Download - Export Import Condition of Bangladesh
Introduction
Bangladeshi international trade is extremely small relative to the size of its population
although it experienced accelerated growth during the last decade It is not very
diversified and depends on the fluctuations of the international market The Bangladeshi
government struggles to attract export-oriented industries removing red tape and
introducing various financial and tax initiatives Between 1990 and 1995 Bangladesh
doubled its exports from US$1671 billion in 1990 to US$3173 billion in 1995 and then
almost doubled them again from US$3173 billion in 1995 to US$5523 billion in
1999During the 1990s the United States has been the largest trading partner for
Bangladesh with its exports to the United States reaching 357 percent in 1998-99 This
percentage consisted mainly of Ready-Made Garments (RMG) Germany is the second-
largest export market with the proportion of goods reaching 104 percent and the United
Kingdom is in third place at 83 percent Other export destinations are France Italy the
Netherlands Belgium and Japan
Trade (expressed in billions of US$)Bangladesh
Exports Imports
1975 327 1321
1980 793 2599
1985 999 2772
1990 1671 3598
1995 3173 6497
1998 3831 7042
1999 383 704
SOURCE International Monetary Fund International Financial Statistics Yearbook 1999
1
Comparative Performance of Bangladeshrsquos Exports
The performance of Bangladeshrsquos export sector in recent years is quite impressive
especially in the 1990s when we compare it with that of world and SAARC countries
The average annual growth rate of Bangladesh export (1191) is higher than those of
the world (948) and SAARC countries (1069) during 1990-2003 Because of the
lower export performance in the 1980s annual average growth rate of this sector during
1980-2003 is not as impressive compared to other Asian countries and the world though
this sector shows competitiveness compared to other SAARC countries (IMF various
years) Over the period of 1980-2003 Bangladeshrsquos exports as a percentage of the
worldrsquos exports remain around 011 to 012 with the exception of 1984 when it was
014 and 1990-1994 when the ratio was around 009 Bangladeshrsquos exports as a
percentage of SAARC countriesrsquo exports show slightly increased trend especially in 2000
and 2001
For these two years Bangladeshrsquos exports are 11 and 12 of the SAARC countriesrsquo
exports respectively Bangladeshrsquos share of SAARC countryrsquosrsquo exports was the lowest
772 in 1983 Bangladeshrsquos exports share in the Asian developing countries however
shows a decreasing trend in the 1990s compared to the1980s though the ratio is slightly
higher in 1998 and 1999 compared to immediate earlier years The ratio dropped to
059 in 2003 from 146 in 1980 though it was 075 in 2001 (IMF various years)
Export Shares to GDP
The contribution of the export sector to Bangladeshrsquos GDP has been gradually increasing
over the years While export share in GDP was 452 in 1980 this share has reached to
1345 in 1999 reflecting 19756 increase in GDP contribution in nineteen years
(World Bank 2004) This ratio further increased in 2000 2001 and 2002 The ratio was
1538 in 2001 The trade openness (tradeGDP ratio) was around 14 to 16 till 1989
After that the ratio increased to 28 in 1995 In 2001 the ratio has increased to 3688
which implies that trade has been liberalized in Bangladesh to a great extent since 1980
Over the years trade deficits ranged from 223 to 737 of GDP (World Bank 2004)
2
Export Earnings and Export Growth
The export sector performed rather well throughout the 1990s This sector achieved a
growth rate of 3704 in the FY 1994-95 During the twelve years 1991-92 to 2002-
2003 Bangladesh experienced negative export growth (-744) only in FY 2001-2002
The terrorist incident of September 11 2001 in USA and subsequent events may be
blamed for this unexpected suffering of the export sector in the particular fiscal year
However the export sector achieved a 939 growth rate an increase of US$ 56235
million during 2002-2003 with total export earnings amounting to US$ 654844 million
compared to US$ 598609 million in 2001-2002 Charts 1 and 2 provide comparative
year-wise export earnings and export growth rates for twelve years
Exports Performance Compared to Imports
The export earnings also continuously increased over the years with increased import
payments Though import payments are always higher than the export earnings in
absolute terms the percentage of Bangladeshrsquos export to imports is improving gradually
and in recent years has been quite impressive In FY 1983-84 the value of Bangladeshrsquos
exports was US$ 811 million and the corresponding figure for Bangladeshrsquos imports was
US$ 2073 million that represents exportimport ratio of 3912 The export-import ratio
increased to 7009 and 6780 respectively in FY2001-02 and FY 2002-03 (EPB
2004)
A Review of Trade Balance
During the last decade Bangladeshi exports shifted from the sale of agricultural products
and raw and processed natural resources to labor-intensive manufactured goods
(including clothing footwear and textiles) but the country unlike neighboring India
could not catch up with the exporters of skill-intensive products The problem of balance
of trade in Bangladesh is well known ever since the independence of the country export
earnings have persistently fallen behind import payments Consequently every year the
country incurs a huge trade deficit
3
Bangladesh has a long history of maintaining a negative trade balance importing more
goods than it exports In the 1970s and 1980s it imported goods and services twice and
sometimes 3 times as much as it exported Even during the relatively successful 1999
financial year the country exported just US$5523 billion worth of products while it
imported US$8381 billion worth of products leaving a large trade shortfall of US$2858
billion
Bangladesh Trade Balance and Export-Import Price Indices
Year Value (Tk Million) Price Indices (198485 = 100)Exportsa Importsa Trade Balancea Exportsb Importsb
197374 2983 7320 -4337 468 490197475 3136 10842 -7706 579 642197576 5552 14703 -9151 507 582197677 6670 13993 -7323 561 577197778 7178 18216 -11038 644 591197879 9632 22073 -12441 804 687197980 10997 30525 -19528 970 874198081 11484 37288 -25804 800 1026198182 12387 38729 -26342 687 1071198283 18016 45265 -27249 699 1015198384 20136 50874 -30738 825 1001198485 26225 68263 -42038 1000 1000198586 27396 62929 -35533 725 889198687 33682 68496 -34814 752 811198788 41161 91588 -50427 880 825198889 42686 95075 -52389 851 877198990 41515 113305 -71790 879 930199091 60272 111877 -51605 937 969199192 74198 132756 -58558 923 942199293 88215 138198 -49983 986 973199394 98739 137540 -38801 1041 1000199495 136970 218564 -81594 1110 1089199596 144521 254646 -110125 1185 1169199697 171554 290187 -118633 1241 1204199798 229408 318916 -89508 1289 1245199899 245620 341016 -95396 1292 1309199900c 289383 422755 -133372 1299 1426
Sources a BBS Foreign Trade Statistics (various issues)
b Bangladesh Economic Survey (various issues)
c Bangladesh Economic Survey 2001
4
Exports of Bangladesh to Industrial and Developing Countries
While developing countries were the major destinations during the 1970s and early
1980s this direction reversed from the middle of 1980s and the trend continued
throughout the 1990s and thereafter Now industrial countries are the main destinations of
Bangladeshrsquos exports The industrial countries used to represent 414 share of
Bangladesh exports in 1978 and developing countries used to represent 458 In 2002
these figures stood at 883 and 117 respectively for industrial and developing
countries Among the developing countries the Asian countries import more than others
from Bangladesh
It is also observed that the annual growth rate of Bangladeshrsquos exports to the world is
positive since the 1990s it is found very impressive in 1990 and 1994 being 281 and
163 respectively However the corresponding figures are better for industrial
countries 406 and 187 The export growth rate to developing countries in 1998 and
2002 are negative -159 and ndash29 respectively though these rates were positive in
1990 and 1994
Trade Policy Reforms
During the past three decades Bangladesh carried out extensive trade policy reforms In
particular the country has been pursuing a liberal trade policy since the beginning of the
1990s which is consistent with the trends in the global market economy Uruguay Round
Accord and agreement with the World Trade Organization The government formulated a
five-year export policy along with a more liberal five-year import policy in 199798 with
the objective of attaining a favorable trade balance and gradual improvement in the
foreign exchange reserve situation (GOB 2002) The governments in 1990s really wanted
to promote rapid export growth by reducing and eliminating the anti-export bias prevalent
in the economy Keeping this goal in mind the government has been pursuing a limited
protective policy only in consideration of several important issues like public health
security and religious restrictions Also the government has been adopting more liberal
import and export policies and programs including reduction and harmonization in tariff
rates and elimination of many quantitative restrictions on imports (GOB 2002 CSB
2003)
5
Export Products of Bangladesh
Fruits Leather Garments Tea
Vegitable Jute Products ICT Products Potteries
Handicrafts Woven Garments Knitwear
Ceramics Products
Frozen Fish Food Products Bicycle
6
Growth of Exports
Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of
1424 percent during 198586 to 199900 compared to an annual trend growth rate of
below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through
198485 Such a pattern of export growth over time largely reflects the effects of progress
in Bangladeshrsquos policy reforms over the period Export products during the earlier period
(eg jute and jute goods) did have a significant effect in limiting the overall export
growth especially starting with the mid-1980s The export upturn in the latter period also
reflects the fact that the export setback in jute and jute goods was more than recouped by
remarkable growth in the export of a new product group ready-made garments
Jute goods
Among jute and jute goods only jute goods had a statistically significant low annual
trend growth rate of more than 6 percent during the early period and around 1 percent for
the entire period In the latter period (198586 to 199900) it had no significant growth
trend Raw jute exports on the other hand had statistically significant negative growth
trends for the whole period as well as for the second period The reasons for the decline
were the growth of jute manufacturing industry in the country and falling demand for raw
jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
Frozen food
Frozen food (mainly frozen shrimps) was one of the major product groups which had a
highly satisfactory trend growth rate of 1611 percent for the whole period However its
growth remained uneven a spectacularly high rate of 31 percent during the period till
198485 along with a sharp drop to about 84 percent during 198586 to 199900 The
drop in the growth rate in the later period may be attributed to a fall in demand in the EU
markets in the late 1980s and early 1990s which recovered only during the second half of
the 1990s The dwindling growth of frozen foods in the later period may also be
attributed to supply constraints
7
Tea
Tea falls in the category of an exceptional export product since it had a significant growth
of 13 percent during the early period up to 198485 However its growth was so low and
erratic subsequently that it showed a negative growth trend during the later period While
Bangladesh successfully recouped the loss of tea export earnings caused by the
dislocation during the countryrsquos war of Independence it lost the momentum in its race
with India and Sri Lanka in the late 1980s and early 1990s
Leather and leather products
Bangladeshrsquos exports of hides skins and leather and leather products have increased
since the early 1970s The product group included in the traditional export category had
a trend growth rate of about 9 percent during the entire period which was close to the
average growth for all exports Its growth rate was more than 13 percent during the first
period but the rate slowed to 5 percent during the second period
Readymade garments
Starting from a virtually zero base during the late 1970s readymade garments exports
grew at a very rapid rate of about 95 percent during the early period up to 198485 and
from a sizeable base at a moderate but fairly high rate of 2037 percent during the later
period
Knitwear products newly entered the export market with some significance only in
198990 and since then its export grew very rapidly ndash at a much faster rate than other
readymade garments The very fast growth of the RMG product group as a major export
earner (in gross terms) was the most remarkable development for Bangladesh and
without this phenomenal growth Bangladeshrsquos total exports which had a setback in the
traditionally important exports of jute and jute goods could not have grown at double
digit in the late 1980s and 1990s
8
Annual Growth Trends of Exports by Commodity GroupsCommodity Group 197273 ndash 199900 197273 ndash 198485 198586 ndash 199900
Raw Jute -175 071 -213Jute Manufactures 122 649 101Frozen Foods 1611 3058 84Tea 175 1323 -095Leather 886 132 488Readymade Garments 5710 9491 2037Others 1902 2318 2439Total Exports 1091 86 1424
9
Composition of Exports 1999-00
54
22
6
6
12
Woven Garments
Kintwear
Frozen Food
Jute and Jute goods
others
Growth in Exports Millions
0
1000
2000
3000
4000
5000
6000
7000
1990-91 1991-92 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00
years
Mil
lio
n $
Source Authorrsquos estimation based on Bangladesh Bank data
Trend of growth in export of Bangladesh among 1980-90 to 1990-99sDuring 1990s Bangladeshrsquos total exports in Current US $ value grew at an annual
compound rate of 144 per cent In fact Bangladesh experienced double digit export
growth in most of the years during the 1990sThe Gap between Export and Import
widened from-US$1791 million in 199091 to -$2814 million in 199000although the
share of export earnings in import payments steadily rose from 31 per cent in 198081 to
67 per cent in 199900The openness of the economy as measured by total external trade
10
as a proportion of GDP went up from around 22 percent in 199091 to nearly 30 percent
in 199000 with the share of export in GDP rising from 7 per cent to 12 percent during
the same period
Trend of growth in export among 1980-90 to 1990-00
Description 198081 199091 199900 Annual compound
Growth rate
1980s
Annual
compound
Growth rate
1990s
Export(millions $) 710 1718 5752 92 144
Import(millions $) 2282 3510 8566 44 104
Trade Deficit
(million $)
1572 1792 2814 13 51
Export as of
import
311 489 671
Export as GDP 5 73 121
import As of GDP 16 15 179
Openness of the
economy
21 223 30
Source Export Promotion Bureau and World Bank
Changes in Composition of Exports and Imports
11
Exports of traditional goods (composed of jute jute goods tea and leather) constituted
most of Bangladeshrsquos total exports around 97 percent in 197273 These exports
precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute
and jute goods in the export trade of Bangladesh has weakened considerably and some
non-traditional items have made inroads For example the share of raw jute in export
earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900
Over the same period the share of jute goods declined from 52 percent to less than 5
percent Another traditional exports item tea declined from 27 percent to 03 percent
during the period Tearsquos relative export share did increase in some of the years in the
1980s but it declined sharply in later years Leatherrsquos share in total exports showed a
significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s
but declined to a level of 34 percent in 199900
On the other hand nontraditional exports (ie exports of goods other than traditional
ones) dramatically grew in importance from 3 percent of total exports in 197273 to more
than 90 percent in 199900 Among the nontraditional exports RMG including knitwear
rose to 54 percent during 199900 from an insignificant level in the early 1980s The
share of frozen food increased from less than 1 percent to 6 percent during the years
Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected
a deceleration in its growth performance in recent years Residual export category
showed a big jump in export importance from 18 percent in 197273 to 31 percent in
199900
12
Composition of Exports by Commodity Groups
( of Total Export Earnings) Year Raw Jute Jute Goods Frozen
FoodsTea Leather Readymade
GarmentsOthers
198889 756 1892 1099 310 1065 3663 1213198990 818 1869 905 259 1174 3997 978199091 607 1041 826 252 782 4283 2210199192 429 1471 640 162 725 5336 1237199293 314 1226 693 173 625 5205 1762199394 226 1121 834 150 666 5097 1906199495 208 921 863 095 583 5298 2032199596 232 849 810 086 545 5023 2455199697 263 720 728 087 441 5062 2699199798 209 543 576 091 367 5497 2717199899 135 571 515 073 316 5607 2784199900 125 462 598 031 339 5360 3084
Source Authorrsquos calculation based on Bangladesh Bank data
Some Graphical Statistics over Last Two Decades
Figure 412 shows thatDuring 1983-84 to 1989-90 the average trade deficit was 73 of GDP This deficit decreased to 67 on average in the last five years
13
Figure 421 shows thatThe growth in exports has fluctuated considerably from an average low of 7 in 1981-1985 period to an average high of in excess of 17 in 1991-1995 and 2006-2008 periods
Figure 422 shows that
14
The share of primary commodities to total exports decreased from 175 in 1980-81 to
7 in 2007-08On the other hand the share of manufactured goods to total exports
increased from 44 in 1980- 81 to 93 in 2007-08
Figure 444 shows that1048707 there has a dramatic increase in the number of expatriate workers since 2005 rising
from about 250 lakh to 875 lakh
1048707 However the impact of the global financial crisis may lead to a decline over the
coming months
15
Trend of Export Earnings
At present Bangladesh faces growing economic competition from India Pakistan and
Indonesia countries which could offer better infrastructure and larger and growing
domestic markets The exports of Bangladesh have been experiencing a steady rise since
the late 80s of which apparels constitute approximately 75 of the total exports Other
items include frozen foods jute amp jute products leather amp leather products handicrafts
vegetables chemical products etc Major export markets for Bangladeshi exporters are
North America (33) and EU (52) while other regions constitute the rest In Fiscal
Year 2006-07 total exports earnings of Bangladesh exceeded US$ 12 billion The trend
of Bangladeshi exports from FY 1972-72 to 2006-07 iis shown below
16
Conclusion
Bangladesh economy has passed through a heightened pace of global integration in the
1990s The degree of openness of the Bangladesh economy is now higher than many
developing countries ndash exports and imports of goods and services currently account for
about a-third of the countryrsquos GDP Thus by definition the state of the global economy
is likely to have a stronger impact on the Bangladesh economy now than at any time in
the past The impact of the state of the global economy would continue to be increasingly
felt in terms of the countryrsquos macroeconomic performance GDP growth rate external
sector performance foreign exchange reserves and health of the financial institutions
This is perhaps one of the most important legacies that the Bangladesh economy has
inherited through its developmental practice and reforms of the 1990s
Bangladeshrsquos export sector registered double-digit real growth rate throughout the 1990s
As a matter of fact real export sector growth rate was almost three times the real GDP
growth rate during this period Even during FY 1990 and FY 1991 a period which
coincided with the last major global recession Bangladeshrsquos export sector posted robust
growth rates of 179 and 127 respectively The structure of export was different
though at the time Raw jute jute goods and leather were some of the major export
commodities in the early 1990s their combined share being equal to the share of RMG in
total exports of Bangladesh A relatively diversified base and market provided some sort
of a cushion against sudden fluctuations of the global market
Exporters and trade experts attribute Bangladeshrsquos export success to the
lsquocompetitivenessrsquo of the countryrsquos readymade garment sector and availability of cheap
labor although exports of frozen food leather and jute fell Garment manufacturers
produced lower-end products whose demand did not fall significantly in global markets
Remaining competitive in these days of difficulties since the quota system was
withdrawn and the ongoing lingering economic slide worldwide is rewarding for
Bangladesh
17
Bangladesh maintains export trends
YEAR EXPORT IN (MILLION US$)
Export (M US$)
CURRENT CUMULATIVE
1983-84 016 016
1984-85 445 461
1985-86 759 1221
1986-87 1527 2747
1987-88 1393 4140
1988-89 1608 5748
1989-90 3421 9169
1990-91 4799 13967
1991-92 7699 21667
1992-93 12705 34371
1993-94 14560 48932
1994-95 22826 71758
1995-96 33702 105460
1996-97 46277 151736
1997-98 63605 215341
1998-99 71169 286510
1999-00 89082 375592
2000-01 106787 482379
2001-02 107703 590081
2002-03 120022 710103
2003-04 135391 845494
2004-05 154868 1000362
2005-06 183618 1183980
2006-07 206367 206367
2007-08 242958 1633304
2008-09 258170 1891474
2009-10 282254 2173728
2010-11 (January 2011)
194001 2367728
Growth (2009-10) 933
18
References Bakht Z (2001) ldquoTrade Liberalisation Exports and Growth of Manufacturing Industries
in Bangladeshrdquo in M M Huq and Love (eds) Strategies for Industrialisation The Case of Bangladesh University Press Ltd Dhaka
Rab A (1997) ldquoExport Trends and Policies in Bangladesh Some Lessons of Past Performance for Future Policiesrdquo paper presented to a Workshop organized by the Institutional Support to the Ministry of Finance Project (ISMOF) supported by the Asian Development Bank March Dhaka
Rahman S H (1979) ldquoThe Determinants of Change in Trade Balance Some Estimates for Bangladesh 195960 ndash 197475rdquo Bangladesh Development Studies vol 7 pp 71 ndash 84
Ahmed S and Sattar Z (2004) ldquoTrade Liberalization Growth and Poverty Reduction The Case of Bangladeshrdquo Working Paper World Bank South Asian Region May 01 2004 The paper was also presented in the ABCDE Bangalore Conference in May 2003
Bangladesh Bank (2002-2003) Annual Report 2002-2003 Dhaka Bangladesh Bangladesh Bank (2007) Quoted in wwwbanglaembassycombhFDI20in
20Bangladeshhtm Downloaded on 31 October 2007 BBS (2000) Statistical Pocketbook of Bangladesh Bangladesh Bureau of Statistics
Dhaka Bangladesh CPD (1997) Growth or Stagnation A Review of Bangladeshrsquos Development 1996
Centre for Policy DialogueUniversity Press Limited Dhaka CSB (2003) Country Study of Bangladesh A Paper Presented at the Country Studies
Workshop on lsquoTrade Cooperation and Economic Policy Reform in South Asiarsquo Bangladesh Institute of Development Studies Dhaka Bangladesh March 30
EPB (Export Promotion Bureau) (2004) Bangladesh Export Statistics 2002-2003 Export Promotion Bureau Dhaka Bangladesh wwwepbbdcomExportStathtml
GOB (2002) lsquoForeign Trade Exchange Rate Management and External Sectorrsquo Bangladesh Economic Review Finance Division Ministry of Finance the Government of Bangladesh Dhaka
GOB (2003) Export Policy 2003-2006 Ministry of Commerce Government of Bangladesh December 2003
GOB (2006) Trade Policy Review by Bangladesh World Trade Organization Report No 06-3754 downloaded on 10907
World Bank (1999) World Development Indicators Database World Bank Washington D C
World Bank (2000) World Development Indicators Database World Bank Washington D C
Bangladesh International trade Information about International trade in Bangladesh httpwwwnationsencyclopediacomeconomiesAsia-and-the-PacificBangladesh-INTERNATIONAL-TRADEhtmlixzz1GOf4e1tc
Bangladesh Export Promotion Bureau
19
- Bangladesh Trade Balance and Export-Import Price Indices
- Growth of Exports
- Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of 1424 percent during 198586 to 199900 compared to an annual trend growth rate of below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through 198485 Such a pattern of export growth over time largely reflects the effects of progress in Bangladeshrsquos policy reforms over the period Export products during the earlier period (eg jute and jute goods) did have a significant effect in limiting the overall export growth especially starting with the mid-1980s The export upturn in the latter period also reflects the fact that the export setback in jute and jute goods was more than recouped by remarkable growth in the export of a new product group ready-made garments
- Jute goods
- Among jute and jute goods only jute goods had a statistically significant low annual trend growth rate of more than 6 percent during the early period and around 1 percent for the entire period In the latter period (198586 to 199900) it had no significant growth trend Raw jute exports on the other hand had statistically significant negative growth trends for the whole period as well as for the second period The reasons for the decline were the growth of jute manufacturing industry in the country and falling demand for raw jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
- Frozen food
- Frozen food (mainly frozen shrimps) was one of the major product groups which had a highly satisfactory trend growth rate of 1611 percent for the whole period However its growth remained uneven a spectacularly high rate of 31 percent during the period till 198485 along with a sharp drop to about 84 percent during 198586 to 199900 The drop in the growth rate in the later period may be attributed to a fall in demand in the EU markets in the late 1980s and early 1990s which recovered only during the second half of the 1990s The dwindling growth of frozen foods in the later period may also be attributed to supply constraints
- Exports of traditional goods (composed of jute jute goods tea and leather) constituted most of Bangladeshrsquos total exports around 97 percent in 197273 These exports precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute and jute goods in the export trade of Bangladesh has weakened considerably and some non-traditional items have made inroads For example the share of raw jute in export earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900 Over the same period the share of jute goods declined from 52 percent to less than 5 percent Another traditional exports item tea declined from 27 percent to 03 percent during the period Tearsquos relative export share did increase in some of the years in the 1980s but it declined sharply in later years Leatherrsquos share in total exports showed a significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s but declined to a level of 34 percent in 199900
- On the other hand nontraditional exports (ie exports of goods other than traditional ones) dramatically grew in importance from 3 percent of total exports in 197273 to more than 90 percent in 199900 Among the nontraditional exports RMG including knitwear rose to 54 percent during 199900 from an insignificant level in the early 1980s The share of frozen food increased from less than 1 percent to 6 percent during the years Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected a deceleration in its growth performance in recent years Residual export category showed a big jump in export importance from 18 percent in 197273 to 31 percent in 199900
-
Comparative Performance of Bangladeshrsquos Exports
The performance of Bangladeshrsquos export sector in recent years is quite impressive
especially in the 1990s when we compare it with that of world and SAARC countries
The average annual growth rate of Bangladesh export (1191) is higher than those of
the world (948) and SAARC countries (1069) during 1990-2003 Because of the
lower export performance in the 1980s annual average growth rate of this sector during
1980-2003 is not as impressive compared to other Asian countries and the world though
this sector shows competitiveness compared to other SAARC countries (IMF various
years) Over the period of 1980-2003 Bangladeshrsquos exports as a percentage of the
worldrsquos exports remain around 011 to 012 with the exception of 1984 when it was
014 and 1990-1994 when the ratio was around 009 Bangladeshrsquos exports as a
percentage of SAARC countriesrsquo exports show slightly increased trend especially in 2000
and 2001
For these two years Bangladeshrsquos exports are 11 and 12 of the SAARC countriesrsquo
exports respectively Bangladeshrsquos share of SAARC countryrsquosrsquo exports was the lowest
772 in 1983 Bangladeshrsquos exports share in the Asian developing countries however
shows a decreasing trend in the 1990s compared to the1980s though the ratio is slightly
higher in 1998 and 1999 compared to immediate earlier years The ratio dropped to
059 in 2003 from 146 in 1980 though it was 075 in 2001 (IMF various years)
Export Shares to GDP
The contribution of the export sector to Bangladeshrsquos GDP has been gradually increasing
over the years While export share in GDP was 452 in 1980 this share has reached to
1345 in 1999 reflecting 19756 increase in GDP contribution in nineteen years
(World Bank 2004) This ratio further increased in 2000 2001 and 2002 The ratio was
1538 in 2001 The trade openness (tradeGDP ratio) was around 14 to 16 till 1989
After that the ratio increased to 28 in 1995 In 2001 the ratio has increased to 3688
which implies that trade has been liberalized in Bangladesh to a great extent since 1980
Over the years trade deficits ranged from 223 to 737 of GDP (World Bank 2004)
2
Export Earnings and Export Growth
The export sector performed rather well throughout the 1990s This sector achieved a
growth rate of 3704 in the FY 1994-95 During the twelve years 1991-92 to 2002-
2003 Bangladesh experienced negative export growth (-744) only in FY 2001-2002
The terrorist incident of September 11 2001 in USA and subsequent events may be
blamed for this unexpected suffering of the export sector in the particular fiscal year
However the export sector achieved a 939 growth rate an increase of US$ 56235
million during 2002-2003 with total export earnings amounting to US$ 654844 million
compared to US$ 598609 million in 2001-2002 Charts 1 and 2 provide comparative
year-wise export earnings and export growth rates for twelve years
Exports Performance Compared to Imports
The export earnings also continuously increased over the years with increased import
payments Though import payments are always higher than the export earnings in
absolute terms the percentage of Bangladeshrsquos export to imports is improving gradually
and in recent years has been quite impressive In FY 1983-84 the value of Bangladeshrsquos
exports was US$ 811 million and the corresponding figure for Bangladeshrsquos imports was
US$ 2073 million that represents exportimport ratio of 3912 The export-import ratio
increased to 7009 and 6780 respectively in FY2001-02 and FY 2002-03 (EPB
2004)
A Review of Trade Balance
During the last decade Bangladeshi exports shifted from the sale of agricultural products
and raw and processed natural resources to labor-intensive manufactured goods
(including clothing footwear and textiles) but the country unlike neighboring India
could not catch up with the exporters of skill-intensive products The problem of balance
of trade in Bangladesh is well known ever since the independence of the country export
earnings have persistently fallen behind import payments Consequently every year the
country incurs a huge trade deficit
3
Bangladesh has a long history of maintaining a negative trade balance importing more
goods than it exports In the 1970s and 1980s it imported goods and services twice and
sometimes 3 times as much as it exported Even during the relatively successful 1999
financial year the country exported just US$5523 billion worth of products while it
imported US$8381 billion worth of products leaving a large trade shortfall of US$2858
billion
Bangladesh Trade Balance and Export-Import Price Indices
Year Value (Tk Million) Price Indices (198485 = 100)Exportsa Importsa Trade Balancea Exportsb Importsb
197374 2983 7320 -4337 468 490197475 3136 10842 -7706 579 642197576 5552 14703 -9151 507 582197677 6670 13993 -7323 561 577197778 7178 18216 -11038 644 591197879 9632 22073 -12441 804 687197980 10997 30525 -19528 970 874198081 11484 37288 -25804 800 1026198182 12387 38729 -26342 687 1071198283 18016 45265 -27249 699 1015198384 20136 50874 -30738 825 1001198485 26225 68263 -42038 1000 1000198586 27396 62929 -35533 725 889198687 33682 68496 -34814 752 811198788 41161 91588 -50427 880 825198889 42686 95075 -52389 851 877198990 41515 113305 -71790 879 930199091 60272 111877 -51605 937 969199192 74198 132756 -58558 923 942199293 88215 138198 -49983 986 973199394 98739 137540 -38801 1041 1000199495 136970 218564 -81594 1110 1089199596 144521 254646 -110125 1185 1169199697 171554 290187 -118633 1241 1204199798 229408 318916 -89508 1289 1245199899 245620 341016 -95396 1292 1309199900c 289383 422755 -133372 1299 1426
Sources a BBS Foreign Trade Statistics (various issues)
b Bangladesh Economic Survey (various issues)
