Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Submitted To
Dr. H. M. Mosarof Hossain
Professor
Department of Finance
University of Dhaka
Submitted By
Sl No.
Name
B.B.A. Roll
1.
16-023
2.
Khaleda Aziz
16-024
3.
16-057
4.
Akhter-E-Tamanna
16-102
5.
16-107
Letter of Transmittal
Date: December 30, 2014
Dr. H. M. Mosarof Hossain
Professor
Department of Finance
University of Dhaka
Subject: Submission of report on Trade Performance of Bangladesh for Last Five Years.
Dear Sir,
We are pleased to submit the report you have assigned to us. The report paper was to prepare
the term paper on the course named International Business course code: F-521, as a part of
our academic activities.
Working on this report was a great opportunity for us to apply our theoretical expertise,
sharpen our view and ideas.
Finally, we are very thankful to you for giving us an effective topic to prepare our report and
we are waiting eagerly for any kind of question you may have concerning our report.
Sincerely yours
On Behalf of our Group
.
Khaleda Aziz
Acknowledgement
This is high time we conveyed our deepest gratitude and sincere submission to the Almighty
ALLAH for giving us the opportunity to accomplish such an enjoyable task of preparing this
report in time.
We express our thanks to our course teacher Dr. H. M. Mosarof Hossain for assigning us a
report dealing with trade performance of Bangladesh for last five years. In this regard, we
would also like to thank ourselves for our good teamwork and successful team spirit. Without
co-operation and the support from each other, it would not be possible to prepare a
resourceful report.
The presentation of this formal study paper is of a great expectation in our M.B.A. program
and we are quite happy to submit it duly applying that we think should have to be included.
Theoretical knowledge should be valued when it is successfully applied in practical decisionmaking scenario. In this respect we found this report a great opportunity to deal with some
progressive methods.
Executive Summary
Since in the independence, Bangladesh has faced so many barriers like hunger & poverty,
malnutrition, illiteracy, low life expectancy, low standard living, political instability and
natural calamities. After passing four decades, Bangladesh has improved its economic
condition by involving foreign trade.
Bangladesh's economy has grown roughly 6% per year since 1996 despite political
instability, poor infrastructure, corruption, insufficient power supplies, slow implementation
of economic reforms, and the 2008-09 global financial crisis and recession. Although more
than half of GDP is generated through the service sector, almost half of Bangladeshis are
employed in the agriculture sector with rice as the single-most-important product. Garment
exports, the backbone of Bangladeshs industrial sector and 80% of total exports, surpassed
$21 billion last year, 18% of GDP. The sector has remained resilient in recent years amidst a
series of factory accidents that have killed over 1,000 workers and crippling strikes that shut
down virtually all economic activity. Steady garment export growth combined with
remittances from overseas Bangladeshis, which totaled almost $15 billion and 13% of GDP
IN 2013, are the largest contributors to Bangladeshs current account surplus and record
foreign exchange holdings
In this report to measure the real TRADE PERFORMANCE OF BANGLADESH, we have
to focus several issues. Firstly discuss about export import policy, composition & barriers.
Secondly we have tried to focus the export & import performance, & future prospects.
Thirdly we have tried to see the trend of export & import over last five years & its impact on
our economy as well as we have also tried to see the present condition of balance of payment.
Finally we have used the multiple regression line to see how export & import impacts on
GDP & exchange rate.
Table of Contents
1. Introduction........................................................................................................................................ 8
2. Economic Overview............................................................................................................................ 9
3. Export Performance of Bangladesh ................................................................................................ 11
Export Value (Product and Country wise) ........................................................................................ 14
The Export sectors ............................................................................................................................ 16
Agriculture .................................................................................................................................... 16
Industry ......................................................................................................................................... 17
Manufacturing Industries .............................................................................................................. 17
Services Sector .............................................................................................................................. 18
Mode of Financing ........................................................................................................................ 18
Commodity wise export receipts (Quarterly data): ........................................................................... 19
Export of Export Processing Zones (EPZ):....................................................................................... 22
Export price index and its break-up before 2009 .............................................................................. 23
4. Import Performance of Bangladesh ................................................................................................ 25
Total import in Bangladeshi taka is shown in figure below.............................................................. 25
Imports of goods and services (annual % growth) in Bangladesh ................................................ 27
Mode of financing ............................................................................................................................. 29
Import price index and its break-ups before 2009 ............................................................................ 34
5. Balance of Trade of Bangladesh ..................................................................................................... 36
Country Wise Trade Deficit of Bangladesh ...................................................................................... 37
Trade Deficit as percent of GDP ....................................................................................................... 38
Foreign Exchange Movement with Respect to Trade Deficit: .......................................................... 39
6. Trade Policy of Bangladesh ............................................................................................................. 40
Salient Features of the Current Trade Policy and Rationale for a New Policy ................................. 40
BRIEF REVIEW OF CURRENT TRADE-RELATED POLICIES ................................................. 42
Trade-related Policies of Bangladesh during the 2000s: Rules/regulations, Instruments and
Institutions..................................................................................................................................... 42
Rules and Regulations under Different Policies ........................................................................... 43
Instruments: Tariffs, Para-tariffs, Exchange Rates and Taxes ...................................................... 43
Reforms in the Tariff Structure ......................................................................................................... 46
FRAMEWORK FOR FUTURE TRADE POLICY .......................................................................... 48
1. Introduction
Origin
This report is written for Course no.F-521(International Business) which is the part of 1st
semester of M.B.A. program of Department of Finance. From this report we have learnt more
about trade performance of Bangladesh for last five years.
Objectives
The primary objective of the report is to identify trade performance of Bangladesh for last
five years.. The specific objectives of our report are:
To know about export performance and policies of Bangladesh
To know about import performance and policies of Bangladesh
To know trade barriers of Bangladesh
To know about the situation of balance of payments
Methodology
We collect all these information from various websites. So, we considered this information as
secondary source of information. Before using the information, we have examined the
following aspects:
Limitations
Though we tried our level best to make the report more effective, we faced some barriers
regarding its making.
2. Economic Overview
The performance of Bangladesh economy in fiscal 2012-13 was mixed. The 6.03 percent
GDP growth realized in FY13 was lower than the 6.32 percent growth achieved in FY12 and
it also fell short of the 7.2 percent annual target. Nevertheless, the performance of the
economy during the fiscal was pretty satisfactory. But for some adverse international factors,
and more so the inadequate supplies of power and gas, poor physical infrastructure, high cost
of bank credit, and political unrest, the actual GDP growth could be much higher.
On the positive side, there was a significant improvement in several social sector indicators
and reduction of poverty. The power situation improved, though the supply of power was
inadequate to meet the growing demand. FDI inflow increased though the absolute volume
of FDI in the country was still very low. The current account balance improved and reverted
to a surplus from the previous years deficit, and the surplus in the overall balance of
payments increased ten-fold during the fiscal. The inflation rate dropped to single digit and
stabilized close to the target. On the negative side, governments revenue collection remained
below target because of underperformance of customs and supplementary duties. Saving and
investment as proportion of GDP were too low to enable a faster rate of GDP growth. Some
glaring irregularities that came to light in the banking sector, viz., loan scams, debt default,
and capital shortfalls have endangered the stability of the financial sector. High costs of bank
credit discouraged private investment. Development imports fell drastically because of the
uncertain business environment created by weak physical infrastructure and political unrest.
The robust remittance growth in the first half of the fiscal waned in the second half due to a
sharp fall of the US dollar and a drop in manpower exports in some Middle-Eastern countries,
as well as the spate of political unrest, hartals and shutdowns that might have discouraged the
expatriates to send remittances.
In order to accelerate economic growth, strong policy action will be required on a number of
fronts. Governments major tasks will be to develop the physical infrastructure, solve the
acute power and energy crisis, widen the tax base and raise more revenue from non-trade
sources, enhance public savings by cutting fiscal deficit and encourage private savings by
bringing improvements in financial intermediation, and keep inflation under check by
adopting prudent fiscal policy measures to complement monetary policy actions. The central
bank will need to ease its monetary policy stance to encourage private sector credit growth
and at the same time take strong action to restore discipline in the banking sector. The most
important challenge, however, is to shun political violence and solve the present political
uncertainty, which is destabilizing the economy. Timely action on all fronts will allow
Bangladesh to reap full gains from a global economic recovery.
THE
POSITION
ACROSS
COUNTRIES
HIGHEST
QATAR
MALDIVES[92]
BANGLADESH
34
LOWEST
DR CONGO[184]
AFGHANISTAN[175]
HIGHEST
SINGAPORE
SRILANKA[99]
BANGLADESH
173
LOWEST
ERITREA[189]
AFGHANISTAN[183]
HIGHEST
NORWAY
SRILANKA
BANGLADESH
142
LOWEST
NIGER
AFGHANISTAN[175]
HIGHEST
SINGAPORE
SRILANKA[84]
BANGLADESH
115
LOWEST
CHAD
NEPAL
HUMAN
DEVELOPMENT
INDEX - UNDP
BUSINESS
INDICATORS
PERCENTAGE
10
11
Year
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
Export (Billion US $ )
5.99
6.55
7.60
8.65
10.53
12.18
14.11
15.57
16.20
22.92
24.30
27.03
30.18
Source: Foreign Exchange Policy Department, Bangladesh Bank, CCI&E and EPB
Of the major products, Bangladesh exported knitwear worth US$10,476 million and woven
products worth US$11,040 million in FY 2013, a 10.43 percent and 14.96 percent year-onyear increase, respectively. The export of knit products failed to meet the target by 1.27
percent while that of woven products surpassed the target by 1.03 percent during the period.
Diversification of products and markets, especially in Japan, China, Russia, Latin America
and Africa, played the major role behind the growth of exports during the fiscal.
Among other products, export earnings from jute goods during the fiscal exceeded the
annual target by 2.5 percent and also surpassed the previous years record by 13.9 percent.
Exports of agricultural products, pharmaceuticals, leather and leather products, handicrafts,
footwear, furniture, copper wire, computer services, and optical, photographic, medical
instruments etc. increased significantly.
