Category Archives: Economic Growth/GDP/Exports and Foreign Trade

RMG exports may grow 15pc in FY12

RMG exports may grow 15pc in FY12
Author / Source : Staff Reporter

Dhaka, Jan 3: Readymade garment (RMG) exports are likely to grow by around 15 per cent this fiscal year (FY), compared to the volume a year earlier, experts say.
Export Promotion Bureau data on July-November exports show that the country’s overall exports have grown by 18 per cent year-on-year against the 40 per cent growth a year ago. In July 2011, exports rose by 28.7 per cent, followed by a rise by 32.4 per cent in August. However, the growth rate declined to 2.29 per cent in September, 15.44 per cent in October and 2.4 per cent in November.

Shubhashish Bose, vice chairman of EPB, told fibre2fashion website, “Bangladesh’s export target for FY 2011-12 is $26.5 billion, and from July to November 2011 we exported $9 billion worth RMG. We hope we will be able to achieve our targets.”

RMG sector constitutes about 70-80 per cent of Bangladesh’s total exports, he added.

Mustafizur Rahman, executive director of Centre for Policy Dialogue (CPD), told fibre2fashion, “The exceptional growth rate of 40 per cent was registered because of rising global demands.

But, such high rate cannot be expected every year.

Considering this, 18 per cent growth is remarkable.”

Rahman also said prices of raw materials, i.e. cotton and yarn, have come down by 50-60 per cent compared to the last year, which resulted in lower price level and margin.

In light of these factors, the growth rate can be termed “significant”. “The demand in the US and Europe market was lower. But there were some shifting orders from China and India has also offered zero tariff access. All these factors favoured exports,” he told the website.

Rahman said that it is uncertain how the Eurozone crisis will develop and whether it will degenerate in recession, but predicted an overall growth. “I foresee a double digit growth rate with the overall growth at around 14-15 percent this fiscal,” he said.

Bose said Bangladesh mainly exports basic apparels, which are not high-value but basic necessities.

“Even if there is recession in Europe or the US, people will buy these apparels. Bangladesh can look forward to a double digit growth and achieving the export target,” he said.


Citi upbeat on govt’s growth target

Citi upbeat on govt’s growth target
Star Business Desk

Bangladesh has done reasonably well in maintaining its growth momentum and achieving the target growth of 6.7 percent in real GDP in fiscal 2011, banking giant Citi said in its annual market update. Following is the first report in a series.

The growth rate, which declined below 6 percent in three consecutive years since FY 2006, was reversed in the past couple of years with good performance in manufacturing and construction sectors, two successive years of bumper harvests in the crop sector as well as a sustained higher level of contribution from the service sector. This strong performance is expected to be repeated and 7 percent real GDP growth target can be achieved in FY 2012 if the continued healthy growth in exports sustains, the power supply situation improves, domestic demand and remittance inflow pick up.

Inflation persistently higher
The year-on-year inflation rate has remained in double digits since March 2011 while the annual average rate of inflation rose above 10.50 percent in November 2011. The point-to-point inflation rate reached almost 12 percent in September which was the highest rate in last 12 years. The food price component of both the point-to-point and average inflation rates are in double digits since December 2010. Although the increase in overall CPI (consumer price index) was driven by food prices, non-food prices also continued to rise since May 2011. Increase in food prices (y-o-y) peaked at 14.36 percent in April before declining to 12.47 percent in November. This rise in inflation rates can be attributed to the increase in global food and commodity prices and demand from expansion in private sector credit. The rise in agricultural wages has contributed to higher production costs, the upward adjustment in fuel prices and the depreciation of the taka also led to the inflationary pressure.

Current account balance under pressure
Exports recorded a growth of 41.7 percent in FY 2011, significantly up from only 4.1 percent in the previous year. Export earnings in FY2011 significantly exceeded (23.9 percent higher) the annual export target ($18.5 billion) set by the government. Recovery in demand for low-end garment products, exploration of new markets and a sharp rise in exports of frozen food and jute products contributed to the higher growth of exports. Export earnings stood at $22.37 billion till November 2011, marking a rise of 30.1 percent over the same period a year back. The government has set a $26.5 billion target for FY 2012 export, 15.6 percent higher than the export earnings in FY 2011. Shifting of orders from other garment exporting countries following rise in wages, and EU’s relaxed rules of origin are expected to help attain the target.