c Bangladesh Economic Survey 2001
4
Exports of Bangladesh to Industrial and Developing Countries
While developing countries were the major destinations during the 1970s and early
1980s this direction reversed from the middle of 1980s and the trend continued
throughout the 1990s and thereafter Now industrial countries are the main destinations of
Bangladeshrsquos exports The industrial countries used to represent 414 share of
Bangladesh exports in 1978 and developing countries used to represent 458 In 2002
these figures stood at 883 and 117 respectively for industrial and developing
countries Among the developing countries the Asian countries import more than others
from Bangladesh
It is also observed that the annual growth rate of Bangladeshrsquos exports to the world is
positive since the 1990s it is found very impressive in 1990 and 1994 being 281 and
163 respectively However the corresponding figures are better for industrial
countries 406 and 187 The export growth rate to developing countries in 1998 and
2002 are negative -159 and ndash29 respectively though these rates were positive in
1990 and 1994
Trade Policy Reforms
During the past three decades Bangladesh carried out extensive trade policy reforms In
particular the country has been pursuing a liberal trade policy since the beginning of the
1990s which is consistent with the trends in the global market economy Uruguay Round
Accord and agreement with the World Trade Organization The government formulated a
five-year export policy along with a more liberal five-year import policy in 199798 with
the objective of attaining a favorable trade balance and gradual improvement in the
foreign exchange reserve situation (GOB 2002) The governments in 1990s really wanted
to promote rapid export growth by reducing and eliminating the anti-export bias prevalent
in the economy Keeping this goal in mind the government has been pursuing a limited
protective policy only in consideration of several important issues like public health
security and religious restrictions Also the government has been adopting more liberal
import and export policies and programs including reduction and harmonization in tariff
rates and elimination of many quantitative restrictions on imports (GOB 2002 CSB
2003)
5
Export Products of Bangladesh
Fruits Leather Garments Tea
Vegitable Jute Products ICT Products Potteries
Handicrafts Woven Garments Knitwear
Ceramics Products
Frozen Fish Food Products Bicycle
6
Growth of Exports
Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of
1424 percent during 198586 to 199900 compared to an annual trend growth rate of
below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through
198485 Such a pattern of export growth over time largely reflects the effects of progress
in Bangladeshrsquos policy reforms over the period Export products during the earlier period
(eg jute and jute goods) did have a significant effect in limiting the overall export
growth especially starting with the mid-1980s The export upturn in the latter period also
reflects the fact that the export setback in jute and jute goods was more than recouped by
remarkable growth in the export of a new product group ready-made garments
Jute goods
Among jute and jute goods only jute goods had a statistically significant low annual
trend growth rate of more than 6 percent during the early period and around 1 percent for
the entire period In the latter period (198586 to 199900) it had no significant growth
trend Raw jute exports on the other hand had statistically significant negative growth
trends for the whole period as well as for the second period The reasons for the decline
were the growth of jute manufacturing industry in the country and falling demand for raw
jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
Frozen food
Frozen food (mainly frozen shrimps) was one of the major product groups which had a
highly satisfactory trend growth rate of 1611 percent for the whole period However its
growth remained uneven a spectacularly high rate of 31 percent during the period till
198485 along with a sharp drop to about 84 percent during 198586 to 199900 The
drop in the growth rate in the later period may be attributed to a fall in demand in the EU
markets in the late 1980s and early 1990s which recovered only during the second half of
the 1990s The dwindling growth of frozen foods in the later period may also be
attributed to supply constraints
7
Tea
Tea falls in the category of an exceptional export product since it had a significant growth
of 13 percent during the early period up to 198485 However its growth was so low and
erratic subsequently that it showed a negative growth trend during the later period While
Bangladesh successfully recouped the loss of tea export earnings caused by the
dislocation during the countryrsquos war of Independence it lost the momentum in its race
with India and Sri Lanka in the late 1980s and early 1990s
Leather and leather products
Bangladeshrsquos exports of hides skins and leather and leather products have increased
since the early 1970s The product group included in the traditional export category had
a trend growth rate of about 9 percent during the entire period which was close to the
average growth for all exports Its growth rate was more than 13 percent during the first
period but the rate slowed to 5 percent during the second period
Readymade garments
Starting from a virtually zero base during the late 1970s readymade garments exports
grew at a very rapid rate of about 95 percent during the early period up to 198485 and
from a sizeable base at a moderate but fairly high rate of 2037 percent during the later
period
Knitwear products newly entered the export market with some significance only in
198990 and since then its export grew very rapidly ndash at a much faster rate than other
readymade garments The very fast growth of the RMG product group as a major export
earner (in gross terms) was the most remarkable development for Bangladesh and
without this phenomenal growth Bangladeshrsquos total exports which had a setback in the
traditionally important exports of jute and jute goods could not have grown at double
digit in the late 1980s and 1990s
8
Annual Growth Trends of Exports by Commodity GroupsCommodity Group 197273 ndash 199900 197273 ndash 198485 198586 ndash 199900
Raw Jute -175 071 -213Jute Manufactures 122 649 101Frozen Foods 1611 3058 84Tea 175 1323 -095Leather 886 132 488Readymade Garments 5710 9491 2037Others 1902 2318 2439Total Exports 1091 86 1424
9
Composition of Exports 1999-00
54
22
6
6
12
Woven Garments
Kintwear
Frozen Food
Jute and Jute goods
others
Growth in Exports Millions
0
1000
2000
3000
4000
5000
6000
7000
1990-91 1991-92 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00
years
Mil
lio
n $
Source Authorrsquos estimation based on Bangladesh Bank data
Trend of growth in export of Bangladesh among 1980-90 to 1990-99sDuring 1990s Bangladeshrsquos total exports in Current US $ value grew at an annual
compound rate of 144 per cent In fact Bangladesh experienced double digit export
growth in most of the years during the 1990sThe Gap between Export and Import
widened from-US$1791 million in 199091 to -$2814 million in 199000although the
share of export earnings in import payments steadily rose from 31 per cent in 198081 to
67 per cent in 199900The openness of the economy as measured by total external trade
10
as a proportion of GDP went up from around 22 percent in 199091 to nearly 30 percent
in 199000 with the share of export in GDP rising from 7 per cent to 12 percent during
the same period
Trend of growth in export among 1980-90 to 1990-00
Description 198081 199091 199900 Annual compound
Growth rate
1980s
Annual
compound
Growth rate
1990s
Export(millions $) 710 1718 5752 92 144
Import(millions $) 2282 3510 8566 44 104
Trade Deficit
(million $)
1572 1792 2814 13 51
Export as of
import
311 489 671
Export as GDP 5 73 121
import As of GDP 16 15 179
Openness of the
economy
21 223 30
Source Export Promotion Bureau and World Bank
Changes in Composition of Exports and Imports
11
Exports of traditional goods (composed of jute jute goods tea and leather) constituted
most of Bangladeshrsquos total exports around 97 percent in 197273 These exports
precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute
and jute goods in the export trade of Bangladesh has weakened considerably and some
non-traditional items have made inroads For example the share of raw jute in export
earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900
Over the same period the share of jute goods declined from 52 percent to less than 5
percent Another traditional exports item tea declined from 27 percent to 03 percent
during the period Tearsquos relative export share did increase in some of the years in the
1980s but it declined sharply in later years Leatherrsquos share in total exports showed a
significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s
but declined to a level of 34 percent in 199900
On the other hand nontraditional exports (ie exports of goods other than traditional
ones) dramatically grew in importance from 3 percent of total exports in 197273 to more
than 90 percent in 199900 Among the nontraditional exports RMG including knitwear
rose to 54 percent during 199900 from an insignificant level in the early 1980s The
share of frozen food increased from less than 1 percent to 6 percent during the years
Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected
a deceleration in its growth performance in recent years Residual export category
showed a big jump in export importance from 18 percent in 197273 to 31 percent in
199900
12
Composition of Exports by Commodity Groups
( of Total Export Earnings) Year Raw Jute Jute Goods Frozen
FoodsTea Leather Readymade
GarmentsOthers
198889 756 1892 1099 310 1065 3663 1213198990 818 1869 905 259 1174 3997 978199091 607 1041 826 252 782 4283 2210199192 429 1471 640 162 725 5336 1237199293 314 1226 693 173 625 5205 1762199394 226 1121 834 150 666 5097 1906199495 208 921 863 095 583 5298 2032199596 232 849 810 086 545 5023 2455199697 263 720 728 087 441 5062 2699199798 209 543 576 091 367 5497 2717199899 135 571 515 073 316 5607 2784199900 125 462 598 031 339 5360 3084
Source Authorrsquos calculation based on Bangladesh Bank data
Some Graphical Statistics over Last Two Decades
Figure 412 shows thatDuring 1983-84 to 1989-90 the average trade deficit was 73 of GDP This deficit decreased to 67 on average in the last five years
13
Figure 421 shows thatThe growth in exports has fluctuated considerably from an average low of 7 in 1981-1985 period to an average high of in excess of 17 in 1991-1995 and 2006-2008 periods
Figure 422 shows that
14
The share of primary commodities to total exports decreased from 175 in 1980-81 to
7 in 2007-08On the other hand the share of manufactured goods to total exports
increased from 44 in 1980- 81 to 93 in 2007-08
Figure 444 shows that1048707 there has a dramatic increase in the number of expatriate workers since 2005 rising
from about 250 lakh to 875 lakh
1048707 However the impact of the global financial crisis may lead to a decline over the
coming months
15
Trend of Export Earnings
At present Bangladesh faces growing economic competition from India Pakistan and
Indonesia countries which could offer better infrastructure and larger and growing
domestic markets The exports of Bangladesh have been experiencing a steady rise since
the late 80s of which apparels constitute approximately 75 of the total exports Other
items include frozen foods jute amp jute products leather amp leather products handicrafts
vegetables chemical products etc Major export markets for Bangladeshi exporters are
North America (33) and EU (52) while other regions constitute the rest In Fiscal
Year 2006-07 total exports earnings of Bangladesh exceeded US$ 12 billion The trend
of Bangladeshi exports from FY 1972-72 to 2006-07 iis shown below
16
Conclusion
Bangladesh economy has passed through a heightened pace of global integration in the
1990s The degree of openness of the Bangladesh economy is now higher than many
developing countries ndash exports and imports of goods and services currently account for
about a-third of the countryrsquos GDP Thus by definition the state of the global economy
is likely to have a stronger impact on the Bangladesh economy now than at any time in
the past The impact of the state of the global economy would continue to be increasingly
felt in terms of the countryrsquos macroeconomic performance GDP growth rate external
sector performance foreign exchange reserves and health of the financial institutions
This is perhaps one of the most important legacies that the Bangladesh economy has
inherited through its developmental practice and reforms of the 1990s
Bangladeshrsquos export sector registered double-digit real growth rate throughout the 1990s
As a matter of fact real export sector growth rate was almost three times the real GDP
growth rate during this period Even during FY 1990 and FY 1991 a period which
coincided with the last major global recession Bangladeshrsquos export sector posted robust
growth rates of 179 and 127 respectively The structure of export was different
though at the time Raw jute jute goods and leather were some of the major export
commodities in the early 1990s their combined share being equal to the share of RMG in
total exports of Bangladesh A relatively diversified base and market provided some sort
of a cushion against sudden fluctuations of the global market
Exporters and trade experts attribute Bangladeshrsquos export success to the
lsquocompetitivenessrsquo of the countryrsquos readymade garment sector and availability of cheap
labor although exports of frozen food leather and jute fell Garment manufacturers
produced lower-end products whose demand did not fall significantly in global markets
Remaining competitive in these days of difficulties since the quota system was
withdrawn and the ongoing lingering economic slide worldwide is rewarding for
Bangladesh
17
Bangladesh maintains export trends
YEAR EXPORT IN (MILLION US$)
Export (M US$)
CURRENT CUMULATIVE
1983-84 016 016
1984-85 445 461
1985-86 759 1221
1986-87 1527 2747
1987-88 1393 4140
1988-89 1608 5748
1989-90 3421 9169
1990-91 4799 13967
1991-92 7699 21667
1992-93 12705 34371
1993-94 14560 48932
1994-95 22826 71758
1995-96 33702 105460
1996-97 46277 151736
1997-98 63605 215341
1998-99 71169 286510
1999-00 89082 375592
2000-01 106787 482379
2001-02 107703 590081
2002-03 120022 710103
2003-04 135391 845494
2004-05 154868 1000362
2005-06 183618 1183980
2006-07 206367 206367
2007-08 242958 1633304
2008-09 258170 1891474
2009-10 282254 2173728
2010-11 (January 2011)
194001 2367728
Growth (2009-10) 933
18
References Bakht Z (2001) ldquoTrade Liberalisation Exports and Growth of Manufacturing Industries
in Bangladeshrdquo in M M Huq and Love (eds) Strategies for Industrialisation The Case of Bangladesh University Press Ltd Dhaka
Rab A (1997) ldquoExport Trends and Policies in Bangladesh Some Lessons of Past Performance for Future Policiesrdquo paper presented to a Workshop organized by the Institutional Support to the Ministry of Finance Project (ISMOF) supported by the Asian Development Bank March Dhaka
Rahman S H (1979) ldquoThe Determinants of Change in Trade Balance Some Estimates for Bangladesh 195960 ndash 197475rdquo Bangladesh Development Studies vol 7 pp 71 ndash 84
Ahmed S and Sattar Z (2004) ldquoTrade Liberalization Growth and Poverty Reduction The Case of Bangladeshrdquo Working Paper World Bank South Asian Region May 01 2004 The paper was also presented in the ABCDE Bangalore Conference in May 2003
Bangladesh Bank (2002-2003) Annual Report 2002-2003 Dhaka Bangladesh Bangladesh Bank (2007) Quoted in wwwbanglaembassycombhFDI20in
20Bangladeshhtm Downloaded on 31 October 2007 BBS (2000) Statistical Pocketbook of Bangladesh Bangladesh Bureau of Statistics
Dhaka Bangladesh CPD (1997) Growth or Stagnation A Review of Bangladeshrsquos Development 1996
Centre for Policy DialogueUniversity Press Limited Dhaka CSB (2003) Country Study of Bangladesh A Paper Presented at the Country Studies
Workshop on lsquoTrade Cooperation and Economic Policy Reform in South Asiarsquo Bangladesh Institute of Development Studies Dhaka Bangladesh March 30
EPB (Export Promotion Bureau) (2004) Bangladesh Export Statistics 2002-2003 Export Promotion Bureau Dhaka Bangladesh wwwepbbdcomExportStathtml
GOB (2002) lsquoForeign Trade Exchange Rate Management and External Sectorrsquo Bangladesh Economic Review Finance Division Ministry of Finance the Government of Bangladesh Dhaka
GOB (2003) Export Policy 2003-2006 Ministry of Commerce Government of Bangladesh December 2003
GOB (2006) Trade Policy Review by Bangladesh World Trade Organization Report No 06-3754 downloaded on 10907
World Bank (1999) World Development Indicators Database World Bank Washington D C
World Bank (2000) World Development Indicators Database World Bank Washington D C
Bangladesh International trade Information about International trade in Bangladesh httpwwwnationsencyclopediacomeconomiesAsia-and-the-PacificBangladesh-INTERNATIONAL-TRADEhtmlixzz1GOf4e1tc
Bangladesh Export Promotion Bureau
19
- Bangladesh Trade Balance and Export-Import Price Indices
- Growth of Exports
- Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of 1424 percent during 198586 to 199900 compared to an annual trend growth rate of below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through 198485 Such a pattern of export growth over time largely reflects the effects of progress in Bangladeshrsquos policy reforms over the period Export products during the earlier period (eg jute and jute goods) did have a significant effect in limiting the overall export growth especially starting with the mid-1980s The export upturn in the latter period also reflects the fact that the export setback in jute and jute goods was more than recouped by remarkable growth in the export of a new product group ready-made garments
- Jute goods
- Among jute and jute goods only jute goods had a statistically significant low annual trend growth rate of more than 6 percent during the early period and around 1 percent for the entire period In the latter period (198586 to 199900) it had no significant growth trend Raw jute exports on the other hand had statistically significant negative growth trends for the whole period as well as for the second period The reasons for the decline were the growth of jute manufacturing industry in the country and falling demand for raw jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
- Frozen food
- Frozen food (mainly frozen shrimps) was one of the major product groups which had a highly satisfactory trend growth rate of 1611 percent for the whole period However its growth remained uneven a spectacularly high rate of 31 percent during the period till 198485 along with a sharp drop to about 84 percent during 198586 to 199900 The drop in the growth rate in the later period may be attributed to a fall in demand in the EU markets in the late 1980s and early 1990s which recovered only during the second half of the 1990s The dwindling growth of frozen foods in the later period may also be attributed to supply constraints
- Exports of traditional goods (composed of jute jute goods tea and leather) constituted most of Bangladeshrsquos total exports around 97 percent in 197273 These exports precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute and jute goods in the export trade of Bangladesh has weakened considerably and some non-traditional items have made inroads For example the share of raw jute in export earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900 Over the same period the share of jute goods declined from 52 percent to less than 5 percent Another traditional exports item tea declined from 27 percent to 03 percent during the period Tearsquos relative export share did increase in some of the years in the 1980s but it declined sharply in later years Leatherrsquos share in total exports showed a significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s but declined to a level of 34 percent in 199900
- On the other hand nontraditional exports (ie exports of goods other than traditional ones) dramatically grew in importance from 3 percent of total exports in 197273 to more than 90 percent in 199900 Among the nontraditional exports RMG including knitwear rose to 54 percent during 199900 from an insignificant level in the early 1980s The share of frozen food increased from less than 1 percent to 6 percent during the years Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected a deceleration in its growth performance in recent years Residual export category showed a big jump in export importance from 18 percent in 197273 to 31 percent in 199900
-
Export Earnings and Export Growth
The export sector performed rather well throughout the 1990s This sector achieved a
growth rate of 3704 in the FY 1994-95 During the twelve years 1991-92 to 2002-
2003 Bangladesh experienced negative export growth (-744) only in FY 2001-2002
The terrorist incident of September 11 2001 in USA and subsequent events may be
blamed for this unexpected suffering of the export sector in the particular fiscal year
However the export sector achieved a 939 growth rate an increase of US$ 56235
million during 2002-2003 with total export earnings amounting to US$ 654844 million
compared to US$ 598609 million in 2001-2002 Charts 1 and 2 provide comparative
year-wise export earnings and export growth rates for twelve years
Exports Performance Compared to Imports
The export earnings also continuously increased over the years with increased import
payments Though import payments are always higher than the export earnings in
absolute terms the percentage of Bangladeshrsquos export to imports is improving gradually
and in recent years has been quite impressive In FY 1983-84 the value of Bangladeshrsquos
exports was US$ 811 million and the corresponding figure for Bangladeshrsquos imports was
US$ 2073 million that represents exportimport ratio of 3912 The export-import ratio
increased to 7009 and 6780 respectively in FY2001-02 and FY 2002-03 (EPB
2004)
A Review of Trade Balance
During the last decade Bangladeshi exports shifted from the sale of agricultural products
and raw and processed natural resources to labor-intensive manufactured goods
(including clothing footwear and textiles) but the country unlike neighboring India
could not catch up with the exporters of skill-intensive products The problem of balance
of trade in Bangladesh is well known ever since the independence of the country export
earnings have persistently fallen behind import payments Consequently every year the
country incurs a huge trade deficit
3
Bangladesh has a long history of maintaining a negative trade balance importing more
goods than it exports In the 1970s and 1980s it imported goods and services twice and
sometimes 3 times as much as it exported Even during the relatively successful 1999
financial year the country exported just US$5523 billion worth of products while it
imported US$8381 billion worth of products leaving a large trade shortfall of US$2858
billion
Bangladesh Trade Balance and Export-Import Price Indices
Year Value (Tk Million) Price Indices (198485 = 100)Exportsa Importsa Trade Balancea Exportsb Importsb
197374 2983 7320 -4337 468 490197475 3136 10842 -7706 579 642197576 5552 14703 -9151 507 582197677 6670 13993 -7323 561 577197778 7178 18216 -11038 644 591197879 9632 22073 -12441 804 687197980 10997 30525 -19528 970 874198081 11484 37288 -25804 800 1026198182 12387 38729 -26342 687 1071198283 18016 45265 -27249 699 1015198384 20136 50874 -30738 825 1001198485 26225 68263 -42038 1000 1000198586 27396 62929 -35533 725 889198687 33682 68496 -34814 752 811198788 41161 91588 -50427 880 825198889 42686 95075 -52389 851 877198990 41515 113305 -71790 879 930199091 60272 111877 -51605 937 969199192 74198 132756 -58558 923 942199293 88215 138198 -49983 986 973199394 98739 137540 -38801 1041 1000199495 136970 218564 -81594 1110 1089199596 144521 254646 -110125 1185 1169199697 171554 290187 -118633 1241 1204199798 229408 318916 -89508 1289 1245199899 245620 341016 -95396 1292 1309199900c 289383 422755 -133372 1299 1426
Sources a BBS Foreign Trade Statistics (various issues)
b Bangladesh Economic Survey (various issues)
c Bangladesh Economic Survey 2001
4
Exports of Bangladesh to Industrial and Developing Countries
While developing countries were the major destinations during the 1970s and early
1980s this direction reversed from the middle of 1980s and the trend continued
throughout the 1990s and thereafter Now industrial countries are the main destinations of
Bangladeshrsquos exports The industrial countries used to represent 414 share of
Bangladesh exports in 1978 and developing countries used to represent 458 In 2002
these figures stood at 883 and 117 respectively for industrial and developing
countries Among the developing countries the Asian countries import more than others
from Bangladesh
It is also observed that the annual growth rate of Bangladeshrsquos exports to the world is
positive since the 1990s it is found very impressive in 1990 and 1994 being 281 and
163 respectively However the corresponding figures are better for industrial
countries 406 and 187 The export growth rate to developing countries in 1998 and
2002 are negative -159 and ndash29 respectively though these rates were positive in
1990 and 1994
Trade Policy Reforms
During the past three decades Bangladesh carried out extensive trade policy reforms In
particular the country has been pursuing a liberal trade policy since the beginning of the
1990s which is consistent with the trends in the global market economy Uruguay Round
Accord and agreement with the World Trade Organization The government formulated a
five-year export policy along with a more liberal five-year import policy in 199798 with
the objective of attaining a favorable trade balance and gradual improvement in the
foreign exchange reserve situation (GOB 2002) The governments in 1990s really wanted
to promote rapid export growth by reducing and eliminating the anti-export bias prevalent
in the economy Keeping this goal in mind the government has been pursuing a limited
protective policy only in consideration of several important issues like public health
security and religious restrictions Also the government has been adopting more liberal
import and export policies and programs including reduction and harmonization in tariff
rates and elimination of many quantitative restrictions on imports (GOB 2002 CSB
2003)
5
Export Products of Bangladesh
Fruits Leather Garments Tea
Vegitable Jute Products ICT Products Potteries
Handicrafts Woven Garments Knitwear
Ceramics Products
Frozen Fish Food Products Bicycle
6
Growth of Exports
Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of
1424 percent during 198586 to 199900 compared to an annual trend growth rate of
below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through
198485 Such a pattern of export growth over time largely reflects the effects of progress
in Bangladeshrsquos policy reforms over the period Export products during the earlier period
(eg jute and jute goods) did have a significant effect in limiting the overall export
growth especially starting with the mid-1980s The export upturn in the latter period also
reflects the fact that the export setback in jute and jute goods was more than recouped by
remarkable growth in the export of a new product group ready-made garments
Jute goods
Among jute and jute goods only jute goods had a statistically significant low annual
trend growth rate of more than 6 percent during the early period and around 1 percent for
the entire period In the latter period (198586 to 199900) it had no significant growth
trend Raw jute exports on the other hand had statistically significant negative growth
trends for the whole period as well as for the second period The reasons for the decline
were the growth of jute manufacturing industry in the country and falling demand for raw
jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
Frozen food
Frozen food (mainly frozen shrimps) was one of the major product groups which had a
highly satisfactory trend growth rate of 1611 percent for the whole period However its
growth remained uneven a spectacularly high rate of 31 percent during the period till
198485 along with a sharp drop to about 84 percent during 198586 to 199900 The
drop in the growth rate in the later period may be attributed to a fall in demand in the EU
markets in the late 1980s and early 1990s which recovered only during the second half of
the 1990s The dwindling growth of frozen foods in the later period may also be
attributed to supply constraints
7
Tea
Tea falls in the category of an exceptional export product since it had a significant growth
of 13 percent during the early period up to 198485 However its growth was so low and
erratic subsequently that it showed a negative growth trend during the later period While
Bangladesh successfully recouped the loss of tea export earnings caused by the
dislocation during the countryrsquos war of Independence it lost the momentum in its race
with India and Sri Lanka in the late 1980s and early 1990s
Leather and leather products
Bangladeshrsquos exports of hides skins and leather and leather products have increased
since the early 1970s The product group included in the traditional export category had
a trend growth rate of about 9 percent during the entire period which was close to the
average growth for all exports Its growth rate was more than 13 percent during the first
period but the rate slowed to 5 percent during the second period
Readymade garments
Starting from a virtually zero base during the late 1970s readymade garments exports
grew at a very rapid rate of about 95 percent during the early period up to 198485 and
from a sizeable base at a moderate but fairly high rate of 2037 percent during the later
period
Knitwear products newly entered the export market with some significance only in
198990 and since then its export grew very rapidly ndash at a much faster rate than other
readymade garments The very fast growth of the RMG product group as a major export
earner (in gross terms) was the most remarkable development for Bangladesh and
without this phenomenal growth Bangladeshrsquos total exports which had a setback in the
traditionally important exports of jute and jute goods could not have grown at double
digit in the late 1980s and 1990s
8
Annual Growth Trends of Exports by Commodity GroupsCommodity Group 197273 ndash 199900 197273 ndash 198485 198586 ndash 199900
Raw Jute -175 071 -213Jute Manufactures 122 649 101Frozen Foods 1611 3058 84Tea 175 1323 -095Leather 886 132 488Readymade Garments 5710 9491 2037Others 1902 2318 2439Total Exports 1091 86 1424
9
Composition of Exports 1999-00
54
22
6
6
12
Woven Garments
Kintwear
Frozen Food
Jute and Jute goods
others
Growth in Exports Millions
0
1000
2000
3000
4000
5000
6000
7000
1990-91 1991-92 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00
years
Mil
lio
n $
Source Authorrsquos estimation based on Bangladesh Bank data
Trend of growth in export of Bangladesh among 1980-90 to 1990-99sDuring 1990s Bangladeshrsquos total exports in Current US $ value grew at an annual
compound rate of 144 per cent In fact Bangladesh experienced double digit export
growth in most of the years during the 1990sThe Gap between Export and Import
widened from-US$1791 million in 199091 to -$2814 million in 199000although the
share of export earnings in import payments steadily rose from 31 per cent in 198081 to
67 per cent in 199900The openness of the economy as measured by total external trade
10
as a proportion of GDP went up from around 22 percent in 199091 to nearly 30 percent
in 199000 with the share of export in GDP rising from 7 per cent to 12 percent during
the same period
Trend of growth in export among 1980-90 to 1990-00
Description 198081 199091 199900 Annual compound
Growth rate
1980s
Annual
compound
Growth rate
1990s
Export(millions $) 710 1718 5752 92 144
Import(millions $) 2282 3510 8566 44 104
Trade Deficit
(million $)
1572 1792 2814 13 51
Export as of
import
311 489 671
Export as GDP 5 73 121
import As of GDP 16 15 179
Openness of the
economy
21 223 30
Source Export Promotion Bureau and World Bank
Changes in Composition of Exports and Imports
11
Exports of traditional goods (composed of jute jute goods tea and leather) constituted
most of Bangladeshrsquos total exports around 97 percent in 197273 These exports
precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute
and jute goods in the export trade of Bangladesh has weakened considerably and some
non-traditional items have made inroads For example the share of raw jute in export
earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900
Over the same period the share of jute goods declined from 52 percent to less than 5
percent Another traditional exports item tea declined from 27 percent to 03 percent
during the period Tearsquos relative export share did increase in some of the years in the
1980s but it declined sharply in later years Leatherrsquos share in total exports showed a
significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s
but declined to a level of 34 percent in 199900
On the other hand nontraditional exports (ie exports of goods other than traditional
ones) dramatically grew in importance from 3 percent of total exports in 197273 to more
than 90 percent in 199900 Among the nontraditional exports RMG including knitwear