Table: Bangladesh Export Performance (in Million US $)
Products
Primary Commodities:
1. Frozen Food
a. Frozen Fish
b. Shrimps
2. Agricultural Products
Exports in FY2013
1145.68
700.00
133.82
545.23
445.68
1079.58
543.84
57.99
454.93
535.74
12
Manufactured Products:
1. Petroleum bi-products
2. Chemical Products
a. Pharmaceuticals
3. Plastic Products
4. Leather
5. Leather Products
6. Cotton and Cotton Prods.
7. Jute and Jute Goods:
a. Raw Jute
b. Jute Goods
8. Specialized Textiles:
a. Terry Towel
9. Knitwear
10. Woven Garments
11. Home Textile
12. Footwear
13. Engineering Products
14. Computer Services
15. All Others
Total
26854.32
334.02
133.77
60.00
119.95
400.00
135.45
130.00
1082.56
301.98
726.01
149.29
102.73
10610.89
10927.37
1150.00
410.05
500.00
85.69
685.28
28000.00
25947.78
313.95
93.01
59.82
84.51
399.73
161.62
124.96
1030.61
229.92
744.16
124.52
81.96
10475.88
11039.85
791.52
419.32
367.47
101.63
419.20
27027.36
On the other hand, the export of frozen foods recorded a negative growth of 9.12 percent
during FY 2013 compared to the previous fiscal, and also fell 22.31 percent short of the
target. In fact, the frozen fish export was severely affected by the global recession that hit the
major export markets in the EU and USA. Likewise, raw jute exports during FY 2013 were
13.65 percent lower than in the previous fiscal, and also fell 23.86 percent short of the target.
Exports of home textile also registered a negative growth of 12.64 percent in FY 2013 and
also fell 31.17 percent short of the target.
Bangladesh Export Processing Zones Authority (BEPZA) achieved good growth in exports
during FY13 despite political unrest and the global meltdown. According to the BEPZA
statistics, its exports increased by 15.44 percent in FY 2013, compared to 13.88 percent in FY
2012. The companies inside the EPZs exported goods worth US$4.86 billion in FY 2013,
compared to US$4.21 billion in FY 2012. The contribution of EPZs to the total national
export is increasing every year. Export earnings from EPZs accounted for about 18 percent of
total export in FY 2013, as against 17.31 percent in the previous fiscal. Readymade garments
and garment accessories, towels, footwear and leather goods, sweater, bags, electronic goods,
lance, golf shaft, weaving, yarn, paper converting, under-garments, embroidery, power
generating sets, bicycles, tent, cap, padding and auto spare parts are the leading foreign
exchange earner from the countrys 8 EPZs.
13
Export
Value
Share
Export
Value
Share
Apparel
19089.73
78.55
21515.73
79.61
973.61
4.01
1030.61
3.81
Frozen Fish
598.42
2.46
543.84
2.01
429.52
4.65
561.35
2.08
Home Textile
906.07
3.73
791.52
2.93
Other
2304.55
9.48
2584.31
9.56
Total
24301.90
100.00
27027.36
100.00
Country wise
USA
5100.91
21.00
5419.60
20.05
EU Countries
12740.33
52.46
14141.80
52.32
Canada
993.67
4.09
1090.01
4.03
Japan
600.52
2.47
750.26
2.78
Turkey
551.88
2.27
637.81
2.36
India
498.42
2.05
563.96
2.08
Other
3816.17
15.66
4423.92
16.37
Total
24301.90
100.00
27027.36
100.00
The high commodity and country concentration makes exports vulnerable to often adverse
international circumstances. Diversification of export products may enhance opportunities to
14
increase export earnings from traditional as well as new export markets. Bangladesh now
enjoys duty-free access to the EU market under its EBA (everything but arms) initiative as
well as its recently relaxed Rules of Origin. Product diversification will further widen
opportunities for availing duty-free access for many more products to the EU markets.
Product diversification will also open export opportunities in the US market. Prior to the
suspension of the GSP benefits in June, 2013 the US government used to allow duty-free
import of some 4800 products from Bangladesh under its GSP scheme. Although the value of
such GSP-eligible exports was no more than 0.5 percent of Bangladeshs total exports to the
US, product diversification beyond ready-made garments is very likely to enhance
opportunities for Bangladesh to export more products to the US under the US-GSP facility,
once the suspension will be withdrawn, for which negotiations are currently underway with
the US government. Similarly, country diversification will enable Bangladesh enter the
markets of a growing number of fast growing emerging economies with rising incomes and
increased import demand and thus lessen the dependence on the traditional trading partners in
the West where incomes are growing slowly and import demand remains stagnant.
Alongside intensifying efforts to diversify exports as means of increasing Bangladeshs
export earnings, it will be necessary to improve competitiveness of the countrys export
products. For raising export competitiveness, it will be necessary to invest in infrastructure,
technology and skills development, broaden the product range, and improve product quality
and safety standards.
Figure: Export value trend
25000
20000
15000
10000
5000
0
Table below shows in greater detail the growth rates of different sectors and sub-sectors of
the economy in the three most recent years. The BBS attributes the achievement of a lowerthan-targeted GDP growth in FY 2013 to the deceleration in agriculture and services sector
growth. The industrial sector, too, which comprises of manufacturing, construction, power
and gas, water supply, and mining and quarrying, experienced only a mildly higher growth in
FY 2013, compared to the preceding fiscal (FY 2012). But for the slowing demand for the
15
countrys exports in some major markets and some national constraints, mainly the acute
shortage of power and gas, the sector might have grown faster.
Table: Growth Rates of Different Sectors/Sub-sectors of GDP (in percent)
Sector
2010-11
2011-12
2012-13
Agriculture:
5.13
3.11
2.17
1.18
5.52
8.99
11.12
9.34
10.32
6.76
8.57
8.05
5.73
4.69
7.63
6.70
8.99
4.07
5.07
9.66
7.51
4.86
6.03
The agriculture sector employs about 47.5 percent of the country's total labor force and
accounts for about 19 percent of its GDP. The sector provides the much-needed food and
nutritional security and, since agriculture is primarily a rural activity and 83 percent of the
countrys poor live in rural areas, the sector plays a big role in income generation and poverty
reduction. The sector also contributes significantly to the country's export earnings.
Agricultural exports fetched US$535.74 million in FY13, registering a 33 percent growth
over the previous fiscal year. According to preliminary BBS data, the sector recorded a low
growth of 2.17 percent in FY13, compared to 3.11 percent in FY12. The BBS attributes the
decline to the high base in the previous few years. According to the BBS, crop production
growth rate was a very low 0.15 percent in FY13. Provisional estimate by the BBS shows that
the production of Boro, which accounts for 55 percent of annual rice production, increased by
a modest 0.11 percent from the previous (2011-12) season.
Agriculture sector includes:
16
Food Situation
The essential elements of food security are the availability of food, access to food, and
utilization of food. Availability of food in turn is a function of domestic production, imports,
food aid, and the stock of food. Recognizing that rice constitutes an important part of food
security, government took adequate measures for further increase in rice production, for
importing rice and wheat to meet domestic shortfalls, building food grain stock, and efficient
handling of the Public Food Distribution System (PFDS) to distribute food grains through
Food for Works (FFW), Test Relief (TR), Open Market Sale (OMS), Fair Price Card (FPC),
Vulnerable Group Development (VGD), and Essential Priorities (EP) channels to poor
households.
Because of improved domestic supplies, total food grains import in FY 2013 was lower at
18.87 in lakh metric tons (lmt), compared to 22.90 lmt in the past fiscal. In the total food
grains import, 0.3 lmt was rice and 18.6 lmt was wheat.
Industry
The broad industry sector grew by 8.99 percent in FY 2013, which was just 0.09 percent
higher than the previous years growth of 8.90 percent. The absence of dynamism in the
industrial sector growth may be due to an unfavorable business environment caused by the
political unrest and also by the central banks 'contractionary' monetary policy pursued during
the last one and a half
years.
All
industrial
Growth Rates of Different
imports declined sharply,
Sectors of GDP (%) 2012-13
and also the settlement of
letters of credit (LCs) for
Agriculture:
Industry:
Services:
industrial raw materials
and capital machinery
13%
34%
registered a negative
growth in FY 2013
53%
compared to the previous
fiscal. Power and gas
supplies to industrial
establishments no doubt
improved a bit but these still remained inadequate to meet the sectors needs. However,
despite this unfavorable situation, the share of the broad industrial sector in the country's
GDP increased to 31.99 percent in FY13 from 31.13 percent in FY 2012. There is a general
feeling that if there were no energy and infrastructural constraints, and no political unrest,
hartals, shutdowns and the associated destructions since December, 2012, the sector could
have performed better and occupied a higher share in GDP.
Manufacturing Industries
Within the industry sector, the performance of different sub-sectors was mixed. The
manufacturing industries, in particular, depicted a lower growth of 9.34 percent in FY 2013,
compared to 9.37 percent in FY 2012 but its share in GDP rose to 19.54 percent from 18.96
17
percent in FY 2012. Within manufacturing, the growth of large and medium industries
decelerated from 10.52 percent in FY 2012 to 10.32 percent in FY13, but small industries
recorded a slightly higher growth of 6.76 percent as against 6.45 percent in FY 2012. Low
disbursement of industrial term loans, a drastic decline in private sector credit growth, erratic
supply of power and gas, and political chaos were the major constraints to the growth of the
manufacturing sub-sector.
Among other industry sub-sectors, the performance of mining and quarrying was relatively
better than in the previous fiscal.
Services Sector
The services sector recorded a slightly lower growth of 5.73 percent in FY 2013 compared to
5.96 percent in the previous fiscal. The lower growth was mainly due to lower growth in
agriculture and large-scale industry, and slower expansion in trade activities. The broad
services sector has nine sub-sectors, data on which are yet insufficient to enable an
understanding of how they fared in the year under review. Nevertheless, there are indications
that activities of most sub-sectors, community & social services, financial intermediation,
transport, hotels & restaurants, education, and wholesale & retail trade suffered due to
political unrest. A much faster growth of overall services sector is possible in the present
fiscal (FY 2014) if the heightened political tensions can be stopped and production in real
sectors increases at a greater pace.