In FY 2011, import payments grew rapidly by 41.8 percent due to higher prices of food grains, fertiliser, fuel, raw cotton and yarn in the international market. In addition, the volume of oil import rose rapidly because of higher demand from the newly set up oil-based power projects. Import payments stood at $30.16 billion till October 2011, marking a rise of 36.28 percent over the same period a year back. The country’s current account balance swung to a deficit of $372 million in the July-October period for the first time since April, retreating from a surplus of $1.1 billion a year earlier due to soaring import costs.

To be continued

Kiev keen on tech transfer

Kiev keen on tech transfer
Author / Source : STAFF REPORTER

DHAKA, DEC 29: Ukrain has expressed its keen interest in technology transfer to help Bangladesh produce sugar from sugar beets. Also, the entrepreneurs of the central European country may come up with investment proposals under joint venture in different sectors, especially in shipbuilding industry and fabricated steel and chemical fertiliser factory. Such keenness was expressed by Oleksandr D Shevchenko, Kiev’s ambassador to Dhaka, to industries minister Dilip Barua when he met him Thursday.

Industries secretary KH Masud Siddiqqui was also present.

During the meeting, various aspects of bilateral assistance to the industrial sector, including agro based industrialisation, technological support to the small and medium industries and enhancing bilateral trade came up for discussion.

Barua told the envoy that Ukraine as a development partner of Bangladesh could make a significant role in enhancing agro production and expanding indsutral sector. The minister also sought cooperation in importing one lakh tonnes of urea fertilizer and 50,000 tonnes of sugar from Ukraine at state level.

Pointing to Bangladesh’s investment potential, he said Ukrainian entrepreneurs would be benefited from investing in shipbuilding, shipbreaking and recycling industry, chemincal fertiliser, fabricated steel and many other priority industries.

“Dhaka is interested to enhance bilateral trade and investment with Kiev,” the minister also said.

The Ukrainian envoy said Bangladesh may utilise  Ukraine experience in building agro-based small and mediuam industry. “Kiev is ready cooperate in building sustainable industrial sector in Bangladesh through transferring  green technology,” Shevchenko said.

Trade officials expect double digit export growth

Trade officials expect double digit export growth
Kazi Zahidul Hasan

Bangladesh’s export sectors could have to achieve a double-digit growth in the current fiscal spurred by low-wage and favourable state support despite the ongoing global economic contraction that slowed down demand for local merchandise in world market, trade officials said on Thursday.

They said that local shipments are heavily dependent on the Western markets epecially to the European Union and the US, which are facing a severe economic crisis that affected on demand side of local goods in the markets.

In the fiscal 2010-11, exports hit a record-breaking growth of over 40 per cent followed by the sharp rise in global trade volumes coupled with competitive price of local merchandise in world market.

“The financial crisis and global recession continue to have an impact on the export sectors, but, it will have to manage a double digit export growth capitalizing low-wage and the government’s policy support on export promotion,” said a senior official of commerce ministry.

He said exports of readymade garments (RMG) remain unaffected in the European Union and a sluggish growth was visible the US market.

“Export grow in the traditional markets is not up to the mark, but growth prospect of new markets are quite impressive,” he noted.

Earlier, the government had provided five per cent cash incentives to the exporters for the development of new export markets.   “Besides, the local exporters are still enjoying a comparative advantage than their competitors capitalizing lower workers’ wages,” he added.

“Overall export value may be fallen in relation with price cut of local merchandise offered by the global buyers as a result of global economic crisis. But the falling value may not affect the double digit export growth,” he added.

The official, however, said being an integral part of global economy, Bangladesh’s export growth may be lowered comparatively from that of the previous year due to sluggish demand from major markets.

Economists believe the recent series of important events around the world led a greater degree of uncertainty of global trade and thus created an uneasiness to the export sectors cutting demands of local goods in the international market.

“The hangover of the global financial crisis must have a knock-on effect on our export sectors as it will influence a large drop in global trade. Besides, developed economies like Europe will keep fuelling protectionist pressures and thus will help to fade our export growth significantly,” said an expert. He opined that competitiveness and productivity of export-oriented industries are keys in maintaining a steady growth in global market.

