and its economy was devastated at that time. So foreign aid was the main source of external earnings for Bangladesh.
After passing about four decade Bangladesh has established a stable economy though it is still troubled with inflation, political instability and other constraints. Bangladesh had once only few countries to trade with as it had limited range of product to export. Importing products is still continued by Bangladesh since its production is not sufficient. Bangladesh domestic need for product is on increase and is still beyond its own production level making it obliged to import from foreign countries. Agro-based economy has made it backward in the industrial sector.
A large number of labor forces are working in the agricultural sector. Industrial sectors lack efficient labor force and its growth obstacles by other constraints. Thus Bangladesh has to import products of billion dollars from foreign countries. Bangladesh had to import food products ago but now it imports more technological and raw material products for industrial sectors. So it spends more of its foreign earnings in importing products. Rise of the industrial sectors brings a wide range of products for Bangladesh to export rather than its traditional agro-based products.
Its government has provided different privileges to its industrial sectors to do their export work. Export processing zone has been set for the special export products. Tax exemption and other advantages are been provided to increase the export and the foreign earnings. Readymade garments have become the most foreign earnings providing source. So Bangladesh is exporting products of billion dollars to variety of countries. With the new industrial sectors Bangladesh is also trying to capture new markets to export. Remittance is another major source of foreign earnings for Bangladesh.
Bangladeshi workers, unskilled and semi-skilled, send huge amounts of foreign currency, which at times exceeds the exports earning from goods and services. Thus external trade of Bangladesh is increasing through various sectors. 1. 2 Objectivity of the Report Objectives of the study are summarized in the following manner: a) To analyze the economy of Bangladesh b) To explain external trade relations c) To show the variability in foreign trade d) To show the trend of the foreign trade 1. 3 Methodology The data in this study are more of numerical, charts or graphs than observatory.
Data from secondary sources has needed to analyze first. Some of the data of the report are raw that has been used from the sources. And rest of the work has taken the necessity of observations. 2002-03 has been chosen as base year to calculate growth. 1. 4 Sources of the Data All the data used in here are collected from secondary sources. Data from different websites has been used in trying to finish the report successfully. Some journals have also been used in this regard. In collection of primary data efforts have been made but all have gone in vain. o in particular the sources are * Import, Export and Remittance statistics * Websites * Related Journals 1. 5 Limitation This study has been done through analyzing different data there might be some flaws as analyzing has its own disadvantage. Moreover the information those have acquired are not that much comfortable to work on and the time got to finish the report was not long enough. So there is no saying that the report has full perfection. Data from 2003-04 to 2008-09 have been used to maintain consistency as finding recent data on every topic has gone in vain. . 0 Economy of Bangladesh The economy of Bangladesh is a rapidly developing market-based economy. According to International Monetary Fund (IMF), Bangladesh ranked as the 43rd largest economy in the world in 2010 in PPP terms and 57th largest in the nominal terms among the Next Eleven or N-11 of Goldman Sachs and D-8 economies. The economy has grown at the rate of 6-7% per annum over the past few years. Bangladesh’s agro-based economy is moving towards to the industrial economy or service-based economy. After independence the economy of Bangladesh was destroyed.
So Bangladesh followed socialist economy by nationalizing all industries and underwent a slow growth of producing experienced entrepreneurs, managers, administrators, engineers and technicians. External and internal trades were disrupted. After 1975, measures had been taken to develop new industrial capacity and rehabilitating its economy. In the course of time Bangladesh started to stabilize its economy. The major economic sectors of the economy of Bangladesh are Agriculture and Manufacturing and Industries. But these sectors help or oblige it to do external trade.
Bangladesh historically has run a large trade deficit, financed largely through aid receipts and remittances from workers overseas. Import still is the only key to meet the domestic demand of goods. Having an agro-based economy Bangladesh was only able to export agro-products. But now the scenario has changed. Bangladesh started export industrial products such as readymade garments, leather goods, pharmaceuticals etc. Exporting products give Bangladesh the key to go ahead with the foreign earnings. Problems are still in there as Bangladesh has not got political stability or got rid of different problems.
