The presentation highlights the status of Bangladesh economy, its challenges and prospects in future. Current scenario of Bangladesh economy along with the investment perspective of the country has been highlighted in a well manner.

1. Bangladesh Economy:
Prospects & Challenges
by
Mohammad Monir Hossan

2. Snapshot
 Present Status of Bangladesh Economy
 Investment Climate, incentives and FDI in
Bangladesh
 Comparison of growth with World and Asian
Countries
 Future Prospects of Bangladesh
 Challenges of Bangladesh
 Possible Solutions
 Concluding Remarks

3. Present Status of Bangladesh
Economy

4.  GDP at current price 116 billion US$
 GDP Growth Rate 6.32 percent
 GDP Composition:
 Industrial Sector 31.26 percent
 Agriculture 19.29 percent
 Service Sector 49.45 percent
 Exports 24.28 billion US$
 Imports 35.51 billion US$
 Trade Balance negative 11.22 billion US$
 Remittance 12.84 billion US$
 Foreign Exchange Reserve 10.36 billion US$
 FDI Inflow 1.13 billion US$
 Government Revenue 1183.9 billion BDT
 Gross Investment is 25.45 percent of GDP
All Data based on FY 2011-12

5. GDP
0
20
40
60
80
100
120
140
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
BillionUS$
2002-03 51.91
2003-04 56.49
2004-05 60.37
2005-06 61.97
2006-07 68.44
2007-08 79.33
2008-09 89.04
2009-10 100.36
2010-11 110.65
2011-12 115.65
Year wise GDP in billion US$

6. GDP Composition
Service
49.45%
Industry
31.26%
Agriculture
19.29%

7. Year Export Import
2002-03 6548 9657
2003-04 7603 10903
2004-05 8655 13147
2005-06 10526 14783
2006-07 12178 17157
2007-08 14111 21629
2008-09 15565 22507
2009-10 16205 23741
2010-11 22924 33658
2011-12 24288 35516
Export and Import
0
5000
10000
15000
20000
25000
30000
35000
40000
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
MillionUS$
Export Import
Amount in Million US$

8. Percapita Income
0
100
200
300
400
500
600
700
800
900
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
US$
Year Percapita
Income
2001-02 361
2002-03 389
2003-04 418
2004-05 441
2005-06 447
2006-07 487
2007-08 559
2008-09 621
2009-10 687
2010-11 755
Amount in US$

9. 0
2000
4000
6000
8000
10000
12000
ValueinUSmillion$
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Worker's Remittance
Year Remittance
2001-02 2501
2002-03 3062
2003-04 3372
2004-05 3848
2005-06 4802
2006-07 5978
2007-08 7915
2008-09 9689
2009-10 10987
2010-11 11650
Amount in Million US$

10. Foreign Exchange Reserve
0
2000
4000
6000
8000
10000
12000
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
MillionUS$
Year Forex Reserve
2001-02 1583
2002-03 2470
2003-04 2705
2004-05 2930
2005-06 3484
2006-07 5077
2007-08 6149
2008-09 7871
2009-10 10750
2010-11 10912
Amount in Million US$

11.  42nd Largest Economy in the world
 68th Largest Exporter of goods in the world
 65th Largest Importer of goods in the world
 2nd Largest Exporter of RMG in the world
 6 percent average GDP growth rate for the last decade
 Positive and Stable outlook in S&P and Moody’s
ranking
 Included in Goldman Sachs’ “Next-11” Countries
 One of the JP Morgan’s “Frontier Five” Economies
 Bangladesh is no more included in “Basket Case”
 Many more………
Source: World Factbook-2012,
WTO-2010

12. Country 2009 2010 2011 2012
World Output -0.6 5.3 3.9 3.5
Emerging &
Developing
Economies
2.8 7.5 6.2 5.3
Developing Asia 7.1 9.7 7.8 6.7
China 9.2 10.4 9.2 7.8
India 6.6 10.6 7.2 6.5
Pakistan 1.7 3.8 2.4 3.7
Bangladesh 5.7 6.07 6.7 6.3
Source: IMF-World Economic Outlook