The country’s overall exports grew by 17.33 per cent year-on-year to $9709.75 million during July-November period of the current fiscal sliding from 20.79 per cent during July-October, according to Export Promotion Bureau (EPB) figures. Export earnings totaled at $8118.51 million during the July-October period of the current fiscal (2011-12).

Ukraine to open consul office in Dhaka

Ukraine to open consul office in Dhaka

Meanwhile, Ukraine has shown interest to open consul office in Dhaka for expanding the existing bilateral relations with Bangladesh and strengthening business opportunities between the two friendly countries.

The newly-appointed Ukrainian Ambassador Oleksandr D Shevchenko said this at a meeting with Dr Md Abdur Razzaque, Minister for Food and Disaster Management at the latter’s secretariat office yesterday.

During the meeting, Ukraine Ambassador said his government is operating all affairs with Bangladesh from its New Delhi office and for this it is facing manifold problems.

“For strengthening the existing bilateral relations between the two countries, we have decided to open a consul office in Dhaka,” the newly-appointed Ambassador said.

Mentioning that Bangladesh is manufacturing high quality medicine, the food minister said the country exports huge volume of drugs to different countries across the world.

Besides, it produces international standard leather and leather goods, ceramics, electronics goods.

Referring to a recent memorandum of understanding signed with Ukrain on importing wheat, the minister said the government is directly importing 100,000 tonnes of wheat under the understanding.

He thanked the envoy for taking the initiative on opening the consul office in Dhaka and assured him of providing all-out support of the government during his tenure in Bangladesh.

“As a member of the Russian Federation, Ukraine contributed a lot to the struggle for the liberation of Bangladesh,” the minister said adding the nation always recalls it.

The then Russian Federation provided due assistance to Bangladesh in reconstruction of the war-ravaged Bangladesh, especially for developing the Chittagong port, the minister said.

Food secretary Barun Dev Mitra, director general of Food Directorate Ahmed Hossain Khan and joint secretary of Food Division Khandakar Atiur Rahman were also present at the meeting.

Govt plans big on Ctg port: PM

Govt plans big on Ctg port: PM
Hasina opens computerised container terminal management

Prime Minister Sheikh Hasina speaks at the launch of a computerised container terminal management system and a radiation detection system at Chittagong Port yesterday.Photo: STAR

Unb, Chittagong

Prime Minister Sheikh Hasina said yesterday the government is working to make Chittagong Port a gateway of South Asia’s commercial hub.

“Steps are being taken to remove all the hassles facing by port users and ensure import-export activities with transparency,” Hasina said while inaugurating the computerised container terminal management system (CTMS) and radiation detection system at the port building in Chittagong.

Currently, more than 90 percent of the country’s export and import is done through the Chittagong Port.

The prime minister said bulk cargo handling has increased by 12 percent and the number of ship arrivals at the port went up by 8 percent during the last fiscal year.

She said the government has undertaken the task of constructing a deep-sea port at Sonadia in Cox’s Bazar to expand commercial activities in South Asia.

On completion of the deep-sea port, the lifestyle of the people of this region, including India, China and Myanmar, will improve, she added.

Hasina said dredging in the channel of the Pashur river will start soon to develop Mongla Port.

She said with the inauguration of the computerised CTMS and the radiation detector, the premier port has been digitalised replacing the manual management operation.

The prime minister said the Chittagong Port has been turned into a safe port in the world with the installation of the radiation detector with financial and technical cooperation from the US.

Prime Minister Sheikh Hasina said illegal transportation of goods will be prevented through radiation pronunciation.

The Chittagong Port through its Mega Port Initiative has joined the international terrorism prevention activities.

Hasina said the Awami League-led government wants to root out terrorism and terrorists at any cost.

She said the improvement of service at the Chittagong Port to international standard will attract increased overseas investment and help expand trade and business.

“We want to become a maritime force in combination with Bangladesh Navy, Bangladesh Coastguard, and Bangladesh Shipping Corporation.”

The Prime Minister said the work on installing Global Maritime Distress and Safety System already began to ensure the protection of mariners and ships.

Besides, International Ship and Port Facility Security (ISPS) Code has already been implemented.

According to the IMO Convention, she said, shipping and maritime culture has been built up in Bangladesh, which has emerged as a shipbuilding nation.