Different measures effectiveness is being lost because investment in the economy is getting lower day by day. Domestic investments are less than the need and foreign investments are being depressed by the govt. different laws. Thus Bangladesh’s economy is in need of visionary goals to survive through the world depression. 3. 0 Import 3. 1 Overview of Import As Bangladesh is a developing country and its economy is not still stable, it has to import different kinds of commodities from other countries. The factors that make Bangladesh import dependence country are: * Huge population * Industrially backward Limited natural resources * Limited production * Lack of technology being used Due to these factors imports in Bangladesh in recent years are very high. Because of population growth our country has to import agricultural products as it can’t fulfill the increasing demand. as we are far lagged behind in technology from rest of the world, so we have to buy those goods from developed countries . Apart from those we are not rich enough in terms of natural resources that is why some of these we have import. 3. 1. 2 Present condition: Bangladesh Imports were worth 2835. 10 Million USD in July of 2012.
Historically, from 1995 until 2012, Bangladesh Imports averaged 4743. 18 Million USD reaching an all time high of 20291. 40 Million USD in June of 2009 and a record low of 1424. 20 Million USD in August of 2009. The total import payments in 2008 (January-November) amounted to US$ 22260. 7 million, which is 31 percent higher than import payments in the previous year. Total merchandise imports showed a robust 35 percent growth (on adjusted fob basis) during July-October 2008 despite a sharp decline in imports of food grains over the corresponding period of the previous fiscal year.
In case of L/C settlements, except for food grains all other categories of import show positive growth in the face of falling prices in international markets. In order to understand the nature of impact of increased imports in the economy, it is important to take a more disaggregated view. From the composition of imports it is clear that capital machinery, crude petroleum products, cotton, yarn and fertilizer, textiles and articles, were the key commodities whose imports increased significantly.
In other words, the nature of imports suggests that these were meant either to increase production or raise productivity in manufacturing industry and agriculture. In July-November, 2008 food grain imports declined by around 25 percent compared to the same period of the previous year. In November ’08 the wheat price per metric ton was US $227 compared to $321 in the same month in 2007. Rice price also declined significantly from $1015 to $563 per metric ton from March’08 to November’08. In terms of volume, food grain imports stood at 11. lakh metric tons during July-December, 2008 compared to 20. 7 lakh metric tons in the same period in 2007. The slide in food imports was due to good domestic production and a respectable public stock level. Public food stocks stood at 13. 2 lakh metric tons at the end of December, 2008 compared to 7. 1 lakh metric tons at the end of December, 2007. 3. 2 Major import items: | | Items that are imported from foreign can be divided into many kinds according to their nature. Bangladesh import many kinds of goods from different parts of world.
In the following we are making division of imported goods: * Technological products: As Bangladesh is not a technological developed country, she has to import many different electronic and technological goods from USA, European & other developed countries. These goods include 1. Computer, its hardware and other accessories. 2. Electrical machinery and equipment. 3. Nuclear reactor, boilers. 4. Others * Agricultural products: Though Bangladesh is an agricultural based country, she has to import some agricultural goods owing to lack of production or unavailability of that product.
Here are some of them 1. Cotton (all types), cotton yarn / thread and cotton fabric. 2. Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruits; industrial or medicinal plants 3. Coffee, spices and other dairy products. 4. Fertilizers. * Petroleum & Edible oil : Bangladesh imports all most of its required oil from Arab countries and Venezuela these Petroleum products consists of mineral fuels, mineral oils and products of their distillation, bituminous substances, mineral waxes. Metallic, plastics & Rubber articles: These kinds of product are iron, steel, aluminum and miscellaneous manufactured articles,. As Bangladesh doesn’t produce rubber significantly, it has to buy it. * Chemical and medical products: these products include 1. Inorganic chemicals, organic or inorganic compounds of precious metals, of rare earth metals, of radioactive elements or of isotopes. 2. Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus, parts accessories thereof. Other products: There are many other products which Bangladesh imports from foreign countries. These products are. 1. Ships, boats and floating structures. 2. Man-made staple fibers. 3. Special woven fabrics, tufted textile fabrics, lace, tapestries, trimmings, embroidery. Amount of import of these above mentioned products depend on aggregate demand and total domestic production. This varies from year to year. Bangladesh generally has imports tie with all countries in the world except Israel. So it buys commodities all over the world.