According to a recent (2012) survey on selected business services by the BBS, the
contribution of four service sub-sectors decorators, recruiting agencies, security, and
cleaning services is growing remarkably in the economy but these activities are not
considered while counting the countrys gross domestic product (GDP). The BBS survey
notes that if the real value of security, cleaning and sweeping, decoration and recruiting
agency sectors were added to the GDP, the size of the country's GDP would have gone up by
0.48 percent in FY 2013. There are reportedly a total of 18,931 agencies in the country under
these sectors.
Mode of Financing
A comparative position of export receipts by mode of financing for the quarters April-June,
2014, January-March, 2014 and April-June, 2013 is shown below in Table-(A). Table-(B)
18
Mode of financing
Cash
Exports of EPZ
Total
(Changes in %)
Mode of financing
Cash
Exports of EPZ
Total
(Changes in %)
Source :
Changes
(1)-(3)
5
36223.00
13009.00
49232.00
(9.7)
Changes
(1)-(3)
5
483.00
171.00
654.00
(10)
19
Commodity
group
Readymade
garments
a) Knitwear
b) Woven
garments
Jute
manufactures
Fish, shrimps
and prawns
a) Fish
b) Shrimps and
prawns
Leather and
leather
manufactures
a) Leather
b) Leather
manufactures
Home Textile
Raw jute
Petroleum and
petroleum
products
Terry Towel
Bicycle
Pharmaceutical
products
Handicraft
Tea
Fertilizer
Others
A. Sub-total
B. Exports of
April-June,
2014
Amount %
of
A
1
381652 83
(Taka in Millions)
JanuaryApril-June,
March, 2014
2013
Amount % Amount %
of
of
A
A
2
3
375976 82 342363 81
Changes Changes
(1)-(2)
(1)-(3)
5676
39289
217699
163953
47
36
205289
170687
45
37
185395
156968
44
37
12410
-6734
32304
6985
13716
12707
16080
1009
-2364
7390
8639
9313
-1249
-1923
1759
5631
0
1
1971
6668
0
1
1617
7696
0
2
-212
-1037
142
-2065
16955
19531
16333
-2576
622
9214
7741
2
2
10552
8979
2
2
9563
6770
2
2
-1338
-1238
-349
971
8727
2335
1304
2
1
0
10316
2287
1381
2
0
0
7645
4498
3924
2
1
1
-1589
48
-77
1082
-2163
-2620
280
1409
1226
0
0
0
232
547
1236
0
0
0
187
1307
1246
0
0
0
48
862
-10
93
102
-20
137
66
5
25819
461021
96873
0
0
0
6
100
0
152
31
1
23272
456308
86735
0
0
0
5
100
0
114
0
5
21783
424798
83864
0
0
0
5
100
0
-15
35
4
2547
4713
10138
23
66
0
4036
36223
13009
20
EPZ
Grand
total:(A+B)
557894
543043
508662
14851
49232
Commodity
group
Readymade
garments
a) Knitwear
b) Woven
garments
Jute
manufactures
Fish, shrimps
and prawns
a) Fish
b) Shrimps and
prawns
Leather and
leather
manufactures
a) Leather
b) Leather
manufactures
Home Textile
Raw jute
Petroleum and
petroleum
products
Terry Towel
Bicycle
Pharmaceutical
products
Handicraft
Tea
April-June,
2014
Amount %
of
A
1
4916
83
Changes Changes
(1)-(2)
(1)-(3)
79
519
2804
2112
47
36
2641
2196
45
37
2381
2016
44
37
163
-84
423
96
177
163
206
14
-29
96
111
120
-15
-24
23
73
0
1
25
86
0
1
21
99
0
2
-2
-13
2
-26
219
251
210
-32
119
100
2
2
136
115
2
2
123
87
2
2
-17
-15
-4
13
112
30
17
2
1
0
133
29
18
2
0
0
98
58
50
2
1
1
-21
1
-1
14
-28
-33
4
18
16
0
0
0
3
7
16
0
0
0
2
17
16
0
0
0
1
11
0
2
1
0
2
1
0
0
2
0
0
0
1
0
0
0
0
1
1
1
21
Fertilizer
Others
A. Sub-total
B. Exports of
EPZ
Grand
total:(A+B)
0
330
5938
1248
0
6
100
0
0
300
5870
1116
0
5
100
0
0
280
5455
1077
0
5
100
0
0
30
68
132
0
50
483
171
7186
6986
6532
200
654
Type of Enterprise
Chittagong
Dhaka
Mongla
Ishwardi
Comilla
Uttara (Nilphamary)
Adamjee
Karnaphuli
Total
88
67
8
6
15
6
21
28
239
24
14
4
1
8
1
8
2
62
58
21
5
8
9
5
10
11
127
Total no. of
Enterprises
operation
170
102
17
15
32
12
39
41
428
22
Below table shows the export receipts by the EPZ enterprises since 1988-89. The data are
collected from Bangladesh Export Processing Zone Authority (BEPZA).
Year
2008-09
2009-10
2010-11
2011-12
2012-13
Amount in Million US $
1900
2150
2801
3426
3829
2013-14
34819.8
4480
It is clearer from figure that whenever the increase in the prices of exportable commodities
other than RMG does not cope with the increase in the price of RMG, the increase in export
price index becomes slower.
23
Figure: Export price index and price of RMG and Nom-RMG products
(Base 2002-03=100)
For example, in FY92 and FY05 the price of readymade garments increased but the prices of
other exportable commodities, especially jute goods declined, which contributed to a
moderate increase in export price index. In the following year, there was a sharp increase in
export price index as the prices of all major exportable commodities went up. On the other
hand, in FY2000, there was a slight decline in export price index mainly due to a decrease in
the prices of commodities other than RMG (basically jute goods) in spite of the increase in
the prices of RMG. In contrast, quite different influential factors were found when
decomposing the import price index.
24
Import (Billion US $ )
2008-09
22.51
2009-10
23.74
2010-11
33.66
2011-12
35.52
2012-13
33.97
2013-14
36.99
Source: Foreign Exchange Policy Department, Bangladesh Bank, CCI&E and EPB
After a robust 41.75 percent increase in 2010-11, the growth of import payments decelerated
to 5.52 percent in 2011-12, and for the first time since 2001-02 import growth turned
negative in 2012-13. Because of lower demand for most of the importable items, import
25
payments in FY13 fell by 4.32 percent to US$33,981 million from US$35,516 million in the
previous fiscal.
The negative import growth can be attributed to lesser imports of food grains, capital
machinery and luxury items as well as lower prices of petroleum imports. While food grains
import came down because of improved domestic production, the import of capital
machinery fell significantly in FY13 because of the uncertain business environment created
by political unrest and worsened law and order conditions.
Lower imports do, of course, lessen pressures on the balance of payments, but a fall in
development imports (capital machinery, intermediate inputs and raw materials for
industries) cannot be good for the country as it will inevitably hurt economic growth. The
reported declines in these essential imports in the 2012-13 fiscal do not, therefore, augur well
for the countrys industrial and economic growth in the short and the medium term.
Fiscal
Year
2009-10
23738.40 (+5.47)
23053.10 (+7.50)
28783.40 (+32.02)
2010-11
2011-12
2012-13P
May
June
33657.50 (+41.75)
35516.30 (+5.52)
33980.60 (-4.32)
2870.40
2927.10 (+1.97)
31953.15 (+38.61)
34814.55 (+8.95)
32356.76 (-7.06)
2699.81
2876.18 (+6.53)
38582.35 (+34.04)
37035.82 (-4.01)
35984.62 (-2.84)
3188.36
2867.85 (-10.05)
L/Cs
The settlement of import LCs, too, registered a negative growth of 7.06 percent during FY13
when the opening of fresh import LCs also declined by 2.84 percent. The falling trend in both
opening and settlement of import LCs might continue unless the root causes behind political
violence that almost always resulted in loss of life and property are removed.
However, a slight reversal of the falling trend was noticed in June 2013 when imports
increased by 1.97 percent to US$2,927 million from US$2,870 million in the immediate past
month, i.e., May, 2013. The settlement of import Letters of Credit (LCs), too, witnessed an
increase, rising by 6.53 percent in June, the closing month of FY13, from the immediate past
month of the fiscal. However, the opening of import LCs recorded a much greater decline of
10.05 percent in June, 2013 from the previous month. The decline in fresh LC opening may,
of course, indicate that import payments may not shoot up in the immediate future to put
26
pressure on balance of payments and the exchange rate, but at the same time it indicates that
the confidence of business and industry in the economy, which has been weakened by the
uncertainty generated by the volatile political situation in the country, is yet to be fully
restored.
Bangladesh imports from many countries in different amounts of product. Bangladesh import
most in percentage of total import in million dollars is from China. The percentage of import
of Bangladesh of top 20 countries is given below table.
27
20132014
% of Total
20132014
% of Total
Sl
No
Major Countries
China, P.R.
58608.5
20.7
7540.8
20.7
India
46908.0
16.6
6035.5
16.6
Singapore
17794.5
6.3
2289.5
6.3
Malaysia
15868.1
5.6
2041.7
5.6
Japan
9977.7
3.5
1283.8
3.5
Korea, Republic of
9318.2
3.3
1198.9
3.3
Indonesia
8582.0
3.0
1104.2
3.0
Brazil
7756.7
2.7
998.0
2.7
Taiwan
7144.6
2.5
919.3
2.5
10
Kuwait
7107.7
2.5
914.6
2.5
11
6498.7
2.3
836.2
2.3
12
Hong Kong
5900.4
2.1
759.2
2.1
13
Thailand
5762.1
2.0
741.4
2.0
14
Australia
4710.1
1.7
606.0
1.7
15
Canada
4550.6
1.6
585.4
1.6
16
Germany
4530.3
1.6
582.9
1.6
17
Uzbekistan
4530.2
1.6
582.9
1.6
18
Vietnam
4525.1
1.6
582.2
1.6
19
Pakistan
4118.5
1.5
529.9
1.5
20
Argentina
3843.4
1.4
494.5
1.4
21
Other Country
45190.7
15.9
5814.5
15.9
Total
283226.1
100.0
36441.4
100.0
28
Mode of financing
The mode of financing of imports of Bangladesh is different. Importers can use any of them
on the basis of the purpose. Financial institutions help in this purpose.