13. Benchmark
FY 2009
Target
FY 2015
Target
FY 2021
Annual Real GDP growth rate (%) 6.1 8.0 10.0
Gross Investment (% of GDP) 24.4 32.5 38.0
Gross National Savings (% of GDP) 30.0 32.1 39.1
Total Govt. Revenue (% of GDP) 10.9 14.6 20.0
Total Govt. Expenditure (% of GDP) 14.6 19.6 25.0
Exports (US$ Billion) 16.2 38.8 82.0
Imports (US$ Billion) 21.4 52.8 110.5
Remittance (US$ Billion) 10.9 17.8 38.5
CPI Inflation (%) 7.5 6.0 5.2
Unemployment rate (%) 30.0 20.0 15.0
Poverty (head count %) 31.5 22.5 13.5

14.  Bangladesh is a liberal democratic country and has a
homogeneous society with no major internal or external tensions.
 Population of the country are very resilient and living in harmony
irrespective of race and religion.
 Broad non-partisan political support for market oriented reform
and the most investor-friendly regulatory regime in South Asia.
 Trainable, enthusiastic, hardworking and low-cost (even by
regional standards) labor force suitable for any labor-intensive
industry.
 The geographic location of the country is ideal for global trade,
with very convenient access to international sea and air routes.
 Bangladesh is endowed with abundant supply of natural gas, water
and its soil is very fertile.

15.  Most Bangladeshi products enjoy complete duty and
quota free access to EU, Canada, Australia and
Norway.
 Though in limited scale, Bangladeshi products
already found their access with lower duty in the
markets of Thailand, India and Pakistan.
 Talks are underway with China, Russia, Malaysia and
other neighboring countries in this regard.

16. Year Total Investment Public Sector
Investment
Private Sector
Investment
2002-03 703.5 186.3 517.2
2003-04 799.9 206.2 593.7
2004-05 909.2 230.1 679.2
2005-06 1024.8 249.3 775.5
2006-07 1155.9 257.3 898.6
2007-08 1321.3 270.4 1050.9
2008-09 1498.4 289.0 1209.4
2009-10 1695.1 348.2 1346.9
2010-11 2003.8 449.3 1554.4
2011-12 2327.8 576.7 1751.0
Amount in Billion TK

17. Sl. No. Country Amount in
Million US$
(2011-12)
1. Egypt 152
2. USA 118
3. Netherlands 117
4. UK 116
5. South Korea 113
6. Hong Kong 105
7. Australia 73
8. Pakistan 71
9. Japan 47
10. Sri Lanka 32
Year FDI in million
US$
2007 666
2008 1,086
2009 700
2010 913
2011 1,136
Source: BOI and BB

18.  Agriculture
 Electronics
 Pharmaceuticals
 Light Engineering
 Power and Energy
 Frozen Foods
 Shipbuilding
 Garments and Textiles
 ICT and Business Services
 Leather and Leather Goods
 Ceramics

19. Bangladesh offers some of the world’s most competitive fiscal and non-fiscal
incentives. These are:
 Remittance of royalty, technical know-how and technical assistance fees.
 Repatriation facilities of dividend and capital at exit.
 Permanent resident permits on investing US$ 75,000 and citizenship on investing
US$ 500,000.
 Depreciation allowances
Accelerated depreciation for new industries is available at the rate of 50%,
30% and 20% for the first, second and third years respectively, on the cost of
plant and machinery.
 Tax holidays
• In the Dhaka & Chittagong Divisions: 100% in first two years: 50% in the year
three and four: and 25% in the year five.
• In the Rajshahi, Khulna, Sylhet, Barisal Divisions and three Chittagong Hilly
Districts: 100% for first three years, 50% for next three years, 25% for year
seven.

20. Cash and added incentives to exporting industries:
 Businesses exporting 80% or more of goods or services
qualify for duty free import of machinery and spares, bonded
warehousing.
 90% loans against letters of credit and funds for export
promotion.
 Export credit guarantee scheme.
 Domestic market sales of up to 20% is allowed to export
oriented business located outside an EPZ on payment of
relevant duties.
 Cash incentives and export subsidies are granted on the FOB
value of selected exports ranging from 5% to 20% on selected
products.

