Research Report On Bangladesh PDF

Project report on Bangladesh
X C E L L O N I N S T I T U T E O F B - S C H O O L

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A
Project Report
On
Bangladesh

Submitted to: Submitted to:
Prof. Surta Mehta Bhaumik Shiroya (M00139)



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Table of content
Particular Page No
1. Introduction 3
2. About country 3
2.1. Geography/Statistics 3
2.2. Economy 3
2.3. Currency and Banking 5
2.4. Government/Politics 5
2.5. Legal system 5
3. Quality of life 5
3.1. Housing 5
3.2. Rental accommodation 6
3.3. Hotels 6
3.4. Education 6
3.4. a. Primary stage 6
3.4. b. Secondary stage 6
3.4. c. Higher secondary education 7
3.4. d. Higher education 7
4. Communication and transport 7
4.1. Road 7
4.2. Air 8
4.3. Rail 8
4.4. Waterway 8
5. Graphical information 9
5.1. Bangladesh government budget 9
5.2. Bangladesh GDP growth rate 9
5.3. Bangladesh GDP 10
5.4. Bangladesh GDP annual growth rate 11
5.5. Bangladesh gross national product 11
5.6. Bangladesh GDP per capita 12
5.7. Bangladesh balance of trade 12
5.8. Bangladesh terms of trade 13
5.9. Bangladesh current account to GDP 13
5.10. Bangladesh consumer spending 14
5.11. Bangladesh unemployment rate 14
6. Questions 15
7. Bibliography 17



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1. Introduction:
Bangladesh is a combination of competitive market, business-friendly environment
and cost structure that can give the best returns. Bangladesh offers a well-educated,
highly adaptive and industrious workforce with the lowest wages and salaries in the
region. 57.30% of the population is under 25, providing a youthful group for
recruitment. The country has consistently developed a skilled workforce catering to
investors needs. English is widely spoken, making communication easy. Bangladesh
is strategically located next to India, China and ASEAN markets. Bangladesh has
proved to be an attractive investment location with its 146.6 million populations and
consistent economic growth leading to strong and growing domestic demand. Energy
prices in Bangladesh are the most competitive in the region. Bangladesh offers the
most liberal FDI regime in South Asia, allowing 100% foreign equity with
unrestricted exit policy, easy remittance of royalty, and repatriation of profits and
incomes. Bangladesh offers export-oriented industrial enclaves with infrastructural
facilities and logistical support for foreign investors.
2. About the country:
2.1. Geography/Statistics:
Bangladesh is located in the Southern Asia, bordering the Bay of Bengal with the
coastline covering 580 km between Burma & India with the land boundaries 4,246 km
where Burma covered 193 km and India covered 4,053 km. The time difference is
GMT+6. The Total area is 147,570sq km and the total population is 164,425,491.The
climate of the country is focused as tropical; mild winter (October to March); hot,
humid summer (March to June); humid, warm rainy monsoon (June to October).
Official language is Bangla (Bengali). English is widely used in Government,
Business and Universities. Out of total population, Muslim 89.6 %, Hindu 9.3 %,
Buddhist 0.5%, Christian 0.3% and Other 0.3%.
2.2. Economy:
The economic position of the country is GDP/PPP (2011 est.): $100 billion; per capita
$664, Real growth rate: 6%, Inflation: 11.3%. The Industries are Textiles, Jute,
Garments, Tea Processing, Paper Newsprint, Cement, Chemical Fertilizer, Light
Engineering, Sugar, Ceramics and Pharmacy. Natural resources are Gas, Timber and
Coal. Arable land covered 55.39% and permanent crops covered 3.08% of total land
area. Bangladesh exports mainly Ready Made Garments including Knit Wear (75% of
exports revenue). Others include: Shrimps, Jute Goods (including Carpet), Leather
Goods and Tea. Bangladesh imports mostly Petroleum Product and Oil, Machinery
and Parts, Soybean and Palm Oil, Raw Cotton, Iron, Steel and Wheat.