rose to 54 percent during 199900 from an insignificant level in the early 1980s The
share of frozen food increased from less than 1 percent to 6 percent during the years
Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected
a deceleration in its growth performance in recent years Residual export category
showed a big jump in export importance from 18 percent in 197273 to 31 percent in
199900
12
Composition of Exports by Commodity Groups
( of Total Export Earnings) Year Raw Jute Jute Goods Frozen
FoodsTea Leather Readymade
GarmentsOthers
198889 756 1892 1099 310 1065 3663 1213198990 818 1869 905 259 1174 3997 978199091 607 1041 826 252 782 4283 2210199192 429 1471 640 162 725 5336 1237199293 314 1226 693 173 625 5205 1762199394 226 1121 834 150 666 5097 1906199495 208 921 863 095 583 5298 2032199596 232 849 810 086 545 5023 2455199697 263 720 728 087 441 5062 2699199798 209 543 576 091 367 5497 2717199899 135 571 515 073 316 5607 2784199900 125 462 598 031 339 5360 3084
Source Authorrsquos calculation based on Bangladesh Bank data
Some Graphical Statistics over Last Two Decades
Figure 412 shows thatDuring 1983-84 to 1989-90 the average trade deficit was 73 of GDP This deficit decreased to 67 on average in the last five years
13
Figure 421 shows thatThe growth in exports has fluctuated considerably from an average low of 7 in 1981-1985 period to an average high of in excess of 17 in 1991-1995 and 2006-2008 periods
Figure 422 shows that
14
The share of primary commodities to total exports decreased from 175 in 1980-81 to
7 in 2007-08On the other hand the share of manufactured goods to total exports
increased from 44 in 1980- 81 to 93 in 2007-08
Figure 444 shows that1048707 there has a dramatic increase in the number of expatriate workers since 2005 rising
from about 250 lakh to 875 lakh
1048707 However the impact of the global financial crisis may lead to a decline over the
coming months
15
Trend of Export Earnings
At present Bangladesh faces growing economic competition from India Pakistan and
Indonesia countries which could offer better infrastructure and larger and growing
domestic markets The exports of Bangladesh have been experiencing a steady rise since
the late 80s of which apparels constitute approximately 75 of the total exports Other
items include frozen foods jute amp jute products leather amp leather products handicrafts
vegetables chemical products etc Major export markets for Bangladeshi exporters are
North America (33) and EU (52) while other regions constitute the rest In Fiscal
Year 2006-07 total exports earnings of Bangladesh exceeded US$ 12 billion The trend
of Bangladeshi exports from FY 1972-72 to 2006-07 iis shown below
16
Conclusion
Bangladesh economy has passed through a heightened pace of global integration in the
1990s The degree of openness of the Bangladesh economy is now higher than many
developing countries ndash exports and imports of goods and services currently account for
about a-third of the countryrsquos GDP Thus by definition the state of the global economy
is likely to have a stronger impact on the Bangladesh economy now than at any time in
the past The impact of the state of the global economy would continue to be increasingly
felt in terms of the countryrsquos macroeconomic performance GDP growth rate external
sector performance foreign exchange reserves and health of the financial institutions
This is perhaps one of the most important legacies that the Bangladesh economy has
inherited through its developmental practice and reforms of the 1990s
Bangladeshrsquos export sector registered double-digit real growth rate throughout the 1990s
As a matter of fact real export sector growth rate was almost three times the real GDP
growth rate during this period Even during FY 1990 and FY 1991 a period which
coincided with the last major global recession Bangladeshrsquos export sector posted robust
growth rates of 179 and 127 respectively The structure of export was different
though at the time Raw jute jute goods and leather were some of the major export
commodities in the early 1990s their combined share being equal to the share of RMG in
total exports of Bangladesh A relatively diversified base and market provided some sort
of a cushion against sudden fluctuations of the global market
Exporters and trade experts attribute Bangladeshrsquos export success to the
lsquocompetitivenessrsquo of the countryrsquos readymade garment sector and availability of cheap
labor although exports of frozen food leather and jute fell Garment manufacturers
produced lower-end products whose demand did not fall significantly in global markets
Remaining competitive in these days of difficulties since the quota system was
withdrawn and the ongoing lingering economic slide worldwide is rewarding for
Bangladesh
17
Bangladesh maintains export trends
YEAR EXPORT IN (MILLION US$)
Export (M US$)
CURRENT CUMULATIVE
1983-84 016 016
1984-85 445 461
1985-86 759 1221
1986-87 1527 2747
1987-88 1393 4140
1988-89 1608 5748
1989-90 3421 9169
1990-91 4799 13967
1991-92 7699 21667
1992-93 12705 34371
1993-94 14560 48932
1994-95 22826 71758
1995-96 33702 105460
1996-97 46277 151736
1997-98 63605 215341
1998-99 71169 286510
1999-00 89082 375592
2000-01 106787 482379
2001-02 107703 590081
2002-03 120022 710103
2003-04 135391 845494
2004-05 154868 1000362
2005-06 183618 1183980
2006-07 206367 206367
2007-08 242958 1633304
2008-09 258170 1891474
2009-10 282254 2173728
2010-11 (January 2011)
194001 2367728
Growth (2009-10) 933
18
References Bakht Z (2001) ldquoTrade Liberalisation Exports and Growth of Manufacturing Industries
in Bangladeshrdquo in M M Huq and Love (eds) Strategies for Industrialisation The Case of Bangladesh University Press Ltd Dhaka
Rab A (1997) ldquoExport Trends and Policies in Bangladesh Some Lessons of Past Performance for Future Policiesrdquo paper presented to a Workshop organized by the Institutional Support to the Ministry of Finance Project (ISMOF) supported by the Asian Development Bank March Dhaka
Rahman S H (1979) ldquoThe Determinants of Change in Trade Balance Some Estimates for Bangladesh 195960 ndash 197475rdquo Bangladesh Development Studies vol 7 pp 71 ndash 84
Ahmed S and Sattar Z (2004) ldquoTrade Liberalization Growth and Poverty Reduction The Case of Bangladeshrdquo Working Paper World Bank South Asian Region May 01 2004 The paper was also presented in the ABCDE Bangalore Conference in May 2003
Bangladesh Bank (2002-2003) Annual Report 2002-2003 Dhaka Bangladesh Bangladesh Bank (2007) Quoted in wwwbanglaembassycombhFDI20in
20Bangladeshhtm Downloaded on 31 October 2007 BBS (2000) Statistical Pocketbook of Bangladesh Bangladesh Bureau of Statistics
Dhaka Bangladesh CPD (1997) Growth or Stagnation A Review of Bangladeshrsquos Development 1996
Centre for Policy DialogueUniversity Press Limited Dhaka CSB (2003) Country Study of Bangladesh A Paper Presented at the Country Studies
Workshop on lsquoTrade Cooperation and Economic Policy Reform in South Asiarsquo Bangladesh Institute of Development Studies Dhaka Bangladesh March 30
EPB (Export Promotion Bureau) (2004) Bangladesh Export Statistics 2002-2003 Export Promotion Bureau Dhaka Bangladesh wwwepbbdcomExportStathtml
GOB (2002) lsquoForeign Trade Exchange Rate Management and External Sectorrsquo Bangladesh Economic Review Finance Division Ministry of Finance the Government of Bangladesh Dhaka
GOB (2003) Export Policy 2003-2006 Ministry of Commerce Government of Bangladesh December 2003
GOB (2006) Trade Policy Review by Bangladesh World Trade Organization Report No 06-3754 downloaded on 10907
World Bank (1999) World Development Indicators Database World Bank Washington D C
World Bank (2000) World Development Indicators Database World Bank Washington D C
Bangladesh International trade Information about International trade in Bangladesh httpwwwnationsencyclopediacomeconomiesAsia-and-the-PacificBangladesh-INTERNATIONAL-TRADEhtmlixzz1GOf4e1tc
Bangladesh Export Promotion Bureau
19
- Bangladesh Trade Balance and Export-Import Price Indices
- Growth of Exports
- Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of 1424 percent during 198586 to 199900 compared to an annual trend growth rate of below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through 198485 Such a pattern of export growth over time largely reflects the effects of progress in Bangladeshrsquos policy reforms over the period Export products during the earlier period (eg jute and jute goods) did have a significant effect in limiting the overall export growth especially starting with the mid-1980s The export upturn in the latter period also reflects the fact that the export setback in jute and jute goods was more than recouped by remarkable growth in the export of a new product group ready-made garments
- Jute goods
- Among jute and jute goods only jute goods had a statistically significant low annual trend growth rate of more than 6 percent during the early period and around 1 percent for the entire period In the latter period (198586 to 199900) it had no significant growth trend Raw jute exports on the other hand had statistically significant negative growth trends for the whole period as well as for the second period The reasons for the decline were the growth of jute manufacturing industry in the country and falling demand for raw jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
- Frozen food
- Frozen food (mainly frozen shrimps) was one of the major product groups which had a highly satisfactory trend growth rate of 1611 percent for the whole period However its growth remained uneven a spectacularly high rate of 31 percent during the period till 198485 along with a sharp drop to about 84 percent during 198586 to 199900 The drop in the growth rate in the later period may be attributed to a fall in demand in the EU markets in the late 1980s and early 1990s which recovered only during the second half of the 1990s The dwindling growth of frozen foods in the later period may also be attributed to supply constraints
- Exports of traditional goods (composed of jute jute goods tea and leather) constituted most of Bangladeshrsquos total exports around 97 percent in 197273 These exports precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute and jute goods in the export trade of Bangladesh has weakened considerably and some non-traditional items have made inroads For example the share of raw jute in export earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900 Over the same period the share of jute goods declined from 52 percent to less than 5 percent Another traditional exports item tea declined from 27 percent to 03 percent during the period Tearsquos relative export share did increase in some of the years in the 1980s but it declined sharply in later years Leatherrsquos share in total exports showed a significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s but declined to a level of 34 percent in 199900
- On the other hand nontraditional exports (ie exports of goods other than traditional ones) dramatically grew in importance from 3 percent of total exports in 197273 to more than 90 percent in 199900 Among the nontraditional exports RMG including knitwear rose to 54 percent during 199900 from an insignificant level in the early 1980s The share of frozen food increased from less than 1 percent to 6 percent during the years Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected a deceleration in its growth performance in recent years Residual export category showed a big jump in export importance from 18 percent in 197273 to 31 percent in 199900
-
Bangladesh has a long history of maintaining a negative trade balance importing more
goods than it exports In the 1970s and 1980s it imported goods and services twice and
sometimes 3 times as much as it exported Even during the relatively successful 1999
financial year the country exported just US$5523 billion worth of products while it
imported US$8381 billion worth of products leaving a large trade shortfall of US$2858
billion
Bangladesh Trade Balance and Export-Import Price Indices
Year Value (Tk Million) Price Indices (198485 = 100)Exportsa Importsa Trade Balancea Exportsb Importsb
197374 2983 7320 -4337 468 490197475 3136 10842 -7706 579 642197576 5552 14703 -9151 507 582197677 6670 13993 -7323 561 577197778 7178 18216 -11038 644 591197879 9632 22073 -12441 804 687197980 10997 30525 -19528 970 874198081 11484 37288 -25804 800 1026198182 12387 38729 -26342 687 1071198283 18016 45265 -27249 699 1015198384 20136 50874 -30738 825 1001198485 26225 68263 -42038 1000 1000198586 27396 62929 -35533 725 889198687 33682 68496 -34814 752 811198788 41161 91588 -50427 880 825198889 42686 95075 -52389 851 877198990 41515 113305 -71790 879 930199091 60272 111877 -51605 937 969199192 74198 132756 -58558 923 942199293 88215 138198 -49983 986 973199394 98739 137540 -38801 1041 1000199495 136970 218564 -81594 1110 1089199596 144521 254646 -110125 1185 1169199697 171554 290187 -118633 1241 1204199798 229408 318916 -89508 1289 1245199899 245620 341016 -95396 1292 1309199900c 289383 422755 -133372 1299 1426
Sources a BBS Foreign Trade Statistics (various issues)
b Bangladesh Economic Survey (various issues)
c Bangladesh Economic Survey 2001
4
Exports of Bangladesh to Industrial and Developing Countries
While developing countries were the major destinations during the 1970s and early
1980s this direction reversed from the middle of 1980s and the trend continued
throughout the 1990s and thereafter Now industrial countries are the main destinations of
Bangladeshrsquos exports The industrial countries used to represent 414 share of
Bangladesh exports in 1978 and developing countries used to represent 458 In 2002
these figures stood at 883 and 117 respectively for industrial and developing
countries Among the developing countries the Asian countries import more than others
from Bangladesh
It is also observed that the annual growth rate of Bangladeshrsquos exports to the world is
positive since the 1990s it is found very impressive in 1990 and 1994 being 281 and
163 respectively However the corresponding figures are better for industrial
countries 406 and 187 The export growth rate to developing countries in 1998 and
2002 are negative -159 and ndash29 respectively though these rates were positive in
1990 and 1994
Trade Policy Reforms
During the past three decades Bangladesh carried out extensive trade policy reforms In
particular the country has been pursuing a liberal trade policy since the beginning of the
1990s which is consistent with the trends in the global market economy Uruguay Round
Accord and agreement with the World Trade Organization The government formulated a
five-year export policy along with a more liberal five-year import policy in 199798 with
the objective of attaining a favorable trade balance and gradual improvement in the
foreign exchange reserve situation (GOB 2002) The governments in 1990s really wanted
to promote rapid export growth by reducing and eliminating the anti-export bias prevalent
in the economy Keeping this goal in mind the government has been pursuing a limited
protective policy only in consideration of several important issues like public health
security and religious restrictions Also the government has been adopting more liberal
import and export policies and programs including reduction and harmonization in tariff
rates and elimination of many quantitative restrictions on imports (GOB 2002 CSB
2003)
5
Export Products of Bangladesh
Fruits Leather Garments Tea
Vegitable Jute Products ICT Products Potteries
Handicrafts Woven Garments Knitwear
Ceramics Products
Frozen Fish Food Products Bicycle
6
Growth of Exports
Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of
1424 percent during 198586 to 199900 compared to an annual trend growth rate of
below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through
198485 Such a pattern of export growth over time largely reflects the effects of progress
in Bangladeshrsquos policy reforms over the period Export products during the earlier period
(eg jute and jute goods) did have a significant effect in limiting the overall export
growth especially starting with the mid-1980s The export upturn in the latter period also
reflects the fact that the export setback in jute and jute goods was more than recouped by
remarkable growth in the export of a new product group ready-made garments
Jute goods
Among jute and jute goods only jute goods had a statistically significant low annual
trend growth rate of more than 6 percent during the early period and around 1 percent for
the entire period In the latter period (198586 to 199900) it had no significant growth
trend Raw jute exports on the other hand had statistically significant negative growth
trends for the whole period as well as for the second period The reasons for the decline
were the growth of jute manufacturing industry in the country and falling demand for raw
jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
Frozen food
Frozen food (mainly frozen shrimps) was one of the major product groups which had a
highly satisfactory trend growth rate of 1611 percent for the whole period However its
growth remained uneven a spectacularly high rate of 31 percent during the period till
198485 along with a sharp drop to about 84 percent during 198586 to 199900 The
drop in the growth rate in the later period may be attributed to a fall in demand in the EU
markets in the late 1980s and early 1990s which recovered only during the second half of
the 1990s The dwindling growth of frozen foods in the later period may also be
attributed to supply constraints
7
Tea
Tea falls in the category of an exceptional export product since it had a significant growth
of 13 percent during the early period up to 198485 However its growth was so low and
erratic subsequently that it showed a negative growth trend during the later period While
Bangladesh successfully recouped the loss of tea export earnings caused by the
dislocation during the countryrsquos war of Independence it lost the momentum in its race
with India and Sri Lanka in the late 1980s and early 1990s
Leather and leather products
Bangladeshrsquos exports of hides skins and leather and leather products have increased
since the early 1970s The product group included in the traditional export category had
a trend growth rate of about 9 percent during the entire period which was close to the
average growth for all exports Its growth rate was more than 13 percent during the first
period but the rate slowed to 5 percent during the second period
Readymade garments
Starting from a virtually zero base during the late 1970s readymade garments exports
grew at a very rapid rate of about 95 percent during the early period up to 198485 and
from a sizeable base at a moderate but fairly high rate of 2037 percent during the later
period
Knitwear products newly entered the export market with some significance only in
198990 and since then its export grew very rapidly ndash at a much faster rate than other
readymade garments The very fast growth of the RMG product group as a major export
earner (in gross terms) was the most remarkable development for Bangladesh and
without this phenomenal growth Bangladeshrsquos total exports which had a setback in the
traditionally important exports of jute and jute goods could not have grown at double
digit in the late 1980s and 1990s
8
Annual Growth Trends of Exports by Commodity GroupsCommodity Group 197273 ndash 199900 197273 ndash 198485 198586 ndash 199900
Raw Jute -175 071 -213Jute Manufactures 122 649 101Frozen Foods 1611 3058 84Tea 175 1323 -095Leather 886 132 488Readymade Garments 5710 9491 2037Others 1902 2318 2439Total Exports 1091 86 1424
9
Composition of Exports 1999-00
54
22
6
6
12
Woven Garments
Kintwear
Frozen Food
Jute and Jute goods
others
Growth in Exports Millions
0
1000
2000
3000
4000
5000
6000
7000
1990-91 1991-92 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00
years
Mil
lio
n $
Source Authorrsquos estimation based on Bangladesh Bank data
Trend of growth in export of Bangladesh among 1980-90 to 1990-99sDuring 1990s Bangladeshrsquos total exports in Current US $ value grew at an annual
compound rate of 144 per cent In fact Bangladesh experienced double digit export
growth in most of the years during the 1990sThe Gap between Export and Import
widened from-US$1791 million in 199091 to -$2814 million in 199000although the
share of export earnings in import payments steadily rose from 31 per cent in 198081 to
67 per cent in 199900The openness of the economy as measured by total external trade
10
as a proportion of GDP went up from around 22 percent in 199091 to nearly 30 percent
in 199000 with the share of export in GDP rising from 7 per cent to 12 percent during
the same period
Trend of growth in export among 1980-90 to 1990-00
Description 198081 199091 199900 Annual compound
Growth rate
1980s
Annual
compound
Growth rate
1990s
Export(millions $) 710 1718 5752 92 144
Import(millions $) 2282 3510 8566 44 104
Trade Deficit
(million $)
1572 1792 2814 13 51
Export as of
import
311 489 671
Export as GDP 5 73 121
import As of GDP 16 15 179
Openness of the
economy
21 223 30
Source Export Promotion Bureau and World Bank
Changes in Composition of Exports and Imports
11
Exports of traditional goods (composed of jute jute goods tea and leather) constituted
most of Bangladeshrsquos total exports around 97 percent in 197273 These exports
precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute
and jute goods in the export trade of Bangladesh has weakened considerably and some
non-traditional items have made inroads For example the share of raw jute in export
earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900
Over the same period the share of jute goods declined from 52 percent to less than 5
percent Another traditional exports item tea declined from 27 percent to 03 percent
during the period Tearsquos relative export share did increase in some of the years in the
1980s but it declined sharply in later years Leatherrsquos share in total exports showed a
significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s
but declined to a level of 34 percent in 199900
On the other hand nontraditional exports (ie exports of goods other than traditional
ones) dramatically grew in importance from 3 percent of total exports in 197273 to more
than 90 percent in 199900 Among the nontraditional exports RMG including knitwear
rose to 54 percent during 199900 from an insignificant level in the early 1980s The
share of frozen food increased from less than 1 percent to 6 percent during the years
Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected
a deceleration in its growth performance in recent years Residual export category
showed a big jump in export importance from 18 percent in 197273 to 31 percent in
199900
12
Composition of Exports by Commodity Groups
( of Total Export Earnings) Year Raw Jute Jute Goods Frozen
FoodsTea Leather Readymade
GarmentsOthers
198889 756 1892 1099 310 1065 3663 1213198990 818 1869 905 259 1174 3997 978199091 607 1041 826 252 782 4283 2210199192 429 1471 640 162 725 5336 1237199293 314 1226 693 173 625 5205 1762199394 226 1121 834 150 666 5097 1906199495 208 921 863 095 583 5298 2032199596 232 849 810 086 545 5023 2455199697 263 720 728 087 441 5062 2699199798 209 543 576 091 367 5497 2717199899 135 571 515 073 316 5607 2784199900 125 462 598 031 339 5360 3084
Source Authorrsquos calculation based on Bangladesh Bank data
Some Graphical Statistics over Last Two Decades
Figure 412 shows thatDuring 1983-84 to 1989-90 the average trade deficit was 73 of GDP This deficit decreased to 67 on average in the last five years
13
Figure 421 shows thatThe growth in exports has fluctuated considerably from an average low of 7 in 1981-1985 period to an average high of in excess of 17 in 1991-1995 and 2006-2008 periods
Figure 422 shows that
14
The share of primary commodities to total exports decreased from 175 in 1980-81 to
7 in 2007-08On the other hand the share of manufactured goods to total exports
increased from 44 in 1980- 81 to 93 in 2007-08
Figure 444 shows that1048707 there has a dramatic increase in the number of expatriate workers since 2005 rising
from about 250 lakh to 875 lakh
1048707 However the impact of the global financial crisis may lead to a decline over the
coming months
15
Trend of Export Earnings
At present Bangladesh faces growing economic competition from India Pakistan and
Indonesia countries which could offer better infrastructure and larger and growing
domestic markets The exports of Bangladesh have been experiencing a steady rise since
the late 80s of which apparels constitute approximately 75 of the total exports Other
items include frozen foods jute amp jute products leather amp leather products handicrafts
vegetables chemical products etc Major export markets for Bangladeshi exporters are
North America (33) and EU (52) while other regions constitute the rest In Fiscal
Year 2006-07 total exports earnings of Bangladesh exceeded US$ 12 billion The trend
of Bangladeshi exports from FY 1972-72 to 2006-07 iis shown below
16
Conclusion
Bangladesh economy has passed through a heightened pace of global integration in the
1990s The degree of openness of the Bangladesh economy is now higher than many
developing countries ndash exports and imports of goods and services currently account for
about a-third of the countryrsquos GDP Thus by definition the state of the global economy
is likely to have a stronger impact on the Bangladesh economy now than at any time in
the past The impact of the state of the global economy would continue to be increasingly
felt in terms of the countryrsquos macroeconomic performance GDP growth rate external
sector performance foreign exchange reserves and health of the financial institutions
This is perhaps one of the most important legacies that the Bangladesh economy has
inherited through its developmental practice and reforms of the 1990s
Bangladeshrsquos export sector registered double-digit real growth rate throughout the 1990s
As a matter of fact real export sector growth rate was almost three times the real GDP
growth rate during this period Even during FY 1990 and FY 1991 a period which
coincided with the last major global recession Bangladeshrsquos export sector posted robust
growth rates of 179 and 127 respectively The structure of export was different
though at the time Raw jute jute goods and leather were some of the major export
commodities in the early 1990s their combined share being equal to the share of RMG in
total exports of Bangladesh A relatively diversified base and market provided some sort
of a cushion against sudden fluctuations of the global market
Exporters and trade experts attribute Bangladeshrsquos export success to the
lsquocompetitivenessrsquo of the countryrsquos readymade garment sector and availability of cheap
labor although exports of frozen food leather and jute fell Garment manufacturers
produced lower-end products whose demand did not fall significantly in global markets
Remaining competitive in these days of difficulties since the quota system was
withdrawn and the ongoing lingering economic slide worldwide is rewarding for
Bangladesh
17
Bangladesh maintains export trends
YEAR EXPORT IN (MILLION US$)
Export (M US$)
CURRENT CUMULATIVE
1983-84 016 016
1984-85 445 461
1985-86 759 1221
1986-87 1527 2747
1987-88 1393 4140
1988-89 1608 5748
1989-90 3421 9169
1990-91 4799 13967
1991-92 7699 21667
1992-93 12705 34371
1993-94 14560 48932
1994-95 22826 71758
1995-96 33702 105460
1996-97 46277 151736
1997-98 63605 215341
1998-99 71169 286510
1999-00 89082 375592
2000-01 106787 482379
2001-02 107703 590081
2002-03 120022 710103
2003-04 135391 845494
2004-05 154868 1000362
2005-06 183618 1183980
2006-07 206367 206367
2007-08 242958 1633304
2008-09 258170 1891474
2009-10 282254 2173728
2010-11 (January 2011)
194001 2367728
Growth (2009-10) 933
18
References Bakht Z (2001) ldquoTrade Liberalisation Exports and Growth of Manufacturing Industries
in Bangladeshrdquo in M M Huq and Love (eds) Strategies for Industrialisation The Case of Bangladesh University Press Ltd Dhaka
Rab A (1997) ldquoExport Trends and Policies in Bangladesh Some Lessons of Past Performance for Future Policiesrdquo paper presented to a Workshop organized by the Institutional Support to the Ministry of Finance Project (ISMOF) supported by the Asian Development Bank March Dhaka
Rahman S H (1979) ldquoThe Determinants of Change in Trade Balance Some Estimates for Bangladesh 195960 ndash 197475rdquo Bangladesh Development Studies vol 7 pp 71 ndash 84
Ahmed S and Sattar Z (2004) ldquoTrade Liberalization Growth and Poverty Reduction The Case of Bangladeshrdquo Working Paper World Bank South Asian Region May 01 2004 The paper was also presented in the ABCDE Bangalore Conference in May 2003
Bangladesh Bank (2002-2003) Annual Report 2002-2003 Dhaka Bangladesh Bangladesh Bank (2007) Quoted in wwwbanglaembassycombhFDI20in
20Bangladeshhtm Downloaded on 31 October 2007 BBS (2000) Statistical Pocketbook of Bangladesh Bangladesh Bureau of Statistics
Dhaka Bangladesh CPD (1997) Growth or Stagnation A Review of Bangladeshrsquos Development 1996
Centre for Policy DialogueUniversity Press Limited Dhaka CSB (2003) Country Study of Bangladesh A Paper Presented at the Country Studies
Workshop on lsquoTrade Cooperation and Economic Policy Reform in South Asiarsquo Bangladesh Institute of Development Studies Dhaka Bangladesh March 30
EPB (Export Promotion Bureau) (2004) Bangladesh Export Statistics 2002-2003 Export Promotion Bureau Dhaka Bangladesh wwwepbbdcomExportStathtml
GOB (2002) lsquoForeign Trade Exchange Rate Management and External Sectorrsquo Bangladesh Economic Review Finance Division Ministry of Finance the Government of Bangladesh Dhaka
GOB (2003) Export Policy 2003-2006 Ministry of Commerce Government of Bangladesh December 2003
GOB (2006) Trade Policy Review by Bangladesh World Trade Organization Report No 06-3754 downloaded on 10907
World Bank (1999) World Development Indicators Database World Bank Washington D C
World Bank (2000) World Development Indicators Database World Bank Washington D C
Bangladesh International trade Information about International trade in Bangladesh httpwwwnationsencyclopediacomeconomiesAsia-and-the-PacificBangladesh-INTERNATIONAL-TRADEhtmlixzz1GOf4e1tc
Bangladesh Export Promotion Bureau
19
- Bangladesh Trade Balance and Export-Import Price Indices
- Growth of Exports
- Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of 1424 percent during 198586 to 199900 compared to an annual trend growth rate of below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through 198485 Such a pattern of export growth over time largely reflects the effects of progress in Bangladeshrsquos policy reforms over the period Export products during the earlier period (eg jute and jute goods) did have a significant effect in limiting the overall export growth especially starting with the mid-1980s The export upturn in the latter period also reflects the fact that the export setback in jute and jute goods was more than recouped by remarkable growth in the export of a new product group ready-made garments
- Jute goods
- Among jute and jute goods only jute goods had a statistically significant low annual trend growth rate of more than 6 percent during the early period and around 1 percent for the entire period In the latter period (198586 to 199900) it had no significant growth trend Raw jute exports on the other hand had statistically significant negative growth trends for the whole period as well as for the second period The reasons for the decline were the growth of jute manufacturing industry in the country and falling demand for raw jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
- Frozen food
- Frozen food (mainly frozen shrimps) was one of the major product groups which had a highly satisfactory trend growth rate of 1611 percent for the whole period However its growth remained uneven a spectacularly high rate of 31 percent during the period till 198485 along with a sharp drop to about 84 percent during 198586 to 199900 The drop in the growth rate in the later period may be attributed to a fall in demand in the EU markets in the late 1980s and early 1990s which recovered only during the second half of the 1990s The dwindling growth of frozen foods in the later period may also be attributed to supply constraints
- Exports of traditional goods (composed of jute jute goods tea and leather) constituted most of Bangladeshrsquos total exports around 97 percent in 197273 These exports precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute and jute goods in the export trade of Bangladesh has weakened considerably and some non-traditional items have made inroads For example the share of raw jute in export earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900 Over the same period the share of jute goods declined from 52 percent to less than 5 percent Another traditional exports item tea declined from 27 percent to 03 percent during the period Tearsquos relative export share did increase in some of the years in the 1980s but it declined sharply in later years Leatherrsquos share in total exports showed a significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s but declined to a level of 34 percent in 199900