Fig: 1 – Distribution of Imported Product line (Annexure-chart-2) 3. 3 Countries Bangladesh imports from: Generally Bangladesh import goods from various parts of the world. Here are some of them: 1. China: China is the top source of import for Bangladesh. Textile fabrics, capital machinery and dyeing chemicals are some of the major items that helped China become the top source of Bangladesh’s import. Chinese products are cheaper than some other countries products that are way it has become an export giant. 2. India: Second largest import country for Bangladesh is India.
Live animals, milk products, wheat, rice, coffee, tea, spices, cumin seed, tamarind powder, sesame seed, sugar, , herbal extract, medicines, fertilizers, chemicals, salt, iron ores, minerals, books, leather products, textile, dyes and pigments, home furnishing, footwear, brass items, Aluminum items, sanitary wear, ceramic, glassware, flanges, fittings, embroidered and Zari items, pipe and pipe fittings, handicraft, cables, medical disposables, laboratory equipments, surgical equipments, sports goods, wooden furniture and various other engineering and electrical products are the items that Bangladesh imports from India. . USA: United States is another major import country not only for Bangladesh but also for other countries of the world. These products include coffee, shipment machinery, apparels and Bangladesh generally import industrially based products from US. 4. Japan: Bangladesh usually imports technological products from Japan. Vehicles, toys, sports products, metal & mineral are major items import from Japan. Japan is basically renowned for exporting cars, bikes and other technological & electrical items. . Other countries: there are many other countries from which Bangladesh buys goods. From North America to Australia. And through this it is clear that Bangladesh is highly import based country. In the following the percentage of goods and commodities import from these countries is given Fig: 2 – Percentage allocation of countries from where import is done (Annexure-chart-1) 3. 4 Trends in Import 3. 4. 1 Flows of Import During the last six years, average import value during 2004-05 to 2009-10 had been Tk. 287151 million. Total import value in 2009-10 had been 1794324 million in taka. Fig: 3 – Import trends of Bangladesh (Annexure- chart-2) The trend of import in here is growing and positive. Every year there is a need to import more. From 2005 to 2006 the import increased 192391 million. But from 2006 to 2007 the import growth was somewhat less. Afterwards the trend of increasing import is going on with fluctuation. In the year 2010 the import surpassed 1794324 million and it is expected to grow in the next year.
The reasons for the increasing import are * Filling the gap of domestic demand * Keeping the growth of industry positive * Making the energy supply stable * To stable the market in the calamities * Being backward in technology and automobile 3. 4. 2 Trends of growth rate of Import During last six years, though the import had been increased but the growth rate drastically drop down to lowest in 2009 which was 5. 62%. The average growth rate over six years was 19. 28% and the growth rate in 2010 was 12. 86%.
Fig: 4 – Growth rate of Import (Annexure-chart-2) The figure shows that the growth rate of import had risen the most in 2008 and it declined the lowest in 2009. The reason of its rose in 2008 was the calamities such as tsunami and it declined because of the instability in the politics and the economy. 3. 4. 3Trend of Import of specific product: Bangladesh has been the importer of materials for consumer goods more than any other goods. Being backward in the industrial sector it has to depend more on the other countries.
Fig: 5 – Trend of import of different product line (Annexure-chart-3) The graph shows that the import of materials for consumer goods has risen over time and the import of other goods remains somewhat steady over time. 4. 0 Export 4. 1 Overview Export in Bangladesh: Manufactured exports from EPZs have register in Board of Investment since 1983. In 1983-84 exports had risen to 0. 16 US$ million. It was about 48 million in FY 1990-1991 and the volume was increased gradually up to 288. 26 million in FY 194-95. Shows the EPZs in Bangladesh are gradually upward moving towards the share of national export.
