Bangladesh Economy - Exports
Remittances sent by some seven million [as of 2011] expatriate workers are valuable source of foreign exchange earnings for Bangladesh. In 2010-11, the country’s seven-million-plus overseas workers sent home $11.6 billion — representing over 10 percent of Bangladesh’s gross domestic product.
It has emerged as a key driver of economic growth and poverty reduction. Revenue from remittances exceeds official development assistance and net earnings from exports which has enabled Bangladesh to maintain a growing level of foreign exchange reserves. Cash inflows from remittances in Bangladesh have consistently increasing and reached the $10 billion USD mark in 2009 as migrant workers have turned to send their remittances to their relatives through official channels.
The country's remittance inflow reached a record $1.09 billion in a single month amid the Middle East crisis, but overall remittance growth still remains low. A Bangladesh Bank official said the rise in remittance in March 2011 was due to return of many expatriates from the Middle East, while many others have been remitting money home instead of keeping the funds there, due to a general sense of insecurity. The March 2011 inflow was the second record of crossing the billion dollar mark in monthly remittance. In November 2009 it crossed that mark for the first time with remittance of $1.05 billion. By January 2012 remittance inflow reached a record US$1.22 billion, up from US$0.97 in January 2011.
Fortunately for Bangladesh, many new jobs have been created by the country's dynamic private ready-made garment industry, which grew at double-digit rates through most of the 1990s. The labor-intensive process of ship-breaking for scrap has developed to the point where it now meets most of Bangladesh's domestic steel needs. Other industries include sugar, tea, leather goods, newsprint, pharmaceutical, and fertilizer production. The country has done less well, however, in expanding its export base -- garments account for more than three-fourths of all exports, dwarfing the country's historic cash crop, jute, along with leather, shrimp, pharmaceuticals, and ceramics.
Despite the country's politically motivated general strikes, poor infrastructure, and weak financial system, Bangladeshi entrepreneurs have shown themselves adept at competing in the global garments marketplace. More than 3.6 million people are employed in the garment industry, the country's largest industrial employer, with some 80% of them women. The world's second-largest apparel exporter, the country sent $18 billion worth of clothes overseas in 2011. Bangladesh exports significant amounts of garments and knitwear to the US and the European Union (EU) market. The initial impact of the end of quotas on Bangladesh's ready-made garment industry has been positive. Downward price pressures, however, mean Bangladesh must continue to cut final delivered costs if it is to remain competitive in the world market.
Safety conditions at many workplaces are extremely poor. Because of high unemployment rates and inadequate enforcement of laws, workers demanding redress of dangerous working conditions or who refused to work under hazardous conditions risked losing their jobs. According to a report during the year by SweatFree Communities, during the first six months of 2010, 356 garment workers were killed in work-related incidents arising from unsafe work environments. The report singled out the garment sector for deadly fires and the collapse of buildings.
Jute is a major agricultural industry in Bangladesh with an estimated 1.8 million metric tons in production and US $1.1 billion in exports in 2010–2011 [up from 913,000 tons and US $0.417 billion in 2008-9]. At a national level, jute is a major contributor to Bangladesh’s GDP and serves as a cash crop to millions of farmers. Jute was long Bangladesh's major foreign exchange earner, and although other products have become important, in 1987 jute still accounted for more than 50 percent of export revenue, with manufactures accouting for an increasing portion of the total (as compared with raw jute).
As of FY 2009, Bangladesh’s economy was weathering the global economic crisis, growing some 5.9%. Exports dipped slightly, but the decrease was modest compared to other developing nations. Remittances from overseas workers remained strong, though it was thought that growth in remittances could slow following an apparent slowdown in the numbers of Bangladesh workers going abroad. The United States is Bangladesh’s third-largest export market, with trade between the two nations reaching $4.2 billion in 2009.
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