21.  To become a Middle Income Country (MIC) by the year 2021
 To become the 30th Largest Economy of world by the year
2030
 To be the largest RMG Exporters in the world
 Youth generation (The age of about 60% of total population
is under 40 years)
 Huge market of non-traditional products
 Enhancing export volume through export diversification
 Huge demand and reputation of Bangladeshi
Pharmaceuticals around the world
 Shipbuilding Sector of Bangladesh
 Higher flow Remittance and Foreign Exchange Reserve

22.  Lack of Infrastructural facilities
 Lack of deep sea port
 Lack of easy communication system
 Attracting handsome amount of FDI
 Ensuring Political stability
 Becoming a Middle Income Country by 2021
 Enhancing share of export
 Effective utilization of foreign aids
 Maintaining lower inflation rate
 Balancing between Govt. revenue and expenditure
 Taking effective strategies to diversify export
 Minimizing corruption
 Poverty Reduction

23.  The Inland Container River Terminal (ICT) at Pangaon, Keraniganj, will
start functioning soon and recently Japan has shown interest to invest in
Inland Container Terminal to be established in Narshingdi.
 Setting up deep sea port is essential for the country. Some countries have
shown interest to invest in deep sea port project in Bangladesh.
 Dhaka-Chittagong economic corridor, Integrated Multi-Modal Transport
Policy, Mass Rapid Transit for Dhaka and Chittagong, upgrading investment in
railway, road maintenance fund etc. should be implemented as early as
possible.
 Special Economic Zones (SEZs) can help promote new businesses and attract
more investment in diverse sectors. The new Economic Zones Act 2010 has
opened up a new window and will allow the private sector to own, develop
and manage economic zones and establish infrastructure and services for the
companies there.

24.  The government is encouraging to invest in Public-Private Partnership
(PPP) projects. A separate PPP office has been established under the
Prime Minister's Office (PMO). Earlier, the government issued the Policy
and Strategy for PPP, 2010. The government has also drafted a PPP Act-
2013 to safeguard the interest of both the parties.
 The land acquisition process should be made transparent and quick. The
government of Bangladesh has taken some initiatives to ease the
process.
 Bangladesh Bank has recently declared a balanced monetary policy to
maintain lower inflation rate and ensure more investment to private
sector. A proper coordination between fiscal and monetary policy is also
very much needed for business expansion through attracting more
investment.
 Political stability must be ensured to attract handsome Foreign Direct
Investment (FDI) in Bangladesh.
 The construction work of Dhaka-Chittagong four lane Highway is going
in full swing. It will ease the communication difficulties between these
two big cities.

25.  Bangladesh economy is at a critical juncture, where the policymakers will have
to tackle the ongoing and emerging macroeconomic pressures.
 Revenue mobilization has to be stepped up further to lessen the need for
excessive borrowing.
 An agreement has been signed between Bangladesh and Russia to produce
new 2000 MW nuclear power and the government is also encouraging solar
power production to remove the power related difficulties.
 Creating new export markets to export traditional and non-traditional
products. The role of Bangladeshi Missions situated in foreign countries
should be strengthened to enhance the export volume through proper export
diversification.
 Foreign aids must be utilized efficiently and effectively.
 Zero tolerance must be shown against all types of corruptions to have a
balance between govt. revenue and expenditure.

26.  Bangladesh is a wonder of success in the world. It’s vast
and energetic people through devotion and sincerity can
make the impossible task possible. Private sector of the
country is considered as the engine of economy. Dhaka
Chamber as the largest private sector of Bangladesh has
been trying its level best to escalate the country to a
unique and prestigious position. We believe that
Bangladesh has all the potentials to be one of the 30th
largest economies of the world by the year 2030. To
achieve the target, we need to effectively utilize the
potentials and face the challenges successfully.

27. THANK YOU