Bangladesh rising

Bangladesh’s export crosses $50 billion mark in FY 2021-22:

Bangladesh has hit a landmark by crossing for the first time in its history the $50 billion mark in export. In FY 2021-22, exports brought home $52 billion, registering a 34.4% year-on-year growth ($38.8 billion in FY 202021). In June 2022 only, the export earning stood at $4.908 billion, up 37.2% year-on-year, and the highest ever on record in a single month. The previous highest was registered in December 2021 when the earning stood at $4.907 billion. Apparel sector continues to be the biggest earner with $42.6 billion (35.5% growth y-on-y) followed by home textiles with $1.62 billion (43.3% growth) and agricultural products with $1.16 billion (13% growth). Two more sectors crossed the billion-dollar export mark: leather and leather goods drew $1.24 billion and jute & jute products fetched $1.12 billion. When the whole world has been struggling due to COVID-19 fallouts and political developments in Europe, Bangladesh’s steady progress has been made possible by the visionary leadership and astute policy guidance of Prime Minister Sheikh Hasina.

Bangladesh: world’s next IT outsourcing destination:

Bangladesh has all the potential to become world’s next outsourcing destination. With around 650,000 IT service exporters or freelancers, Bangladesh is now the second largest supplier of online labour globally with 16% of world’s market share. Its ICT industry has witnessed an exponential growth in the last decade. Export revenue from this sector leapfrogged from $26 million (in 2008) to $1.4 billion (in 2021). A 50,000-strong 300 companies sector swelled to a million people in 1700+ companies. The number has been almost doubled in the last five years. Development of market ecosystem, policy support and the capability of the ICT companies have made Bangladesh an attractive destination for ICT outsourcing.

Bangladesh gearing up to tap Fourth Industrial Revolution (4IR):

Realizing the potential of the Fourth Industrial Revolution (4IR), Bangladesh has decided to set up the Sheikh Hasina Institute of Frontier Technology (SHIFT), a $ 150 million state-of-the-art specialised institute. SHIFT will focus on enhancing capabilities in the fields of biotechnology, nanotechnology, neurotechnology, cyber security, artificial intelligence, internet of things, robotics, blockchain, data science, hyper-automation and other 4IR technologies, technological ethics, behaviour and experience engineering, innovation and entrepreneurship. Against the apprehension of some 5.5 million job loss, it is expected that 4IR will create 10 million new jobs in Bangladesh and that frontier technology would be one of the biggest catalysts for turning Bangladesh into a smart, developed country by 2041. Nearly three million people would be provided with training to build capacity on 4IR in the next five years.

Ship building: A booming industry of Bangladesh:

Bangladesh’s ship building industry is relatively new, it started with exporting a ship to Denmark in 2008 for the first time. However, cost-effective human resources, simplified import facilities for raw materials, strong backward linkage ecosystem and duty-free market access coupled with the government’s policy support including cash incentives and tax exemption have spurred significant growth of this industry (5.4% last year). Bangladesh now hosts at least 15 ship building yards of international standard. It is now an emerging player in the world in small and medium sized oceangoing vessels. As a result, there has been a big jump for Bangladesh in ship building industry, moving up over the last five years 13 places to 14th position globally, as per UNCTAD’s latest report. The country is now exporting ships to UK, Netherlands, Finland, Germany, New Zealand, UAE, Pakistan, India, Sudan, and Kenya. This year, Bangladesh is expected to receive orders equivalent to $ 1.5 billion and eventually, the sector could fetch $ 4 billion a year.

Bangladesh expands medicine export to developed markets:

After establishing themselves as a significant player in the Asian and African markets, Bangladeshi pharmaceutical companies are now expanding their footprints in the regulated markets. Medicine exports to the developed countries are on the rise. Medicine shipment to the US in FY 2020-21 was worth $15 million as opposed to $13.6 million in FY 2018-19. Denmark has emerged as the second largest export destination in developed world taking medicines worth $2.43 million in FY 2020- 21, a 14-fold rise from the previous year. Medicines worth $1.3 million was sent to Canada--62% growth from the past year. This growth in the advanced markets is partly attributed to regulatory approval from US (Food and Drug Administration), European and some other countries. Bangladesh’s capacity to produce high-quality drugs at affordable price and to make any generic version of drugs has brought a sea change in the local pharmaceutical industry.

Bangladesh: an emerging investment destination:

With stellar economic growth, business friendly environment and government’s business supporting policies, Bangladesh continues to enjoy the confidence of international investors. Chinese, Korean,

Taiwanese, American, British, Japanese and European manufacturers are eager to relocate their industrial units to Bangladesh owing to their increasing production costs as well as pandemic fallout, global trade rivalry and political developments in Europe. Sectors with active FDI include agribusiness, garment/textiles, leather/leather goods, light manufacturing, power and energy, electronics, light engineering, ICT, plastic, healthcare, medical equipment, pharmaceutical, ship building, and infrastructure.

Some of the big global names having investment/assembly plants/factories in Bangladesh are Honda, Suzuki, Mitsubishi, Yamaha, Hino (Japan), Super Petrochemical, Samsung, HKD, Hyundai (South Korea), Chevron, Huntsman Corporation (US), Telenor (Norway), Proton Saga, Axiata (Malaysia), Tata, Ashok Leyland, Mahindra, Hero, Malabar (India) and Arcelik (Turkey).

Export Processing Zones (EPZs) have been an important facilitating factor for bringing FDI into the country. More than 450 factories in 8 different EPZs are currently contributing 20% of Bangladesh’s annual export earnings. These have received $5 billion+ investments. Following the success of EPZs (Export Processing Zones), Bangladesh is establishing a total of 100 EZs (Economic Zones)—both government and private, over the next 15 years across the country. By providing attractive fiscal and financial benefits and serviced industrial plots, these zones are already turning into lucrative investment destinations from both domestic and foreign sources. Out of the 100, two alone--Bangabandhu Sheikh Mujib Shilpa Nagar, Sreehatta and Moheshkhali EZs, are attracting around US$5.78 billion investment from companies in China, South Korea, Japan, India, Singapore, the UK, Australia, Malaysia, and the US. Over 60 local companies are also expected to invest US$12.13 billion in these EZs. Among the foreign ones, the highest investment proposal worth US$2.83 billion came for the power sector from two Chinese companies. South Korean entity Super Petrochemical showed interest to invest US$2.38 billion in petrochemicals, the second biggest amount. A Singaporean company stood third in the list with a fund of US$400 million for the food processing sector. There are dedicated EZs for Japan, India, China and South Korea too.