The contribution of EPZs to national exports increased from 2. 69 in 1990- 91 to 8. 68 in 1995-96. The trend EPZs contribution in the national export is still upward 16. 51% in 2000-01 to 17. 44% in 2005-06. Form the export data table it is clear that Bangladesh has benefited tremendously from the export earnings are concerned. This trend is enough to support development of EPZ in Bangladesh. This sharply increased figure is proven the foreign exchange which is badly needed to accelerate the pace of economic development in Bangladesh 4. Export processing zone in Bangladesh: Export Processing Zones (EPZs) have become an important factor for economic enclaves particularly in employment generation, export diversification and investment creation. One of the important objectives of Industrial Policy of Bangladesh is to employment creation and to expand investment in export-oriented industries. In continuing to that policy, EPZ is playing as a prime role as an economic instruments for attracting foreign direct investment, employment, foreign exchange earnings and technology transfer.
In the age of globalization the concept of EPZ has become more significance for economic growth. Geographically, politically and economically, in 1971 Bangladesh has got an independent and it covers 144,000 square kilometers but Bangladesh had to face the challenges , as a result, its economy has been diversified with limited resource , rapidly growing population, natural disaster (visited Bangladesh in 1970s and 1980) and political instability during 1975, 1981 and 1982. Over the last three decades, Bangladesh economy has been changed gradually.
Agriculture sectors contribution has steadily declining, and manufacturing sector has been rising. Even though, garments sector has become the prior earning and employment generation. Apart from this, EPZs has playing a pioneer role for attracting foreign direct investment. From the past, Bangladesh economic development can be categorized into three phase, those are 1972-1978, 1979-1990 and 1991 until now. Bangladesh is late starter in the process of liberalization, particularly after 1990s. This trade liberalization geared up the country’s economic condition like as export.
Finally, Government had taken a decision to emerged capital investment in Export Processing Zone in the name of industrial development. The first zone in Bangladesh was set up in Southern part of Bangladesh in Chittagong in 1983 (Table 1). After reviewing the tremendous success of that zone, Government had decided to increase in number 8 including Chittagong and Dhaka are as follows: Name Of Zone| Year Of Establishment| No. Of Plot| Chittagong| 1993| 454| Dhaka| 1993| 388| Mogla| 2000| 162| Comilla| 2001| 208| Ishwardi| 2001| 166| Uttara| 2001| 155| Adamjee| 2005| 200|
Karnaphuli| 2005| 100| 4. 3 Major exporting sectors: Leather and leather goods: Prior to 1971 a few small and medium sized tanneries were engaged in the production of wet Blue leather. After liberation of Bangladesh the leather sector of the country suffered a setback because the non-Bengali owner/entrepreneurs left Bangladesh. After 1980-81 major policy reforms took place, which resulted in positive development of the sector. Today the leather sector is a major industry in the country. The basis of this sector is the domestic supply of rawhides and skins of goat, cow and buffalo.
In 1997, there were 139 large and medium industries processing these rawhides and skin into semi- finished and finished leather. Apparel Sector: The garment industry in Bangladesh, like in so many other garment-producing countries, has experienced unprecedented growth over the last decade and half with exports accounting for approximately 76 per cent o f total Bangladesh export earnings in 2000/200 1. Today, the industry accounts for 9. 5 per cent o f Bangladesh’s GDP and 29. 7 per cent o f the manufacturing GDP. 94.
The Bangladeshi garment sector, which has been enjoying preferential treatment because o f the country’s special status as a least developed country, will be exposed to increasingly intense global competition beginning in 2005. Although the industry will still enjoy preferential market access to the EU, Canada, Australia, Norway ‘and Japan, these will not be enough to shield it from the competitive landscape. The industry and government have had plenty o f time to prepare in order to compete in this new era, yet the risks to the industry remain high.
In the event of a major disruption of the RMG industry, at least 10% o f the population would be directly affected with many more being indirectly affected. The consequences of such would be socially and economically harsh. Pharmaceutical Sector in Bangladesh: Pharmaceutical sector is technologically the most developed manufacturing industries in Bangladesh and the third largest industry in terms of contribution to government’s revenue. The industry contributes about 1% of the total GDP. Bangladesh’s overall export earnings from pharmaceuticals reached USD 46. billion for the calendar year 2011, recording a growth of 16. 1% over USD 39. 6 billion in calendar year 2010. Exports earnings in Q1’2012 were USD 10. 9 billion, 5. 7% up from the same period previous year. Table 6 shows the quarter wise export earnings for the last three years while Chart 5 shows the total export over the last eight fiscal years. Pharmaceutical export from Bangladesh recorded 25. 5% growth annually over the last seven years. However, the growth was not steady across all the years – in fact in FY2009 pharmaceutical export dropped 1. 8% following the global financial crisis.