Table: Import payments by mode of financing (Quarterly data)
(Amount in Million)
Import by
mode of
financing
April-June, 2014
Amount
January-March, 2014
Percentage
of total
Taka
USD
Cash
609244
Buyers Credit
Amount
Changes
Percentage
of total
Taka
(1)-(4)
USD
(2)-(5)
Taka
USD
7846.5
75.2
598393
7697.7
74.2
10851
(+1.8)
148.8
(+1.9)
115586
1488.7
14.3
110976
1427.7
13.8
4610
61
Loans/Grants
1542
19.9
0.2
74
0.9
0.0
1468
19
Short term
loans (IDB)
20862
268.6
2.6
20919
269.0
2.6
-57
-0.4
Other
unclassified
imports
1557
20.0
0.2
2086
26.9
0.4
-529
-6.9
29
A. Sub-total
748791
9643.7
92.5
732448
9422.2
90.9
16343
221.5
B. Imports of
EPZ
61147
787.5
7.5
73540
946.1
9.1
-12393
-158.6
Total Import:
(A+B) (c&f)
809938
10431.2
100.0
805988
10368.3
100.0
3950
(+0.5)
62.9
(+0.6)
Import payments can be seen in the Commodity-Wise in the table below. If we notice that
that Last years the percentage of import of Cotton,(all types) cotton yarn/thread and cotton
fabrics is the highest in percentage.
Table: Import payments: Major Commodity-Wise Imports
(Taka in crore)
(Million US$)
Major Commodities
2013-2014
Amount
2012-2013
Amount
Taka
USD
% of
Total
(A)
Changes
(1)-(4)
Changes
(2)-(5)
Taka
USD
% of
Total
(A)
A. Import under
(Cash+Buyer's
Credit) ( c& f)
283226.1
36441.4
100.0
232204.9
29059.6
100.0
+51021.2
+7381.8
Cotton,(all types)
cotton
yarn/thread and
cotton fabrics
42149.0
5423.2
14.9
37807.9
4735.1
16.3
4341.1
688.1
Mineral fuel,
mineral oils and
product of their
distillation,
bituminous
substances
30755.1
3957.5
10.9
20505.1
2567.4
8.8
10250.0
1390.1
Nuclear
reactors,Boilers,
Machinery and
mechanical
appliances, parts
thereof
23936.8
3079.9
8.5
19999.8
2500.9
8.6
3937.0
579.0
30
14889.4
1915.7
5.3
13187.4
1652.8
5.7
1702.0
262.9
Electrical
machinery and
equipment and
parts thereof,
sound recorders
and reproducers,
television image
and sound
recorders and
reproducers and
parts and
accessories of
such articles
14522.3
1868.5
5.1
10470.0
1309.4
4.5
4052.3
559.1
Animal or
vegetable fats and
oils and their
cleavage
products,
prepared edible
fats, animal or
vegetable wax
13846.2
1781.5
4.9
11313.9
1418.0
4.9
2532.3
363.5
Cereals
12841.6
1652.2
4.5
6353.4
793.7
2.7
6488.2
858.5
Plastics and
articles thereof
11808.0
1519.3
4.2
9267.6
1160.9
4.0
2540.4
358.4
8009.4
1030.5
2.8
8069.0
1009.3
3.5
-59.6
21.2
10
Fertilizer
7977.1
1026.2
2.8
9564.6
1188.3
4.1
-1587.5
-162.1
11
7206.2
927.1
2.5
5976.7
747.1
2.6
1229.5
180.0
12
Vehicles other
than railway or
tramway, rolling
stock and parts
and accessories
thereof
6894.7
887.2
2.4
4869.1
609.6
2.1
2025.6
277.6
13
Salt, Sulphur,
earth and stone,
plastering
materials, lime
and cement
6686.8
860.3
2.4
5659.3
708.1
2.4
1027.5
152.2
14
Man-made staple
fibres
6167.6
793.6
2.2
5885.2
736.4
2.5
282.4
57.2
31
15
Edible vegetables
and certain roots
and tubers
5404.6
695.3
1.9
4494.4
562.9
1.9
910.2
132.4
16
4422.0
568.9
1.6
2463.6
308.3
1.1
1958.4
260.6
17
Organic
chemicals
4412.8
567.8
1.6
3558.1
445.3
1.5
854.7
122.5
18
Knitted or
crocheted fabrics
4296.2
552.7
1.5
4274.4
535.2
1.8
21.8
17.5
19
Man-made
filaments; strip
and the like of
man made textile
materials
4222.5
543.3
1.5
3334.3
417.6
1.4
888.2
125.7
20
Tanning or
dyeing extracts
tannins and their
derivatives, dyes,
pigments, and
other colouring
matters, paints
and varnishes,
putty and other
mastics, inks
4185.4
538.5
1.5
3189.6
399.4
1.4
995.8
139.1
21
Residues and
waste from the
food industries
prepared animal
fodder
4103.7
528.0
1.4
3471.0
436.0
1.5
632.7
92.0
22
3351.4
431.2
1.2
3152.9
394.8
1.4
198.5
36.4
23
Misc. chemical
products
2835.6
364.8
1.0
2621.8
328.0
1.1
213.8
36.8
24
2532.9
325.8
0.9
1238.8
155.1
0.5
1294.1
170.7
32
citrus fruit or
melons
25
Dairy produce,
birds' eggs
natural honey,
edible products of
animal origin, not
elsewhere
specified or
included
2340.5
301.1
0.8
1772.6
222.0
0.8
567.9
79.1
26
Inorganic
chemicals,
organic or
inorganic
compounds of
precious metals
of rare-earth
metals, of
radioactive
elements or of
isotopes
2293.7
295.1
0.8
2150.4
269.2
0.9
143.3
25.9
27
Articles of
apparel and
clothing
accessories,
knitted or
crocheted
2258.8
290.6
0.8
1986.0
248.6
0.9
272.8
42.0
28
Rubber and
articles thereof
2123.9
273.3
0.7
1636.7
204.7
0.7
487.2
68.6
29
Optical,
photographic,
cinematographic,
measuring,
checking,
precision,
medical or
surgical
instruments and
apparatus, parts
and accessories
thereof
1992.3
256.3
0.7
1697.1
212.4
0.7
295.2
43.9
30
1690.6
217.5
0.6
1030.3
129.3
0.4
660.3
88.2
31
Aluminium and
articles thereof
1645.4
211.7
0.6
1417.0
177.3
0.6
228.4
34.4
33
32
Special woven
fabrics, tufted
textile fabrics,
lace, tapestries,
trimmings,
embroidery
1287.4
165.6
0.5
1469.0
183.7
0.6
-181.6
-18.1
33
Articles of iron or
steel
1270.6
163.5
0.4
1748.8
219.1
0.8
-478.2
-55.6
34
Others
18865.6
2427.7
6.6
16569.1
2073.7
7.3
2296.5
354.0
B. Imports
under loans and
grants
199.4
25.7
433.0
53.7
-233.6
-28
C. Imports
under IDB loan
(short term)
9141.5
1176.0
18519.2
2315.9
-9377.7
-1139.9
D. Other
unclassified
imports
884.4
113.8
1195.7
149.8
-311.3
-36
E. Imports of
EPZ
23120.8
2975.0
19975.1
2504.6
+3145.7
+470.4
GRAND
TOTAL :
(A+B+C+D+E
)(c&f)
316572.2
40731.9
272327.9
34083.6
+44244.3
+6648.3
34
Figure: Import Price Index and Price Indices of Major Importable Commodities
(Base: 2002-02=100)
From figure, it is observed that on an average, the prices of all major importable commodities
except cotton textiles almost tripled, some even quadrupled during 1990-2008. The price of
cotton textiles increased by 50% only, whereas the prices of cereals, edible oil, petroleum
products and iron & steel increased by 350%, 256%, 180% and 158% respectively.
During this period the import price index increased except in FY93, having been influenced
by different importable commodities. In FY93, the import price index declined due to the
decrease in the prices of petroleum products, cotton textiles and iron & steel despite the
increase in prices of cereals and edible oil. On the other hand, in FY94, the import price index
increased due to the large increase in prices of cereals and iron & steel, despite the decrease
in the prices of petroleum products, edible oil and cotton textiles. Similarly, in FY2000 and
FY06, the import price index increased due to the increase in prices of edible oil and cotton
textiles despite the decrease in the prices of cereals, petroleum products and iron & steel.
Therefore, unlike the export price index, the trend in import price index was influenced by
the prices of different importable commodities in different ways.
35
Total import
Balance of Trade
10000
0
-10000
36
Export(million
Tk)
import
Balance
China
2167
48292
-46125
USA
29156
6244
22912
Germany
24452
3186
21266
India
1910
24753
-22843
Malyasia
563
12851
-12288
japan
4513
7314
-2801
The table shows that the largest trade deficit of Bangladesh is with China (Tk.46125 million),
followed by India (Tk.22843 million). At the same time, Bangladesh has a huge trade surplus
with Germany (Tk 21266 million) and the USA (Tk 22912 million). These numbers illustrate
the following fundamental principle of global trade. A country should export to markets that
fetch the highest price for its products and import from countries with the lowest price for
their imported products. With 200 plus countries in the global market, it would be a rare
coincidence that a country that fetches the maximum price for our exports is also the country
that is the cheapest source for our imports. So, the concept of "balanced trade" with any
specific country is not an economically meaningful concept.
Applying this logic to Bangladesh, it is hardly surprising that Bangladesh sends most of its
exports (RMG) to the OECD countries where it gets the best price. Similarly, it is hardly
surprising that China, followed by India and are the most important sources of our imports.
