Trade opportunities of Bangladesh in ASEAN+

2.  Established in Aug 8, 1967.
 5 Founding Member Countries- Indonesia, Malaysia, Philippines, Singapore &
Thailand.
 10 Member Countries at present after Brunei Darussalam, Vietnam, Laos,
Myanmar and Cambodia joined.
 Combined Population- 629 Million. Combined Land Area - 4.49 Million
Square km (3% of the total land area of Earth)
 GDP (at current prices)- USD 2.43 Trillion (6th largest as a single economy)
and Trade Volume is $2.26 Trillion (8th largest as single market, 3rd in Asia)
 ASEAN+3 Forum: ASEAN+ China, Japan & South Korea
 ASEAN+6 Forum: ASEAN+ China, Japan, South Korea, India, Australia and
New Zealand

3. Three pillars of ASEAN :
I. The ASEAN Political-Security Community (APSC)
II. The ASEAN Economic Community (AEC)
III. The ASEAN Socio-Cultural Community (ASCC)
The aims and purposes of ASEAN includes:
 Acceleration of economic growth
 Social progress and cultural development
 Regional peace and stability
 Assisting on training and research
 Collaboration for greater utilization of their agriculture, industries and
trade
 Promotion of Southeast Asian studies
 Maintaining close and beneficial cooperation with other regional
organizations

4.  Aim is to create a single market and production base, a competitive
economic region, a region of equitable economic development, and a
region that is fully integrated into the global economy.
 The AEC Blueprint 2025, adopted in 2015 provides broad directions
through strategic measures for the ASEAN Economic Community (AEC)
from 2016 to 2025.
Characteristics of The AEC Blueprint 2025:
 A Highly Integrated and Cohesive Economy
 A Competitive, Innovative, and Dynamic ASEAN
 Enhanced Connectivity (Physical Connectivity, Institutional Connectivity
and People-to-People connectivity) and Sectoral Cooperation
 A Resilient, Inclusive, People-Oriented, and People-Centred ASEAN
 A Global ASEAN

5. Country
Gross domestic
product
at current prices
Gross domestic product
per capita
at current prices
International merchandise trade Foreign
direct
investments
inflowExports Imports Total trade
US$ million US$ US$ PPP US$ million US$ million US$ million US$ million
2015 2015 2015 2015 2015 2015 2015
Brunei Darussalam 12,909 30,942 87,117 6,350 3,042 9,392 171
Cambodia 18,463 1,198 3,578 8,839 10,838 19,676 1,701
Indonesia 857,603 3,357 11,108 150,282 142,695 292,977 16,073
Lao PDR 12,639 1,831 5,466 3,714 3,049 6,763 1,079
Malaysia 294,390 9,657 26,515 199,869 175,961 375,830 11,290
Myanmar 65,392 1,246 5,275 11,432 16,844 28,275 2,824
Philippines 289,503 2,850 7,241 58,648 70,295 128,944 5,724
Singapore 291,938 52,744 85,021 366,344 296,765 663,109 61,285
Thailand 395,726 5,737 16,064 214,396 202,751 417,147 8,027
Viet Nam 193,407 2,109 6,083 162,014 165,730 327,744 11,800
ASEAN 2,431,969 3,867 11,009 1,181,889 1,087,970 2,269,859 119,975
Trade within ASEAN States stands at 23% of ASEAN’s trade with the world

6.  Bangladesh-ASEAN Trade Is Negatively Balanced:
Bangladesh-ASEAN trade as of 2015:
Import: $5,989.99 million
Export: $476.26 million
Trade Balance: -$5,513.73
Total: $6,466.24 million being only 0.3% of ASEAN’s overall trade
What are the causes of poor export figure of Bangladesh with ASEAN?
 Very small export basket with items-Frozen Food, Agri-Products, Chemical
products, Leather, Raw Jute, Jute goods etc
 Non-exploration of export items & trade opportunities
 Poor Negotiation skills
These are going to be diagnosed................