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Economic
indicators 2007 2008 2009 2010
GDP $ mn. 68415.4 79554.4 89359.8 100357.0

GDP growth % 6.4 6.2 5.7 6.1

Inflation (CPI) % 9.1 8.9 5.4 8.1

Unemployment % - - - -
Foreign direct
investment % of GDP 1.0 1.3 0.8 1.0

Export growth % 13.0 7.0 0.0 0.9

Import growth % 16.0 -2.1 -2.6 0.7

Current
account
balance $ mn. 856.9 926.2 3556.1 2502.4
Sources: The World Bank, World Development Indicators 2011 | International
Monetary Fund (IMF), World Economic Outlook 2011 | Stockholm International Pease
Research Institute (SIPRI), Military Expenditure Database 2011.



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2.3. Currency and Banking:
Currency of the country is Bangladeshi Taka (Tk). The financial system of
Bangladesh consists of Bangladesh Bank (BB) as the central bank, 4 State Owned
Commercial Banks (SCB), 5 government owned specialized banks, 30 domestic
private banks, 9 foreign banks and 29 non-banking financial institutions. The financial
system also embraces insurance companies, stock exchanges and co-operative banks.
Bangladesh Bank is both the Governments banker and the bankers bank, a Lender
of the Last Resort. Bangladesh Bank, like most of the central banks of different
countries, exercises monopoly over the issue of currency and the banknotes.
2.4. Government/Politics:
The conventional long form is People's Republic of Bangladesh and the
conventional short form is Bangladesh. The government type is parliamentary
democracy. Capital is Dhaka and the administrative 7 divisions are Barisal,
Chittagong, Dhaka, Khulna, Rajshahi, Rangpur and Sylhet. 26 March 1971 is the date
of independence and 16 December 1971 is known as Victory Day and commemorates
the official creation of the state of Bangladesh.
2.5. Legal system:
Bangladesh seceded from Pakistan in December 1971. The British-era legislation
applied in Pakistan after 1947 and post-partition legislation enacted in Pakistan
continued to form the basis of Bangladeshi personal status laws, but legal
developments since 1972 have been distinct.
Constitution adopted 4 November 1972. Amended in 1977 to remove principle of
secularism included in Part II entitled Fundamental Principles of State Policy. After
the emergence of Bangladesh in 1971, a rigid constitution has been adopted which
came into force on 16 December 1972. The basic law of Bangladesh is the
constitution of the People's Republic of Bangladesh, 1972 as amended from time to
time. Till 2010, fifteen amendments to the constitution have been made. All laws of
the country are subordinate laws made by the elected Sangsad (the legislature consists
of 350 members) conforming to the tenets of the Constitution.
To try offences committed by children below the age of 16 years, juvenile courts have
been formed with the magistrates and sessions judges, and juvenile courts follow the
special procedure laid down in the children's Act.
3. Quality of life:
3.1. Housing:
Expatriates living in Dhaka have found it to be an affordable, safe and comfortable
place to live in, with a good range of expatriate housing readily available in centrally
located apartments. Popular places to live in include Gulshan, Baridhara and Banani.
Most expatriates live in these areas. A quality apartment rents for $700-$1,000/month.
Luxury houses rent from $1,000-$1,500 (luxury units).
In several suburban areas, quiet and secluded housing are also available for rent. For


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those visiting Bangladesh, Dhaka offers several international standard hotels
including the Dhaka Sheraton and the Sonargaon (a Pan-Pacific Hotel). These hotels
provide deluxe accommodation, restaurants, health clubs and entertainment facilities.
In addition there are a number of medium standard hotels and guest houses in Dhaka
and Chittagong to accommodate the expatriates.
3.2. Rental accommodation:
Expatriates in Bangladesh have found it to be an affordable, safe and comfortable
place, with acceptable expatriate housing readily available in centrally located
apartments. Many expatriates live in the Dhaka areas of Gulshan, Baridhara, and
Banani. A typical apartment will rent for $800-$1,200/month, houses for $1,200-
$1,500 (luxury units).
3.3. Hotels:
Dhaka offers several 5 star hotels. They include the following:
Pan Pacific Sonargaon Hotel