In FY2011 also, the growth was only 1. 0% because of sovereign debt crisis in Europe. Apart from these two years where trade slowed down significantly worldwide, pharmaceutical export was robust in all other years. We expect the export growth to pick up from 2012 onwards given that the world trade is likely to recover from the sovereign debt crisis. 4. 4 Major commodity in exporting sector: a)Total Primary commodities(1-5)| b)Total Manufactured goods (6-15)| 1. Raw Jute| 6. Jute goods| 2. Tea| 7. Leather| 3. Frozen food| 8. Naphtha, furnace oil , bitumen| 4. Agricultural products| 9. Readymade garments| . Other primary commodities| 10. Knitwear| | 11. Chemical products| | 12. Shoe| | 13. Handicrafts| | 14. Engineering products| | 15. Other mfg. products| 4. 5 Major export destination of Bangladesh: Over the last three decade though the export items of Bangladesh has increases from 25 to 154 and the export destination has reached to 184, but major export volume goes to few destination. The major market for export in FY 2008-09 was European Union and North American region. About 55. 60 percent of exports were destined for the EU bloc while another 29. 1 percent entered into the NAFTA bloc.
Analysis of country wise export shows that the USA is the main destination of e export. It appears from Table that in FY 2008-09, the USA secured the top position in respect of importing commodities from Bangladesh followed by UK (14. 58%), Germany (9. 64%) and France (6. 62%). During the period under report, goods worth US$4,052. 00 million were exported to the USA, which was 26. 03 percent of the total export of the country. The principal commodities exported to USA are woven garments, knitwear, frozen food, cap, home textile etc. FY| 2002-03| 2003-04| 2004-05| 2005-06| 2006-07| 2007-08| 2008-09| USA| 2155. | 1966. 5| 2418. 6| 3039. 7| 3441. 0| 3590. 5| 4052| UK| 778. 2| 898. 2| 944. 1| 1053. 7| 1173. 9| 1374| 1501. 2| Germany| 820. 7| 298. 5| 1351| 1763. 3| 1955. 3| 2174. 7| 2269. 7| France| 418. 5| 552. 9| 625. 5| 678. 9| 731. 7| 953. 1| 1031| Belgium| 289. 4| 326. 9| 327. 8| 359. 3| 435. 8| 488. 3| 409. 8| Italy| 258. 9| 315. 9| 369. 7| 427. 8| 515. 6| 579. 2| 615. 5| Netherland| 277. 9| 290. 4| 290. 9| 327. 2| 459| 653. 8| 970. 8| Canada| 170. 2| 284. 3| 335. 2| 406. 9| 457. 2| 564. 4| 663. 2| Japan| 108. 3| 118. 1| 122. 5| 138. 4| 147. 4| 172. 5| 202. 6| Others| 1270. | 1550. 9| 1868. 8| 2330. 4| 2860. 5| 559. 8| 3849. 3| Total| 6548. 4| 7602. 9| 8654. 5| 10526. 1| 12177. 8| 14110. 8| 15565. 1| Table: 1 Country-wise amount of export (in millions) 4. 6 Trends of Export 4. 6 Trend of export Trade: The average export from 2005 to 2010 was 878433 million Tk. The export has always been on the increase. Import in 2010 was 1134589 million Tk. which has exceeded all the export that has been done in previous years. Fig: 6 – Trend of Exports of Bangladesh (Annexure chart-4) Above graph shows flow of export from 20005 to 2009-2010 fiscal years.
The increasing export shows the potential growth of Bangladesh in the exporting market. Recently Bangladesh has started to export new products such as Ships which brought the increase in export. Readymade garments, leather products and frozen foods are also the contributing sectors in here. 4. 6. 2 Trend of growth rate of Export The average growth of export from 2004-05 to 2009-10 was 17. 56%. The highest growth was in 2005-06 and the lowest growth was in 2009-10. Fig; 7 – Growth rates of Exports (Annexure-chart-4) Above graph shows that after 2005-06 the growth of export is declining.