7.  Bangladesh is already very eager to get membership of ASEAN
considering its potential economic benefits – “Look East” policy.
 Looking to capture the opportunity of being a “Regional Economic
Corridor”.
Reasons to join ASEAN:
 New export destinations
 Reduce dependency on the West
 Narrow its trade gaps with other countries
 Slow progress of SAARC compared to other regional bodies
 Promote collaboration on economic, social, cultural, technical, scientific
and administrative issues

8.  India & China have Regional Comprehensive Economic Partnership
(RCEP) agreement with ASEAN
 USA has Trans-Pacific Partnership (TPP) trade agreement with ASEAN
 Bangladesh has to engage in strategic regional trade agreement with
ASEAN like RCEP & TPP
 ASEAN+3 (China, Japan & S. Korea) & ASEAN+6 (China, Japan, S. Korea,
India, Australia & New Zealand)
NB: Even Pakistan is noticeable in the country/region list of ASEAN website
(asean.org) not Bangladesh. Bangladesh’s drawback is here; Weakness in
terms of Political Negotiation.

9. Disaster Management: government level sharing of knowledge.
ASEAN Dhaka Center (ADC): Established in 2013, aiming at
strengthening ties between ASEAN and Bangladesh.
‘Look East Policy’ of Bangladesh: Govt. of Bangladesh’s conscious focus
to the ASEAN+.
One Belt, One Road policy of China: China is focusing on building a
network connecting at least 60 Asian countries with Europe and Africa It
will open door for connectivity with ASEAN countries.

10.  Overlapping Regional Organizations: Common nations in BIMSTEC and
ASEAN are Myanmar and Thailand.
 Master Plan for ASEAN Connectivity 2025: It aims at three major areas of
connectivity among ASEAN nations namely Physical Connectivity,
Institutional Connectivity and People-to-People connectivity.

11. Approaching ASEAN From Trade Perspective:
The traders and business firms of the country should brainstorm on the
business opportunities in ASEAN in the current scenario until anything
favorable happens in terms of policy to change the status quo. Therefore,
doing a market research- SWOT analysis, segmentation, targeting and
positioning is required for grabbing the 3rd largest in Asia and the 8th
largest market of the world.
SWOT Analysis of ASEAN Countries:
Before digging deep into ASEAN, a SWOT analysis has been attempted on
individual countries of ASEAN which will be our starting point of
segmentation and targeting the markets. SWOT analysis has pointed out
some key areas which may be kept in mind for designing our products,
services and exchanges.

12. Segmentations ASEAN Countries
LDC & Growing (Land, Natural Resources) Laos, Cambodia, Myanmar
High Income & Developed Singapore, Thailand, Vietnam, Brunei
Overlapping TBs (Myanmar & Thailand) both in ASEAN & BIMSTEC
Religion (Muslim Majority) Indonesia, Malaysia,Brunei
Population Youth Dense: Laos (71% 18-34y)
Land Vs Population: very high (Myanmar, Cambodia)
Aging: 19thASEAN Plus Three Summit on 7 September 2016 in Vientiane, Lao
PDR recognized the issue.

13. Country Major Exports Major Imports
Thailand Jute goods, Knitwear, Woven Garments,
Agri-Products, Frozen Food
Vegetable products , Mineral
products, tobacco and manufactured
tobacco substitutes , paper and
paperboard, rubber, Textiles
Brunei Agri-Products, Leather, Jute goods Mineral products, Products of the
chemical or allied industries; rubber,
Pulp of wood or of other fibrous
cellulosic material
Indonesia Agri-Products, Chemical products, Woven
garments
Vegetable products, Animal or
vegetable fats and oils; Mineral
products, Plastics; rubber, paper and
paperboard, Base metals, television
image and sound recorders, Vehicles,
aircraft, vessels and associated
transport equipment
Malaysia Frozen Food, Agri-products, Knitwear,
Woven Garments
Animal or vegetable waxes, Mineral
products, Plastics; rubber, Products of
the chemical or allied Industries,
Textiles, Base metals