- On the other hand nontraditional exports (ie exports of goods other than traditional ones) dramatically grew in importance from 3 percent of total exports in 197273 to more than 90 percent in 199900 Among the nontraditional exports RMG including knitwear rose to 54 percent during 199900 from an insignificant level in the early 1980s The share of frozen food increased from less than 1 percent to 6 percent during the years Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected a deceleration in its growth performance in recent years Residual export category showed a big jump in export importance from 18 percent in 197273 to 31 percent in 199900
-
Exports of Bangladesh to Industrial and Developing Countries
While developing countries were the major destinations during the 1970s and early
1980s this direction reversed from the middle of 1980s and the trend continued
throughout the 1990s and thereafter Now industrial countries are the main destinations of
Bangladeshrsquos exports The industrial countries used to represent 414 share of
Bangladesh exports in 1978 and developing countries used to represent 458 In 2002
these figures stood at 883 and 117 respectively for industrial and developing
countries Among the developing countries the Asian countries import more than others
from Bangladesh
It is also observed that the annual growth rate of Bangladeshrsquos exports to the world is
positive since the 1990s it is found very impressive in 1990 and 1994 being 281 and
163 respectively However the corresponding figures are better for industrial
countries 406 and 187 The export growth rate to developing countries in 1998 and
2002 are negative -159 and ndash29 respectively though these rates were positive in
1990 and 1994
Trade Policy Reforms
During the past three decades Bangladesh carried out extensive trade policy reforms In
particular the country has been pursuing a liberal trade policy since the beginning of the
1990s which is consistent with the trends in the global market economy Uruguay Round
Accord and agreement with the World Trade Organization The government formulated a
five-year export policy along with a more liberal five-year import policy in 199798 with
the objective of attaining a favorable trade balance and gradual improvement in the
foreign exchange reserve situation (GOB 2002) The governments in 1990s really wanted
to promote rapid export growth by reducing and eliminating the anti-export bias prevalent
in the economy Keeping this goal in mind the government has been pursuing a limited
protective policy only in consideration of several important issues like public health
security and religious restrictions Also the government has been adopting more liberal
import and export policies and programs including reduction and harmonization in tariff
rates and elimination of many quantitative restrictions on imports (GOB 2002 CSB
2003)
5
Export Products of Bangladesh
Fruits Leather Garments Tea
Vegitable Jute Products ICT Products Potteries
Handicrafts Woven Garments Knitwear
Ceramics Products
Frozen Fish Food Products Bicycle
6
Growth of Exports
Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of
1424 percent during 198586 to 199900 compared to an annual trend growth rate of
below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through
198485 Such a pattern of export growth over time largely reflects the effects of progress
in Bangladeshrsquos policy reforms over the period Export products during the earlier period
(eg jute and jute goods) did have a significant effect in limiting the overall export
growth especially starting with the mid-1980s The export upturn in the latter period also
reflects the fact that the export setback in jute and jute goods was more than recouped by
remarkable growth in the export of a new product group ready-made garments
Jute goods
Among jute and jute goods only jute goods had a statistically significant low annual
trend growth rate of more than 6 percent during the early period and around 1 percent for
the entire period In the latter period (198586 to 199900) it had no significant growth
trend Raw jute exports on the other hand had statistically significant negative growth
trends for the whole period as well as for the second period The reasons for the decline
were the growth of jute manufacturing industry in the country and falling demand for raw
jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
Frozen food
Frozen food (mainly frozen shrimps) was one of the major product groups which had a
highly satisfactory trend growth rate of 1611 percent for the whole period However its
growth remained uneven a spectacularly high rate of 31 percent during the period till
198485 along with a sharp drop to about 84 percent during 198586 to 199900 The
drop in the growth rate in the later period may be attributed to a fall in demand in the EU
markets in the late 1980s and early 1990s which recovered only during the second half of
the 1990s The dwindling growth of frozen foods in the later period may also be
attributed to supply constraints
7
Tea
Tea falls in the category of an exceptional export product since it had a significant growth
of 13 percent during the early period up to 198485 However its growth was so low and
erratic subsequently that it showed a negative growth trend during the later period While
Bangladesh successfully recouped the loss of tea export earnings caused by the
dislocation during the countryrsquos war of Independence it lost the momentum in its race
with India and Sri Lanka in the late 1980s and early 1990s
Leather and leather products
Bangladeshrsquos exports of hides skins and leather and leather products have increased
since the early 1970s The product group included in the traditional export category had
a trend growth rate of about 9 percent during the entire period which was close to the
average growth for all exports Its growth rate was more than 13 percent during the first
period but the rate slowed to 5 percent during the second period
Readymade garments
Starting from a virtually zero base during the late 1970s readymade garments exports
grew at a very rapid rate of about 95 percent during the early period up to 198485 and
from a sizeable base at a moderate but fairly high rate of 2037 percent during the later
period
Knitwear products newly entered the export market with some significance only in
198990 and since then its export grew very rapidly ndash at a much faster rate than other
readymade garments The very fast growth of the RMG product group as a major export
earner (in gross terms) was the most remarkable development for Bangladesh and
without this phenomenal growth Bangladeshrsquos total exports which had a setback in the
traditionally important exports of jute and jute goods could not have grown at double
digit in the late 1980s and 1990s
8
Annual Growth Trends of Exports by Commodity GroupsCommodity Group 197273 ndash 199900 197273 ndash 198485 198586 ndash 199900
Raw Jute -175 071 -213Jute Manufactures 122 649 101Frozen Foods 1611 3058 84Tea 175 1323 -095Leather 886 132 488Readymade Garments 5710 9491 2037Others 1902 2318 2439Total Exports 1091 86 1424
9
Composition of Exports 1999-00
54
22
6
6
12
Woven Garments
Kintwear
Frozen Food
Jute and Jute goods
others
Growth in Exports Millions
0
1000
2000
3000
4000
5000
6000
7000
1990-91 1991-92 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00
years
Mil
lio
n $
Source Authorrsquos estimation based on Bangladesh Bank data
Trend of growth in export of Bangladesh among 1980-90 to 1990-99sDuring 1990s Bangladeshrsquos total exports in Current US $ value grew at an annual
compound rate of 144 per cent In fact Bangladesh experienced double digit export
growth in most of the years during the 1990sThe Gap between Export and Import
widened from-US$1791 million in 199091 to -$2814 million in 199000although the
share of export earnings in import payments steadily rose from 31 per cent in 198081 to
67 per cent in 199900The openness of the economy as measured by total external trade
10
as a proportion of GDP went up from around 22 percent in 199091 to nearly 30 percent
in 199000 with the share of export in GDP rising from 7 per cent to 12 percent during
the same period
Trend of growth in export among 1980-90 to 1990-00
Description 198081 199091 199900 Annual compound
Growth rate
1980s
Annual
compound
Growth rate
1990s
Export(millions $) 710 1718 5752 92 144
Import(millions $) 2282 3510 8566 44 104
Trade Deficit
(million $)
1572 1792 2814 13 51
Export as of
import
311 489 671
Export as GDP 5 73 121
import As of GDP 16 15 179
Openness of the
economy
21 223 30
Source Export Promotion Bureau and World Bank
Changes in Composition of Exports and Imports
11
Exports of traditional goods (composed of jute jute goods tea and leather) constituted
most of Bangladeshrsquos total exports around 97 percent in 197273 These exports
precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute
and jute goods in the export trade of Bangladesh has weakened considerably and some
non-traditional items have made inroads For example the share of raw jute in export
earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900
Over the same period the share of jute goods declined from 52 percent to less than 5
percent Another traditional exports item tea declined from 27 percent to 03 percent
during the period Tearsquos relative export share did increase in some of the years in the
1980s but it declined sharply in later years Leatherrsquos share in total exports showed a
significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s
but declined to a level of 34 percent in 199900
On the other hand nontraditional exports (ie exports of goods other than traditional
ones) dramatically grew in importance from 3 percent of total exports in 197273 to more
than 90 percent in 199900 Among the nontraditional exports RMG including knitwear
rose to 54 percent during 199900 from an insignificant level in the early 1980s The
share of frozen food increased from less than 1 percent to 6 percent during the years
Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected
a deceleration in its growth performance in recent years Residual export category
showed a big jump in export importance from 18 percent in 197273 to 31 percent in
199900
12
Composition of Exports by Commodity Groups
( of Total Export Earnings) Year Raw Jute Jute Goods Frozen
FoodsTea Leather Readymade
GarmentsOthers
198889 756 1892 1099 310 1065 3663 1213198990 818 1869 905 259 1174 3997 978199091 607 1041 826 252 782 4283 2210199192 429 1471 640 162 725 5336 1237199293 314 1226 693 173 625 5205 1762199394 226 1121 834 150 666 5097 1906199495 208 921 863 095 583 5298 2032199596 232 849 810 086 545 5023 2455199697 263 720 728 087 441 5062 2699199798 209 543 576 091 367 5497 2717199899 135 571 515 073 316 5607 2784199900 125 462 598 031 339 5360 3084
Source Authorrsquos calculation based on Bangladesh Bank data
Some Graphical Statistics over Last Two Decades
Figure 412 shows thatDuring 1983-84 to 1989-90 the average trade deficit was 73 of GDP This deficit decreased to 67 on average in the last five years
13
Figure 421 shows thatThe growth in exports has fluctuated considerably from an average low of 7 in 1981-1985 period to an average high of in excess of 17 in 1991-1995 and 2006-2008 periods
Figure 422 shows that
14
The share of primary commodities to total exports decreased from 175 in 1980-81 to
7 in 2007-08On the other hand the share of manufactured goods to total exports
increased from 44 in 1980- 81 to 93 in 2007-08
Figure 444 shows that1048707 there has a dramatic increase in the number of expatriate workers since 2005 rising
from about 250 lakh to 875 lakh
1048707 However the impact of the global financial crisis may lead to a decline over the
coming months
15
Trend of Export Earnings
At present Bangladesh faces growing economic competition from India Pakistan and
Indonesia countries which could offer better infrastructure and larger and growing
domestic markets The exports of Bangladesh have been experiencing a steady rise since
the late 80s of which apparels constitute approximately 75 of the total exports Other
items include frozen foods jute amp jute products leather amp leather products handicrafts
vegetables chemical products etc Major export markets for Bangladeshi exporters are
North America (33) and EU (52) while other regions constitute the rest In Fiscal
Year 2006-07 total exports earnings of Bangladesh exceeded US$ 12 billion The trend
of Bangladeshi exports from FY 1972-72 to 2006-07 iis shown below
16
Conclusion
Bangladesh economy has passed through a heightened pace of global integration in the
1990s The degree of openness of the Bangladesh economy is now higher than many
developing countries ndash exports and imports of goods and services currently account for
about a-third of the countryrsquos GDP Thus by definition the state of the global economy
is likely to have a stronger impact on the Bangladesh economy now than at any time in
the past The impact of the state of the global economy would continue to be increasingly
felt in terms of the countryrsquos macroeconomic performance GDP growth rate external
sector performance foreign exchange reserves and health of the financial institutions
This is perhaps one of the most important legacies that the Bangladesh economy has
inherited through its developmental practice and reforms of the 1990s
Bangladeshrsquos export sector registered double-digit real growth rate throughout the 1990s
As a matter of fact real export sector growth rate was almost three times the real GDP
growth rate during this period Even during FY 1990 and FY 1991 a period which
coincided with the last major global recession Bangladeshrsquos export sector posted robust
growth rates of 179 and 127 respectively The structure of export was different
though at the time Raw jute jute goods and leather were some of the major export
commodities in the early 1990s their combined share being equal to the share of RMG in
total exports of Bangladesh A relatively diversified base and market provided some sort
of a cushion against sudden fluctuations of the global market
Exporters and trade experts attribute Bangladeshrsquos export success to the
lsquocompetitivenessrsquo of the countryrsquos readymade garment sector and availability of cheap
labor although exports of frozen food leather and jute fell Garment manufacturers
produced lower-end products whose demand did not fall significantly in global markets
Remaining competitive in these days of difficulties since the quota system was
withdrawn and the ongoing lingering economic slide worldwide is rewarding for
Bangladesh
17
Bangladesh maintains export trends
YEAR EXPORT IN (MILLION US$)
Export (M US$)
CURRENT CUMULATIVE
1983-84 016 016
1984-85 445 461
1985-86 759 1221
1986-87 1527 2747
1987-88 1393 4140
1988-89 1608 5748
1989-90 3421 9169
1990-91 4799 13967
1991-92 7699 21667
1992-93 12705 34371
1993-94 14560 48932
1994-95 22826 71758
1995-96 33702 105460
1996-97 46277 151736
1997-98 63605 215341
1998-99 71169 286510
1999-00 89082 375592
2000-01 106787 482379
2001-02 107703 590081
2002-03 120022 710103
2003-04 135391 845494
2004-05 154868 1000362
2005-06 183618 1183980
2006-07 206367 206367
2007-08 242958 1633304
2008-09 258170 1891474
2009-10 282254 2173728
2010-11 (January 2011)
194001 2367728
Growth (2009-10) 933
18
References Bakht Z (2001) ldquoTrade Liberalisation Exports and Growth of Manufacturing Industries
in Bangladeshrdquo in M M Huq and Love (eds) Strategies for Industrialisation The Case of Bangladesh University Press Ltd Dhaka
Rab A (1997) ldquoExport Trends and Policies in Bangladesh Some Lessons of Past Performance for Future Policiesrdquo paper presented to a Workshop organized by the Institutional Support to the Ministry of Finance Project (ISMOF) supported by the Asian Development Bank March Dhaka
Rahman S H (1979) ldquoThe Determinants of Change in Trade Balance Some Estimates for Bangladesh 195960 ndash 197475rdquo Bangladesh Development Studies vol 7 pp 71 ndash 84
Ahmed S and Sattar Z (2004) ldquoTrade Liberalization Growth and Poverty Reduction The Case of Bangladeshrdquo Working Paper World Bank South Asian Region May 01 2004 The paper was also presented in the ABCDE Bangalore Conference in May 2003
Bangladesh Bank (2002-2003) Annual Report 2002-2003 Dhaka Bangladesh Bangladesh Bank (2007) Quoted in wwwbanglaembassycombhFDI20in
20Bangladeshhtm Downloaded on 31 October 2007 BBS (2000) Statistical Pocketbook of Bangladesh Bangladesh Bureau of Statistics
Dhaka Bangladesh CPD (1997) Growth or Stagnation A Review of Bangladeshrsquos Development 1996
Centre for Policy DialogueUniversity Press Limited Dhaka CSB (2003) Country Study of Bangladesh A Paper Presented at the Country Studies
Workshop on lsquoTrade Cooperation and Economic Policy Reform in South Asiarsquo Bangladesh Institute of Development Studies Dhaka Bangladesh March 30
EPB (Export Promotion Bureau) (2004) Bangladesh Export Statistics 2002-2003 Export Promotion Bureau Dhaka Bangladesh wwwepbbdcomExportStathtml
GOB (2002) lsquoForeign Trade Exchange Rate Management and External Sectorrsquo Bangladesh Economic Review Finance Division Ministry of Finance the Government of Bangladesh Dhaka
GOB (2003) Export Policy 2003-2006 Ministry of Commerce Government of Bangladesh December 2003
GOB (2006) Trade Policy Review by Bangladesh World Trade Organization Report No 06-3754 downloaded on 10907
World Bank (1999) World Development Indicators Database World Bank Washington D C
World Bank (2000) World Development Indicators Database World Bank Washington D C
Bangladesh International trade Information about International trade in Bangladesh httpwwwnationsencyclopediacomeconomiesAsia-and-the-PacificBangladesh-INTERNATIONAL-TRADEhtmlixzz1GOf4e1tc
Bangladesh Export Promotion Bureau
19
- Bangladesh Trade Balance and Export-Import Price Indices
- Growth of Exports
- Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of 1424 percent during 198586 to 199900 compared to an annual trend growth rate of below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through 198485 Such a pattern of export growth over time largely reflects the effects of progress in Bangladeshrsquos policy reforms over the period Export products during the earlier period (eg jute and jute goods) did have a significant effect in limiting the overall export growth especially starting with the mid-1980s The export upturn in the latter period also reflects the fact that the export setback in jute and jute goods was more than recouped by remarkable growth in the export of a new product group ready-made garments
- Jute goods
- Among jute and jute goods only jute goods had a statistically significant low annual trend growth rate of more than 6 percent during the early period and around 1 percent for the entire period In the latter period (198586 to 199900) it had no significant growth trend Raw jute exports on the other hand had statistically significant negative growth trends for the whole period as well as for the second period The reasons for the decline were the growth of jute manufacturing industry in the country and falling demand for raw jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
- Frozen food
- Frozen food (mainly frozen shrimps) was one of the major product groups which had a highly satisfactory trend growth rate of 1611 percent for the whole period However its growth remained uneven a spectacularly high rate of 31 percent during the period till 198485 along with a sharp drop to about 84 percent during 198586 to 199900 The drop in the growth rate in the later period may be attributed to a fall in demand in the EU markets in the late 1980s and early 1990s which recovered only during the second half of the 1990s The dwindling growth of frozen foods in the later period may also be attributed to supply constraints
- Exports of traditional goods (composed of jute jute goods tea and leather) constituted most of Bangladeshrsquos total exports around 97 percent in 197273 These exports precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute and jute goods in the export trade of Bangladesh has weakened considerably and some non-traditional items have made inroads For example the share of raw jute in export earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900 Over the same period the share of jute goods declined from 52 percent to less than 5 percent Another traditional exports item tea declined from 27 percent to 03 percent during the period Tearsquos relative export share did increase in some of the years in the 1980s but it declined sharply in later years Leatherrsquos share in total exports showed a significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s but declined to a level of 34 percent in 199900
- On the other hand nontraditional exports (ie exports of goods other than traditional ones) dramatically grew in importance from 3 percent of total exports in 197273 to more than 90 percent in 199900 Among the nontraditional exports RMG including knitwear rose to 54 percent during 199900 from an insignificant level in the early 1980s The share of frozen food increased from less than 1 percent to 6 percent during the years Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected a deceleration in its growth performance in recent years Residual export category showed a big jump in export importance from 18 percent in 197273 to 31 percent in 199900
-
Export Products of Bangladesh
Fruits Leather Garments Tea
Vegitable Jute Products ICT Products Potteries
Handicrafts Woven Garments Knitwear
Ceramics Products
Frozen Fish Food Products Bicycle
6
Growth of Exports
Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of
1424 percent during 198586 to 199900 compared to an annual trend growth rate of
below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through
198485 Such a pattern of export growth over time largely reflects the effects of progress
in Bangladeshrsquos policy reforms over the period Export products during the earlier period
(eg jute and jute goods) did have a significant effect in limiting the overall export
growth especially starting with the mid-1980s The export upturn in the latter period also
reflects the fact that the export setback in jute and jute goods was more than recouped by
remarkable growth in the export of a new product group ready-made garments
Jute goods
Among jute and jute goods only jute goods had a statistically significant low annual
trend growth rate of more than 6 percent during the early period and around 1 percent for
the entire period In the latter period (198586 to 199900) it had no significant growth
trend Raw jute exports on the other hand had statistically significant negative growth
trends for the whole period as well as for the second period The reasons for the decline
were the growth of jute manufacturing industry in the country and falling demand for raw
jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
Frozen food
Frozen food (mainly frozen shrimps) was one of the major product groups which had a
highly satisfactory trend growth rate of 1611 percent for the whole period However its
growth remained uneven a spectacularly high rate of 31 percent during the period till
198485 along with a sharp drop to about 84 percent during 198586 to 199900 The
drop in the growth rate in the later period may be attributed to a fall in demand in the EU
markets in the late 1980s and early 1990s which recovered only during the second half of
the 1990s The dwindling growth of frozen foods in the later period may also be
attributed to supply constraints
7
Tea
Tea falls in the category of an exceptional export product since it had a significant growth
of 13 percent during the early period up to 198485 However its growth was so low and
erratic subsequently that it showed a negative growth trend during the later period While
Bangladesh successfully recouped the loss of tea export earnings caused by the
dislocation during the countryrsquos war of Independence it lost the momentum in its race
with India and Sri Lanka in the late 1980s and early 1990s
Leather and leather products
Bangladeshrsquos exports of hides skins and leather and leather products have increased
since the early 1970s The product group included in the traditional export category had
a trend growth rate of about 9 percent during the entire period which was close to the
average growth for all exports Its growth rate was more than 13 percent during the first
period but the rate slowed to 5 percent during the second period
Readymade garments
Starting from a virtually zero base during the late 1970s readymade garments exports
grew at a very rapid rate of about 95 percent during the early period up to 198485 and
from a sizeable base at a moderate but fairly high rate of 2037 percent during the later
period
Knitwear products newly entered the export market with some significance only in
198990 and since then its export grew very rapidly ndash at a much faster rate than other
readymade garments The very fast growth of the RMG product group as a major export
earner (in gross terms) was the most remarkable development for Bangladesh and
without this phenomenal growth Bangladeshrsquos total exports which had a setback in the
traditionally important exports of jute and jute goods could not have grown at double
digit in the late 1980s and 1990s
8
Annual Growth Trends of Exports by Commodity GroupsCommodity Group 197273 ndash 199900 197273 ndash 198485 198586 ndash 199900
Raw Jute -175 071 -213Jute Manufactures 122 649 101Frozen Foods 1611 3058 84Tea 175 1323 -095Leather 886 132 488Readymade Garments 5710 9491 2037Others 1902 2318 2439Total Exports 1091 86 1424
9
Composition of Exports 1999-00
54
22
6
6
12
Woven Garments
Kintwear
Frozen Food
Jute and Jute goods
others
Growth in Exports Millions
0
1000
2000
3000
4000
5000
6000
7000
1990-91 1991-92 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00
years
Mil
lio
n $
Source Authorrsquos estimation based on Bangladesh Bank data
Trend of growth in export of Bangladesh among 1980-90 to 1990-99sDuring 1990s Bangladeshrsquos total exports in Current US $ value grew at an annual
compound rate of 144 per cent In fact Bangladesh experienced double digit export
growth in most of the years during the 1990sThe Gap between Export and Import
widened from-US$1791 million in 199091 to -$2814 million in 199000although the
share of export earnings in import payments steadily rose from 31 per cent in 198081 to
67 per cent in 199900The openness of the economy as measured by total external trade
10
as a proportion of GDP went up from around 22 percent in 199091 to nearly 30 percent
in 199000 with the share of export in GDP rising from 7 per cent to 12 percent during
the same period
Trend of growth in export among 1980-90 to 1990-00
Description 198081 199091 199900 Annual compound
Growth rate
1980s
Annual
compound
Growth rate
1990s
Export(millions $) 710 1718 5752 92 144
Import(millions $) 2282 3510 8566 44 104
Trade Deficit
(million $)
1572 1792 2814 13 51
Export as of
import
311 489 671
Export as GDP 5 73 121
import As of GDP 16 15 179
Openness of the
economy
21 223 30
Source Export Promotion Bureau and World Bank
Changes in Composition of Exports and Imports
11
Exports of traditional goods (composed of jute jute goods tea and leather) constituted
most of Bangladeshrsquos total exports around 97 percent in 197273 These exports
precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute
and jute goods in the export trade of Bangladesh has weakened considerably and some
non-traditional items have made inroads For example the share of raw jute in export
earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900
Over the same period the share of jute goods declined from 52 percent to less than 5
percent Another traditional exports item tea declined from 27 percent to 03 percent
during the period Tearsquos relative export share did increase in some of the years in the
1980s but it declined sharply in later years Leatherrsquos share in total exports showed a
significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s
but declined to a level of 34 percent in 199900
On the other hand nontraditional exports (ie exports of goods other than traditional
ones) dramatically grew in importance from 3 percent of total exports in 197273 to more
than 90 percent in 199900 Among the nontraditional exports RMG including knitwear
rose to 54 percent during 199900 from an insignificant level in the early 1980s The
share of frozen food increased from less than 1 percent to 6 percent during the years
Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected
a deceleration in its growth performance in recent years Residual export category
showed a big jump in export importance from 18 percent in 197273 to 31 percent in
199900
12
Composition of Exports by Commodity Groups
( of Total Export Earnings) Year Raw Jute Jute Goods Frozen
FoodsTea Leather Readymade
GarmentsOthers
198889 756 1892 1099 310 1065 3663 1213198990 818 1869 905 259 1174 3997 978199091 607 1041 826 252 782 4283 2210199192 429 1471 640 162 725 5336 1237199293 314 1226 693 173 625 5205 1762199394 226 1121 834 150 666 5097 1906199495 208 921 863 095 583 5298 2032199596 232 849 810 086 545 5023 2455199697 263 720 728 087 441 5062 2699199798 209 543 576 091 367 5497 2717199899 135 571 515 073 316 5607 2784199900 125 462 598 031 339 5360 3084
Source Authorrsquos calculation based on Bangladesh Bank data
Some Graphical Statistics over Last Two Decades
Figure 412 shows thatDuring 1983-84 to 1989-90 the average trade deficit was 73 of GDP This deficit decreased to 67 on average in the last five years
13
Figure 421 shows thatThe growth in exports has fluctuated considerably from an average low of 7 in 1981-1985 period to an average high of in excess of 17 in 1991-1995 and 2006-2008 periods
Figure 422 shows that
14
The share of primary commodities to total exports decreased from 175 in 1980-81 to
7 in 2007-08On the other hand the share of manufactured goods to total exports
increased from 44 in 1980- 81 to 93 in 2007-08
Figure 444 shows that1048707 there has a dramatic increase in the number of expatriate workers since 2005 rising
from about 250 lakh to 875 lakh
1048707 However the impact of the global financial crisis may lead to a decline over the
coming months
15
Trend of Export Earnings
At present Bangladesh faces growing economic competition from India Pakistan and
Indonesia countries which could offer better infrastructure and larger and growing
domestic markets The exports of Bangladesh have been experiencing a steady rise since
the late 80s of which apparels constitute approximately 75 of the total exports Other
items include frozen foods jute amp jute products leather amp leather products handicrafts
vegetables chemical products etc Major export markets for Bangladeshi exporters are
North America (33) and EU (52) while other regions constitute the rest In Fiscal
Year 2006-07 total exports earnings of Bangladesh exceeded US$ 12 billion The trend
of Bangladeshi exports from FY 1972-72 to 2006-07 iis shown below
16
Conclusion
Bangladesh economy has passed through a heightened pace of global integration in the
1990s The degree of openness of the Bangladesh economy is now higher than many
developing countries ndash exports and imports of goods and services currently account for
about a-third of the countryrsquos GDP Thus by definition the state of the global economy
is likely to have a stronger impact on the Bangladesh economy now than at any time in
the past The impact of the state of the global economy would continue to be increasingly
felt in terms of the countryrsquos macroeconomic performance GDP growth rate external
sector performance foreign exchange reserves and health of the financial institutions
This is perhaps one of the most important legacies that the Bangladesh economy has
inherited through its developmental practice and reforms of the 1990s
Bangladeshrsquos export sector registered double-digit real growth rate throughout the 1990s
As a matter of fact real export sector growth rate was almost three times the real GDP
growth rate during this period Even during FY 1990 and FY 1991 a period which
coincided with the last major global recession Bangladeshrsquos export sector posted robust
growth rates of 179 and 127 respectively The structure of export was different
though at the time Raw jute jute goods and leather were some of the major export
commodities in the early 1990s their combined share being equal to the share of RMG in
total exports of Bangladesh A relatively diversified base and market provided some sort
of a cushion against sudden fluctuations of the global market
Exporters and trade experts attribute Bangladeshrsquos export success to the
lsquocompetitivenessrsquo of the countryrsquos readymade garment sector and availability of cheap
labor although exports of frozen food leather and jute fell Garment manufacturers
produced lower-end products whose demand did not fall significantly in global markets
Remaining competitive in these days of difficulties since the quota system was
withdrawn and the ongoing lingering economic slide worldwide is rewarding for
Bangladesh
17
Bangladesh maintains export trends
YEAR EXPORT IN (MILLION US$)
Export (M US$)
CURRENT CUMULATIVE
1983-84 016 016
1984-85 445 461
1985-86 759 1221
1986-87 1527 2747
1987-88 1393 4140
1988-89 1608 5748
1989-90 3421 9169
1990-91 4799 13967
1991-92 7699 21667
1992-93 12705 34371
1993-94 14560 48932
1994-95 22826 71758
1995-96 33702 105460
1996-97 46277 151736
1997-98 63605 215341
1998-99 71169 286510
1999-00 89082 375592
2000-01 106787 482379
2001-02 107703 590081
2002-03 120022 710103
2003-04 135391 845494
2004-05 154868 1000362
2005-06 183618 1183980
2006-07 206367 206367
2007-08 242958 1633304
2008-09 258170 1891474
2009-10 282254 2173728
2010-11 (January 2011)
194001 2367728
Growth (2009-10) 933
18