Radisson Water Garden Hotel
The Westin Hotel
Seagull Hotel
3.4. Education:
The three main educational systems in Bangladesh:

General Education System

Madrasah Education System

Technical - Vocational Education System
3.4. a. Primary stage:
Five-year compulsory primary education for the 6-10 age group is imparted mainly in
government and non-government primary schools. In metropolitan cities, however,
government and non-government primary schools cater to the educational needs
mainly of the poorer sections of the people, as the better-off families usually send
their children to Private English Medium schools/ secondary schools that run primary
sections as well. There, however, exist some NGO-run non-formal schools catering
mainly for the dropouts of the government and non-government primary schools.
3.4.b. Secondary stage:
On completion of primary education, students (11+) enrol for junior secondary
education that spans over 3 years. At the end of this phase, some students switch over
to join the vocational stream, offered at Vocational Training Institutes (VTI) and
Technical Training Centres (TTC) run by the Ministry of Education, and the Ministry
of Labor and Employment respectively, while students in the mainstream continue in


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government and non-government secondary schools for a 2 year secondary education
in their respective areas of specialization i.e. humanities, science, commerce, etc. At
the end of 10th class, the students sit for their first public examination called
Secondary School Certificate (S.S.C.) examination under the supervision of seven
education boards.
The students of religious education and English medium streams also sit for their
respective public examinations, Dakhil and O level, conducted by the Madrasha
Education Board and London/Cambridge University respectively.
3.4. c. Higher secondary education:
After 10 years of schooling (primary and secondary), students (16+) who succeed in
passing the Secondary School Certificate (S.S.C.)/Dakhil/O Level examination have
the option of joining a college for a 2 year higher secondary education in their
respective areas of specialization, or enrol in technical/ poly technical institutes for
technical education. After 2-year higher secondary education, one has to sit for
another public examination called Higher Secondary Certificate (H.S.C.) examination
conducted by the education boards.
Students of Religious and English Medium streams also sit for their respective public
examinations, Alim and A' level, conducted by the Madrasha Education Board and
London/Cambridge University respectively.
3.4. d. Higher education:
Under-graduate education of various duration (2 to 5 years) are offered to 18+
students at a number of public and private universities / degree colleges/technical
colleges/ specialized institutions. Successful completion of a degree course is a pre-
requisite for appointment to a white-collar civilian job.
Post-graduate education normally of 1-2 year duration is provided at the universities
and selected degree colleges and institutions.
4. Communication and transport:
The transport sector of Bangladesh consists of a variety of modes. As the country is
essentially a flat plain all three modes of surface transport, i.e. road, railway and
water, are widely used in carrying both passengers and cargo. The airline network is
also extensive and effective.
4.1. Road:
In Bangladesh, among the various modes of transport, road transport system has been
playing a significant role in transporting passengers and goods. The Roads and
Highways Department (RHD) manage several categories of road. RHD has total
length of 20,948 Km road unders its control. RHD also control a total number of
4,659 bridges and 6,122 culverts. RHD are currently operating about 161 ferry boats
in 81 crossings (13 on national highways, 11 on regional highways and 57 on feeder
roads) on its road network throughout the country. As of January 2010, Local
Government Engineering Department (LGED) has so far constructed a total of