14. Country Major Exports Major Imports
Myanmar Chemical products, Leather, Jute goods, Wood, Vegetable products, rubber
Philippines Agri-Products, Chemical products,
Knitwear, Woven Garments
Tobacco, Mineral products, Raw hides
and skins, leather, furskins; Base
metals, Machinery and mechanical
appliances
Vietnam Frozen Food, Agri-Products, Chemical
products, Leather, Raw Jute, Jute goods
Vegetable products , Mineral
products, Textiles, Base metals,
Machinery and mechanical
appliances; electrical equipment
Singapore Frozen Food, Agri-Products, Knitwear,
Woven Garments
Vegetable products, Animal or
vegetable fats, tobacco , Plastics,
Mineral products, paper, Base metals,
Vehicles, aircraft, vessels and
associated transport equipment,
musical instruments, sound recorders
and reproducers, television image and
sound recorders and reproducers,
Textiles

15. Partnership with Myanmar: Strategic
 Major Exports: Chemical products, Knitwear.
Major Imports: Wood, articles of wood, wood charcoal, Vegetable
products, rubber.
 Opportunities: Cheap and unskilled labor, access to natural resources.
 Rationale: Myanmar has opened-up to the world as global trade
sanctions against Myanmar have been lifted. Myanmar is a corridor link
between India-Bangladesh and ASEAN.
 Comparative Advantage: Large number of young population, skill and
expertise in certain sectors such as RMG/textile, pharmaceuticals.
 Competitive Advantage: Bangladesh’s skill and expertise in textile/RMG,
pharmaceuticals, leather, IT etc. Bangladesh also has a very good track
record in trade with USA, EU and India.

16. Leather products: Export
 Target Markets: Brunei, Cambodia, Malaysia, Thailand
 Rationale: In addition to exporting to countries such as Italy, UK,
Belgium, Spain, France, Germany, Poland, US, Canada, Japan and
Australia, Bangladesh can look for new markets within the ASEAN
community for leather products.
 Comparative Advantage: Low price of raw hide and cheap labor.
 Competitive Advantage: While Vietnam has strong expertise in providing
high quality leather and leather products, most other countries does not
have developed leather industry.

17. RMG & Backward Linkages: Export, Joint Venture
 Markets: Myanmar, Laos, Cambodia etc comparatively low income
countries.
 Rationale: Well established Bangladeshi companies can expand into
those countries to manufacture goods with comparatively low cost.
 Comparative Advantage: 30 Years of expertise in Garments
manufacturing, skilled labor, low-cost production.
 Competitive Advantage: World’s second largest RMG exporter after
China.

18. Pharmaceutical products: Export
 Target Markets: Myanmar, Cambodia, Thailand, Lao PDR
 Rationale: Bangladesh is a candidate to supplement or substitute other
international manufacturers to the developing country markets of both
finished drugs and Active Pharmaceutical Ingredients (APIs) and develop
new exporting destinations.
 Comparative Advantage: Low cost of production.
 Competitive Advantage: Expertise in the sector and ability to offer
cheaper pharmaceutical products compared to other players in
Indonesia and Vietnam.

19. Halal Products: Partnership
❑ Target Markets: Indonesia, Malaysia and Brunei and other Muslim
countries outside ASEAN
❑ Rationale: Bangladesh can develop Halal products concept with Brunei
and export to Indonesia as well as other Muslim countries globally.
❑ Comparative Advantage: Low cost of production, large workforce.
❑ Competitive Advantage: Halal products are a relatively new concept,
where Brunei has been trying to make their mark. Bangladesh can
develop their own line of Halal products in partnership with Brunei and
market globally to Muslim countries.

20. Eel Fish: Export
❑ Markets: Vietnam, Indonesia and Singapore
❑ Rationale: It will diversify our export basket; Market can be enlarged by
adding Laos, Cambodia and Malaysia also.
❑ Comparative Advantage: Fresh water rivers, ponds already available
❑ Competitive Advantage: Fishing culture sector has already matured.
Southern and Mid-Northern districts like Mymensingh, Satkhira etc have
ample experience in fishing. Support industry has also matured.