References Bakht Z (2001) ldquoTrade Liberalisation Exports and Growth of Manufacturing Industries
in Bangladeshrdquo in M M Huq and Love (eds) Strategies for Industrialisation The Case of Bangladesh University Press Ltd Dhaka
Rab A (1997) ldquoExport Trends and Policies in Bangladesh Some Lessons of Past Performance for Future Policiesrdquo paper presented to a Workshop organized by the Institutional Support to the Ministry of Finance Project (ISMOF) supported by the Asian Development Bank March Dhaka
Rahman S H (1979) ldquoThe Determinants of Change in Trade Balance Some Estimates for Bangladesh 195960 ndash 197475rdquo Bangladesh Development Studies vol 7 pp 71 ndash 84
Ahmed S and Sattar Z (2004) ldquoTrade Liberalization Growth and Poverty Reduction The Case of Bangladeshrdquo Working Paper World Bank South Asian Region May 01 2004 The paper was also presented in the ABCDE Bangalore Conference in May 2003
Bangladesh Bank (2002-2003) Annual Report 2002-2003 Dhaka Bangladesh Bangladesh Bank (2007) Quoted in wwwbanglaembassycombhFDI20in
20Bangladeshhtm Downloaded on 31 October 2007 BBS (2000) Statistical Pocketbook of Bangladesh Bangladesh Bureau of Statistics
Dhaka Bangladesh CPD (1997) Growth or Stagnation A Review of Bangladeshrsquos Development 1996
Centre for Policy DialogueUniversity Press Limited Dhaka CSB (2003) Country Study of Bangladesh A Paper Presented at the Country Studies
Workshop on lsquoTrade Cooperation and Economic Policy Reform in South Asiarsquo Bangladesh Institute of Development Studies Dhaka Bangladesh March 30
EPB (Export Promotion Bureau) (2004) Bangladesh Export Statistics 2002-2003 Export Promotion Bureau Dhaka Bangladesh wwwepbbdcomExportStathtml
GOB (2002) lsquoForeign Trade Exchange Rate Management and External Sectorrsquo Bangladesh Economic Review Finance Division Ministry of Finance the Government of Bangladesh Dhaka
GOB (2003) Export Policy 2003-2006 Ministry of Commerce Government of Bangladesh December 2003
GOB (2006) Trade Policy Review by Bangladesh World Trade Organization Report No 06-3754 downloaded on 10907
World Bank (1999) World Development Indicators Database World Bank Washington D C
World Bank (2000) World Development Indicators Database World Bank Washington D C
Bangladesh International trade Information about International trade in Bangladesh httpwwwnationsencyclopediacomeconomiesAsia-and-the-PacificBangladesh-INTERNATIONAL-TRADEhtmlixzz1GOf4e1tc
Bangladesh Export Promotion Bureau
19
- Bangladesh Trade Balance and Export-Import Price Indices
- Growth of Exports
- Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of 1424 percent during 198586 to 199900 compared to an annual trend growth rate of below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through 198485 Such a pattern of export growth over time largely reflects the effects of progress in Bangladeshrsquos policy reforms over the period Export products during the earlier period (eg jute and jute goods) did have a significant effect in limiting the overall export growth especially starting with the mid-1980s The export upturn in the latter period also reflects the fact that the export setback in jute and jute goods was more than recouped by remarkable growth in the export of a new product group ready-made garments
- Jute goods
- Among jute and jute goods only jute goods had a statistically significant low annual trend growth rate of more than 6 percent during the early period and around 1 percent for the entire period In the latter period (198586 to 199900) it had no significant growth trend Raw jute exports on the other hand had statistically significant negative growth trends for the whole period as well as for the second period The reasons for the decline were the growth of jute manufacturing industry in the country and falling demand for raw jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
- Frozen food
- Frozen food (mainly frozen shrimps) was one of the major product groups which had a highly satisfactory trend growth rate of 1611 percent for the whole period However its growth remained uneven a spectacularly high rate of 31 percent during the period till 198485 along with a sharp drop to about 84 percent during 198586 to 199900 The drop in the growth rate in the later period may be attributed to a fall in demand in the EU markets in the late 1980s and early 1990s which recovered only during the second half of the 1990s The dwindling growth of frozen foods in the later period may also be attributed to supply constraints
- Exports of traditional goods (composed of jute jute goods tea and leather) constituted most of Bangladeshrsquos total exports around 97 percent in 197273 These exports precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute and jute goods in the export trade of Bangladesh has weakened considerably and some non-traditional items have made inroads For example the share of raw jute in export earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900 Over the same period the share of jute goods declined from 52 percent to less than 5 percent Another traditional exports item tea declined from 27 percent to 03 percent during the period Tearsquos relative export share did increase in some of the years in the 1980s but it declined sharply in later years Leatherrsquos share in total exports showed a significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s but declined to a level of 34 percent in 199900
- On the other hand nontraditional exports (ie exports of goods other than traditional ones) dramatically grew in importance from 3 percent of total exports in 197273 to more than 90 percent in 199900 Among the nontraditional exports RMG including knitwear rose to 54 percent during 199900 from an insignificant level in the early 1980s The share of frozen food increased from less than 1 percent to 6 percent during the years Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected a deceleration in its growth performance in recent years Residual export category showed a big jump in export importance from 18 percent in 197273 to 31 percent in 199900
-
Growth of Exports
Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of
1424 percent during 198586 to 199900 compared to an annual trend growth rate of
below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through
198485 Such a pattern of export growth over time largely reflects the effects of progress
in Bangladeshrsquos policy reforms over the period Export products during the earlier period
(eg jute and jute goods) did have a significant effect in limiting the overall export
growth especially starting with the mid-1980s The export upturn in the latter period also
reflects the fact that the export setback in jute and jute goods was more than recouped by
remarkable growth in the export of a new product group ready-made garments
Jute goods
Among jute and jute goods only jute goods had a statistically significant low annual
trend growth rate of more than 6 percent during the early period and around 1 percent for
the entire period In the latter period (198586 to 199900) it had no significant growth
trend Raw jute exports on the other hand had statistically significant negative growth
trends for the whole period as well as for the second period The reasons for the decline
were the growth of jute manufacturing industry in the country and falling demand for raw
jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
Frozen food
Frozen food (mainly frozen shrimps) was one of the major product groups which had a
highly satisfactory trend growth rate of 1611 percent for the whole period However its
growth remained uneven a spectacularly high rate of 31 percent during the period till
198485 along with a sharp drop to about 84 percent during 198586 to 199900 The
drop in the growth rate in the later period may be attributed to a fall in demand in the EU
markets in the late 1980s and early 1990s which recovered only during the second half of
the 1990s The dwindling growth of frozen foods in the later period may also be
attributed to supply constraints
7
Tea
Tea falls in the category of an exceptional export product since it had a significant growth
of 13 percent during the early period up to 198485 However its growth was so low and
erratic subsequently that it showed a negative growth trend during the later period While
Bangladesh successfully recouped the loss of tea export earnings caused by the
dislocation during the countryrsquos war of Independence it lost the momentum in its race
with India and Sri Lanka in the late 1980s and early 1990s
Leather and leather products
Bangladeshrsquos exports of hides skins and leather and leather products have increased
since the early 1970s The product group included in the traditional export category had
a trend growth rate of about 9 percent during the entire period which was close to the
average growth for all exports Its growth rate was more than 13 percent during the first
period but the rate slowed to 5 percent during the second period
Readymade garments
Starting from a virtually zero base during the late 1970s readymade garments exports
grew at a very rapid rate of about 95 percent during the early period up to 198485 and
from a sizeable base at a moderate but fairly high rate of 2037 percent during the later
period
Knitwear products newly entered the export market with some significance only in
198990 and since then its export grew very rapidly ndash at a much faster rate than other
readymade garments The very fast growth of the RMG product group as a major export
earner (in gross terms) was the most remarkable development for Bangladesh and
without this phenomenal growth Bangladeshrsquos total exports which had a setback in the
traditionally important exports of jute and jute goods could not have grown at double
digit in the late 1980s and 1990s
8
Annual Growth Trends of Exports by Commodity GroupsCommodity Group 197273 ndash 199900 197273 ndash 198485 198586 ndash 199900
Raw Jute -175 071 -213Jute Manufactures 122 649 101Frozen Foods 1611 3058 84Tea 175 1323 -095Leather 886 132 488Readymade Garments 5710 9491 2037Others 1902 2318 2439Total Exports 1091 86 1424
9
Composition of Exports 1999-00
54
22
6
6
12
Woven Garments
Kintwear
Frozen Food
Jute and Jute goods
others
Growth in Exports Millions
0
1000
2000
3000
4000
5000
6000
7000
1990-91 1991-92 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00
years
Mil
lio
n $
Source Authorrsquos estimation based on Bangladesh Bank data
Trend of growth in export of Bangladesh among 1980-90 to 1990-99sDuring 1990s Bangladeshrsquos total exports in Current US $ value grew at an annual
compound rate of 144 per cent In fact Bangladesh experienced double digit export
growth in most of the years during the 1990sThe Gap between Export and Import
widened from-US$1791 million in 199091 to -$2814 million in 199000although the
share of export earnings in import payments steadily rose from 31 per cent in 198081 to
67 per cent in 199900The openness of the economy as measured by total external trade
10
as a proportion of GDP went up from around 22 percent in 199091 to nearly 30 percent
in 199000 with the share of export in GDP rising from 7 per cent to 12 percent during
the same period
Trend of growth in export among 1980-90 to 1990-00
Description 198081 199091 199900 Annual compound
Growth rate
1980s
Annual
compound
Growth rate
1990s
Export(millions $) 710 1718 5752 92 144
Import(millions $) 2282 3510 8566 44 104
Trade Deficit
(million $)
1572 1792 2814 13 51
Export as of
import
311 489 671
Export as GDP 5 73 121
import As of GDP 16 15 179
Openness of the
economy
21 223 30
Source Export Promotion Bureau and World Bank
Changes in Composition of Exports and Imports
11
Exports of traditional goods (composed of jute jute goods tea and leather) constituted
most of Bangladeshrsquos total exports around 97 percent in 197273 These exports
precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute
and jute goods in the export trade of Bangladesh has weakened considerably and some
non-traditional items have made inroads For example the share of raw jute in export
earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900
Over the same period the share of jute goods declined from 52 percent to less than 5
percent Another traditional exports item tea declined from 27 percent to 03 percent
during the period Tearsquos relative export share did increase in some of the years in the
1980s but it declined sharply in later years Leatherrsquos share in total exports showed a
significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s
but declined to a level of 34 percent in 199900
On the other hand nontraditional exports (ie exports of goods other than traditional
ones) dramatically grew in importance from 3 percent of total exports in 197273 to more
than 90 percent in 199900 Among the nontraditional exports RMG including knitwear
rose to 54 percent during 199900 from an insignificant level in the early 1980s The
share of frozen food increased from less than 1 percent to 6 percent during the years
Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected
a deceleration in its growth performance in recent years Residual export category
showed a big jump in export importance from 18 percent in 197273 to 31 percent in
199900
12
Composition of Exports by Commodity Groups
( of Total Export Earnings) Year Raw Jute Jute Goods Frozen
FoodsTea Leather Readymade
GarmentsOthers
198889 756 1892 1099 310 1065 3663 1213198990 818 1869 905 259 1174 3997 978199091 607 1041 826 252 782 4283 2210199192 429 1471 640 162 725 5336 1237199293 314 1226 693 173 625 5205 1762199394 226 1121 834 150 666 5097 1906199495 208 921 863 095 583 5298 2032199596 232 849 810 086 545 5023 2455199697 263 720 728 087 441 5062 2699199798 209 543 576 091 367 5497 2717199899 135 571 515 073 316 5607 2784199900 125 462 598 031 339 5360 3084
Source Authorrsquos calculation based on Bangladesh Bank data
Some Graphical Statistics over Last Two Decades
Figure 412 shows thatDuring 1983-84 to 1989-90 the average trade deficit was 73 of GDP This deficit decreased to 67 on average in the last five years
13
Figure 421 shows thatThe growth in exports has fluctuated considerably from an average low of 7 in 1981-1985 period to an average high of in excess of 17 in 1991-1995 and 2006-2008 periods
Figure 422 shows that
14
The share of primary commodities to total exports decreased from 175 in 1980-81 to
7 in 2007-08On the other hand the share of manufactured goods to total exports
increased from 44 in 1980- 81 to 93 in 2007-08
Figure 444 shows that1048707 there has a dramatic increase in the number of expatriate workers since 2005 rising
from about 250 lakh to 875 lakh
1048707 However the impact of the global financial crisis may lead to a decline over the
coming months
15
Trend of Export Earnings
At present Bangladesh faces growing economic competition from India Pakistan and
Indonesia countries which could offer better infrastructure and larger and growing
domestic markets The exports of Bangladesh have been experiencing a steady rise since
the late 80s of which apparels constitute approximately 75 of the total exports Other
items include frozen foods jute amp jute products leather amp leather products handicrafts
vegetables chemical products etc Major export markets for Bangladeshi exporters are
North America (33) and EU (52) while other regions constitute the rest In Fiscal
Year 2006-07 total exports earnings of Bangladesh exceeded US$ 12 billion The trend
of Bangladeshi exports from FY 1972-72 to 2006-07 iis shown below
16
Conclusion
Bangladesh economy has passed through a heightened pace of global integration in the
1990s The degree of openness of the Bangladesh economy is now higher than many
developing countries ndash exports and imports of goods and services currently account for
about a-third of the countryrsquos GDP Thus by definition the state of the global economy
is likely to have a stronger impact on the Bangladesh economy now than at any time in
the past The impact of the state of the global economy would continue to be increasingly
felt in terms of the countryrsquos macroeconomic performance GDP growth rate external
sector performance foreign exchange reserves and health of the financial institutions
This is perhaps one of the most important legacies that the Bangladesh economy has
inherited through its developmental practice and reforms of the 1990s
Bangladeshrsquos export sector registered double-digit real growth rate throughout the 1990s
As a matter of fact real export sector growth rate was almost three times the real GDP
growth rate during this period Even during FY 1990 and FY 1991 a period which
coincided with the last major global recession Bangladeshrsquos export sector posted robust
growth rates of 179 and 127 respectively The structure of export was different
though at the time Raw jute jute goods and leather were some of the major export
commodities in the early 1990s their combined share being equal to the share of RMG in
total exports of Bangladesh A relatively diversified base and market provided some sort
of a cushion against sudden fluctuations of the global market
Exporters and trade experts attribute Bangladeshrsquos export success to the
lsquocompetitivenessrsquo of the countryrsquos readymade garment sector and availability of cheap
labor although exports of frozen food leather and jute fell Garment manufacturers
produced lower-end products whose demand did not fall significantly in global markets
Remaining competitive in these days of difficulties since the quota system was
withdrawn and the ongoing lingering economic slide worldwide is rewarding for
Bangladesh
17
Bangladesh maintains export trends
YEAR EXPORT IN (MILLION US$)
Export (M US$)
CURRENT CUMULATIVE
1983-84 016 016
1984-85 445 461
1985-86 759 1221
1986-87 1527 2747
1987-88 1393 4140
1988-89 1608 5748
1989-90 3421 9169
1990-91 4799 13967
1991-92 7699 21667
1992-93 12705 34371
1993-94 14560 48932
1994-95 22826 71758
1995-96 33702 105460
1996-97 46277 151736
1997-98 63605 215341
1998-99 71169 286510
1999-00 89082 375592
2000-01 106787 482379
2001-02 107703 590081
2002-03 120022 710103
2003-04 135391 845494
2004-05 154868 1000362
2005-06 183618 1183980
2006-07 206367 206367
2007-08 242958 1633304
2008-09 258170 1891474
2009-10 282254 2173728
2010-11 (January 2011)
194001 2367728
Growth (2009-10) 933
18
References Bakht Z (2001) ldquoTrade Liberalisation Exports and Growth of Manufacturing Industries
in Bangladeshrdquo in M M Huq and Love (eds) Strategies for Industrialisation The Case of Bangladesh University Press Ltd Dhaka
Rab A (1997) ldquoExport Trends and Policies in Bangladesh Some Lessons of Past Performance for Future Policiesrdquo paper presented to a Workshop organized by the Institutional Support to the Ministry of Finance Project (ISMOF) supported by the Asian Development Bank March Dhaka
Rahman S H (1979) ldquoThe Determinants of Change in Trade Balance Some Estimates for Bangladesh 195960 ndash 197475rdquo Bangladesh Development Studies vol 7 pp 71 ndash 84
Ahmed S and Sattar Z (2004) ldquoTrade Liberalization Growth and Poverty Reduction The Case of Bangladeshrdquo Working Paper World Bank South Asian Region May 01 2004 The paper was also presented in the ABCDE Bangalore Conference in May 2003
Bangladesh Bank (2002-2003) Annual Report 2002-2003 Dhaka Bangladesh Bangladesh Bank (2007) Quoted in wwwbanglaembassycombhFDI20in
20Bangladeshhtm Downloaded on 31 October 2007 BBS (2000) Statistical Pocketbook of Bangladesh Bangladesh Bureau of Statistics
Dhaka Bangladesh CPD (1997) Growth or Stagnation A Review of Bangladeshrsquos Development 1996
Centre for Policy DialogueUniversity Press Limited Dhaka CSB (2003) Country Study of Bangladesh A Paper Presented at the Country Studies
Workshop on lsquoTrade Cooperation and Economic Policy Reform in South Asiarsquo Bangladesh Institute of Development Studies Dhaka Bangladesh March 30
EPB (Export Promotion Bureau) (2004) Bangladesh Export Statistics 2002-2003 Export Promotion Bureau Dhaka Bangladesh wwwepbbdcomExportStathtml
GOB (2002) lsquoForeign Trade Exchange Rate Management and External Sectorrsquo Bangladesh Economic Review Finance Division Ministry of Finance the Government of Bangladesh Dhaka
GOB (2003) Export Policy 2003-2006 Ministry of Commerce Government of Bangladesh December 2003
GOB (2006) Trade Policy Review by Bangladesh World Trade Organization Report No 06-3754 downloaded on 10907
World Bank (1999) World Development Indicators Database World Bank Washington D C
World Bank (2000) World Development Indicators Database World Bank Washington D C
Bangladesh International trade Information about International trade in Bangladesh httpwwwnationsencyclopediacomeconomiesAsia-and-the-PacificBangladesh-INTERNATIONAL-TRADEhtmlixzz1GOf4e1tc
Bangladesh Export Promotion Bureau
19
- Bangladesh Trade Balance and Export-Import Price Indices
- Growth of Exports
- Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of 1424 percent during 198586 to 199900 compared to an annual trend growth rate of below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through 198485 Such a pattern of export growth over time largely reflects the effects of progress in Bangladeshrsquos policy reforms over the period Export products during the earlier period (eg jute and jute goods) did have a significant effect in limiting the overall export growth especially starting with the mid-1980s The export upturn in the latter period also reflects the fact that the export setback in jute and jute goods was more than recouped by remarkable growth in the export of a new product group ready-made garments
- Jute goods
- Among jute and jute goods only jute goods had a statistically significant low annual trend growth rate of more than 6 percent during the early period and around 1 percent for the entire period In the latter period (198586 to 199900) it had no significant growth trend Raw jute exports on the other hand had statistically significant negative growth trends for the whole period as well as for the second period The reasons for the decline were the growth of jute manufacturing industry in the country and falling demand for raw jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
- Frozen food
- Frozen food (mainly frozen shrimps) was one of the major product groups which had a highly satisfactory trend growth rate of 1611 percent for the whole period However its growth remained uneven a spectacularly high rate of 31 percent during the period till 198485 along with a sharp drop to about 84 percent during 198586 to 199900 The drop in the growth rate in the later period may be attributed to a fall in demand in the EU markets in the late 1980s and early 1990s which recovered only during the second half of the 1990s The dwindling growth of frozen foods in the later period may also be attributed to supply constraints
- Exports of traditional goods (composed of jute jute goods tea and leather) constituted most of Bangladeshrsquos total exports around 97 percent in 197273 These exports precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute and jute goods in the export trade of Bangladesh has weakened considerably and some non-traditional items have made inroads For example the share of raw jute in export earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900 Over the same period the share of jute goods declined from 52 percent to less than 5 percent Another traditional exports item tea declined from 27 percent to 03 percent during the period Tearsquos relative export share did increase in some of the years in the 1980s but it declined sharply in later years Leatherrsquos share in total exports showed a significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s but declined to a level of 34 percent in 199900
- On the other hand nontraditional exports (ie exports of goods other than traditional ones) dramatically grew in importance from 3 percent of total exports in 197273 to more than 90 percent in 199900 Among the nontraditional exports RMG including knitwear rose to 54 percent during 199900 from an insignificant level in the early 1980s The share of frozen food increased from less than 1 percent to 6 percent during the years Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected a deceleration in its growth performance in recent years Residual export category showed a big jump in export importance from 18 percent in 197273 to 31 percent in 199900
-
Tea
Tea falls in the category of an exceptional export product since it had a significant growth
of 13 percent during the early period up to 198485 However its growth was so low and
erratic subsequently that it showed a negative growth trend during the later period While
Bangladesh successfully recouped the loss of tea export earnings caused by the
dislocation during the countryrsquos war of Independence it lost the momentum in its race
with India and Sri Lanka in the late 1980s and early 1990s
Leather and leather products
Bangladeshrsquos exports of hides skins and leather and leather products have increased
since the early 1970s The product group included in the traditional export category had
a trend growth rate of about 9 percent during the entire period which was close to the
average growth for all exports Its growth rate was more than 13 percent during the first
period but the rate slowed to 5 percent during the second period
Readymade garments
Starting from a virtually zero base during the late 1970s readymade garments exports
grew at a very rapid rate of about 95 percent during the early period up to 198485 and
from a sizeable base at a moderate but fairly high rate of 2037 percent during the later
period
Knitwear products newly entered the export market with some significance only in
198990 and since then its export grew very rapidly ndash at a much faster rate than other
readymade garments The very fast growth of the RMG product group as a major export
earner (in gross terms) was the most remarkable development for Bangladesh and
without this phenomenal growth Bangladeshrsquos total exports which had a setback in the
traditionally important exports of jute and jute goods could not have grown at double
digit in the late 1980s and 1990s
8
Annual Growth Trends of Exports by Commodity GroupsCommodity Group 197273 ndash 199900 197273 ndash 198485 198586 ndash 199900
Raw Jute -175 071 -213Jute Manufactures 122 649 101Frozen Foods 1611 3058 84Tea 175 1323 -095Leather 886 132 488Readymade Garments 5710 9491 2037Others 1902 2318 2439Total Exports 1091 86 1424
9
Composition of Exports 1999-00
54
22
6
6
12
Woven Garments
Kintwear
Frozen Food
Jute and Jute goods
others
Growth in Exports Millions
0
1000
2000
3000
4000
5000
6000
7000
1990-91 1991-92 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00
years
Mil
lio
n $
Source Authorrsquos estimation based on Bangladesh Bank data
Trend of growth in export of Bangladesh among 1980-90 to 1990-99sDuring 1990s Bangladeshrsquos total exports in Current US $ value grew at an annual
compound rate of 144 per cent In fact Bangladesh experienced double digit export
growth in most of the years during the 1990sThe Gap between Export and Import
widened from-US$1791 million in 199091 to -$2814 million in 199000although the
share of export earnings in import payments steadily rose from 31 per cent in 198081 to
67 per cent in 199900The openness of the economy as measured by total external trade
10
as a proportion of GDP went up from around 22 percent in 199091 to nearly 30 percent
in 199000 with the share of export in GDP rising from 7 per cent to 12 percent during
the same period
Trend of growth in export among 1980-90 to 1990-00
Description 198081 199091 199900 Annual compound
Growth rate
1980s
Annual
compound
Growth rate
1990s
Export(millions $) 710 1718 5752 92 144
Import(millions $) 2282 3510 8566 44 104
Trade Deficit
(million $)
1572 1792 2814 13 51
Export as of
import
311 489 671
Export as GDP 5 73 121
import As of GDP 16 15 179
Openness of the
economy
21 223 30
Source Export Promotion Bureau and World Bank
Changes in Composition of Exports and Imports
11
Exports of traditional goods (composed of jute jute goods tea and leather) constituted
most of Bangladeshrsquos total exports around 97 percent in 197273 These exports
precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute
and jute goods in the export trade of Bangladesh has weakened considerably and some
non-traditional items have made inroads For example the share of raw jute in export
earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900
Over the same period the share of jute goods declined from 52 percent to less than 5
percent Another traditional exports item tea declined from 27 percent to 03 percent
during the period Tearsquos relative export share did increase in some of the years in the
1980s but it declined sharply in later years Leatherrsquos share in total exports showed a
significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s
but declined to a level of 34 percent in 199900
On the other hand nontraditional exports (ie exports of goods other than traditional
ones) dramatically grew in importance from 3 percent of total exports in 197273 to more
than 90 percent in 199900 Among the nontraditional exports RMG including knitwear
rose to 54 percent during 199900 from an insignificant level in the early 1980s The
share of frozen food increased from less than 1 percent to 6 percent during the years
Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected
a deceleration in its growth performance in recent years Residual export category
showed a big jump in export importance from 18 percent in 197273 to 31 percent in
199900
12
Composition of Exports by Commodity Groups
( of Total Export Earnings) Year Raw Jute Jute Goods Frozen
FoodsTea Leather Readymade
GarmentsOthers
198889 756 1892 1099 310 1065 3663 1213198990 818 1869 905 259 1174 3997 978199091 607 1041 826 252 782 4283 2210199192 429 1471 640 162 725 5336 1237199293 314 1226 693 173 625 5205 1762199394 226 1121 834 150 666 5097 1906199495 208 921 863 095 583 5298 2032199596 232 849 810 086 545 5023 2455199697 263 720 728 087 441 5062 2699199798 209 543 576 091 367 5497 2717199899 135 571 515 073 316 5607 2784199900 125 462 598 031 339 5360 3084
Source Authorrsquos calculation based on Bangladesh Bank data
Some Graphical Statistics over Last Two Decades
Figure 412 shows thatDuring 1983-84 to 1989-90 the average trade deficit was 73 of GDP This deficit decreased to 67 on average in the last five years
13
Figure 421 shows thatThe growth in exports has fluctuated considerably from an average low of 7 in 1981-1985 period to an average high of in excess of 17 in 1991-1995 and 2006-2008 periods
Figure 422 shows that
14
The share of primary commodities to total exports decreased from 175 in 1980-81 to
7 in 2007-08On the other hand the share of manufactured goods to total exports
increased from 44 in 1980- 81 to 93 in 2007-08
Figure 444 shows that1048707 there has a dramatic increase in the number of expatriate workers since 2005 rising
from about 250 lakh to 875 lakh
1048707 However the impact of the global financial crisis may lead to a decline over the
coming months
15
Trend of Export Earnings
At present Bangladesh faces growing economic competition from India Pakistan and
Indonesia countries which could offer better infrastructure and larger and growing
domestic markets The exports of Bangladesh have been experiencing a steady rise since
the late 80s of which apparels constitute approximately 75 of the total exports Other
items include frozen foods jute amp jute products leather amp leather products handicrafts
vegetables chemical products etc Major export markets for Bangladeshi exporters are
North America (33) and EU (52) while other regions constitute the rest In Fiscal
Year 2006-07 total exports earnings of Bangladesh exceeded US$ 12 billion The trend
of Bangladeshi exports from FY 1972-72 to 2006-07 iis shown below
16
Conclusion
Bangladesh economy has passed through a heightened pace of global integration in the
1990s The degree of openness of the Bangladesh economy is now higher than many
developing countries ndash exports and imports of goods and services currently account for
about a-third of the countryrsquos GDP Thus by definition the state of the global economy
is likely to have a stronger impact on the Bangladesh economy now than at any time in
the past The impact of the state of the global economy would continue to be increasingly
felt in terms of the countryrsquos macroeconomic performance GDP growth rate external
sector performance foreign exchange reserves and health of the financial institutions
This is perhaps one of the most important legacies that the Bangladesh economy has
inherited through its developmental practice and reforms of the 1990s
Bangladeshrsquos export sector registered double-digit real growth rate throughout the 1990s
As a matter of fact real export sector growth rate was almost three times the real GDP
growth rate during this period Even during FY 1990 and FY 1991 a period which
coincided with the last major global recession Bangladeshrsquos export sector posted robust
growth rates of 179 and 127 respectively The structure of export was different
though at the time Raw jute jute goods and leather were some of the major export
commodities in the early 1990s their combined share being equal to the share of RMG in
total exports of Bangladesh A relatively diversified base and market provided some sort
of a cushion against sudden fluctuations of the global market
Exporters and trade experts attribute Bangladeshrsquos export success to the
lsquocompetitivenessrsquo of the countryrsquos readymade garment sector and availability of cheap