Though Bangladesh has availed some new products to sell in the market but overall it couldn’t flourish its growth by increasing the growth of the export per year. The major problems that can be mentioned are * Recession in the global economy * Lower credit facility causes lower investment * Devaluation of Taka in the world economy * Increasing competition in the global economy * Higher taxes and tariff costs * Impediment in entering new markets * Quality crisis or lower quality products supplied 4. 6. 3 Trend of export of specific product line: Bangladesh has supplied more of consumer goods than any other goods.
Export of consumer goods is on the highest point. Others are relatively in low points. Fig: 8 – Trend of export of different product line (Annexure-chart-5) Above graph explains that Bangladesh as having more of agro-based economy supplied consumer goods more. Other products supply remains more of steady. Bangladesh though is supplying manufacturing goods the number of this is very little to consider. 4. 7 Balance of Trade Foreign trade plays a vital role in achieving rapid economic development of a country. Since Bangladesh is a developing country, foreign trade can be considered of pivotal importance.
But unfortunately, trade balance of this country is still very unfavorable. Each year Bangladesh has to spend a huge amount of money for importing consumer goods and materials which is not a positive sign for our country. Bangladesh also spends much more for importing industrial raw materials, but it is a positive signal for our economy as it shows enhanced production of the economy. The country’s requirement of petroleum products is entirely met by import. During the last five years, current gap in trade balance of Bangladesh is the highest. It is observed from the last five year figures given in Table 2. that the trade gap is widening gradually. With a view to reducing the gap between exports and imports, the Government is trying to boost up the volume of exports by aiding private exporters in many ways. Arrangement of trade fairs at home and abroad is an effective measure of promoting export. Over the last few years, some non-traditional items have been enlisted in the list of exportable commodities. The trend of balance of trade of Bangladesh during the last 6 years is shown below: Fig: 9 – Balance of Trade (Annexure chart-8) Above figure shows the balance of trade in the negative.
Bangladesh being too much dependent on the import has caused this problem. The balance of trade remains steady for first three years but rose higher and then it rose to its peak in 2010 creating 659735 million taka in deficit. 5. 0 Remittance 5. 1 An overview of remittance of Bangladesh: Bangladesh is a densely populated country. Most of the people of her population lie under poverty line. To earn bread and in search of livelihood the people of Bangladesh has to go abroad to work. People go abroad in a search of work and they send money doing work which is known as remittance.
Remittance inflows in the economy of Bangladesh are getting larger every passing year, matching with the increasing external demand for its manpower. Since 1976, remittance earnings have been playing a significant role in the economic development of Bangladesh. The role of inward remittance on the economy has in fact been gradually increasing during the last two decades. It is now considered as a major influencing factor over the economic policy-making process of our country. The increasing flow of remittance has been reducing Bangladesh’s external aid dependency.
The ensuing development impacts of remittances, as a means of transfer of wealth, on socioeconomic factors are increasingly viewed with importance. Remittances have helped improve the social and economic indicators like nutrition, living condition and housing, education, health care, poverty reduction, social security, and investment activities of the recipient households. The relative weight of remittances has also increased against most of the macroeconomic variables alongside the contribution to GDP 3. 2 percent of the people of Bangladesh work outside the country and their contributions in the GDP are 10. percent. . Remittances have emerged as a key driver of economic growth and poverty reduction in Bangladesh, increasing at an average annual rate of 19 percent in the last 30 years (1979-2008). 5. 2 Trends in Remittance Inflow in Bangladesh: 5. 2. 1 General Trend in Remittance Inflow Bangladesh is considered as one of the major labor exporting countries of the world. Since independence over 7. 4 million Bangladeshi went abroad. The migrants have sent total 29694 million USD $ through the year 2004 to 2009. Year wise remittance inflows through the year 2004 to 2009 are shown with a help of graph.