21. Business Process Outsourcing (BPO): Export & Import, Joint Venture
 Markets: EU, USA, North America and local market ($250 billion globally
by 2020).
 Rationale: Educated Tech-ICT savvy young population of BD can find a
big scope for employing them. This sector can be a major source of
trading after RMG within a short time.
 Comparative Advantage: Educated Young Population require skill
building which will be done by joint-venture with Pilipino Firms.
Bangladesh has a large number of young population.
 Competitive Advantage: Philippines is highly skilled and experienced in
this sector by serving the global BPO market by 12.30%

22. NGO for Development: Strategic Investment & Exchange
 Markets: Countries like Myanmar, Indonesia, Laos and Cambodia are
fighting with extreme poverty.
 Rationale: Bangladesh has been globally appreciated for her huge
success in poverty alleviation. Bangladesh can go abroad with this
expertise as UN, World Bank and other global organizations have
already endorsed us in this regard. This can both build relation and
create scope for employment in ASEAN countries and engage
Bangladeshi investment in poverty alleviation.
 Comparative Advantage: NGOs like Grameen Bank, BRAC and many
other has established themselves.
 Competitive Advantage: BD has the credit of winning Nobel Price by Dr.
Muhammad Yunus, a Pioneer in NGO apart from Sir Fazle Hasan Abed of
BRAC. Skill and professionalism in this sector is far beyond our
competitors, if any.

23. Human Resource: Market Exploration
 Markets: Agro based Market-Myanmar, Laos, Cambodia
Developed Market-Singapore, Malaysia, Vietnam, Brunei etc.
 Rationale: Recent inflow of unskilled labours from Middle East has
pressurized the govt for finding new market. ASEAN developed as well
as low density agricultural countries may be a potential market for
skilled and unskilled HR.
 Comparative Advantage: Youth population stands 47.3%
 Competitive Advantage: BD has long experience in providing manpower
to Middle East though unskilled.

24. Tourism: Export, Joint Venture
 Markets: Singapore, Thailand, Malaysia, Indonesia, Brunei, Vietnam.
Comparatively richer countries of ASEAN. Bangladesh can partner with
Thailand to develop its tourist industry.
 Rationale: Bangladesh’s service industry is booming. There is thousands
of people being ready each year to join the wave. Hike of tourism
increases brand value of that particular country significantly. Land of
River, longest sea beach in the world, largest mangrove forest even after
being one of the smallest countries.
 Comparative Advantages: Cheap labor, government endorsements,
booming economy etc.
 Competitive Advantages: Land of River, longest sea beach in the world,
largest mangrove forest even after being one of the smallest countries

25. Jute Products: Export
 Target Markets: Singapore, Vietnam, Malaysia etc (Home essentials)
 Rationale: Increasing concern for Planet
 Traditional (Jute Bags, Sacks, Packaging, Carpets), New (Jute-stick
Charcoal), Innovative Products (Car Interiors, Jute and jute composite
could be used with others textile fibres to make innovative finished
products.
 Comparative Advantage: Land, Water & Weather; reputation of quality
jute fiber being produced in BD.
 Competitive Advantage: Skilled & matured farmers and farming
experience.
 Special Note: Jute along with RMG was specially mentioned in speech of
Chinise President Xi Jinping in his state visit to Bangladesh while
emphasizing import products from BD.

26. Products of Cultural & Heritage: Export
❑ Markets: High Income markets like Singapore, Malaysia, Vietnam and
Thailand
❑ Rationale: Branding Bangladesh and diversifying export basket at the
same time.
❑ Comparative Advantage: Pat-paintings, Nakshikhantha, Terracotta etc
are culturally inherited by Bangladesh but not commercially traded.
❑ Competitive Advantage: BRAC has set exemplary trading strategy in this
sector and gone with the products to some first world destination. Skills
and management of the items are definitely a competitive area for BD.
However, mass production and marketing are still lagging behind.

27. The following areas should be selected for future trade in ASEAN:
❑ As 23.9% of the total trade of ASEAN is done within the block,
Bangladeshi companies going out and setting up joint venture
companies in countries where factors of production is available at a
competitive price will be beneficial from trade perspective. Strategic
partnership with Myanmar, Cambodia, Laos & Indonesia may come out
as crucial in this regard.
❑ Apart from policy and strategic stand point, until the status quo of trade
relations with ASEAN changes the following products can be considered
seriously by the business community of the country for sustainable
growth in trade with ASEAN: Jute products, Leather goods, Cultural
products, Eel Fish, Pharmaceutical items, Tourism etc.
❑ Finally Bangladesh should seriously think about joining ASEAN if not
right now; at least the country should join the body as an observer very
shortly to take advantages of trade between Bangladesh and ASEAN.