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133,514 km (64,691 km dirt road and 68,823 km paved roads) upazila and union
roads and 971,498 bridges/culverts.
The 4.8 km long Bangabandhu Bridge, which was opened to traffic in 1998, is the
eleventh longest in the world. It has established a strategic link between the East and
the West of Bangladesh. It is generating multifaceted benefits to the people and
promoting inter-regional trade. Apart from quick movement of goods and passenger
traffic, it is facilitating transmission of electricity and natural gas and has integrated
the telecommunication links.
4.2. Air:
The Civil Aviation Authority is a public sector entity entrusted to construct, maintain
and supervise airports and regulate air traffic. The national flag carrier Biman flies to
26 international and eight domestic destinations.
There are now 13 operational airports and Short Take-off and Landing (STOL) ports
in Bangladesh. These are Dhaka, Barisal, Chittagong, Comilla, Cox's Bazar, Ishurdi,
Jessore, Rajshahi, Syedpur, Sylhet and Thakurgaon. Of these, the airports at Dhaka,
Chittagong and Sylhet serve international routes. Air cargo and STOL services have
been handed over to the private sector by the government.
4.3. Rail:
About 32% of the total area of Bangladesh is effectively covered by railways.
Bangladesh Railway had a total network of 2,835.04 km (Broad Gauge 659.33 km,
Dual Gauge 374.83 km and Meter Gauge-1,800.88 km) and a total of 440 stations at
the end of the year 2008-2009. Train services between Dhaka-Kolkata have been
commenced on 14 April 2008 in order to establish communication between
Bangladesh and India. After inclusion of railway track over the Jamuna Bridge,
railway link between east and west zone has been established.
4.4. Waterway:
Country made crafts are the most widely used carriers on the rivers. These carry
passengers and merchandise on a large scale. The landscape of Bangladesh is
dominated by about 250 major rivers which flow essentially north-south. The alluvial
flood plain formed by these rivers covers most of the country. Wherever there is a
river and a village, a launch or steamer will play for trade.
Bangladesh Inland Water Transport Authority (BIWTA) has been established by the
Government for maintenance of navigability of ports and channels while the state-
owned BIWTC provides passenger and cargo services in inland waterways and
coastal areas of the country.
The entire coast along the Bay of Bengal is 710 km long. There are two major ports in
the country. Chittagong, the oldest port, has been an entry-port for at least 1,000
years. The Mongla port in Khulna region serves the western part of Bangladesh.



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5. Graphical information:

5.1. BANGLADESH GOVERNMENT BUDGET

Bangladesh recorded a Government Budget deficit equal to 2.90 percent of the
country's Gross Domestic Product in 2011. Government Budget in Bangladesh is
reported by the Bangladesh Bank. Historically, from 1994 until 2011, Bangladesh
Government Budget averaged -3.3 Percent of GDP reaching an all time high of -1.6
Percent of GDP in December of 2009 and a record low of -5.3 Percent of GDP in
December of 2008. Government Budget is an itemized accounting of the payments
received by government (taxes and other fees) and the payments made by government
(purchases and transfer payments). A budget deficit occurs when 4a government
spends more money than it takes in. The opposite of a budget deficit is a budget
surplus.

5.2. BANGLADESH GDP GROWTH RATE:



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The Gross Domestic Product (GDP) in Bangladesh expanded 6.30 percent in 2012
from the previous year. GDP Growth Rate in Bangladesh is reported by the
Bangladesh Bank. Historically, from 1994 until 2012, Bangladesh GDP Growth Rate
averaged 5.58 Percent reaching an all time high of 6.70 Percent in June of 2011 and a
record low of 4.08 Percent in June of 1994. Bangladesh is considered as a developing
economy. Yet, almost one-third of Bangladeshs 150m people live in extreme
poverty. In the last decade, the country has recorded GDP growth rates above 5
percent due to development of microcredit and garment industry. Although three
fifths of Bangladeshis are employed in the agriculture sector, three quarters of exports
revenues come from producing ready-made garments. The biggest obstacles to
sustainable development in Bangladesh are overpopulation, poor infrastructure,
corruption, political instability and a slow implementation of economic reforms.

5.3. BANGLADESH GDP:

The Gross Domestic Product (GDP) in Bangladesh was worth 110.61 billion US
dollars in 2011. The GDP value of Bangladesh represents 0.18 percent of the world
economy. GDP in Bangladesh is reported by the the World Bank. Historically, from
1960 until 2011, Bangladesh GDP averaged 30.3 USD Billion reaching an all time
high of 110.6 USD Billion in December of 2011 and a record low of 4.3 USD Billion
in December of 1960. The gross domestic product (GDP) measures of national
income and output for a given country's economy. The gross domestic product (GDP)
is equal to the total expenditures for all final goods and services produced within the
country in a stipulated period of time.