These countries provide the cheapest sources for our industrial raw materials, food items and
fuel. Given this, it is very natural that Bangladesh has huge trade surpluses with Western
Europe and the USA while, at the same time, it has large deficits with China, India and the
Middle East. Just as we celebrate our trade surpluses with Western Europe and USA, we
should not decry our trade deficits with India, China or the Middle East.
Western Europe and the USA will then impose huge tariffs to prevent RMG exports from
Bangladesh and close the gap, while Bangladesh will impose prohibitive tariffs on imports
from China, India and . The net result for Bangladesh (and for other countries) will be a huge
loss of trade and corresponding welfare loss. Bangladesh will lose out on exports, both
37
through high tariffs from Western Europe and the USA, as well as from much more costlier
imports of industrial raw materials. Other countries will similarly lose.
The variable we need to monitor is the current account balance and not the trade gap. If we
have a large and growing current account deficit not matched by foreign aid and private
capital flow, then we should take monetary, fiscal and exchange rate measures to correct this
gap. If we have a large current surplus, then we have a huge positive balance on the services
account, owing to inflow of income from factor and non-factor services, and it is most likely
that we will have a large trade gap (unless we are rapidly accumulating foreign reserves).
However, all effort must stay focused on expanding exports at the global level, including
India and China. Our tiny exports to China, India, and Japan suggest that there may be scope
for market expansion. However, this should be secured through export creation and not
diversion. The barriers to exports are mostly within: incentive policies, trade logistics, and
infrastructure constraints. These must be addressed. To the extent that further and better
cooperation with India and other neighbors allows Bangladesh to ease the trade logistic and
infrastructure constraints (e.g. through better connectivity and trade in power), this should be
encouraged.
With rapid trade liberalization, even in India, the global trade regime today, in nonagricultural commodities, is much more liberal than in the recent past. As a result, behindthe-border problems are a much bigger constraint on non-agricultural exports than trade
restrictions in partner countries. Nevertheless, if trade partners, as well as India, are engaged
in discriminatory trade practices, including non-tariff barriers, they need to be taken up at the
highest level and resolved. These must be based on well-researched and documented facts
rather than anecdotes and populist misperceptions.
-0.02
-0.04
-0.06
-0.08
38
Forex(US$)
Trade deficit(in
crore US$)
39
40
41
Depending on diversity of policies and policy frameworks, countries tend to deploy diverse
and different modalities to attain short, medium and long term trade-related goals. This also
involves various degrees of pacing, sequencing and phasing for attaining the targeted
objectives. Additionally development priorities also vary across countries and respective
trade policies reflect those. In view of this, the search for an appropriate trade policy format,
adequately reflecting Bangladeshs priorities and developmental needs, manifests itself as an
urgent task. In a world of imperfect competition, Bangladesh should search for a policy
framework that would able to ensure maximum possible welfare for the country.
Bangladeshs external trade is regulated by a number of policies, orders and acts which are
structured under a broader liberalization framework. The main objective of Bangladeshs
export policy is to strengthen export-led industrialization through enhancing export,
increasing productive capacity of export-oriented industries and facilitating overall export
sector through capacity building of local industries (Export Policy 2009-12). The import
policy on the other hand, is aimed to make the import regime compatible to the WTO,
simplify the procedure to import capital machineries and raw materials, provide facilities for
technological innovation and allow import of essential commodities on emergency basis
(Bangladesh Economic Review, 2010). The Import Policy Order 2009-2012 and the Export
Policy 2009-2012 delineate export and import targets, priority sectors which need special
support, strategies to promote import-substituting, domestic market oriented and labor
intensive industries. While export and import policies are formulated and implemented by the
Ministry of Commerce; import tariff, para-tariff and other duties, which are important
instruments related to trade policy, are determined by the Ministry of Finance. The monetary
policy focuses on inflation management and equitable growth through adjustment of different
monetary variables such as money supply, level of interest rate and exchange rate etc.
42
Industrial Policy 2010 and SME Policy Strategies 2005 provide policy directions with regard
to industrialization particularly in case of micro, small, medium and public sector enterprises.
The Sixth Five Year Plan (2011-15) and Ten Year Perspective Plan (2011-21) have sketched
the long term targets related to export and import during 2011-2021. Overall a number of
short, medium and long term policies, rules, regulations, acts and orders are in operation in
Bangladesh to regulate international trade.
Rules and Regulations under Different Policies
Bangladeshs external trade is governed by two separate policies, i.e. Import Policy Order
2012-15 and Export Policy 2012-15. These three-year long policies have been in operation
since 2002. Before that policies were for five years and two years in the 1990s and even for a
one year period in the 1980s. It is important to note that while import policy is a legally
binding document; export policy is not legally binding. Nonetheless, different kinds of
activities taking place at the stages of export and import are governed by separate acts, orders
and rules. Most important of these activities are: customs valuation and inspection, preshipment inspection, customs clearance and administration, tariffs (applied and bound tariff),
duty-free import items, specific duties, MFN tariff, tariff concessions, tariff preferences, rules
of origin, other border charges and levies, advance income tax, value-added tax (VAT) and
advance trade VAT (ATV), supplementary duty (SD), regulatory duty, import restrictions;
state trading, standards and other technical regulations, sanitary and phyto-sanitary standards,
labeling and packaging, anti-dumping, countervailing, and safeguard measures. There are
some specific activities related to export which are regulated by specific rules and acts, such
as quality control and export clearance; charges and levies; export restrictions; voluntary
restraints, surveillance and similar measures; export subsidies and other financial assistance;
duty concessions; tax concessions; export finance; export insurance and guarantees and
export promotion and marketing assistance. Trade in services is guided by various rules and
regulations on specific kinds of service related activities. In general different trade related
activities have been carried out under the common understanding between different ministries
and departments as per rules and procedures. In order to ensure better understanding and
improve the efficiency, institutional coordination at inter-ministerial and intra-ministerial
level is highly important. An effective trade policy should ensure that relevant government
departments and agencies work in a coordinated manner.
As part of trade liberalization, Bangladeshs tariff reforms have taken place in three phases in
consideration of the pace and sequence of reduction of the various tariff and para-tariff
barriers (Rahman et al., 2010).1 Those reform measures included provision for duty-free
access on imported inputs, reduction in tariff levels and number of tariff rates, streamlining
and simplification of import procedures, provision for financial assistance to traditional
exports, tax rebates on export earnings and concessionary duties on imported capital,
43
accelerated depreciation allowance, and refund of excise duties imposed on domestic raw
materials and inputs, proportional income tax rebates on export earnings.
While tariff rates at the import stage have declined, application of para-tariff has significantly
increased in recent years. According to Figure 2, revenue generated through VAT at the
import stage has now surpassed the revenue generated through import tariff. Similarly, the
share of supplementary duty has registered a rise in recent years which is both due to rise in
volume of import and rise in the charged rates. Both VAT and supplementary duty comprises
about 60 per cent of total revenue generated at the import stage during July-March, 2011.
44
Bangladeshs external trade sector was confronted with a number of challenges in the
international market. In case of export, non-tariff barriers appear to be a major obstacle. Such
NTBs prevail in the form of technical barriers to trade (TBT), standards (standard disparities;
packaging, labeling and marking; intergovernmental acceptances of testing methods and
standards), sanitary and phyto-sanitary (SPS) measures, countervailing duties, domestic
assistance programs and documentation requirements. In case of import, major obstacles are:
voluntary export restrains of essential commodities imported by Bangladesh, problems in
customs and administrative entry procedures (valuation, anti-dumping practices and tariff
classification); intellectual property laws etc. The Tariff Commission has reported strong
evidence of dumping of different types concerning imported products. In addition, importers
also face problems when some of Bangladeshs partner countries make changes in their
domestic or external policies. In view of this, the Ministry of Commerce should consult with
other relevant ministries regarding problems faced by Bangladeshi exporters including fiscal,
legal, and administrative and other matters and should take necessary measures accordingly.
Trade in services is increasingly becoming important for Bangladesh. However, the policies,
rules and regulations are not well structured to address local and global service trade related
issues. As is known, service trade negotiation in GATS is made on the basis of request-offer
basis.2 To open up service sectors to trade, Bangladesh has received requests from nine
countries including Singapore, the EC, Japan, Norway, Korea, Hong Kong (China), Malaysia,
Sri Lanka and the USA (Raihan, 2007). 3 Bangladesh needs to take position with regard to
what she will offer keeping in view her strategic interest. Her own request will also need to
be designed by keeping her strategic interests in mind. Recognizing the importance of service
trade, SAARC countries have adopted a separate agreement on services- SAARC Agreement
on Trade in Services (SATIS), Here also Bangladesh will need to identify sectors in view of
offer and request lists keeping her strategic interests in the perspective.
With a view to liberalize the exchange rate, Bangladesh moved from fixed exchange rate
regime in the 1980s and 1990s towards managed floating exchange rate regime. As a result,
the gap between nominal and real exchange rate has narrowed down in the 2000s. (Figure 3)
This has contributed towards reducing effective protection and thereby has contributed to
45
reducing the anti-export bias in the tariff structure. Following the introduction of the new
regime, exchange rate of the Bangladeshi taka (BDT) vis--vis major currencies is being
determined mainly through the market mechanism. As is known, after fairly stable exchange
rates between 2007-10 BDT has seen significant depreciation in recent times. In this context
Mujeri and Hossain (2011) has identified two challenges concerning maintenance of a stable
forex regime in Bangladesh: a) limited export base and b) high reliance on imported raw
materials. They have recommended export diversification and promotion of importcompeting activities.
As part of maintaining price stability and promoting economic growth, the government has
deployed a diverse range of monetary policy instruments at various points of time when
contractionary or expansionary stances were taken with regard to money supply and interest
rates. However, monetary policy in Bangladesh often faces challenges to address the issue of
controlling inflation and enhancing productive economic activities (Mujeri and Hossain,
2011). Monetary policy instruments would be effective once the supporting policies and
measures operate in coherent manner. In order to ensure pro- poor growth, monetary policy
tools need to be deployed in a manner that ensures a strong link with the trade policy tools.