Bangladesh has been building and exporting oceangoing vessels to different countries, including Germany, Finland and Denmark, she added.

“The government has been able to build a peaceful and disciplined image of Bangladesh,” Hasina said, adding that those who were in power in the past had turned Bangladesh into a militant and extremist nation.

Mentioning the government’s firm commitment to turn Chittagong into the commercial capital of the country, Hasina said a tunnel would be built beneath the Karnaphuli river.

Shipping Minister Shahjahan Khan and Chairman of Chittagong Port Authority Commodore Anwarul Islam also spoke on the occasion.

Port officials said container handling capacity of the port will double with the new system introduced that is sure to help ease the complete container handling process and make the stakeholders anxiety-free while tracing out their containers at the yard.

With the implementation of the CTMS, the operational activities of the import and export containers and payment of charges and dues will come under online networking system.

Under the new system, loading and unloading activities of the container ships at the port, shifting of containers in the yard, stacking, tracking, delivery and gate control will be conducted through online billing.

Partial operation of the CTMS system began at the port’s Chittagong Container Terminal and New Mooring Container Terminal on October 10 and at the general cargo berths on October 12 last.

The equipment that will be added to the handling capacity of the port include six straddle carriers, three container movers, 10 low-mast fork lifts and four rubber-tyred gantry cranes worth Tk 117 crore.

The import consignments from Finland, Germany, South Korea, Japan and the USA include equipment for bulk cargo handling as well.

Country moving towards digitalisation despite poverty, population boom

Country moving towards digitalisation despite poverty, population boom
Nizam Ahmed

Despite persistent poverty, population explosion, lack of much needed economic reforms and frequent natural disasters, the country is moving ahead to become a digital Bangladesh, officials said on Wednesday.

“To achieve economic improvement by removing all these constraints the government has taken the plan to digitalise the country by 2021,” a senior official of the ministry of information and communication technology (MICT) told the FE.

Introduction of national web portal of Bangladesh, online admission and exam systems in major educational institutions, online banking transaction and online edition of newspapers, etc have become the hallmarks of digitalisation of the country, an IT expert said.

“However the government officials assigned to handle the information technology should be more prompt in responding to people’s query, otherwise the objectives may not be achieved in time,” IT expert Eng. Akhtar Hussain, technical manager of a multimedia wire service told the FE.

With fast penetration into the population by computers, internet and mobile telephones, the relevant operators and service providers are playing a leading role in digitalising Bangladesh, a report of the Telecom Market Overview and Forecasts (TMOF) said.

The regulatory reforms introduced by the Bangladesh Telecommunication Regulatory Commission (BTRC) under the ministry of post and telecommunications and the Bangladesh Computer Council under the ministry of science, information and communication technology have played effective role in the telecom and the internet infrastructures, said the report of the TMOF, a global entity.

In a latest development the container handling at the country’s main Chittagong port was fully automated as Prime Minister Sheikh Hasina inaugurated the automated operations on Tuesday, officials said.

“Bangladesh’s mobile market crossed 80 million subscribers by the middle of 2011 as penetration neared 50 per cent,” said the TMOF report released recently.

This had been preceded by a significant five-year period in which the country saw mobile subscriber numbers grew almost 20 times, the report said.

Use of international bandwidth rose some 200 per cent over the last three years and e-services capacity was expected to be upgraded by 500 over the next two years for completely turning the country into a digital Bangladesh by 2021, the report said.

Meanwhile, the country has started manufacturing and distributing low-cost laptops to popularise the use of internet for digitalising the country as per the schedule.

Of the six mobile operators, GrameenPhone is the leader, claiming close to 35 million subscribers, or 44 per cent of the total mobile subscriber base, as of mid-2011, despite the best commercial efforts of its competitors.

Airtel Bangladesh became the fastest growing mobile operator in the country, its subscriber base lifting 51 per cent in the 12 months to August 2011; in the previous year Orascom had been the fastest mover, the TMOF report said.

However the Internet penetration still remains low with some 0.4 per cent user penetration following the granting of a number of WiMAX licences, the report said.

There are early signs that the market was about to change as the new WiMAX services were rolled out and started to attract customers.

It includes the development of the ICT sector of the country and its implementation in sectors such as education, health and job placements.

Following all these actions taken by the government, Bangladesh has attracted a lot of international mobile players, said the TMOF.