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5.4. BANGLADESH GDP ANNUAL GROWTH RATE:

The Gross Domestic Product (GDP) in Bangladesh expanded 6.30 percent in 2012
from the previous year. GDP Annual Growth Rate in Bangladesh is reported by the
Bangladesh Bank. Historically, from 1994 until 2012, Bangladesh GDP Annual
Growth Rate averaged 5.6 Percent reaching an all time high of 6.7 Percent in June of
2011 and a record low of 4.1 Percent in June of 1994. In Bangladesh, services are the
biggest sector of the economy and account for 50 percent of total GDP. Within
services the most important segments are: wholesale retail and trade (14 percent of
total GDP); transport, storage and communication (11 percent) and real estate, renting
and business activities (7 percent). Industry accounts for 30 percent of GDP. Within
industry, the manufacturing segment represents 18 percent of GDP while construction
accounts for 9 percent. The remaining 20 percent is contributed by agriculture and
forestry (16 percent), and fishing (4 percent).

5.5. BANGLADESH GROSS NATIONAL PRODUCT



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Gross National Product in Bangladesh increased to 4496.26 BDT Billion in 2012
from 4200.96 BDT Billion in 2011. Gross National Product in Bangladesh is reported
by the. Historically, from 2003 until 2012, Bangladesh Gross National Product
averaged 3475.54 BDT Billion reaching an all time high of 4496.26 BDT Billion in
June of 2012 and a record low of 2483.46 BDT Billion in June of 2003.
5.6. BANGLADESH GDP PER CAPITA

The Gross Domestic Product per capita in Bangladesh was last recorded at 588.12 US
dollars in 2011. The GDP per Capita in Bangladesh is equivalent to 5 percent of the
world's average. GDP per capita in Bangladesh is reported by the World Bank.
Historically, from 1960 until 2011, Bangladesh GDP per capita averaged 298.9 USD
reaching an all time high of 588.1 USD in December of 2011 and a record low of
210.3 USD in December of 1972. The GDP per capita is obtained by dividing the
countrys gross domestic product, adjusted by inflation, by the total population.
5.7. BANGLADESH BALANCE OF TRADE

Bangladesh recorded a trade deficit of 977 USD Million in November of 2012.
Balance of Trade in Bangladesh is reported by the Bangladesh Bank. Historically,
from 1995 until 2012, Bangladesh Balance of Trade averaged -1209.67 USD Million


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reaching an all time high of -56.40 USD Million in August of 2009 and a record low
of -5370.60 USD Million in June of 2008. Bangladesh exports mainly readymade
garments including knit wear and hosiery (75% of exports revenue). Others include:
Shrimps, jute goods (including Carpet), leather goods and tea. Bangladesh main
exports partners are United States (23% of total), Germany, United Kingdom, France,
Japan and India. Bangladesh imports mostly petroleum product and oil, machinery
and parts, soya bean and palm oil, raw cotton, iron and steel and wheat. Bangladesh
main imports partners are China (17% of total), India, Indonesia, Singapore and
Japan.
5.8. BANGLADESH INTEREST RATE

The benchmark interest rate in Bangladesh was last recorded at 7.75 percent. Interest
Rate in Bangladesh is reported by the Bangladesh Bank. Historically, from 2008 until
2013, Bangladesh Interest Rate averaged 7.25 Percent reaching an all time high of
8.75 Percent in February of 2009 and a record low of 4.50 Percent in July of 2010. In
Bangladesh, interest rates decisions are taken by the Bangladesh Bank. The
Bangladesh Bank controls two policy interest rates: the repo rate (repurchase rate),
which it uses to inject money into the banking system, and the reverse repo rate.
5.9. BANGLADESH CAPITAL FLOWS



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Capital Flows in Bangladesh decreased to 3.08 BDT Billion in October of 2012 from
8.01 BDT Billion in September of 2012. Capital Flows in Bangladesh is reported by
the. Historically, from 1997 until 2012, Bangladesh Capital Flows averaged 33.31
BDT Billion reaching an all time high of 679.50 BDT Billion in March of 2007 and a
record low of -12.72 BDT Billion in May of 1998. In Bangladesh, international
capital flows are measured using the Capital and Financial Account Balance of the
Balance of Payments.