The fiscal policy of the government is mainly focused on collection of revenue through the
imposition of tax, VAT and other duties in one hand, and providing support to domestic
industries in the form of different kinds of fiscal incentives on the other. Over the years,
corporate tax and tax on dividend income for industries have gradually declined (Bakht and
Ahmed, 2011); at the same time, various fiscal incentives such as tax holiday, accelerated
depreciated allowances (ADA), bonded warehouse facility, duty drawback facility and cash
incentives have been provided to encourage investment in different industrial activities. A
proper assessment of linkages between fiscal and trade-related policies as well as their
effectiveness towards growth and development of industrial enterprises is highly required.
46
percent (Table 2). Much of this reduced protection was achieved through the reduction in the
maximum rate. Table 2 suggests that in 1991-92 the maximum tariff rate was 350 percent,
which came down to only 25 percent in 2011-2012. Bangladesh has no tariff quotas, seasonal
tariffs and variable import levies (WTO, 2000). All these measures have greatly simplified
the tariff regime and helped streamline customs administration procedures.
One important aspect of the tariff structure in Bangladesh relates to the use of import taxes
which have protective effects (also known as para-tariffs) over and above the protection
provided by customs duties (World Bank, 2004). These taxes have been the infrastructure
development surcharge (IDSC), supplementary duties (SD), Regulatory duties. Although
these taxes have been primarily imposed for generating additional revenues, in the absence of
equivalent taxes on domestic production they have provide extra protection to local
industries. Similarly, while the value added tax (VAT) is supposed to be trade-neutral,
exemptions for specified domestic products have also resulted in its having some protective
content. Some of these para-tariffs, such as the IDSC, are applied across-the-board to all or
practically all imports, and can be considered as general or normally applied protective taxes
which affect all or nearly all tariff lines. Others are selective protective taxes in that they are
only applied to selected products, for example the supplementary duties. The para-tariffs
employed during the 1990s and 2000s in Bangladesh are summarized in Table 3. It appears
that, despite the lowering of customs duties, the presence of para-tariffs did not significantly
lower the total protection rate.
47
Objectives: The goal of the proposed trade policy will be to make local industries competitive
both in domestic and international markets by enhancing productivity and efficiency and
better governance in trade related activities. This will hopefully lead to increase in trade and
stimulate to enhanced domestic production. All these are expected to contribute to the
achievement of higher levels of growth, more diversified and qualitatively improved
employment opportunities and reduction of poverty. The policy will highlight on
implementing a strategic trade policy through undertaking appropriate policy tools and
techniques. A major objective of the trade policy will be to improve diversity in production,
quality and standard of products and application of modern technologies. Export-oriented and
domestic market oriented industries with significant market potentials will be identified in
order to provide necessary support to ensure their growth and development. The trade in
services is to be prioritised through strengthening of domestic policies. Diversification of
export markets is to be encouraged through application of new marketing techniques, ecommerce and other modern IT based tools etc. Trade policy will put emphasis on trade
facilitation measures through improvement of physical and institutional capacities.
48
The proposed Comprehensive Trade Policy will be built on the following ten pillars.
a) Strategic trade policy: In order to attain the targeted level of growth and employment
through enhancing production for domestic and export markets, a strategic trade policy
appears to be a more appropriate tool to go forward. Government and market forces will
identify strategic industries which are perceived to be promising both in terms of their own
potential and from the perspective long term development goals. Proposed Policy will
delineate the guidelines for selection of strategic sectors particularly indicators for selection
of strategic industries. A set of possible indicators may be as follows: industrys value
addition, employment generation, export share, linkage effect, market diversification, product
diversification, domestic market potentials, less land intensiveness, environment friendliness,
and overall performance from static and dynamic points of view.
These strategic industries will need policy support for a specified time period. Strategic
industries will enjoy targeted supports in the forms of such as tariff protection, fiscal
incentives, financial support including through preferential credit, infrastructural and logistic
facilities etc. The support structure and time schedule for providing support are to be decided
as per requirement of the particular industry.
b) Ensure better governance:In trade related activities Bangladeshi products sometimes
face unfair competition because of various kinds of distortive practices both in the domestic
and international markets. These include under invoicing, problems in customs valuation,
false statement about imported products and dumping etc. In the international market,
Bangladeshi products face unfair competition because of imposition of anti-dumping duties
and other trade distortive measures which could be contested. On both counts, Bangladesh
should strengthen institutional mechanisms to identify such distortive trade practices and to
take appropriate legal measures. Besides, technical capacity of trade related institutions needs
to be improved further particularly in the areas of tariff classification, customs valuation,
standards, product labeling and identification of dumping issues etc.
c) Supportive macro policies:Better coordination among various components of the
macroeconomic policies is necessary to pursue strategic trade policy effectively. Various
policy instruments deployed in fiscal, monetary and exchange rate policies ought to be better
coordinated with those of the trade policy. Whilst market signals are critically important,
fiscal and monetary tools will need to be selectively calibrated to support sectors with
potential and promise. In this context, strong inter-ministerial coordination will play a key
role.
d) Improving the business process: Private sector plays the key role in business and
commercial life in Bangladesh. Its competitiveness depends on availability of improved
business processes. Government needs to ensure this by re- engineering the existing ones. A
modern efficient firm endeavours to put particular emphasis on productivity enhancement
through training, adoption of more efficient technology, by redefining processes and through
adoption of comprehensive application of IT. Trade Policy and related policies should create
49
a conducive environment where firms are able to access modern, state-of-the art technologies,
skilled professionals especially middle and senior management pool and workers as per the
need of the sector. Thus, there should be dedicated programmers to carter to the demand of
the enterprises and entrepreneurs particularly demand voiced by small and medium scale
entrepreneurs. Promotion of modern business practices such as standardization of quality,
weights and measures and adoption of modern accountancy, record keeping and insurance
services are also necessary. Improvement of contract enforcement, copyright protection and
intellectual property rights are emerging areas which will need to be given adequate attention
to.
e) Product and market diversification: Since the countrys export sector is concentrated in
a limited number of products and markets, developing strategies for diversification of export
is crucial to Bangladesh. Product and market diversification will expand the portfolio and
reduce risks from the global market volatility which have been observed in recent times. Thus
appropriate strategies should be developed towards towards diversification of products,
processes and export markets. Institutional arrangement for product designing, finishing and
other measures should be included in the proposed Trade Policy.
f) Strengthening linkages with global value chains: A major objective of the proposed
trade policy should be to strengthen production networks of different manufactured products.
Since production chains are linked to diverse and dispersed locations, appropriate policy tools
should be used to make the value chain more efficient. In this context, sector-based trade and
investment agreement between countries involved more intensely within a specific value
chain may be considered (Moazzem and Tariq, 2010). For example, Bangladesh may
consider coming to a framework agreement with countries involved in the upstream part of
the value chain in the textiles and apparels sector. In this context, strengthening intra-industry
investment between countries involved in specific value chain needs to have taken into
cognizance.
g) Improving trade facilitation: Transaction costs at and behind the border in Bangladesh
impact negatively on competitiveness of her products. A major focus of the proposed trade
policy will be to improve trade logistics to remove the barriers in cross-border trade. For
enhancing trade at global and regional levels, the proposed policy shall adopt measures such
as providing facilities at border customs stations (e.g. banking, ware house, quality control
and other infrastructure facilities at the border), establishing region-based testing institutions
in order to reduce hassle and cost. Measures will be taken for simplification and
harmonization of trade procedures involving various trade partners. For example,
establishment of a single window for the submission of trade-related documents, and setting
up a committee for managing trade related grievances may be considered in this connection.
It is important to gradually develop automation system in all border trading points. In order to
facilitate local firms in having international presence and to penetrate the international
market, government should provide support for opening exporters offices and opening retail
sales outlets abroad; warehouse schemes abroad and support to enterprises that are able to get
compliance certification need.
50
51
1. Updating and liberalizing the trade regime in accordance with the needs and
requirements of the World Trade Organization and globalization;
2. Encouraging labor-intensive (especially female labor) export-oriented production;
3. Ensuring availability of raw materials from home and abroad for manufacturing export
goods;
4. Augmenting productivity and diversification of products;
5. Improving the quality of products, encouraging the use of modern, appropriate and
environment-friendly technology, producing high-end products, and improving the design of
the products;
6. Enhancing efficiency and dynamism by using e-Commerce and e-Governance;
7. Initiating new strategies for the expansion of the markets for export products, making
proper utilization of computer technology and encouraging application of all modern
technologies including e-Commerce;
8. Assisting the development of necessary infrastructure, particularly for backward and
forward linkages in order to encourage the production of exportable goods;
9. Creating new exporters and providing all-out support to the existing exporters;
10. Assisting the development of a skilled labor-force through proper training for
managing international trade; and
11. Providing adequate guidance to trade bodies, business organizations, business people and
related individuals in understanding the changing international trading system, etc.
Implementation Strategy
1. Increasing the institutional skills and efficiency of the Export Promotion Bureau
(EPB), providing assistance in capacity building of the Customs Authorities, Sea and
Land Port Authorities, Department of Fisheries, BSTI, Tea Board and different trade
bodies;
2. Modernizing and updating Bangladesh Foreign Missions abroad by strengthening
economic diplomacy;
3. Strengthening and expanding the Product based Business Promotion Council
activities through joint initiatives of public and private sectors to encourage the
production and export of potential goods;
4. Providing assistance to producers and exporters in gathering market intelligence
information regarding demands for commodities abroad, expanding markets, ensuring
competitive and higher price, etc.