labor although exports of frozen food leather and jute fell Garment manufacturers
produced lower-end products whose demand did not fall significantly in global markets
Remaining competitive in these days of difficulties since the quota system was
withdrawn and the ongoing lingering economic slide worldwide is rewarding for
Bangladesh
17
Bangladesh maintains export trends
YEAR EXPORT IN (MILLION US$)
Export (M US$)
CURRENT CUMULATIVE
1983-84 016 016
1984-85 445 461
1985-86 759 1221
1986-87 1527 2747
1987-88 1393 4140
1988-89 1608 5748
1989-90 3421 9169
1990-91 4799 13967
1991-92 7699 21667
1992-93 12705 34371
1993-94 14560 48932
1994-95 22826 71758
1995-96 33702 105460
1996-97 46277 151736
1997-98 63605 215341
1998-99 71169 286510
1999-00 89082 375592
2000-01 106787 482379
2001-02 107703 590081
2002-03 120022 710103
2003-04 135391 845494
2004-05 154868 1000362
2005-06 183618 1183980
2006-07 206367 206367
2007-08 242958 1633304
2008-09 258170 1891474
2009-10 282254 2173728
2010-11 (January 2011)
194001 2367728
Growth (2009-10) 933
18
References Bakht Z (2001) ldquoTrade Liberalisation Exports and Growth of Manufacturing Industries
in Bangladeshrdquo in M M Huq and Love (eds) Strategies for Industrialisation The Case of Bangladesh University Press Ltd Dhaka
Rab A (1997) ldquoExport Trends and Policies in Bangladesh Some Lessons of Past Performance for Future Policiesrdquo paper presented to a Workshop organized by the Institutional Support to the Ministry of Finance Project (ISMOF) supported by the Asian Development Bank March Dhaka
Rahman S H (1979) ldquoThe Determinants of Change in Trade Balance Some Estimates for Bangladesh 195960 ndash 197475rdquo Bangladesh Development Studies vol 7 pp 71 ndash 84
Ahmed S and Sattar Z (2004) ldquoTrade Liberalization Growth and Poverty Reduction The Case of Bangladeshrdquo Working Paper World Bank South Asian Region May 01 2004 The paper was also presented in the ABCDE Bangalore Conference in May 2003
Bangladesh Bank (2002-2003) Annual Report 2002-2003 Dhaka Bangladesh Bangladesh Bank (2007) Quoted in wwwbanglaembassycombhFDI20in
20Bangladeshhtm Downloaded on 31 October 2007 BBS (2000) Statistical Pocketbook of Bangladesh Bangladesh Bureau of Statistics
Dhaka Bangladesh CPD (1997) Growth or Stagnation A Review of Bangladeshrsquos Development 1996
Centre for Policy DialogueUniversity Press Limited Dhaka CSB (2003) Country Study of Bangladesh A Paper Presented at the Country Studies
Workshop on lsquoTrade Cooperation and Economic Policy Reform in South Asiarsquo Bangladesh Institute of Development Studies Dhaka Bangladesh March 30
EPB (Export Promotion Bureau) (2004) Bangladesh Export Statistics 2002-2003 Export Promotion Bureau Dhaka Bangladesh wwwepbbdcomExportStathtml
GOB (2002) lsquoForeign Trade Exchange Rate Management and External Sectorrsquo Bangladesh Economic Review Finance Division Ministry of Finance the Government of Bangladesh Dhaka
GOB (2003) Export Policy 2003-2006 Ministry of Commerce Government of Bangladesh December 2003
GOB (2006) Trade Policy Review by Bangladesh World Trade Organization Report No 06-3754 downloaded on 10907
World Bank (1999) World Development Indicators Database World Bank Washington D C
World Bank (2000) World Development Indicators Database World Bank Washington D C
Bangladesh International trade Information about International trade in Bangladesh httpwwwnationsencyclopediacomeconomiesAsia-and-the-PacificBangladesh-INTERNATIONAL-TRADEhtmlixzz1GOf4e1tc
Bangladesh Export Promotion Bureau
19
- Bangladesh Trade Balance and Export-Import Price Indices
- Growth of Exports
- Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of 1424 percent during 198586 to 199900 compared to an annual trend growth rate of below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through 198485 Such a pattern of export growth over time largely reflects the effects of progress in Bangladeshrsquos policy reforms over the period Export products during the earlier period (eg jute and jute goods) did have a significant effect in limiting the overall export growth especially starting with the mid-1980s The export upturn in the latter period also reflects the fact that the export setback in jute and jute goods was more than recouped by remarkable growth in the export of a new product group ready-made garments
- Jute goods
- Among jute and jute goods only jute goods had a statistically significant low annual trend growth rate of more than 6 percent during the early period and around 1 percent for the entire period In the latter period (198586 to 199900) it had no significant growth trend Raw jute exports on the other hand had statistically significant negative growth trends for the whole period as well as for the second period The reasons for the decline were the growth of jute manufacturing industry in the country and falling demand for raw jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
- Frozen food
- Frozen food (mainly frozen shrimps) was one of the major product groups which had a highly satisfactory trend growth rate of 1611 percent for the whole period However its growth remained uneven a spectacularly high rate of 31 percent during the period till 198485 along with a sharp drop to about 84 percent during 198586 to 199900 The drop in the growth rate in the later period may be attributed to a fall in demand in the EU markets in the late 1980s and early 1990s which recovered only during the second half of the 1990s The dwindling growth of frozen foods in the later period may also be attributed to supply constraints
- Exports of traditional goods (composed of jute jute goods tea and leather) constituted most of Bangladeshrsquos total exports around 97 percent in 197273 These exports precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute and jute goods in the export trade of Bangladesh has weakened considerably and some non-traditional items have made inroads For example the share of raw jute in export earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900 Over the same period the share of jute goods declined from 52 percent to less than 5 percent Another traditional exports item tea declined from 27 percent to 03 percent during the period Tearsquos relative export share did increase in some of the years in the 1980s but it declined sharply in later years Leatherrsquos share in total exports showed a significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s but declined to a level of 34 percent in 199900
- On the other hand nontraditional exports (ie exports of goods other than traditional ones) dramatically grew in importance from 3 percent of total exports in 197273 to more than 90 percent in 199900 Among the nontraditional exports RMG including knitwear rose to 54 percent during 199900 from an insignificant level in the early 1980s The share of frozen food increased from less than 1 percent to 6 percent during the years Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected a deceleration in its growth performance in recent years Residual export category showed a big jump in export importance from 18 percent in 197273 to 31 percent in 199900
-
Annual Growth Trends of Exports by Commodity GroupsCommodity Group 197273 ndash 199900 197273 ndash 198485 198586 ndash 199900
Raw Jute -175 071 -213Jute Manufactures 122 649 101Frozen Foods 1611 3058 84Tea 175 1323 -095Leather 886 132 488Readymade Garments 5710 9491 2037Others 1902 2318 2439Total Exports 1091 86 1424
9
Composition of Exports 1999-00
54
22
6
6
12
Woven Garments
Kintwear
Frozen Food
Jute and Jute goods
others
Growth in Exports Millions
0
1000
2000
3000
4000
5000
6000
7000
1990-91 1991-92 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00
years
Mil
lio
n $
Source Authorrsquos estimation based on Bangladesh Bank data
Trend of growth in export of Bangladesh among 1980-90 to 1990-99sDuring 1990s Bangladeshrsquos total exports in Current US $ value grew at an annual
compound rate of 144 per cent In fact Bangladesh experienced double digit export
growth in most of the years during the 1990sThe Gap between Export and Import
widened from-US$1791 million in 199091 to -$2814 million in 199000although the
share of export earnings in import payments steadily rose from 31 per cent in 198081 to
67 per cent in 199900The openness of the economy as measured by total external trade
10
as a proportion of GDP went up from around 22 percent in 199091 to nearly 30 percent
in 199000 with the share of export in GDP rising from 7 per cent to 12 percent during
the same period
Trend of growth in export among 1980-90 to 1990-00
Description 198081 199091 199900 Annual compound
Growth rate
1980s
Annual
compound
Growth rate
1990s
Export(millions $) 710 1718 5752 92 144
Import(millions $) 2282 3510 8566 44 104
Trade Deficit
(million $)
1572 1792 2814 13 51
Export as of
import
311 489 671
Export as GDP 5 73 121
import As of GDP 16 15 179
Openness of the
economy
21 223 30
Source Export Promotion Bureau and World Bank
Changes in Composition of Exports and Imports
11
Exports of traditional goods (composed of jute jute goods tea and leather) constituted
most of Bangladeshrsquos total exports around 97 percent in 197273 These exports
precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute
and jute goods in the export trade of Bangladesh has weakened considerably and some
non-traditional items have made inroads For example the share of raw jute in export
earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900
Over the same period the share of jute goods declined from 52 percent to less than 5
percent Another traditional exports item tea declined from 27 percent to 03 percent
during the period Tearsquos relative export share did increase in some of the years in the
1980s but it declined sharply in later years Leatherrsquos share in total exports showed a
significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s
but declined to a level of 34 percent in 199900
On the other hand nontraditional exports (ie exports of goods other than traditional
ones) dramatically grew in importance from 3 percent of total exports in 197273 to more
than 90 percent in 199900 Among the nontraditional exports RMG including knitwear
rose to 54 percent during 199900 from an insignificant level in the early 1980s The
share of frozen food increased from less than 1 percent to 6 percent during the years
Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected
a deceleration in its growth performance in recent years Residual export category
showed a big jump in export importance from 18 percent in 197273 to 31 percent in
199900
12
Composition of Exports by Commodity Groups
( of Total Export Earnings) Year Raw Jute Jute Goods Frozen
FoodsTea Leather Readymade
GarmentsOthers
198889 756 1892 1099 310 1065 3663 1213198990 818 1869 905 259 1174 3997 978199091 607 1041 826 252 782 4283 2210199192 429 1471 640 162 725 5336 1237199293 314 1226 693 173 625 5205 1762199394 226 1121 834 150 666 5097 1906199495 208 921 863 095 583 5298 2032199596 232 849 810 086 545 5023 2455199697 263 720 728 087 441 5062 2699199798 209 543 576 091 367 5497 2717199899 135 571 515 073 316 5607 2784199900 125 462 598 031 339 5360 3084
Source Authorrsquos calculation based on Bangladesh Bank data
Some Graphical Statistics over Last Two Decades
Figure 412 shows thatDuring 1983-84 to 1989-90 the average trade deficit was 73 of GDP This deficit decreased to 67 on average in the last five years
13
Figure 421 shows thatThe growth in exports has fluctuated considerably from an average low of 7 in 1981-1985 period to an average high of in excess of 17 in 1991-1995 and 2006-2008 periods
Figure 422 shows that
14
The share of primary commodities to total exports decreased from 175 in 1980-81 to
7 in 2007-08On the other hand the share of manufactured goods to total exports
increased from 44 in 1980- 81 to 93 in 2007-08
Figure 444 shows that1048707 there has a dramatic increase in the number of expatriate workers since 2005 rising
from about 250 lakh to 875 lakh
1048707 However the impact of the global financial crisis may lead to a decline over the
coming months
15
Trend of Export Earnings
At present Bangladesh faces growing economic competition from India Pakistan and
Indonesia countries which could offer better infrastructure and larger and growing
domestic markets The exports of Bangladesh have been experiencing a steady rise since
the late 80s of which apparels constitute approximately 75 of the total exports Other
items include frozen foods jute amp jute products leather amp leather products handicrafts
vegetables chemical products etc Major export markets for Bangladeshi exporters are
North America (33) and EU (52) while other regions constitute the rest In Fiscal
Year 2006-07 total exports earnings of Bangladesh exceeded US$ 12 billion The trend
of Bangladeshi exports from FY 1972-72 to 2006-07 iis shown below
16
Conclusion
Bangladesh economy has passed through a heightened pace of global integration in the
1990s The degree of openness of the Bangladesh economy is now higher than many
developing countries ndash exports and imports of goods and services currently account for
about a-third of the countryrsquos GDP Thus by definition the state of the global economy
is likely to have a stronger impact on the Bangladesh economy now than at any time in
the past The impact of the state of the global economy would continue to be increasingly
felt in terms of the countryrsquos macroeconomic performance GDP growth rate external
sector performance foreign exchange reserves and health of the financial institutions
This is perhaps one of the most important legacies that the Bangladesh economy has
inherited through its developmental practice and reforms of the 1990s
Bangladeshrsquos export sector registered double-digit real growth rate throughout the 1990s
As a matter of fact real export sector growth rate was almost three times the real GDP
growth rate during this period Even during FY 1990 and FY 1991 a period which
coincided with the last major global recession Bangladeshrsquos export sector posted robust
growth rates of 179 and 127 respectively The structure of export was different
though at the time Raw jute jute goods and leather were some of the major export
commodities in the early 1990s their combined share being equal to the share of RMG in
total exports of Bangladesh A relatively diversified base and market provided some sort
of a cushion against sudden fluctuations of the global market
Exporters and trade experts attribute Bangladeshrsquos export success to the
lsquocompetitivenessrsquo of the countryrsquos readymade garment sector and availability of cheap
labor although exports of frozen food leather and jute fell Garment manufacturers
produced lower-end products whose demand did not fall significantly in global markets
Remaining competitive in these days of difficulties since the quota system was
withdrawn and the ongoing lingering economic slide worldwide is rewarding for
Bangladesh
17
Bangladesh maintains export trends
YEAR EXPORT IN (MILLION US$)
Export (M US$)
CURRENT CUMULATIVE
1983-84 016 016
1984-85 445 461
1985-86 759 1221
1986-87 1527 2747
1987-88 1393 4140
1988-89 1608 5748
1989-90 3421 9169
1990-91 4799 13967
1991-92 7699 21667
1992-93 12705 34371
1993-94 14560 48932
1994-95 22826 71758
1995-96 33702 105460
1996-97 46277 151736
1997-98 63605 215341
1998-99 71169 286510
1999-00 89082 375592
2000-01 106787 482379
2001-02 107703 590081
2002-03 120022 710103
2003-04 135391 845494
2004-05 154868 1000362
2005-06 183618 1183980
2006-07 206367 206367
2007-08 242958 1633304
2008-09 258170 1891474
2009-10 282254 2173728
2010-11 (January 2011)
194001 2367728
Growth (2009-10) 933
18
References Bakht Z (2001) ldquoTrade Liberalisation Exports and Growth of Manufacturing Industries
in Bangladeshrdquo in M M Huq and Love (eds) Strategies for Industrialisation The Case of Bangladesh University Press Ltd Dhaka
Rab A (1997) ldquoExport Trends and Policies in Bangladesh Some Lessons of Past Performance for Future Policiesrdquo paper presented to a Workshop organized by the Institutional Support to the Ministry of Finance Project (ISMOF) supported by the Asian Development Bank March Dhaka
Rahman S H (1979) ldquoThe Determinants of Change in Trade Balance Some Estimates for Bangladesh 195960 ndash 197475rdquo Bangladesh Development Studies vol 7 pp 71 ndash 84
Ahmed S and Sattar Z (2004) ldquoTrade Liberalization Growth and Poverty Reduction The Case of Bangladeshrdquo Working Paper World Bank South Asian Region May 01 2004 The paper was also presented in the ABCDE Bangalore Conference in May 2003
Bangladesh Bank (2002-2003) Annual Report 2002-2003 Dhaka Bangladesh Bangladesh Bank (2007) Quoted in wwwbanglaembassycombhFDI20in
20Bangladeshhtm Downloaded on 31 October 2007 BBS (2000) Statistical Pocketbook of Bangladesh Bangladesh Bureau of Statistics
Dhaka Bangladesh CPD (1997) Growth or Stagnation A Review of Bangladeshrsquos Development 1996
Centre for Policy DialogueUniversity Press Limited Dhaka CSB (2003) Country Study of Bangladesh A Paper Presented at the Country Studies
Workshop on lsquoTrade Cooperation and Economic Policy Reform in South Asiarsquo Bangladesh Institute of Development Studies Dhaka Bangladesh March 30
EPB (Export Promotion Bureau) (2004) Bangladesh Export Statistics 2002-2003 Export Promotion Bureau Dhaka Bangladesh wwwepbbdcomExportStathtml
GOB (2002) lsquoForeign Trade Exchange Rate Management and External Sectorrsquo Bangladesh Economic Review Finance Division Ministry of Finance the Government of Bangladesh Dhaka
GOB (2003) Export Policy 2003-2006 Ministry of Commerce Government of Bangladesh December 2003
GOB (2006) Trade Policy Review by Bangladesh World Trade Organization Report No 06-3754 downloaded on 10907
World Bank (1999) World Development Indicators Database World Bank Washington D C
World Bank (2000) World Development Indicators Database World Bank Washington D C
Bangladesh International trade Information about International trade in Bangladesh httpwwwnationsencyclopediacomeconomiesAsia-and-the-PacificBangladesh-INTERNATIONAL-TRADEhtmlixzz1GOf4e1tc
Bangladesh Export Promotion Bureau
19
- Bangladesh Trade Balance and Export-Import Price Indices
- Growth of Exports
- Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of 1424 percent during 198586 to 199900 compared to an annual trend growth rate of below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through 198485 Such a pattern of export growth over time largely reflects the effects of progress in Bangladeshrsquos policy reforms over the period Export products during the earlier period (eg jute and jute goods) did have a significant effect in limiting the overall export growth especially starting with the mid-1980s The export upturn in the latter period also reflects the fact that the export setback in jute and jute goods was more than recouped by remarkable growth in the export of a new product group ready-made garments
- Jute goods
- Among jute and jute goods only jute goods had a statistically significant low annual trend growth rate of more than 6 percent during the early period and around 1 percent for the entire period In the latter period (198586 to 199900) it had no significant growth trend Raw jute exports on the other hand had statistically significant negative growth trends for the whole period as well as for the second period The reasons for the decline were the growth of jute manufacturing industry in the country and falling demand for raw jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
- Frozen food
- Frozen food (mainly frozen shrimps) was one of the major product groups which had a highly satisfactory trend growth rate of 1611 percent for the whole period However its growth remained uneven a spectacularly high rate of 31 percent during the period till 198485 along with a sharp drop to about 84 percent during 198586 to 199900 The drop in the growth rate in the later period may be attributed to a fall in demand in the EU markets in the late 1980s and early 1990s which recovered only during the second half of the 1990s The dwindling growth of frozen foods in the later period may also be attributed to supply constraints
- Exports of traditional goods (composed of jute jute goods tea and leather) constituted most of Bangladeshrsquos total exports around 97 percent in 197273 These exports precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute and jute goods in the export trade of Bangladesh has weakened considerably and some non-traditional items have made inroads For example the share of raw jute in export earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900 Over the same period the share of jute goods declined from 52 percent to less than 5 percent Another traditional exports item tea declined from 27 percent to 03 percent during the period Tearsquos relative export share did increase in some of the years in the 1980s but it declined sharply in later years Leatherrsquos share in total exports showed a significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s but declined to a level of 34 percent in 199900
- On the other hand nontraditional exports (ie exports of goods other than traditional ones) dramatically grew in importance from 3 percent of total exports in 197273 to more than 90 percent in 199900 Among the nontraditional exports RMG including knitwear rose to 54 percent during 199900 from an insignificant level in the early 1980s The share of frozen food increased from less than 1 percent to 6 percent during the years Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected a deceleration in its growth performance in recent years Residual export category showed a big jump in export importance from 18 percent in 197273 to 31 percent in 199900
-
Composition of Exports 1999-00
54
22
6
6
12
Woven Garments
Kintwear
Frozen Food
Jute and Jute goods
others
Growth in Exports Millions
0
1000
2000
3000
4000
5000
6000
7000
1990-91 1991-92 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00
years
Mil
lio
n $
Source Authorrsquos estimation based on Bangladesh Bank data
Trend of growth in export of Bangladesh among 1980-90 to 1990-99sDuring 1990s Bangladeshrsquos total exports in Current US $ value grew at an annual
compound rate of 144 per cent In fact Bangladesh experienced double digit export
growth in most of the years during the 1990sThe Gap between Export and Import
widened from-US$1791 million in 199091 to -$2814 million in 199000although the
share of export earnings in import payments steadily rose from 31 per cent in 198081 to
67 per cent in 199900The openness of the economy as measured by total external trade
10
as a proportion of GDP went up from around 22 percent in 199091 to nearly 30 percent
in 199000 with the share of export in GDP rising from 7 per cent to 12 percent during
the same period
Trend of growth in export among 1980-90 to 1990-00
Description 198081 199091 199900 Annual compound
Growth rate
1980s
Annual
compound
Growth rate
1990s
Export(millions $) 710 1718 5752 92 144
Import(millions $) 2282 3510 8566 44 104
Trade Deficit
(million $)
1572 1792 2814 13 51
Export as of
import
311 489 671
Export as GDP 5 73 121
import As of GDP 16 15 179
Openness of the
economy
21 223 30
Source Export Promotion Bureau and World Bank
Changes in Composition of Exports and Imports
11
Exports of traditional goods (composed of jute jute goods tea and leather) constituted
most of Bangladeshrsquos total exports around 97 percent in 197273 These exports
precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute
and jute goods in the export trade of Bangladesh has weakened considerably and some
non-traditional items have made inroads For example the share of raw jute in export
earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900
Over the same period the share of jute goods declined from 52 percent to less than 5
percent Another traditional exports item tea declined from 27 percent to 03 percent
during the period Tearsquos relative export share did increase in some of the years in the
1980s but it declined sharply in later years Leatherrsquos share in total exports showed a
significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s
but declined to a level of 34 percent in 199900
On the other hand nontraditional exports (ie exports of goods other than traditional
ones) dramatically grew in importance from 3 percent of total exports in 197273 to more
than 90 percent in 199900 Among the nontraditional exports RMG including knitwear
rose to 54 percent during 199900 from an insignificant level in the early 1980s The
share of frozen food increased from less than 1 percent to 6 percent during the years
Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected
a deceleration in its growth performance in recent years Residual export category
showed a big jump in export importance from 18 percent in 197273 to 31 percent in
199900
12
Composition of Exports by Commodity Groups
( of Total Export Earnings) Year Raw Jute Jute Goods Frozen
FoodsTea Leather Readymade
GarmentsOthers
198889 756 1892 1099 310 1065 3663 1213198990 818 1869 905 259 1174 3997 978199091 607 1041 826 252 782 4283 2210199192 429 1471 640 162 725 5336 1237199293 314 1226 693 173 625 5205 1762199394 226 1121 834 150 666 5097 1906199495 208 921 863 095 583 5298 2032199596 232 849 810 086 545 5023 2455199697 263 720 728 087 441 5062 2699199798 209 543 576 091 367 5497 2717199899 135 571 515 073 316 5607 2784199900 125 462 598 031 339 5360 3084
Source Authorrsquos calculation based on Bangladesh Bank data
Some Graphical Statistics over Last Two Decades
Figure 412 shows thatDuring 1983-84 to 1989-90 the average trade deficit was 73 of GDP This deficit decreased to 67 on average in the last five years
13
Figure 421 shows thatThe growth in exports has fluctuated considerably from an average low of 7 in 1981-1985 period to an average high of in excess of 17 in 1991-1995 and 2006-2008 periods
Figure 422 shows that
14
The share of primary commodities to total exports decreased from 175 in 1980-81 to
7 in 2007-08On the other hand the share of manufactured goods to total exports
increased from 44 in 1980- 81 to 93 in 2007-08
Figure 444 shows that1048707 there has a dramatic increase in the number of expatriate workers since 2005 rising
from about 250 lakh to 875 lakh
1048707 However the impact of the global financial crisis may lead to a decline over the
coming months
15
Trend of Export Earnings
At present Bangladesh faces growing economic competition from India Pakistan and
Indonesia countries which could offer better infrastructure and larger and growing
domestic markets The exports of Bangladesh have been experiencing a steady rise since
the late 80s of which apparels constitute approximately 75 of the total exports Other
items include frozen foods jute amp jute products leather amp leather products handicrafts
vegetables chemical products etc Major export markets for Bangladeshi exporters are
North America (33) and EU (52) while other regions constitute the rest In Fiscal
Year 2006-07 total exports earnings of Bangladesh exceeded US$ 12 billion The trend
of Bangladeshi exports from FY 1972-72 to 2006-07 iis shown below
16
Conclusion
Bangladesh economy has passed through a heightened pace of global integration in the
1990s The degree of openness of the Bangladesh economy is now higher than many
developing countries ndash exports and imports of goods and services currently account for
about a-third of the countryrsquos GDP Thus by definition the state of the global economy
is likely to have a stronger impact on the Bangladesh economy now than at any time in
the past The impact of the state of the global economy would continue to be increasingly
felt in terms of the countryrsquos macroeconomic performance GDP growth rate external
sector performance foreign exchange reserves and health of the financial institutions
This is perhaps one of the most important legacies that the Bangladesh economy has
inherited through its developmental practice and reforms of the 1990s
Bangladeshrsquos export sector registered double-digit real growth rate throughout the 1990s
As a matter of fact real export sector growth rate was almost three times the real GDP
growth rate during this period Even during FY 1990 and FY 1991 a period which
coincided with the last major global recession Bangladeshrsquos export sector posted robust
growth rates of 179 and 127 respectively The structure of export was different
though at the time Raw jute jute goods and leather were some of the major export
commodities in the early 1990s their combined share being equal to the share of RMG in
total exports of Bangladesh A relatively diversified base and market provided some sort
of a cushion against sudden fluctuations of the global market
Exporters and trade experts attribute Bangladeshrsquos export success to the
lsquocompetitivenessrsquo of the countryrsquos readymade garment sector and availability of cheap
labor although exports of frozen food leather and jute fell Garment manufacturers
produced lower-end products whose demand did not fall significantly in global markets
Remaining competitive in these days of difficulties since the quota system was
withdrawn and the ongoing lingering economic slide worldwide is rewarding for
Bangladesh
17
Bangladesh maintains export trends
YEAR EXPORT IN (MILLION US$)
Export (M US$)
CURRENT CUMULATIVE
1983-84 016 016
1984-85 445 461
1985-86 759 1221
1986-87 1527 2747
1987-88 1393 4140
1988-89 1608 5748
1989-90 3421 9169
1990-91 4799 13967
1991-92 7699 21667
1992-93 12705 34371
1993-94 14560 48932
1994-95 22826 71758
1995-96 33702 105460
1996-97 46277 151736
1997-98 63605 215341
1998-99 71169 286510
1999-00 89082 375592
2000-01 106787 482379
2001-02 107703 590081
2002-03 120022 710103
2003-04 135391 845494
2004-05 154868 1000362
2005-06 183618 1183980
2006-07 206367 206367
2007-08 242958 1633304
2008-09 258170 1891474
2009-10 282254 2173728
2010-11 (January 2011)
194001 2367728
Growth (2009-10) 933
18
References Bakht Z (2001) ldquoTrade Liberalisation Exports and Growth of Manufacturing Industries
in Bangladeshrdquo in M M Huq and Love (eds) Strategies for Industrialisation The Case of Bangladesh University Press Ltd Dhaka
Rab A (1997) ldquoExport Trends and Policies in Bangladesh Some Lessons of Past Performance for Future Policiesrdquo paper presented to a Workshop organized by the Institutional Support to the Ministry of Finance Project (ISMOF) supported by the Asian Development Bank March Dhaka
Rahman S H (1979) ldquoThe Determinants of Change in Trade Balance Some Estimates for Bangladesh 195960 ndash 197475rdquo Bangladesh Development Studies vol 7 pp 71 ndash 84
Ahmed S and Sattar Z (2004) ldquoTrade Liberalization Growth and Poverty Reduction The Case of Bangladeshrdquo Working Paper World Bank South Asian Region May 01 2004 The paper was also presented in the ABCDE Bangalore Conference in May 2003
Bangladesh Bank (2002-2003) Annual Report 2002-2003 Dhaka Bangladesh Bangladesh Bank (2007) Quoted in wwwbanglaembassycombhFDI20in
20Bangladeshhtm Downloaded on 31 October 2007 BBS (2000) Statistical Pocketbook of Bangladesh Bangladesh Bureau of Statistics
Dhaka Bangladesh CPD (1997) Growth or Stagnation A Review of Bangladeshrsquos Development 1996
Centre for Policy DialogueUniversity Press Limited Dhaka CSB (2003) Country Study of Bangladesh A Paper Presented at the Country Studies
Workshop on lsquoTrade Cooperation and Economic Policy Reform in South Asiarsquo Bangladesh Institute of Development Studies Dhaka Bangladesh March 30
EPB (Export Promotion Bureau) (2004) Bangladesh Export Statistics 2002-2003 Export Promotion Bureau Dhaka Bangladesh wwwepbbdcomExportStathtml
GOB (2002) lsquoForeign Trade Exchange Rate Management and External Sectorrsquo Bangladesh Economic Review Finance Division Ministry of Finance the Government of Bangladesh Dhaka
GOB (2003) Export Policy 2003-2006 Ministry of Commerce Government of Bangladesh December 2003
GOB (2006) Trade Policy Review by Bangladesh World Trade Organization Report No 06-3754 downloaded on 10907
World Bank (1999) World Development Indicators Database World Bank Washington D C
World Bank (2000) World Development Indicators Database World Bank Washington D C
Bangladesh International trade Information about International trade in Bangladesh httpwwwnationsencyclopediacomeconomiesAsia-and-the-PacificBangladesh-INTERNATIONAL-TRADEhtmlixzz1GOf4e1tc
Bangladesh Export Promotion Bureau
19
- Bangladesh Trade Balance and Export-Import Price Indices
- Growth of Exports
- Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of 1424 percent during 198586 to 199900 compared to an annual trend growth rate of below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through 198485 Such a pattern of export growth over time largely reflects the effects of progress in Bangladeshrsquos policy reforms over the period Export products during the earlier period (eg jute and jute goods) did have a significant effect in limiting the overall export growth especially starting with the mid-1980s The export upturn in the latter period also reflects the fact that the export setback in jute and jute goods was more than recouped by remarkable growth in the export of a new product group ready-made garments
- Jute goods
- Among jute and jute goods only jute goods had a statistically significant low annual trend growth rate of more than 6 percent during the early period and around 1 percent for the entire period In the latter period (198586 to 199900) it had no significant growth trend Raw jute exports on the other hand had statistically significant negative growth trends for the whole period as well as for the second period The reasons for the decline were the growth of jute manufacturing industry in the country and falling demand for raw jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