5.10. BANGLADESH INFLATION RATE

The inflation rate in Bangladesh was recorded at 7.38 percent in January of 2013.
Inflation Rate in Bangladesh is reported by the Bangladesh Bureau of Statistics.
Historically, from 1994 until 2013, Bangladesh Inflation Rate averaged 6.58 Percent
reaching an all time high of 12.71 Percent in December of 1998 and a record low of -
0.02 Percent in December of 1996. In Bangladesh, the inflation rate measures a broad
rise or fall in prices that consumers pay for a standard basket of goods.
5.11. BANGLADESH UNEMPLOYMENT RATE



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Unemployment Rate in Bangladesh decreased to 4.50 percent in 2010 from 5.10
percent in 2009. Unemployment Rate in Bangladesh is reported by the Bangladesh
Bureau of Statistics. Historically, from 2003 until 2010, Bangladesh Unemployment
Rate averaged 4.6 Percent reaching an all time high of 5.1 Percent in December of
2009 and a record low of 4.3 Percent in December of 2006. In Bangladesh, the
unemployment rate measures the number of people actively looking for a job as a
percentage of the labour force.
6. Questions:
1. What are the advantages/strengths of that economy from an investors point
of view? Analyze the country?
Above I analyze the country and base on that here I give the answer.
There are many advantages of that economy from an investors point of view
like as I mention over here in this report.
Growth Domestic Rate
Interest rate
Growth National Product
Prices of human resource are still low in Bangladesh
2. What are the weaknesses of that economy from an investors point of view?
One of them 1
st
is inflation rate and 2
nd
one is unemployment. In this country
inflation rate is nearly 7.38.
Establishment of good governance is the foremost condition for economic
development. Due to lack of indiscipline we cannot get the expected success.
For the lack of good governance investors are not interested to invest our
country.
Lack of proper government policy
High production cost
Political instability



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3. Identify the fastest growing / most promising sector of the economy in
Bangladesh?
Readymade garment industry
I.T sector is the promising sector in Bangladesh.
In this sector accounting and financial management, webside and web
application and hr software is the right to invest because there developing
respectively 69%, 57% and 58%.
In Bangladesh, the systems and services of telecommunication have been
expanded. Government has already allowed private operation in this sector
and has plans to increase the number of fixed telephone lines by 1.6 million.
As a result, it has emerged as one of the largest sectors having huge growth
potential in the reform environment of telecom sector.
Both the sector are promising for investment in Bangladesh.
4. If you want to invest in those identified sectors, what economic factors would
affect your decision?
Since economic growth is determined by a countrys productivity, we will
evaluate the different factors that affect productivity. These factors include:
physical capital per worker, human capital per worker, natural resources per
worker, and technological knowledge. We will also examine the economic
freedom and the budget deficit/surplus because both of these factors can
greatly affect the long-run economic growth of a country.
Government policy will affect to the garment industry because Bangladesh do
the more export to readymade garment so that custom duty and other tax will
may be do increase, in that matter government will affect.
Competitors of same business
Price factor
Rules and regulation of government
This type of factor which I mention above and also many more economy factor would
be affect to my decision.



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7. Bibliography:
1. http://en.wikipedia.org/wiki/Bangladesh
2. www.mgiworld.com
3. www.worldbank.org
4. www.tradingeconomics.com
5. http://www-
wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/03/07/00
0442464_20130307102650/Rendered/PDF/ICR248000PUBLIC0http://data.world
bank.org/country.pdf
6. http://sonjibtalukder.wordpress.com/2011/08/11/%E2%80%9Cproblems-and-
prospects-of-foreign-direct-investment-in-bangladesh/

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