52
5. Extending support to export facilitating agencies by introducing automation and eGovernance for enhancing work-efficiency and ensuring transparency and
accountability;
6. Providing assistance for updating and modernizing the over-all trade system by
ensuring the best use of all modern technologies including e-Commerce for making
the export products more competitive through reducing cost of doing business,
increasing production, expanding market and reducing lead time;
7. Disseminating latest information to the exporters on export markets and technology to
facilitate diversification of exports;
8. Creating training opportunities and establishing sector-specific training institutes for
workers, staff and management personnel to increase productivity;
9. Encouraging promotion of export through increased institutional facilities including
trading and export houses;
10. Providing assistance in establishing internationally accredited certification system to
ensure the quality of the products;
11. Encouraging the establishment of product-wise design centers for improvement of
product designs;
12. Assisting producers in using modern technology for production;
13. Providing supports to the exporters to get acquainted with the working procedures of
significantly successful exporting countries;
14. Providing various financial and tax subsidies or incentives including low-interest
loans to exporters;
53
(a) In case any restriction is imposed on import of a particular commodity with a view to
protecting the interest of a local industry the concerned sponsoring authority/ Bangladesh
Tariff Commission shall strictly monitor production of that industrial unit regularly;
(b) The industrial units (Protected Industry) which are specially engaged in assembling
type activities shall have to actively and expeditiously move towards progressive
manufacturing ;
(c) Except due to the rise of price of raw materials or the decline in the rate of exchange, if
the price of an item increases or the price of finished product increases disproportionately
than the rise in the price of the raw materials in the international market, the ban on the
import may be revoked on the recommendation of the concerned sponsoring authority or
Tariff Commission;
(d) Goods from Israel or goods produced in that country and also goods carried in the flag
vessels of that country shall not be importable.
(e) However, if anyone is aggrieved by any decision regarding ban or restriction on import of
any item, that person or organization can submit his representation to the Bangladesh Tariff
Commission. The Bangladesh Tariff Commission will duly examine such a representation
and furnish its recommendation(s) to the Ministry of Commerce for consideration.
Terms of Trade
The terms of trade are an important indicator in the external sector of any economy.
Conventionally it used to be considered as the barometer of the dynamics of the welfare gain
or loss of a country from international trade. An upward (downward) movement in a nation's
terms of trade (i.e. the increase in the relative price of a country's export to import) is good
(bad) for that country in the sense that it is to pay less (more) for its imports compared to
what it is receiving from exports. Therefore, a declining trend in the terms of trade indicates a
possible deterioration in the countrys balance of trade. Without any other flows like
remittances or foreign direct investment, the deterioration in the trade balance may lead to
deterioration in the current account balance and in the overall balance of payments. Such a
shock in external sector may hamper the growth of an economy.
In the case of Bangladesh, the terms of trade has been almost continuously falling since 199293. Except India, most of the selected Asian countries are also experiencing similar trends.
These East Asian countries have performed remarkably in terms of most economic and social
sector indicators despite the TOT deterioration. As a result, it is important for us to
understand whether the deterioration of TOT has necessarily been a bad thing for Bangladesh
in terms of its growth and macroeconomic stability.
Trends in Terms of Trade in Bangladesh
The terms of trade of Bangladesh can be characterized by three episodes of falling trends
without any significantly large shocks. The first episode happened during 1979-80 which
might have been a result of the second oil price shock globally that occurred in the wake of
the Iranian Revolution in 1979 which was intensified by the Iraqi invasion of Iran in the
54
following year. At that time the prices of exportable like jute goods, tea and leather declined
while those of importable increased (figure-2). The second episode was during 1989-92
which might have been an impact of the 1st Gulf war. During the period, a remarkable
diversification of exports took place with the dominance of readymade garments (RMG), the
price of which contributed to the increase in export price index. Instead, the prices of
importable had increased more than those of exportable. The recent episode of secular
deterioration of terms of trade was observed during 1999-2008. This might have been the
impact of the Asian economic crisis and 9/11.
During this period RMG was a deterministic factor for the movements in export price index
whilst many commodities influenced the trend in import price index. However, the prices of
exportable commodities increased steadily while those of importable commodities like
cereals, edible oil, petroleum products, cement clinker, fertilizer and iron & steel increased
more sharply. The movements of price indices of export and import thus contributed to the
TOT deterioration.
Terms of Trade and Trade Performance
Though the falling trend of terms of trade in a country implies that foreign exchange will be
lost while trading with countries prevailing with increasing trends in terms of trade, it is not
the only indicator to judge the trading performance of that country. In addition to terms of
trade, relative values of exports and imports i.e. export-import ratio can also be regarded as
an indication of trading performance. Moreover, productivity of exportable commodities can
be considered a helpful indicator of trading performance.
1. Export/Import Ratios in Selected Countries
We have seen earlier that the relative prices of exports and imports, i.e. terms of trade in all
selected countries are falling in recent years except India. However, the trends in relative
values of exports and imports are quite different (figure-6). From figure-6, it is observed that
the trends in export-import ratios in selected Asian countries are falling, except for
Bangladesh where the trend is improving gradually over the years, and China where the trend
is increasing since 2004. It is noticeable that in both Bangladesh and China, the recent trends
in the terms of trade are falling but export-import ratios are improving. In contrast, in India
the recent trends in terms of trade is increasing but export-import ratios is declining. The
increasing trend in Bangladesh's export-import ratio indicates the growth in the volume of
exports is higher than that of imports. The higher growth in the volume of exports was
motivated by the steady increase in the prices of our exportable products, although the slower
growth in prices of exportable deteriorated the terms of trade. In addition, a steady increase in
the prices and higher growth in the volume of exportable commodities can also be regarded
as an improvement of Bangladesh's competitiveness in the international market. However, the
types and productivity of the exportable commodities contribute to the steady increase in
export price index and massive growth in the volumes of exports.
55
56
From the above figure, it is observed that in spite of an initial drop, the overall trends in the
real export per worker of readymade garments has been improving over the years, though the
trend in the terms of trade was declining. It is also noticeable that the real RMG export per
worker increased steadily given the slower increase in RMG price.
Trade Barriers
Import controls
Inspection rules change frequently so exporters should check the requirements either with
their customer or with the relevant pre-shipment company. Bangladeshs import policy orders
prohibit the importation of horror-based and subversive or offensive literature, including
printed material, posters, audio and video based productions. Items causing offence to
Muslims will not be allowed to enter the territory. In addition, temporary bans may be
enforced like the recently-implemented prohibition against the importation of birds from
Romania and Croatia (to reduce the chances of avian flu spreading to Bangladesh).
Import Duties (Tariffs)
57
Historically, like many other developing countries Bangladesh relied on tariffs and
quantitative restrictions to protect domestic activities and raise revenue. Roughly 40% of its
total tax revenue still comes from import taxes. Average protective tariffs are currently at
20.1%, with average agricultural tariff at 28.8% and non-agricultural tariff at 18.5%. A
noteworthy feature of the present tariff structure is the significant application of para-tariff
called supplementary duties, which account for about 31% of the average protection. The
average customs duty, which registers a decrease over time, is currently 13.8% with four nonzero duty slabs of 3%, 7%, 12% and 25%. Food stuff, fertilizer, seed, plastic trays used in
poultry and dairy, medicines and raw cottons are not subject to any custom duty. Some
consumer goods, mainly the non-food luxury items, have high protective rates even up to
463%- well beyond the top custom duty rate.
Anti-Dumping and Countervailing
As a member of the World Trade Organization (WTO) Bangladesh can apply anti-dumping
or countervailing duties to products which are sold in Bangladesh for less than they sell in the
country of origin in order to gain market share or undermine an existing or emerging industry
in Bangladesh. These additional duties are imposed on a temporary basis to counteract the
effects of an unfairly low price or an unfair subsidy to the producer. An example of an unfair
subsidy would be government grants, capital loans, favorable loan guarantees, export rebates,
and tax incentives. These duties can only be imposed if the imported goods have caused, or
are likely to cause, material harm to the Bangladeshi domestic market.
Additional taxes
The United Kingdom has a Double Taxation Agreement and an Investment Promotion and
Protection Agreement (IPPA) with Bangladesh.
Intellectual Property
Bangladesh imposes no foreign exchange controls and no other restrictions on the repatriation
of profits or capital by foreign investors.
58
Trade Barriers
Bangladesh has made significant progress in liberalizing its trade regime. Customs duty rates
have been compressed to a range of 0.0-40.0%. The 2.5% import permit fee is the only other
protective instrument for most imports (a trade neutral 15% value-added tax is also applied).
The import permit system is now automatic. The cumbersome procedure for opening letters
of credit has been simplified.
Customs duties are levied on all imports except raw cotton, textile machinery, certain
machinery used in irrigation and agriculture, animal feeds used by the poultry and dairy
industries, and certain drugs and medical equipment. Duty rates are determined along the
following lines:
-few items, mostly inputs
-basic raw materials
-intermediate products
-finished products
0.0-15%
15-22.5%
22.5-30%
30-40%
59
Importing most goods does not require an import license. All importers must be registered
with the Ministry of Commerce. Some goods are restricted or prohibited.
Prohibited or highly restricted imports
Prior permission is required to import goods on the restricted list. Certain restricted goods
may be imported only by authorized users.Imports from Serbia and Montenegro are
prohibited.Bangladesh observes a boycott of Israel. Imports may not ship on Israeli flag
vessels. No vessel or aircraft used for shipments to Bangladesh may call on any port in Israel.
Import customs tariff
Bangladesh uses the Harmonized Tariff System for tariff classification. Tariff rates are set at
10, 15, 20, and 25 percent. Certain products are exempt from duties.
60
Most goods do not require an import license. The Ministry of Commerce requires registration
of each importer. Prior approval is required to import goods on the restricted list. Certain
restricted goods may be imported only by authorized users. There are no tariff quotas on
imports.
61
shown that extending duty-free access to Bangladesh Products would have negligible costs.
In fact, duty-free treatment would yield huge benefits to the Bangladeshs economy, but its
negative impact on African exports would be minimal.
Crucial to the improvement of the external sector position is the diversification of exports, in
terms of both export products and export destinations. Efforts of the business community
should be intensified to diversify the product range, and, with assistance from the
promotional agency, government, and foreign missions, they will need to explore new
markets for their products. The central bank can play an important role in export
diversification by introducing a time-bound program for commercial banks to offer export
credit to prominent thrust industries. The NBR on its part may allow duty-free import of
spare parts of capital machinery and certain raw materials for specific export-oriented
industries.