- Frozen food
- Frozen food (mainly frozen shrimps) was one of the major product groups which had a highly satisfactory trend growth rate of 1611 percent for the whole period However its growth remained uneven a spectacularly high rate of 31 percent during the period till 198485 along with a sharp drop to about 84 percent during 198586 to 199900 The drop in the growth rate in the later period may be attributed to a fall in demand in the EU markets in the late 1980s and early 1990s which recovered only during the second half of the 1990s The dwindling growth of frozen foods in the later period may also be attributed to supply constraints
- Exports of traditional goods (composed of jute jute goods tea and leather) constituted most of Bangladeshrsquos total exports around 97 percent in 197273 These exports precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute and jute goods in the export trade of Bangladesh has weakened considerably and some non-traditional items have made inroads For example the share of raw jute in export earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900 Over the same period the share of jute goods declined from 52 percent to less than 5 percent Another traditional exports item tea declined from 27 percent to 03 percent during the period Tearsquos relative export share did increase in some of the years in the 1980s but it declined sharply in later years Leatherrsquos share in total exports showed a significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s but declined to a level of 34 percent in 199900
- On the other hand nontraditional exports (ie exports of goods other than traditional ones) dramatically grew in importance from 3 percent of total exports in 197273 to more than 90 percent in 199900 Among the nontraditional exports RMG including knitwear rose to 54 percent during 199900 from an insignificant level in the early 1980s The share of frozen food increased from less than 1 percent to 6 percent during the years Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected a deceleration in its growth performance in recent years Residual export category showed a big jump in export importance from 18 percent in 197273 to 31 percent in 199900
-
as a proportion of GDP went up from around 22 percent in 199091 to nearly 30 percent
in 199000 with the share of export in GDP rising from 7 per cent to 12 percent during
the same period
Trend of growth in export among 1980-90 to 1990-00
Description 198081 199091 199900 Annual compound
Growth rate
1980s
Annual
compound
Growth rate
1990s
Export(millions $) 710 1718 5752 92 144
Import(millions $) 2282 3510 8566 44 104
Trade Deficit
(million $)
1572 1792 2814 13 51
Export as of
import
311 489 671
Export as GDP 5 73 121
import As of GDP 16 15 179
Openness of the
economy
21 223 30
Source Export Promotion Bureau and World Bank
Changes in Composition of Exports and Imports
11
Exports of traditional goods (composed of jute jute goods tea and leather) constituted
most of Bangladeshrsquos total exports around 97 percent in 197273 These exports
precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute
and jute goods in the export trade of Bangladesh has weakened considerably and some
non-traditional items have made inroads For example the share of raw jute in export
earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900
Over the same period the share of jute goods declined from 52 percent to less than 5
percent Another traditional exports item tea declined from 27 percent to 03 percent
during the period Tearsquos relative export share did increase in some of the years in the
1980s but it declined sharply in later years Leatherrsquos share in total exports showed a
significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s
but declined to a level of 34 percent in 199900
On the other hand nontraditional exports (ie exports of goods other than traditional
ones) dramatically grew in importance from 3 percent of total exports in 197273 to more
than 90 percent in 199900 Among the nontraditional exports RMG including knitwear
rose to 54 percent during 199900 from an insignificant level in the early 1980s The
share of frozen food increased from less than 1 percent to 6 percent during the years
Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected
a deceleration in its growth performance in recent years Residual export category
showed a big jump in export importance from 18 percent in 197273 to 31 percent in
199900
12
Composition of Exports by Commodity Groups
( of Total Export Earnings) Year Raw Jute Jute Goods Frozen
FoodsTea Leather Readymade
GarmentsOthers
198889 756 1892 1099 310 1065 3663 1213198990 818 1869 905 259 1174 3997 978199091 607 1041 826 252 782 4283 2210199192 429 1471 640 162 725 5336 1237199293 314 1226 693 173 625 5205 1762199394 226 1121 834 150 666 5097 1906199495 208 921 863 095 583 5298 2032199596 232 849 810 086 545 5023 2455199697 263 720 728 087 441 5062 2699199798 209 543 576 091 367 5497 2717199899 135 571 515 073 316 5607 2784199900 125 462 598 031 339 5360 3084
Source Authorrsquos calculation based on Bangladesh Bank data
Some Graphical Statistics over Last Two Decades
Figure 412 shows thatDuring 1983-84 to 1989-90 the average trade deficit was 73 of GDP This deficit decreased to 67 on average in the last five years
13
Figure 421 shows thatThe growth in exports has fluctuated considerably from an average low of 7 in 1981-1985 period to an average high of in excess of 17 in 1991-1995 and 2006-2008 periods
Figure 422 shows that
14
The share of primary commodities to total exports decreased from 175 in 1980-81 to
7 in 2007-08On the other hand the share of manufactured goods to total exports
increased from 44 in 1980- 81 to 93 in 2007-08
Figure 444 shows that1048707 there has a dramatic increase in the number of expatriate workers since 2005 rising
from about 250 lakh to 875 lakh
1048707 However the impact of the global financial crisis may lead to a decline over the
coming months
15
Trend of Export Earnings
At present Bangladesh faces growing economic competition from India Pakistan and
Indonesia countries which could offer better infrastructure and larger and growing
domestic markets The exports of Bangladesh have been experiencing a steady rise since
the late 80s of which apparels constitute approximately 75 of the total exports Other
items include frozen foods jute amp jute products leather amp leather products handicrafts
vegetables chemical products etc Major export markets for Bangladeshi exporters are
North America (33) and EU (52) while other regions constitute the rest In Fiscal
Year 2006-07 total exports earnings of Bangladesh exceeded US$ 12 billion The trend
of Bangladeshi exports from FY 1972-72 to 2006-07 iis shown below
16
Conclusion
Bangladesh economy has passed through a heightened pace of global integration in the
1990s The degree of openness of the Bangladesh economy is now higher than many
developing countries ndash exports and imports of goods and services currently account for
about a-third of the countryrsquos GDP Thus by definition the state of the global economy
is likely to have a stronger impact on the Bangladesh economy now than at any time in
the past The impact of the state of the global economy would continue to be increasingly
felt in terms of the countryrsquos macroeconomic performance GDP growth rate external
sector performance foreign exchange reserves and health of the financial institutions
This is perhaps one of the most important legacies that the Bangladesh economy has
inherited through its developmental practice and reforms of the 1990s
Bangladeshrsquos export sector registered double-digit real growth rate throughout the 1990s
As a matter of fact real export sector growth rate was almost three times the real GDP
growth rate during this period Even during FY 1990 and FY 1991 a period which
coincided with the last major global recession Bangladeshrsquos export sector posted robust
growth rates of 179 and 127 respectively The structure of export was different
though at the time Raw jute jute goods and leather were some of the major export
commodities in the early 1990s their combined share being equal to the share of RMG in
total exports of Bangladesh A relatively diversified base and market provided some sort
of a cushion against sudden fluctuations of the global market
Exporters and trade experts attribute Bangladeshrsquos export success to the
lsquocompetitivenessrsquo of the countryrsquos readymade garment sector and availability of cheap
labor although exports of frozen food leather and jute fell Garment manufacturers
produced lower-end products whose demand did not fall significantly in global markets
Remaining competitive in these days of difficulties since the quota system was
withdrawn and the ongoing lingering economic slide worldwide is rewarding for
Bangladesh
17
Bangladesh maintains export trends
YEAR EXPORT IN (MILLION US$)
Export (M US$)
CURRENT CUMULATIVE
1983-84 016 016
1984-85 445 461
1985-86 759 1221
1986-87 1527 2747
1987-88 1393 4140
1988-89 1608 5748
1989-90 3421 9169
1990-91 4799 13967
1991-92 7699 21667
1992-93 12705 34371
1993-94 14560 48932
1994-95 22826 71758
1995-96 33702 105460
1996-97 46277 151736
1997-98 63605 215341
1998-99 71169 286510
1999-00 89082 375592
2000-01 106787 482379
2001-02 107703 590081
2002-03 120022 710103
2003-04 135391 845494
2004-05 154868 1000362
2005-06 183618 1183980
2006-07 206367 206367
2007-08 242958 1633304
2008-09 258170 1891474
2009-10 282254 2173728
2010-11 (January 2011)
194001 2367728
Growth (2009-10) 933
18
References Bakht Z (2001) ldquoTrade Liberalisation Exports and Growth of Manufacturing Industries
in Bangladeshrdquo in M M Huq and Love (eds) Strategies for Industrialisation The Case of Bangladesh University Press Ltd Dhaka
Rab A (1997) ldquoExport Trends and Policies in Bangladesh Some Lessons of Past Performance for Future Policiesrdquo paper presented to a Workshop organized by the Institutional Support to the Ministry of Finance Project (ISMOF) supported by the Asian Development Bank March Dhaka
Rahman S H (1979) ldquoThe Determinants of Change in Trade Balance Some Estimates for Bangladesh 195960 ndash 197475rdquo Bangladesh Development Studies vol 7 pp 71 ndash 84
Ahmed S and Sattar Z (2004) ldquoTrade Liberalization Growth and Poverty Reduction The Case of Bangladeshrdquo Working Paper World Bank South Asian Region May 01 2004 The paper was also presented in the ABCDE Bangalore Conference in May 2003
Bangladesh Bank (2002-2003) Annual Report 2002-2003 Dhaka Bangladesh Bangladesh Bank (2007) Quoted in wwwbanglaembassycombhFDI20in
20Bangladeshhtm Downloaded on 31 October 2007 BBS (2000) Statistical Pocketbook of Bangladesh Bangladesh Bureau of Statistics
Dhaka Bangladesh CPD (1997) Growth or Stagnation A Review of Bangladeshrsquos Development 1996
Centre for Policy DialogueUniversity Press Limited Dhaka CSB (2003) Country Study of Bangladesh A Paper Presented at the Country Studies
Workshop on lsquoTrade Cooperation and Economic Policy Reform in South Asiarsquo Bangladesh Institute of Development Studies Dhaka Bangladesh March 30
EPB (Export Promotion Bureau) (2004) Bangladesh Export Statistics 2002-2003 Export Promotion Bureau Dhaka Bangladesh wwwepbbdcomExportStathtml
GOB (2002) lsquoForeign Trade Exchange Rate Management and External Sectorrsquo Bangladesh Economic Review Finance Division Ministry of Finance the Government of Bangladesh Dhaka
GOB (2003) Export Policy 2003-2006 Ministry of Commerce Government of Bangladesh December 2003
GOB (2006) Trade Policy Review by Bangladesh World Trade Organization Report No 06-3754 downloaded on 10907
World Bank (1999) World Development Indicators Database World Bank Washington D C
World Bank (2000) World Development Indicators Database World Bank Washington D C
Bangladesh International trade Information about International trade in Bangladesh httpwwwnationsencyclopediacomeconomiesAsia-and-the-PacificBangladesh-INTERNATIONAL-TRADEhtmlixzz1GOf4e1tc
Bangladesh Export Promotion Bureau
19
- Bangladesh Trade Balance and Export-Import Price Indices
- Growth of Exports
- Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of 1424 percent during 198586 to 199900 compared to an annual trend growth rate of below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through 198485 Such a pattern of export growth over time largely reflects the effects of progress in Bangladeshrsquos policy reforms over the period Export products during the earlier period (eg jute and jute goods) did have a significant effect in limiting the overall export growth especially starting with the mid-1980s The export upturn in the latter period also reflects the fact that the export setback in jute and jute goods was more than recouped by remarkable growth in the export of a new product group ready-made garments
- Jute goods
- Among jute and jute goods only jute goods had a statistically significant low annual trend growth rate of more than 6 percent during the early period and around 1 percent for the entire period In the latter period (198586 to 199900) it had no significant growth trend Raw jute exports on the other hand had statistically significant negative growth trends for the whole period as well as for the second period The reasons for the decline were the growth of jute manufacturing industry in the country and falling demand for raw jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
- Frozen food
- Frozen food (mainly frozen shrimps) was one of the major product groups which had a highly satisfactory trend growth rate of 1611 percent for the whole period However its growth remained uneven a spectacularly high rate of 31 percent during the period till 198485 along with a sharp drop to about 84 percent during 198586 to 199900 The drop in the growth rate in the later period may be attributed to a fall in demand in the EU markets in the late 1980s and early 1990s which recovered only during the second half of the 1990s The dwindling growth of frozen foods in the later period may also be attributed to supply constraints
- Exports of traditional goods (composed of jute jute goods tea and leather) constituted most of Bangladeshrsquos total exports around 97 percent in 197273 These exports precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute and jute goods in the export trade of Bangladesh has weakened considerably and some non-traditional items have made inroads For example the share of raw jute in export earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900 Over the same period the share of jute goods declined from 52 percent to less than 5 percent Another traditional exports item tea declined from 27 percent to 03 percent during the period Tearsquos relative export share did increase in some of the years in the 1980s but it declined sharply in later years Leatherrsquos share in total exports showed a significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s but declined to a level of 34 percent in 199900
- On the other hand nontraditional exports (ie exports of goods other than traditional ones) dramatically grew in importance from 3 percent of total exports in 197273 to more than 90 percent in 199900 Among the nontraditional exports RMG including knitwear rose to 54 percent during 199900 from an insignificant level in the early 1980s The share of frozen food increased from less than 1 percent to 6 percent during the years Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected a deceleration in its growth performance in recent years Residual export category showed a big jump in export importance from 18 percent in 197273 to 31 percent in 199900
-
Exports of traditional goods (composed of jute jute goods tea and leather) constituted
most of Bangladeshrsquos total exports around 97 percent in 197273 These exports
precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute
and jute goods in the export trade of Bangladesh has weakened considerably and some
non-traditional items have made inroads For example the share of raw jute in export
earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900
Over the same period the share of jute goods declined from 52 percent to less than 5
percent Another traditional exports item tea declined from 27 percent to 03 percent
during the period Tearsquos relative export share did increase in some of the years in the
1980s but it declined sharply in later years Leatherrsquos share in total exports showed a
significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s
but declined to a level of 34 percent in 199900
On the other hand nontraditional exports (ie exports of goods other than traditional
ones) dramatically grew in importance from 3 percent of total exports in 197273 to more
than 90 percent in 199900 Among the nontraditional exports RMG including knitwear
rose to 54 percent during 199900 from an insignificant level in the early 1980s The
share of frozen food increased from less than 1 percent to 6 percent during the years
Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected
a deceleration in its growth performance in recent years Residual export category
showed a big jump in export importance from 18 percent in 197273 to 31 percent in
199900
12
Composition of Exports by Commodity Groups
( of Total Export Earnings) Year Raw Jute Jute Goods Frozen
FoodsTea Leather Readymade
GarmentsOthers
198889 756 1892 1099 310 1065 3663 1213198990 818 1869 905 259 1174 3997 978199091 607 1041 826 252 782 4283 2210199192 429 1471 640 162 725 5336 1237199293 314 1226 693 173 625 5205 1762199394 226 1121 834 150 666 5097 1906199495 208 921 863 095 583 5298 2032199596 232 849 810 086 545 5023 2455199697 263 720 728 087 441 5062 2699199798 209 543 576 091 367 5497 2717199899 135 571 515 073 316 5607 2784199900 125 462 598 031 339 5360 3084
Source Authorrsquos calculation based on Bangladesh Bank data
Some Graphical Statistics over Last Two Decades
Figure 412 shows thatDuring 1983-84 to 1989-90 the average trade deficit was 73 of GDP This deficit decreased to 67 on average in the last five years
13
Figure 421 shows thatThe growth in exports has fluctuated considerably from an average low of 7 in 1981-1985 period to an average high of in excess of 17 in 1991-1995 and 2006-2008 periods
Figure 422 shows that
14
The share of primary commodities to total exports decreased from 175 in 1980-81 to
7 in 2007-08On the other hand the share of manufactured goods to total exports
increased from 44 in 1980- 81 to 93 in 2007-08
Figure 444 shows that1048707 there has a dramatic increase in the number of expatriate workers since 2005 rising
from about 250 lakh to 875 lakh
1048707 However the impact of the global financial crisis may lead to a decline over the
coming months
15
Trend of Export Earnings
At present Bangladesh faces growing economic competition from India Pakistan and
Indonesia countries which could offer better infrastructure and larger and growing
domestic markets The exports of Bangladesh have been experiencing a steady rise since
the late 80s of which apparels constitute approximately 75 of the total exports Other
items include frozen foods jute amp jute products leather amp leather products handicrafts
vegetables chemical products etc Major export markets for Bangladeshi exporters are
North America (33) and EU (52) while other regions constitute the rest In Fiscal
Year 2006-07 total exports earnings of Bangladesh exceeded US$ 12 billion The trend
of Bangladeshi exports from FY 1972-72 to 2006-07 iis shown below
16
Conclusion
Bangladesh economy has passed through a heightened pace of global integration in the
1990s The degree of openness of the Bangladesh economy is now higher than many
developing countries ndash exports and imports of goods and services currently account for
about a-third of the countryrsquos GDP Thus by definition the state of the global economy
is likely to have a stronger impact on the Bangladesh economy now than at any time in
the past The impact of the state of the global economy would continue to be increasingly
felt in terms of the countryrsquos macroeconomic performance GDP growth rate external
sector performance foreign exchange reserves and health of the financial institutions
This is perhaps one of the most important legacies that the Bangladesh economy has
inherited through its developmental practice and reforms of the 1990s
Bangladeshrsquos export sector registered double-digit real growth rate throughout the 1990s
As a matter of fact real export sector growth rate was almost three times the real GDP
growth rate during this period Even during FY 1990 and FY 1991 a period which
coincided with the last major global recession Bangladeshrsquos export sector posted robust
growth rates of 179 and 127 respectively The structure of export was different
though at the time Raw jute jute goods and leather were some of the major export
commodities in the early 1990s their combined share being equal to the share of RMG in
total exports of Bangladesh A relatively diversified base and market provided some sort
of a cushion against sudden fluctuations of the global market
Exporters and trade experts attribute Bangladeshrsquos export success to the
lsquocompetitivenessrsquo of the countryrsquos readymade garment sector and availability of cheap
labor although exports of frozen food leather and jute fell Garment manufacturers
produced lower-end products whose demand did not fall significantly in global markets
Remaining competitive in these days of difficulties since the quota system was
withdrawn and the ongoing lingering economic slide worldwide is rewarding for
Bangladesh
17
Bangladesh maintains export trends
YEAR EXPORT IN (MILLION US$)
Export (M US$)
CURRENT CUMULATIVE
1983-84 016 016
1984-85 445 461
1985-86 759 1221
1986-87 1527 2747
1987-88 1393 4140
1988-89 1608 5748
1989-90 3421 9169
1990-91 4799 13967
1991-92 7699 21667
1992-93 12705 34371
1993-94 14560 48932
1994-95 22826 71758
1995-96 33702 105460
1996-97 46277 151736
1997-98 63605 215341
1998-99 71169 286510
1999-00 89082 375592
2000-01 106787 482379
2001-02 107703 590081
2002-03 120022 710103
2003-04 135391 845494
2004-05 154868 1000362
2005-06 183618 1183980
2006-07 206367 206367
2007-08 242958 1633304
2008-09 258170 1891474
2009-10 282254 2173728
2010-11 (January 2011)
194001 2367728
Growth (2009-10) 933
18
References Bakht Z (2001) ldquoTrade Liberalisation Exports and Growth of Manufacturing Industries
in Bangladeshrdquo in M M Huq and Love (eds) Strategies for Industrialisation The Case of Bangladesh University Press Ltd Dhaka
Rab A (1997) ldquoExport Trends and Policies in Bangladesh Some Lessons of Past Performance for Future Policiesrdquo paper presented to a Workshop organized by the Institutional Support to the Ministry of Finance Project (ISMOF) supported by the Asian Development Bank March Dhaka
Rahman S H (1979) ldquoThe Determinants of Change in Trade Balance Some Estimates for Bangladesh 195960 ndash 197475rdquo Bangladesh Development Studies vol 7 pp 71 ndash 84
Ahmed S and Sattar Z (2004) ldquoTrade Liberalization Growth and Poverty Reduction The Case of Bangladeshrdquo Working Paper World Bank South Asian Region May 01 2004 The paper was also presented in the ABCDE Bangalore Conference in May 2003
Bangladesh Bank (2002-2003) Annual Report 2002-2003 Dhaka Bangladesh Bangladesh Bank (2007) Quoted in wwwbanglaembassycombhFDI20in
20Bangladeshhtm Downloaded on 31 October 2007 BBS (2000) Statistical Pocketbook of Bangladesh Bangladesh Bureau of Statistics
Dhaka Bangladesh CPD (1997) Growth or Stagnation A Review of Bangladeshrsquos Development 1996
Centre for Policy DialogueUniversity Press Limited Dhaka CSB (2003) Country Study of Bangladesh A Paper Presented at the Country Studies
Workshop on lsquoTrade Cooperation and Economic Policy Reform in South Asiarsquo Bangladesh Institute of Development Studies Dhaka Bangladesh March 30
EPB (Export Promotion Bureau) (2004) Bangladesh Export Statistics 2002-2003 Export Promotion Bureau Dhaka Bangladesh wwwepbbdcomExportStathtml
GOB (2002) lsquoForeign Trade Exchange Rate Management and External Sectorrsquo Bangladesh Economic Review Finance Division Ministry of Finance the Government of Bangladesh Dhaka
GOB (2003) Export Policy 2003-2006 Ministry of Commerce Government of Bangladesh December 2003
GOB (2006) Trade Policy Review by Bangladesh World Trade Organization Report No 06-3754 downloaded on 10907
World Bank (1999) World Development Indicators Database World Bank Washington D C
World Bank (2000) World Development Indicators Database World Bank Washington D C
Bangladesh International trade Information about International trade in Bangladesh httpwwwnationsencyclopediacomeconomiesAsia-and-the-PacificBangladesh-INTERNATIONAL-TRADEhtmlixzz1GOf4e1tc
Bangladesh Export Promotion Bureau
19
- Bangladesh Trade Balance and Export-Import Price Indices
- Growth of Exports
- Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of 1424 percent during 198586 to 199900 compared to an annual trend growth rate of below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through 198485 Such a pattern of export growth over time largely reflects the effects of progress in Bangladeshrsquos policy reforms over the period Export products during the earlier period (eg jute and jute goods) did have a significant effect in limiting the overall export growth especially starting with the mid-1980s The export upturn in the latter period also reflects the fact that the export setback in jute and jute goods was more than recouped by remarkable growth in the export of a new product group ready-made garments
- Jute goods
- Among jute and jute goods only jute goods had a statistically significant low annual trend growth rate of more than 6 percent during the early period and around 1 percent for the entire period In the latter period (198586 to 199900) it had no significant growth trend Raw jute exports on the other hand had statistically significant negative growth trends for the whole period as well as for the second period The reasons for the decline were the growth of jute manufacturing industry in the country and falling demand for raw jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
- Frozen food
- Frozen food (mainly frozen shrimps) was one of the major product groups which had a highly satisfactory trend growth rate of 1611 percent for the whole period However its growth remained uneven a spectacularly high rate of 31 percent during the period till 198485 along with a sharp drop to about 84 percent during 198586 to 199900 The drop in the growth rate in the later period may be attributed to a fall in demand in the EU markets in the late 1980s and early 1990s which recovered only during the second half of the 1990s The dwindling growth of frozen foods in the later period may also be attributed to supply constraints
- Exports of traditional goods (composed of jute jute goods tea and leather) constituted most of Bangladeshrsquos total exports around 97 percent in 197273 These exports precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute and jute goods in the export trade of Bangladesh has weakened considerably and some non-traditional items have made inroads For example the share of raw jute in export earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900 Over the same period the share of jute goods declined from 52 percent to less than 5 percent Another traditional exports item tea declined from 27 percent to 03 percent during the period Tearsquos relative export share did increase in some of the years in the 1980s but it declined sharply in later years Leatherrsquos share in total exports showed a significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s but declined to a level of 34 percent in 199900
- On the other hand nontraditional exports (ie exports of goods other than traditional ones) dramatically grew in importance from 3 percent of total exports in 197273 to more than 90 percent in 199900 Among the nontraditional exports RMG including knitwear rose to 54 percent during 199900 from an insignificant level in the early 1980s The share of frozen food increased from less than 1 percent to 6 percent during the years Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected a deceleration in its growth performance in recent years Residual export category showed a big jump in export importance from 18 percent in 197273 to 31 percent in 199900
-
Composition of Exports by Commodity Groups
( of Total Export Earnings) Year Raw Jute Jute Goods Frozen
FoodsTea Leather Readymade
GarmentsOthers
198889 756 1892 1099 310 1065 3663 1213198990 818 1869 905 259 1174 3997 978199091 607 1041 826 252 782 4283 2210199192 429 1471 640 162 725 5336 1237199293 314 1226 693 173 625 5205 1762199394 226 1121 834 150 666 5097 1906199495 208 921 863 095 583 5298 2032199596 232 849 810 086 545 5023 2455199697 263 720 728 087 441 5062 2699199798 209 543 576 091 367 5497 2717199899 135 571 515 073 316 5607 2784199900 125 462 598 031 339 5360 3084
Source Authorrsquos calculation based on Bangladesh Bank data
Some Graphical Statistics over Last Two Decades
Figure 412 shows thatDuring 1983-84 to 1989-90 the average trade deficit was 73 of GDP This deficit decreased to 67 on average in the last five years
13
Figure 421 shows thatThe growth in exports has fluctuated considerably from an average low of 7 in 1981-1985 period to an average high of in excess of 17 in 1991-1995 and 2006-2008 periods
Figure 422 shows that
14
The share of primary commodities to total exports decreased from 175 in 1980-81 to
7 in 2007-08On the other hand the share of manufactured goods to total exports
increased from 44 in 1980- 81 to 93 in 2007-08
Figure 444 shows that1048707 there has a dramatic increase in the number of expatriate workers since 2005 rising
from about 250 lakh to 875 lakh
1048707 However the impact of the global financial crisis may lead to a decline over the
coming months
15
Trend of Export Earnings
At present Bangladesh faces growing economic competition from India Pakistan and
Indonesia countries which could offer better infrastructure and larger and growing
domestic markets The exports of Bangladesh have been experiencing a steady rise since
the late 80s of which apparels constitute approximately 75 of the total exports Other
items include frozen foods jute amp jute products leather amp leather products handicrafts
vegetables chemical products etc Major export markets for Bangladeshi exporters are
North America (33) and EU (52) while other regions constitute the rest In Fiscal
Year 2006-07 total exports earnings of Bangladesh exceeded US$ 12 billion The trend
of Bangladeshi exports from FY 1972-72 to 2006-07 iis shown below
16
Conclusion
Bangladesh economy has passed through a heightened pace of global integration in the
1990s The degree of openness of the Bangladesh economy is now higher than many
developing countries ndash exports and imports of goods and services currently account for
about a-third of the countryrsquos GDP Thus by definition the state of the global economy
is likely to have a stronger impact on the Bangladesh economy now than at any time in
the past The impact of the state of the global economy would continue to be increasingly
felt in terms of the countryrsquos macroeconomic performance GDP growth rate external
sector performance foreign exchange reserves and health of the financial institutions
This is perhaps one of the most important legacies that the Bangladesh economy has
inherited through its developmental practice and reforms of the 1990s
Bangladeshrsquos export sector registered double-digit real growth rate throughout the 1990s
As a matter of fact real export sector growth rate was almost three times the real GDP
growth rate during this period Even during FY 1990 and FY 1991 a period which
coincided with the last major global recession Bangladeshrsquos export sector posted robust
growth rates of 179 and 127 respectively The structure of export was different
though at the time Raw jute jute goods and leather were some of the major export
commodities in the early 1990s their combined share being equal to the share of RMG in
total exports of Bangladesh A relatively diversified base and market provided some sort
of a cushion against sudden fluctuations of the global market
Exporters and trade experts attribute Bangladeshrsquos export success to the
lsquocompetitivenessrsquo of the countryrsquos readymade garment sector and availability of cheap
labor although exports of frozen food leather and jute fell Garment manufacturers
produced lower-end products whose demand did not fall significantly in global markets
Remaining competitive in these days of difficulties since the quota system was
withdrawn and the ongoing lingering economic slide worldwide is rewarding for
Bangladesh
17
Bangladesh maintains export trends
YEAR EXPORT IN (MILLION US$)
Export (M US$)
CURRENT CUMULATIVE
1983-84 016 016
1984-85 445 461
1985-86 759 1221
1986-87 1527 2747
1987-88 1393 4140
1988-89 1608 5748
1989-90 3421 9169
1990-91 4799 13967
1991-92 7699 21667
1992-93 12705 34371
1993-94 14560 48932
1994-95 22826 71758
1995-96 33702 105460
1996-97 46277 151736
1997-98 63605 215341
1998-99 71169 286510
1999-00 89082 375592
2000-01 106787 482379
2001-02 107703 590081
2002-03 120022 710103
2003-04 135391 845494
2004-05 154868 1000362
2005-06 183618 1183980
2006-07 206367 206367
2007-08 242958 1633304
2008-09 258170 1891474
2009-10 282254 2173728