Fig: 10 – Trends of Remittance Flow (Annexure-chart-6) From the figure we can see that the remittance inflow of Bangladesh is increasing gradually. In 2004-2005 periods the remittance inflow of Bangladesh was 3548 million US$. Inflow of remittance had rose a little bit in 2005-2006 and stood at 4315 million US$. The inflow of remittances during the period 2006 to 2008 had rose and stood at 5428 million US$ in 2006-2007 and 6562 million US $ in the following year. In FY 2008-2009 the remittance inflow was increased in a high amount and reached at 8941 million US$.
In 2009 Bangladesh became first as the highest remittance earner country. 5. 2. 2 Growth rate of remittance inflow: Though the growth rate of remittance of Bangladesh has increased gradually in 2006 the growth rate of remittance has fallen as its contribution in GDP has decreased. A graph showing the growth rate of remittance of Bangladesh through the year 2004 to 2009 has drawn below. Fig: 11 – Growth rate of Remittance (Annexure-chart-6) From the figure it is shown that in FY 2004-2005 the growth rate of remittance was 19. 38. This growth rate was lower than the previous year.
In FY 2005-2006 the growth rate of remittance had been increased and stood at 28. 94%. But in the following year the growth rate again had fallen and came down at 19. 89%. Surprisingly in FY 2007-2008 the growth rate of remittance had been increased in a great extent. Ironically in FY 2008-2009 the growth rate of remittance had fallen to a high percentage and came down at 18. 08% which was less than the all previous year growth rate. 5. 3 Remittance and its impact on macroeconomics issue: Remittance impacts on the macroeconomics issue like as GDP, inflation, export, import, reserve and current account balance.
Remittance influences on these issue to a great extent. 5. 3. 1 Impacts of remittance on GDP: Remittance as a percentage of GDP is increasing over the year. A graph showing the changes in remittance and contribution of remittance in GDP is drawn. Fig: 12 – Changes in remittance flow with GDP (Annexure-chart-7) From the graph we can see that changes in remittance flow through the year 2004 t0 2006 has been increased. In FY 2004-2005 the percentage of changes in remittance was 18. 99%. In the following year the percentage had been increased and reached at 36. 49%.
But in FY 2006-2007 the percentages changes in remittance slowed down and stood at 27. 96%. In FY 2007-2008 the remittance inflow had been increased for that reason the percentage changes in remittance had been increased also. In FY 2008-2009 the remittance inflow had been increased but percentage changes in remittance had been decreased dramatically and stood at 22. 8%. And the contribution of remittance in GDP had been increased gradually through the year 2004 to 2009. 5. 4 Country wise remittance earnings of Bangladesh: The people of Bangladesh go many countries all over the world in search of lively hood.
The people of Bangladesh mainly go in USA, UK, UEA, Saudi- Arabia, Thailand, Malaysia, Singapore, Qatar, Kuwait and so many countries. Fig: 13 – Remittance inflow changes regarding different countries (Annexure-chart-8) From the graph it is clear that Bangladesh earns maximum remittance from the KSA. Bangladesh earns a significant amount of remittance from UAE, USA, UK. But Bangladesh receives highest amount of remittance from the Middle East countries like Saudi- Arabia, Kuwait, Qatar, Malaysia, Oman, Thailand as most of the Bangladeshi migrant live those country. . 0 Conclusion To sum up Bangladesh is still in poor condition in foreign trade. It balance of trade suggests it to take more measures to increase the export of the country. Though potential market is opening for Bangladesh but lack of capital and other issues may hamper the advantages of those opportunities. Moreover, Bangladesh has been unsuccessful in taking any opportunities. It also has lost some of its potential markets because of lack of vision. It has also lost some of the places to export its human resource to increase the flow of remittance.
Lack of measures is the key here to waste the advantages. So Bangladesh has to more cautious of its trend of import, export and remittance. Reference: 1. Bangladesh Statistics Bureau. Foreign Trade Statistics of Bangladesh (2009-10) 2. “Export, Import, Remittance and Growth in Bangladesh: An empirical analysis” by Haydori Akbar Ahmed and Md. Gazi Salah Uddin 3. “Remittance As A Tool of Economic Development: Bangladesh Perspective” by Kuntal Roy Chowdhury, Fauzia Hamid and D. D. Chatterjee 4. www. wikipedia. org/economy_of_Bangladesh
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