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Import and export in bangladesh


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Import-Export Characteristics of Bangladesh

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Import and export in bangladesh

  1. 1. 1 CHARACTERISTICS OF IMPORT AND EXPORT IN BANGLADESH IMPORT CHARACTERISTICS: i) Import of consumable items; ii) Import of capital goods; iii) Import of Multi dimensional products; iv) High import expenditure; v) Decentralization of import trade; vi) Introducing of Wage earners scheme; vii) Relaxation of government control; viii) Import of essential goods; ix) Increasing import of other goods except food; x) Liberal and free import policy; xi) Reduction of import of luxury goods; xii) Reduction of import of primary goods; xiii) Increasing import customs of luxury goods; xiv) Increasing import of manufactured goods. The trend of import trade of Bangladesh has significantly changed in last few years. As export earnings have increased, the import expenditure has also increased. EXPORT CHARACTERISTICS:
  2. 2. 2 Comparative Performance of Bangladesh’s Exports: The performance of Bangladesh’s export sector in recent years is quite impressive especially in the 1990s when we compare it with that of world and SAARC countries. The average annual growth rate of Bangladesh export (11.91%) is higher than those of the world (9.48%) and SAARC countries (10.69%) during 1990-2003. Export Shares to GDP: The contribution of the export sector to Bangladesh’s GDP has been gradually increasing over the years. Over the years trade deficits ranged from 2.23% to 7.37% of GDP (World Bank 2004). Export Earnings and Export Growth: The export sector performed rather well throughout the 1990s. This sector achieved a growth rate of 37.04% in the FY 1994-95. During the twelve years, 1991-92 to 2002-2003, Bangladesh experienced negative export growth (-7.44%) only in FY 2001-2002 because of the 9/11 incidents. However, the export sector achieved a 9.39% growth rate, an increase of US$ 562.35 million, during 2002- 2003. Exports Performance Compared to Imports: The export earnings also continuously increased over the years with increased import payments. Though import payments are always higher than the export earnings in absolute terms, the percentage of Bangladesh’s export to imports is improving gradually and in recent years has been quite impressive. The export- import ratio increased to 70.09% and 67.80%, respectively, in FY 2001-02 and FY 2002-03 (EPB2004). A Review of Trade Balance: During the last decade, Bangladeshi exports shifted from the sale of agricultural products and raw and processed natural resources to labor-intensive manufactured goods(including clothing, footwear, and textiles), but the country, unlike neighboring India, could not catch up with the exporters of skill-intensive products. The problem of balance of trade in Bangladesh is well known: ever since
  3. 3. 3 the independence of the country, export earnings have persistently fallen behind import payments. Consequently, every year the country incurs a huge trade deficit. In a brief- 1. Export of quality goods 2. Export Shares GDP 3. Government control over export activities 4. Balance between import and export 5. Magnifying export actions 6. Achieving free market access 7. Expanding Product based business IMPORTANCE OF FOREIGN TRADE IN BANGLADESH: i. Maximum Use of Natural Resources Foreign trade helps each country to specialize in the production of those goods, which best suits it environments. It, thus leads to maximum use of its natural resources. Many natural raw materials such as jute, rice, tea etc. are grown in Bangladesh. ii. Availability of Goods It enables a country to obtain goods by importing which it cannot produce due to higher costs at home. Bangladesh can trade small quantity of good commodities with large quantity of average commodity to provide those to its large population. iii. Specialization Foreign trade leads to specialize in the production of goods. Specialization leads to lowering of costs and improving the quality of goods. The countries therefore, benefit from international trade. iv. Economics of Large Scale The expansion of foreign trade leads to production of goods on large scale. The economics of large scale production (both external and internal) are thus availed of by the trading countries of the world. The growth of GDP is 6.6% in 2015. v. Stability in Prices Foreign trade equalizes prices of goods throughout the world. The value of USD is balanced with BDT through this process.
  4. 4. 4 vi. Advance Equipment’s The developing countries can import latest machinery and knowhow from the developed world. They can thus speedily break the vicious circle of poverty. vii. Benefits to Consumers The consumers are able to get those goods which are not produced in their own countries. viii. Development of the means of Communication and Transport Different Countries may dispose of those goods which they have in surplus and obtain goods which they are short in supply. The trades between the countries lead to development in the means of communications and transport. ix. Ability to Face Natural Calamities International trade helps a country to face naturals incidents such as Earthquake, floods etc. The effected countries are able to import goods which they are short in supply. Bangladesh is country of natural calamities. x. Discouragement to Monopolies International trade discourages the formation of monopolies in a country. If there is a combination of certain business units and they raise the prices of goods higher than the market, the government imports those goods to reduce the prices in the country. xi. International Co-operation Foreign trade brings the people of different countries close to each other. It can bring better understanding and harmony among the various nations. SAARC, ASEAN and other organizations can assist Bangladesh with foreign trading. xii. Better Employment Opportunities As the Foreign trade expands, it creates jobs and provides better employment opportunities for the people both in and outside the country. “BANGLADESH IS THE BREEZING COUNTRY OF ECONOMIC DEVELOPMENT BETWEEN SAARC AND ASEAN” – EXPLAIN. The above statement can be proven or explained by analyzing the following phenomena- i. Geographical Advantage and Transit Facilities: Bangladesh is located at a very important strategic position in South Asia. It connects the South Asian
  5. 5. 5 Association for Regional Cooperation (SAARC) and Association of Southeast Asian Nations (ASEAN) states. One can reach at the doorstep of half of the world population within 24 hours with a motor vehicle from Bangladesh. That means they have direct access to the half of the world market here to build a channel of distribution especially with consumer goods. Asian highway and inter SAARC connectivity can make Bangladesh tomorrow’s world business hub between SAARC and ASEAN member states. ii. GDP Contribution: Current population of SAARC plus ASEAN states are about 241 crores i.e. 33 per cent of the world population. China has border with both the regional bodies i.e. he total GDP of SAARC and ASEAN is about USD 5,110 billion i.e. about 6.5 per cent of the world GDP. Bangladesh has an important role in this sector as well. iii. Assistance to BIMSTEC: Bangladesh has many things to do for capturing the opportunity of being a regional economic corridor of the region. Not only in SAARC or ASEAN, Bangladesh could work with the issue in the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) or the Asia-Pacific Trade Agreement (APTA), etc. platforms. All the major players of both the regions are member of APTA. Our strategic
  6. 6. 6 geographical location could help us most to offer the connectivity through land, sea even in the air. We have diplomatic good relationship with all these nations. Now we have to develop our infrastructural facilities like deep sea port, national highways, and participating in the Asian highway system, offer a competitive policy to attract investors into this particular process. iv. Bangladeshi Sea Ports: Bangladeshi sea ports especially Mongla Port is very much eligible to offer economic transport facilities to the land-locked Nepal and Bhutan. Indian north-eastern provinces could be our major partners for using Bangladeshi ports during their international trade. Bangladesh could offer one stop service facility for both the local and foreign investors to invest here, manufacture products, sale around the SAARC, ASEAN nations even export to the western countries either Europe or America with our duty free market access facility around the globe. v. Air Transit: Not only in road or sea connectivity Bangladesh has opportunity to establish new airports and a regional transit point for the global citizens. Once all the South Asian citizens were Singapore-bound to catch up transit plane. Similarly Dubai and Doha have established themselves as global transit points. Why not Dhaka, Dhaka shall try to be a popular transit destination for increasing people’s movement here in Bangladesh. It will increase our acceptability, reputation, FDI opportunity as well as export of products.