Table: Export Value (in Million US$) and Share (%) in Total Exports, 2011-12 and
2012-13
Commodity
Country
and
2011-12
2012-13
Commodity
Export
Value
Share
Export
Value
Share
Apparel
19089.73
78.55
21515.73
79.61
973.61
4.01
1030.61
3.81
Frozen Fish
598.42
2.46
543.84
2.01
429.52
4.65
561.35
2.08
Home Textile
906.07
3.73
791.52
2.93
21997.35
90.52
Sub-total
Other
2304.55
Total
24301.90
9.48
100.00
24443.05
2584.31
27027.36
90.44
9.56
100.00
Country
USA
5100.91
21.00
5419.60
20.05
12740.33
52.46
14141.80
52.32
Canada
993.67
4.09
1090.01
4.03
Japan
600.52
2.47
750.26
2.78
EU Countries
62
Turkey
551.88
2.27
637.81
2.36
India
498.42
2.05
563.96
2.08
Sub-total
20485.73
84.34
22603.44
83.63
Other
3816.17
15.66
4423.92
16.37
Total
24301.90
27027.36
100.00
100.00
63
SUMMARY OUTPUT
Regression Statistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.818453
0.743556
0.635322
0.264683
41
ANOVA TABLE
SS
MS
df
Regression
Residual
Total
Coeffic
ients
Interce
pt
X
Variabl
e1
X
Variabl
e2
2
38
40
6.53E+11
1.21E+11
7.75E+11
34475.7 11859.
8
52
0.00196 2.7208
88
69
2.907
014
0.723
6
0.00605
9
0.00299 1.7709
824
5
1.684
059
0.01003
7
0.04737
4
Significance F
Lower
95%
Upper
95%
Lower
95.0%
Upper
95.0%
10467.
44396
7.4769
40625
0.6027
15864
58484.
10996
10467.4
4396
7.47694
0625
0.60271
5864
58484.1
0996
3.5392
80968
6.5674
84159
3.53928
0968
6.56748
4159
Y= + 1 x1 + 2 x2 +
Y= 34475.78-0.0019688X1 + 0.00299824X2
First of all I took Gross Domestic Products (GDP) as dependent variable and 1 =Total
Import & 2=Total Export as independent variables. After running the regression model I
64
find that significance F (0.004929928) is lower than 0.05, the number of standard
error is reasonably low (0.264683) &The R- square is (0.743556) which indicates that
74.356% of the variation of the dependent variable can be explained by the
independent variable, so the regression model is significant here and we can use this
model.
That means, 1% increase or decrease of Total Export will increase or decrease 0.2998 %
of Gross Domestic Products (GDP). Here, independent variable (Total Export) can
explain 74.356%of dependent variable (GDP). If the independent variable (Total
Export) becomes 0 then the lowest value of dependent variable (GDP) would be
34475.78 TK in crore.
That means, 1% increase of Total Import will decrease 0.19689% of GDP. Again 1%
decrease of Total Import will increase 0.19689% of GDP. Here, independent variable
(Total Import) can explain 74.356of dependent variable (GDP). If the independent
variable (Total Import) becomes 0 then the lowest value of dependent variable (GDP)
would be 34475.78TK in crore.
0.843883806
0.712139878
0.696989345
0.117241733
41
65
ANOVA TABLE
Regression
Residual
Total
Coeffici
ents
Intercept
68.8668
8301
df
SS
2
38
40
Stan
dard
Erro
r
t Stat Pvalue
2.462
3198
8
10.9
1120
744
1.03
1151
4
1.67
7626
238
X Variable 1
0.000658
252
X Variable 2
0.000831
685
MS
0.000
5649
18
0.000
3676
92
2.8633
5E-13
0.0308
98843
0.0101
62798
Significance F
5.30211E-11
Lower
95%
Uppe
r
95%
Lower
95.0%
Upper
95.0%
21.882
17701
31.85
1589
21.88217
701
31.8515
89
0.0017
26132
0.0001
27504
0.000
5611
0.001
36120
2
0.001726
132
0.000127
504
0.00056
11
0.00136
1202
After running the regression model I find that significance F (5.30211E-11) is lower than
0.05, the number of standard error is reasonably low (0.117241733) &The R- square is
(0.712139878) which indicates that 71.213% of the variation of the dependent variable
can be explained by the independent variable, so the regression model is significant
here and we can use this model
That means, 1% increase of Total Import will decrease -0.06582 % of Exchange Rate.
Again 1% decrease of Total Import will increase -0.06582 % of Exchange Rate. Here,
independent variable (Total Import) can explain 71.213%of dependent variable
66
(Exchange Rate). If the independent variable (Total Import) becomes 0 then the lowest
value of dependent variable (Exchange Rate) would be US $ 1= BDT68.866883.
67
8. Conclusion
The overall scenario of the foreign trade performance is satisfactory considering the world
economy that reflects the impact of global recession, huge import payment pressure and
scarcity of foreign currency reserve through the Balance of trade and Balance of payment of
Bangladesh. Export growth has been satisfactory though the major portion of export income
comes from RMG sector but major portion of raw materials for RMG sector are imported
goods; so there is no positive change in BOP, to increase export growth, the export oriented
industries should be diversified and variety should also come. Balance of payment had been
surplus for the past 5 years, but it has been deficit in the year 2011, due to the low rate of
foreign remittance inflow, low FDI and foreign aids.
So country should take some initiatives to diversify its export line as well reduce its import
goods so that countrys gross domestic products (GDP) increase & domestic countrys
currency will appreciate & when foreign currency depreciates then new investment will incur
&the opportunity of employment generation will create that will improve our economic
condition.
68
9. References
1. Bangladesh country report: Trade and Employment, July 2013 by International labor
Organization.
2. Export policy 2012-15 by Ministry of Commerce, Government of the Peoples
Republic of Bangladesh.
3. Foreign Direct Investment in Bangladesh: An Empirical Analysis on its Determinants
and Impacts by Quader, Syed Manzur.
4. Import policy order 2012-15by Ministry of Commerce, Government of the Peoples
Republic of Bangladesh.
5. Working Paper Series: WP1201 Terms of Trade and Its Implications: Bangladesh
Perspective by Research Department, Bangladesh Bank, February 2012.
6. Websites:
i. http://www.bangladesh-bank.org
ii. http://www.bangladesh-bank.org/econdata/index.php
iii. http://www.ccie.gov.bd/index.php
iv.
http://www.epb.gov.bd/exportdataanalysis.php
v. http://www.ieconomics.com
vi.
http://www.mincom.gov.bd/export_info.php
vii.
http://www.mof.gov.bd/en/
viii. http://www.tradingeconomics.com
ix. www.thefinancialexpress-bd.com
x. www.trading-strategies.info
69
10. Appendix
70
71
72
FROIGEN TRADE
Period
1972-73
1973-74
1974-75
1975-76
1976-77
1977-78
1978-79
1979-80
1980-81
1981-82
1982-83
1983-84
1984-85
1985-86
1986-87
1987-88
1988-89
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
Total
Export
286
252
342
481
712
755
892
1151
1334
1454
1861
2051
2521
2717
3064
3705
4267
5004
6125
7522
8800
9799
13130
13857
16564
20393
20851
24923
32419
30934
33242
40581
50835
62601
78931
86283
97445
102148
144431
180313
189437
Total Imports
768
680
1057
1910
1307
2164
2498
3546
4266
5220
5513
5869
6874
7065
8026
9329
10896
12480
12521
13452
15934
16766
23455
28304
30540
34183
38480
42131
50371
49049
55918
64257
80895
99130
118478
148370
154821
164241
240028
280963
272328
Balance of
Payment
-482
-428
-715
-1429
-595
-1409
-1606
-2395
-2932
-3766
-3652
-3818
-4353
-4348
-4962
-5624
-6629
-7476
-6396
-5930
-7134
-6967
-10325
-14447
-13976
-13790
-17629
-17208
-17952
-18115
-22676
-23676
-30060
-36529
-39560
-62087
-57324.5
-62093
-95596.9
-100650
-82891.2
Total GDP
4441.7
4922.5
5165.7
5553.9
5660.9
6077.2
6351.9
6476.3
6929.9
7003.4
7383.9
7651.1
7834.9
40139.7
41769
43017.7
43993.6
46932.7
48356.8
50217
52146.5
54243.1
56390.2
59407.5
62697.3
65776.7
193429
204927
215736
225261
237101
251968
266974
284672
302971
321726
340197
360845
385050
409053
433720
US
Dollar
7.88
7.97
8.88
15.05
15.43
15.12
15.22
15.49
16.26
20.07
23.8
24.94
25.96
29.89
30.63
31.24
32.14
32.92
35.68
38.15
39.14
40
40.2
40.84
42.7
45.46
48.06
50.31
53.96
57.43
57.9
58.94
61.39
67.08
69.03
68.6
68.8
69.18
71.17
79.1
79.93
73
REGRESSION ON GDP
SUMMARY OUTPUT
Regression Statistics
Multiple R
0.8185
R Square
0.7436
Adjusted R Square
0.6353
Standard Error 0.2647
Observations
41
ANOVA
Regression
Residual
df
2
38
SS
6.53351E+11
1.21169E+11
Total
40
7.74521E+11
Intercept
X Variable 1
X Variable 2
MS
F
Significance F
3.26676E+11 102.449 0.004929928
3188668543
t Stat
2.907014064
-0.723603385
1.684059313
Upper 95.0%
58484.10996
3.539280968
6.567484159
Regression Statistics
Multiple R
0.843883806
R Square
0.712139878
Adjusted R Square
0.696989345
Standard Error
0.117241733
Observations
41
ANOVA
df
Regression
Residual
Total
Intercept
X Variable 1
X Variable 2
SS
2 12922.06311
38 5223.337134
40 18145.40024
MS
F
Significance F
6461.031553 47.00427959 5.302E-11
137.4562404
t Stat
P-value
Lower 95% Upper 95% Lower 95.0% Upper 95.0%
10.91120744 2.86335E-13 21.882177
31.851589 21.882177 31.851589
-1.0311514 0.030898843 -0.001726
0.0005611 -0.00172613 0.0005611
1.677626238 0.010162798 -0.000128 0.001361202 -0.0001275 0.0013612
74
75