2010-11 (January 2011)
194001 2367728
Growth (2009-10) 933
18
References Bakht Z (2001) ldquoTrade Liberalisation Exports and Growth of Manufacturing Industries
in Bangladeshrdquo in M M Huq and Love (eds) Strategies for Industrialisation The Case of Bangladesh University Press Ltd Dhaka
Rab A (1997) ldquoExport Trends and Policies in Bangladesh Some Lessons of Past Performance for Future Policiesrdquo paper presented to a Workshop organized by the Institutional Support to the Ministry of Finance Project (ISMOF) supported by the Asian Development Bank March Dhaka
Rahman S H (1979) ldquoThe Determinants of Change in Trade Balance Some Estimates for Bangladesh 195960 ndash 197475rdquo Bangladesh Development Studies vol 7 pp 71 ndash 84
Ahmed S and Sattar Z (2004) ldquoTrade Liberalization Growth and Poverty Reduction The Case of Bangladeshrdquo Working Paper World Bank South Asian Region May 01 2004 The paper was also presented in the ABCDE Bangalore Conference in May 2003
Bangladesh Bank (2002-2003) Annual Report 2002-2003 Dhaka Bangladesh Bangladesh Bank (2007) Quoted in wwwbanglaembassycombhFDI20in
20Bangladeshhtm Downloaded on 31 October 2007 BBS (2000) Statistical Pocketbook of Bangladesh Bangladesh Bureau of Statistics
Dhaka Bangladesh CPD (1997) Growth or Stagnation A Review of Bangladeshrsquos Development 1996
Centre for Policy DialogueUniversity Press Limited Dhaka CSB (2003) Country Study of Bangladesh A Paper Presented at the Country Studies
Workshop on lsquoTrade Cooperation and Economic Policy Reform in South Asiarsquo Bangladesh Institute of Development Studies Dhaka Bangladesh March 30
EPB (Export Promotion Bureau) (2004) Bangladesh Export Statistics 2002-2003 Export Promotion Bureau Dhaka Bangladesh wwwepbbdcomExportStathtml
GOB (2002) lsquoForeign Trade Exchange Rate Management and External Sectorrsquo Bangladesh Economic Review Finance Division Ministry of Finance the Government of Bangladesh Dhaka
GOB (2003) Export Policy 2003-2006 Ministry of Commerce Government of Bangladesh December 2003
GOB (2006) Trade Policy Review by Bangladesh World Trade Organization Report No 06-3754 downloaded on 10907
World Bank (1999) World Development Indicators Database World Bank Washington D C
World Bank (2000) World Development Indicators Database World Bank Washington D C
Bangladesh International trade Information about International trade in Bangladesh httpwwwnationsencyclopediacomeconomiesAsia-and-the-PacificBangladesh-INTERNATIONAL-TRADEhtmlixzz1GOf4e1tc
Bangladesh Export Promotion Bureau
19
- Bangladesh Trade Balance and Export-Import Price Indices
- Growth of Exports
- Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of 1424 percent during 198586 to 199900 compared to an annual trend growth rate of below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through 198485 Such a pattern of export growth over time largely reflects the effects of progress in Bangladeshrsquos policy reforms over the period Export products during the earlier period (eg jute and jute goods) did have a significant effect in limiting the overall export growth especially starting with the mid-1980s The export upturn in the latter period also reflects the fact that the export setback in jute and jute goods was more than recouped by remarkable growth in the export of a new product group ready-made garments
- Jute goods
- Among jute and jute goods only jute goods had a statistically significant low annual trend growth rate of more than 6 percent during the early period and around 1 percent for the entire period In the latter period (198586 to 199900) it had no significant growth trend Raw jute exports on the other hand had statistically significant negative growth trends for the whole period as well as for the second period The reasons for the decline were the growth of jute manufacturing industry in the country and falling demand for raw jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
- Frozen food
- Frozen food (mainly frozen shrimps) was one of the major product groups which had a highly satisfactory trend growth rate of 1611 percent for the whole period However its growth remained uneven a spectacularly high rate of 31 percent during the period till 198485 along with a sharp drop to about 84 percent during 198586 to 199900 The drop in the growth rate in the later period may be attributed to a fall in demand in the EU markets in the late 1980s and early 1990s which recovered only during the second half of the 1990s The dwindling growth of frozen foods in the later period may also be attributed to supply constraints
- Exports of traditional goods (composed of jute jute goods tea and leather) constituted most of Bangladeshrsquos total exports around 97 percent in 197273 These exports precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute and jute goods in the export trade of Bangladesh has weakened considerably and some non-traditional items have made inroads For example the share of raw jute in export earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900 Over the same period the share of jute goods declined from 52 percent to less than 5 percent Another traditional exports item tea declined from 27 percent to 03 percent during the period Tearsquos relative export share did increase in some of the years in the 1980s but it declined sharply in later years Leatherrsquos share in total exports showed a significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s but declined to a level of 34 percent in 199900
- On the other hand nontraditional exports (ie exports of goods other than traditional ones) dramatically grew in importance from 3 percent of total exports in 197273 to more than 90 percent in 199900 Among the nontraditional exports RMG including knitwear rose to 54 percent during 199900 from an insignificant level in the early 1980s The share of frozen food increased from less than 1 percent to 6 percent during the years Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected a deceleration in its growth performance in recent years Residual export category showed a big jump in export importance from 18 percent in 197273 to 31 percent in 199900
-
Figure 421 shows thatThe growth in exports has fluctuated considerably from an average low of 7 in 1981-1985 period to an average high of in excess of 17 in 1991-1995 and 2006-2008 periods
Figure 422 shows that
14
The share of primary commodities to total exports decreased from 175 in 1980-81 to
7 in 2007-08On the other hand the share of manufactured goods to total exports
increased from 44 in 1980- 81 to 93 in 2007-08
Figure 444 shows that1048707 there has a dramatic increase in the number of expatriate workers since 2005 rising
from about 250 lakh to 875 lakh
1048707 However the impact of the global financial crisis may lead to a decline over the
coming months
15
Trend of Export Earnings
At present Bangladesh faces growing economic competition from India Pakistan and
Indonesia countries which could offer better infrastructure and larger and growing
domestic markets The exports of Bangladesh have been experiencing a steady rise since
the late 80s of which apparels constitute approximately 75 of the total exports Other
items include frozen foods jute amp jute products leather amp leather products handicrafts
vegetables chemical products etc Major export markets for Bangladeshi exporters are
North America (33) and EU (52) while other regions constitute the rest In Fiscal
Year 2006-07 total exports earnings of Bangladesh exceeded US$ 12 billion The trend
of Bangladeshi exports from FY 1972-72 to 2006-07 iis shown below
16
Conclusion
Bangladesh economy has passed through a heightened pace of global integration in the
1990s The degree of openness of the Bangladesh economy is now higher than many
developing countries ndash exports and imports of goods and services currently account for
about a-third of the countryrsquos GDP Thus by definition the state of the global economy
is likely to have a stronger impact on the Bangladesh economy now than at any time in
the past The impact of the state of the global economy would continue to be increasingly
felt in terms of the countryrsquos macroeconomic performance GDP growth rate external
sector performance foreign exchange reserves and health of the financial institutions
This is perhaps one of the most important legacies that the Bangladesh economy has
inherited through its developmental practice and reforms of the 1990s
Bangladeshrsquos export sector registered double-digit real growth rate throughout the 1990s
As a matter of fact real export sector growth rate was almost three times the real GDP
growth rate during this period Even during FY 1990 and FY 1991 a period which
coincided with the last major global recession Bangladeshrsquos export sector posted robust
growth rates of 179 and 127 respectively The structure of export was different
though at the time Raw jute jute goods and leather were some of the major export
commodities in the early 1990s their combined share being equal to the share of RMG in
total exports of Bangladesh A relatively diversified base and market provided some sort
of a cushion against sudden fluctuations of the global market
Exporters and trade experts attribute Bangladeshrsquos export success to the
lsquocompetitivenessrsquo of the countryrsquos readymade garment sector and availability of cheap
labor although exports of frozen food leather and jute fell Garment manufacturers
produced lower-end products whose demand did not fall significantly in global markets
Remaining competitive in these days of difficulties since the quota system was
withdrawn and the ongoing lingering economic slide worldwide is rewarding for
Bangladesh
17
Bangladesh maintains export trends
YEAR EXPORT IN (MILLION US$)
Export (M US$)
CURRENT CUMULATIVE
1983-84 016 016
1984-85 445 461
1985-86 759 1221
1986-87 1527 2747
1987-88 1393 4140
1988-89 1608 5748
1989-90 3421 9169
1990-91 4799 13967
1991-92 7699 21667
1992-93 12705 34371
1993-94 14560 48932
1994-95 22826 71758
1995-96 33702 105460
1996-97 46277 151736
1997-98 63605 215341
1998-99 71169 286510
1999-00 89082 375592
2000-01 106787 482379
2001-02 107703 590081
2002-03 120022 710103
2003-04 135391 845494
2004-05 154868 1000362
2005-06 183618 1183980
2006-07 206367 206367
2007-08 242958 1633304
2008-09 258170 1891474
2009-10 282254 2173728
2010-11 (January 2011)
194001 2367728
Growth (2009-10) 933
18
References Bakht Z (2001) ldquoTrade Liberalisation Exports and Growth of Manufacturing Industries
in Bangladeshrdquo in M M Huq and Love (eds) Strategies for Industrialisation The Case of Bangladesh University Press Ltd Dhaka
Rab A (1997) ldquoExport Trends and Policies in Bangladesh Some Lessons of Past Performance for Future Policiesrdquo paper presented to a Workshop organized by the Institutional Support to the Ministry of Finance Project (ISMOF) supported by the Asian Development Bank March Dhaka
Rahman S H (1979) ldquoThe Determinants of Change in Trade Balance Some Estimates for Bangladesh 195960 ndash 197475rdquo Bangladesh Development Studies vol 7 pp 71 ndash 84
Ahmed S and Sattar Z (2004) ldquoTrade Liberalization Growth and Poverty Reduction The Case of Bangladeshrdquo Working Paper World Bank South Asian Region May 01 2004 The paper was also presented in the ABCDE Bangalore Conference in May 2003
Bangladesh Bank (2002-2003) Annual Report 2002-2003 Dhaka Bangladesh Bangladesh Bank (2007) Quoted in wwwbanglaembassycombhFDI20in
20Bangladeshhtm Downloaded on 31 October 2007 BBS (2000) Statistical Pocketbook of Bangladesh Bangladesh Bureau of Statistics
Dhaka Bangladesh CPD (1997) Growth or Stagnation A Review of Bangladeshrsquos Development 1996
Centre for Policy DialogueUniversity Press Limited Dhaka CSB (2003) Country Study of Bangladesh A Paper Presented at the Country Studies
Workshop on lsquoTrade Cooperation and Economic Policy Reform in South Asiarsquo Bangladesh Institute of Development Studies Dhaka Bangladesh March 30
EPB (Export Promotion Bureau) (2004) Bangladesh Export Statistics 2002-2003 Export Promotion Bureau Dhaka Bangladesh wwwepbbdcomExportStathtml
GOB (2002) lsquoForeign Trade Exchange Rate Management and External Sectorrsquo Bangladesh Economic Review Finance Division Ministry of Finance the Government of Bangladesh Dhaka
GOB (2003) Export Policy 2003-2006 Ministry of Commerce Government of Bangladesh December 2003
GOB (2006) Trade Policy Review by Bangladesh World Trade Organization Report No 06-3754 downloaded on 10907
World Bank (1999) World Development Indicators Database World Bank Washington D C
World Bank (2000) World Development Indicators Database World Bank Washington D C
Bangladesh International trade Information about International trade in Bangladesh httpwwwnationsencyclopediacomeconomiesAsia-and-the-PacificBangladesh-INTERNATIONAL-TRADEhtmlixzz1GOf4e1tc
Bangladesh Export Promotion Bureau
19
- Bangladesh Trade Balance and Export-Import Price Indices
- Growth of Exports
- Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of 1424 percent during 198586 to 199900 compared to an annual trend growth rate of below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through 198485 Such a pattern of export growth over time largely reflects the effects of progress in Bangladeshrsquos policy reforms over the period Export products during the earlier period (eg jute and jute goods) did have a significant effect in limiting the overall export growth especially starting with the mid-1980s The export upturn in the latter period also reflects the fact that the export setback in jute and jute goods was more than recouped by remarkable growth in the export of a new product group ready-made garments
- Jute goods
- Among jute and jute goods only jute goods had a statistically significant low annual trend growth rate of more than 6 percent during the early period and around 1 percent for the entire period In the latter period (198586 to 199900) it had no significant growth trend Raw jute exports on the other hand had statistically significant negative growth trends for the whole period as well as for the second period The reasons for the decline were the growth of jute manufacturing industry in the country and falling demand for raw jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
- Frozen food
- Frozen food (mainly frozen shrimps) was one of the major product groups which had a highly satisfactory trend growth rate of 1611 percent for the whole period However its growth remained uneven a spectacularly high rate of 31 percent during the period till 198485 along with a sharp drop to about 84 percent during 198586 to 199900 The drop in the growth rate in the later period may be attributed to a fall in demand in the EU markets in the late 1980s and early 1990s which recovered only during the second half of the 1990s The dwindling growth of frozen foods in the later period may also be attributed to supply constraints
- Exports of traditional goods (composed of jute jute goods tea and leather) constituted most of Bangladeshrsquos total exports around 97 percent in 197273 These exports precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute and jute goods in the export trade of Bangladesh has weakened considerably and some non-traditional items have made inroads For example the share of raw jute in export earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900 Over the same period the share of jute goods declined from 52 percent to less than 5 percent Another traditional exports item tea declined from 27 percent to 03 percent during the period Tearsquos relative export share did increase in some of the years in the 1980s but it declined sharply in later years Leatherrsquos share in total exports showed a significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s but declined to a level of 34 percent in 199900
- On the other hand nontraditional exports (ie exports of goods other than traditional ones) dramatically grew in importance from 3 percent of total exports in 197273 to more than 90 percent in 199900 Among the nontraditional exports RMG including knitwear rose to 54 percent during 199900 from an insignificant level in the early 1980s The share of frozen food increased from less than 1 percent to 6 percent during the years Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected a deceleration in its growth performance in recent years Residual export category showed a big jump in export importance from 18 percent in 197273 to 31 percent in 199900
-
The share of primary commodities to total exports decreased from 175 in 1980-81 to
7 in 2007-08On the other hand the share of manufactured goods to total exports
increased from 44 in 1980- 81 to 93 in 2007-08
Figure 444 shows that1048707 there has a dramatic increase in the number of expatriate workers since 2005 rising
from about 250 lakh to 875 lakh
1048707 However the impact of the global financial crisis may lead to a decline over the
coming months
15
Trend of Export Earnings
At present Bangladesh faces growing economic competition from India Pakistan and
Indonesia countries which could offer better infrastructure and larger and growing
domestic markets The exports of Bangladesh have been experiencing a steady rise since
the late 80s of which apparels constitute approximately 75 of the total exports Other
items include frozen foods jute amp jute products leather amp leather products handicrafts
vegetables chemical products etc Major export markets for Bangladeshi exporters are
North America (33) and EU (52) while other regions constitute the rest In Fiscal
Year 2006-07 total exports earnings of Bangladesh exceeded US$ 12 billion The trend
of Bangladeshi exports from FY 1972-72 to 2006-07 iis shown below
16
Conclusion
Bangladesh economy has passed through a heightened pace of global integration in the
1990s The degree of openness of the Bangladesh economy is now higher than many
developing countries ndash exports and imports of goods and services currently account for
about a-third of the countryrsquos GDP Thus by definition the state of the global economy
is likely to have a stronger impact on the Bangladesh economy now than at any time in
the past The impact of the state of the global economy would continue to be increasingly
felt in terms of the countryrsquos macroeconomic performance GDP growth rate external
sector performance foreign exchange reserves and health of the financial institutions
This is perhaps one of the most important legacies that the Bangladesh economy has
inherited through its developmental practice and reforms of the 1990s
Bangladeshrsquos export sector registered double-digit real growth rate throughout the 1990s
As a matter of fact real export sector growth rate was almost three times the real GDP
growth rate during this period Even during FY 1990 and FY 1991 a period which
coincided with the last major global recession Bangladeshrsquos export sector posted robust
growth rates of 179 and 127 respectively The structure of export was different
though at the time Raw jute jute goods and leather were some of the major export
commodities in the early 1990s their combined share being equal to the share of RMG in
total exports of Bangladesh A relatively diversified base and market provided some sort
of a cushion against sudden fluctuations of the global market
Exporters and trade experts attribute Bangladeshrsquos export success to the
lsquocompetitivenessrsquo of the countryrsquos readymade garment sector and availability of cheap
labor although exports of frozen food leather and jute fell Garment manufacturers
produced lower-end products whose demand did not fall significantly in global markets
Remaining competitive in these days of difficulties since the quota system was
withdrawn and the ongoing lingering economic slide worldwide is rewarding for
Bangladesh
17
Bangladesh maintains export trends
YEAR EXPORT IN (MILLION US$)
Export (M US$)
CURRENT CUMULATIVE
1983-84 016 016
1984-85 445 461
1985-86 759 1221
1986-87 1527 2747
1987-88 1393 4140
1988-89 1608 5748
1989-90 3421 9169
1990-91 4799 13967
1991-92 7699 21667
1992-93 12705 34371
1993-94 14560 48932
1994-95 22826 71758
1995-96 33702 105460
1996-97 46277 151736
1997-98 63605 215341
1998-99 71169 286510
1999-00 89082 375592
2000-01 106787 482379
2001-02 107703 590081
2002-03 120022 710103
2003-04 135391 845494
2004-05 154868 1000362
2005-06 183618 1183980
2006-07 206367 206367
2007-08 242958 1633304
2008-09 258170 1891474
2009-10 282254 2173728
2010-11 (January 2011)
194001 2367728
Growth (2009-10) 933
18
References Bakht Z (2001) ldquoTrade Liberalisation Exports and Growth of Manufacturing Industries
in Bangladeshrdquo in M M Huq and Love (eds) Strategies for Industrialisation The Case of Bangladesh University Press Ltd Dhaka
Rab A (1997) ldquoExport Trends and Policies in Bangladesh Some Lessons of Past Performance for Future Policiesrdquo paper presented to a Workshop organized by the Institutional Support to the Ministry of Finance Project (ISMOF) supported by the Asian Development Bank March Dhaka
Rahman S H (1979) ldquoThe Determinants of Change in Trade Balance Some Estimates for Bangladesh 195960 ndash 197475rdquo Bangladesh Development Studies vol 7 pp 71 ndash 84
Ahmed S and Sattar Z (2004) ldquoTrade Liberalization Growth and Poverty Reduction The Case of Bangladeshrdquo Working Paper World Bank South Asian Region May 01 2004 The paper was also presented in the ABCDE Bangalore Conference in May 2003
Bangladesh Bank (2002-2003) Annual Report 2002-2003 Dhaka Bangladesh Bangladesh Bank (2007) Quoted in wwwbanglaembassycombhFDI20in
20Bangladeshhtm Downloaded on 31 October 2007 BBS (2000) Statistical Pocketbook of Bangladesh Bangladesh Bureau of Statistics
Dhaka Bangladesh CPD (1997) Growth or Stagnation A Review of Bangladeshrsquos Development 1996
Centre for Policy DialogueUniversity Press Limited Dhaka CSB (2003) Country Study of Bangladesh A Paper Presented at the Country Studies
Workshop on lsquoTrade Cooperation and Economic Policy Reform in South Asiarsquo Bangladesh Institute of Development Studies Dhaka Bangladesh March 30
EPB (Export Promotion Bureau) (2004) Bangladesh Export Statistics 2002-2003 Export Promotion Bureau Dhaka Bangladesh wwwepbbdcomExportStathtml
GOB (2002) lsquoForeign Trade Exchange Rate Management and External Sectorrsquo Bangladesh Economic Review Finance Division Ministry of Finance the Government of Bangladesh Dhaka
GOB (2003) Export Policy 2003-2006 Ministry of Commerce Government of Bangladesh December 2003
GOB (2006) Trade Policy Review by Bangladesh World Trade Organization Report No 06-3754 downloaded on 10907
World Bank (1999) World Development Indicators Database World Bank Washington D C
World Bank (2000) World Development Indicators Database World Bank Washington D C
Bangladesh International trade Information about International trade in Bangladesh httpwwwnationsencyclopediacomeconomiesAsia-and-the-PacificBangladesh-INTERNATIONAL-TRADEhtmlixzz1GOf4e1tc
Bangladesh Export Promotion Bureau
19
- Bangladesh Trade Balance and Export-Import Price Indices
- Growth of Exports
- Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of 1424 percent during 198586 to 199900 compared to an annual trend growth rate of below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through 198485 Such a pattern of export growth over time largely reflects the effects of progress in Bangladeshrsquos policy reforms over the period Export products during the earlier period (eg jute and jute goods) did have a significant effect in limiting the overall export growth especially starting with the mid-1980s The export upturn in the latter period also reflects the fact that the export setback in jute and jute goods was more than recouped by remarkable growth in the export of a new product group ready-made garments
- Jute goods
- Among jute and jute goods only jute goods had a statistically significant low annual trend growth rate of more than 6 percent during the early period and around 1 percent for the entire period In the latter period (198586 to 199900) it had no significant growth trend Raw jute exports on the other hand had statistically significant negative growth trends for the whole period as well as for the second period The reasons for the decline were the growth of jute manufacturing industry in the country and falling demand for raw jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
- Frozen food
- Frozen food (mainly frozen shrimps) was one of the major product groups which had a highly satisfactory trend growth rate of 1611 percent for the whole period However its growth remained uneven a spectacularly high rate of 31 percent during the period till 198485 along with a sharp drop to about 84 percent during 198586 to 199900 The drop in the growth rate in the later period may be attributed to a fall in demand in the EU markets in the late 1980s and early 1990s which recovered only during the second half of the 1990s The dwindling growth of frozen foods in the later period may also be attributed to supply constraints
- Exports of traditional goods (composed of jute jute goods tea and leather) constituted most of Bangladeshrsquos total exports around 97 percent in 197273 These exports precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute and jute goods in the export trade of Bangladesh has weakened considerably and some non-traditional items have made inroads For example the share of raw jute in export earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900 Over the same period the share of jute goods declined from 52 percent to less than 5 percent Another traditional exports item tea declined from 27 percent to 03 percent during the period Tearsquos relative export share did increase in some of the years in the 1980s but it declined sharply in later years Leatherrsquos share in total exports showed a significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s but declined to a level of 34 percent in 199900
- On the other hand nontraditional exports (ie exports of goods other than traditional ones) dramatically grew in importance from 3 percent of total exports in 197273 to more than 90 percent in 199900 Among the nontraditional exports RMG including knitwear rose to 54 percent during 199900 from an insignificant level in the early 1980s The share of frozen food increased from less than 1 percent to 6 percent during the years Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected a deceleration in its growth performance in recent years Residual export category showed a big jump in export importance from 18 percent in 197273 to 31 percent in 199900
-
Trend of Export Earnings
At present Bangladesh faces growing economic competition from India Pakistan and
Indonesia countries which could offer better infrastructure and larger and growing
domestic markets The exports of Bangladesh have been experiencing a steady rise since
the late 80s of which apparels constitute approximately 75 of the total exports Other
items include frozen foods jute amp jute products leather amp leather products handicrafts
vegetables chemical products etc Major export markets for Bangladeshi exporters are
North America (33) and EU (52) while other regions constitute the rest In Fiscal
Year 2006-07 total exports earnings of Bangladesh exceeded US$ 12 billion The trend
of Bangladeshi exports from FY 1972-72 to 2006-07 iis shown below
16
Conclusion
Bangladesh economy has passed through a heightened pace of global integration in the
1990s The degree of openness of the Bangladesh economy is now higher than many
developing countries ndash exports and imports of goods and services currently account for
about a-third of the countryrsquos GDP Thus by definition the state of the global economy
is likely to have a stronger impact on the Bangladesh economy now than at any time in
the past The impact of the state of the global economy would continue to be increasingly
felt in terms of the countryrsquos macroeconomic performance GDP growth rate external
sector performance foreign exchange reserves and health of the financial institutions
This is perhaps one of the most important legacies that the Bangladesh economy has
inherited through its developmental practice and reforms of the 1990s
Bangladeshrsquos export sector registered double-digit real growth rate throughout the 1990s
As a matter of fact real export sector growth rate was almost three times the real GDP
growth rate during this period Even during FY 1990 and FY 1991 a period which
coincided with the last major global recession Bangladeshrsquos export sector posted robust
growth rates of 179 and 127 respectively The structure of export was different
though at the time Raw jute jute goods and leather were some of the major export
commodities in the early 1990s their combined share being equal to the share of RMG in
total exports of Bangladesh A relatively diversified base and market provided some sort
of a cushion against sudden fluctuations of the global market
Exporters and trade experts attribute Bangladeshrsquos export success to the
lsquocompetitivenessrsquo of the countryrsquos readymade garment sector and availability of cheap
labor although exports of frozen food leather and jute fell Garment manufacturers
produced lower-end products whose demand did not fall significantly in global markets
Remaining competitive in these days of difficulties since the quota system was
withdrawn and the ongoing lingering economic slide worldwide is rewarding for
Bangladesh
17
Bangladesh maintains export trends
YEAR EXPORT IN (MILLION US$)
Export (M US$)
CURRENT CUMULATIVE
1983-84 016 016
1984-85 445 461
1985-86 759 1221
1986-87 1527 2747
1987-88 1393 4140
1988-89 1608 5748
1989-90 3421 9169
1990-91 4799 13967
1991-92 7699 21667
1992-93 12705 34371
1993-94 14560 48932
1994-95 22826 71758
1995-96 33702 105460
1996-97 46277 151736
1997-98 63605 215341
1998-99 71169 286510
1999-00 89082 375592
2000-01 106787 482379
2001-02 107703 590081
2002-03 120022 710103
2003-04 135391 845494
2004-05 154868 1000362
2005-06 183618 1183980
2006-07 206367 206367
2007-08 242958 1633304
2008-09 258170 1891474
2009-10 282254 2173728
2010-11 (January 2011)
194001 2367728
Growth (2009-10) 933
18
References Bakht Z (2001) ldquoTrade Liberalisation Exports and Growth of Manufacturing Industries
in Bangladeshrdquo in M M Huq and Love (eds) Strategies for Industrialisation The Case of Bangladesh University Press Ltd Dhaka
Rab A (1997) ldquoExport Trends and Policies in Bangladesh Some Lessons of Past Performance for Future Policiesrdquo paper presented to a Workshop organized by the Institutional Support to the Ministry of Finance Project (ISMOF) supported by the Asian Development Bank March Dhaka
Rahman S H (1979) ldquoThe Determinants of Change in Trade Balance Some Estimates for Bangladesh 195960 ndash 197475rdquo Bangladesh Development Studies vol 7 pp 71 ndash 84
Ahmed S and Sattar Z (2004) ldquoTrade Liberalization Growth and Poverty Reduction The Case of Bangladeshrdquo Working Paper World Bank South Asian Region May 01 2004 The paper was also presented in the ABCDE Bangalore Conference in May 2003
Bangladesh Bank (2002-2003) Annual Report 2002-2003 Dhaka Bangladesh Bangladesh Bank (2007) Quoted in wwwbanglaembassycombhFDI20in
20Bangladeshhtm Downloaded on 31 October 2007 BBS (2000) Statistical Pocketbook of Bangladesh Bangladesh Bureau of Statistics
Dhaka Bangladesh CPD (1997) Growth or Stagnation A Review of Bangladeshrsquos Development 1996
Centre for Policy DialogueUniversity Press Limited Dhaka CSB (2003) Country Study of Bangladesh A Paper Presented at the Country Studies
Workshop on lsquoTrade Cooperation and Economic Policy Reform in South Asiarsquo Bangladesh Institute of Development Studies Dhaka Bangladesh March 30
EPB (Export Promotion Bureau) (2004) Bangladesh Export Statistics 2002-2003 Export Promotion Bureau Dhaka Bangladesh wwwepbbdcomExportStathtml
GOB (2002) lsquoForeign Trade Exchange Rate Management and External Sectorrsquo Bangladesh Economic Review Finance Division Ministry of Finance the Government of Bangladesh Dhaka
GOB (2003) Export Policy 2003-2006 Ministry of Commerce Government of Bangladesh December 2003
GOB (2006) Trade Policy Review by Bangladesh World Trade Organization Report No 06-3754 downloaded on 10907
World Bank (1999) World Development Indicators Database World Bank Washington D C
World Bank (2000) World Development Indicators Database World Bank Washington D C
Bangladesh International trade Information about International trade in Bangladesh httpwwwnationsencyclopediacomeconomiesAsia-and-the-PacificBangladesh-INTERNATIONAL-TRADEhtmlixzz1GOf4e1tc
Bangladesh Export Promotion Bureau
19
- Bangladesh Trade Balance and Export-Import Price Indices
- Growth of Exports
- Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of 1424 percent during 198586 to 199900 compared to an annual trend growth rate of below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through 198485 Such a pattern of export growth over time largely reflects the effects of progress in Bangladeshrsquos policy reforms over the period Export products during the earlier period (eg jute and jute goods) did have a significant effect in limiting the overall export growth especially starting with the mid-1980s The export upturn in the latter period also reflects the fact that the export setback in jute and jute goods was more than recouped by remarkable growth in the export of a new product group ready-made garments
- Jute goods
- Among jute and jute goods only jute goods had a statistically significant low annual trend growth rate of more than 6 percent during the early period and around 1 percent for the entire period In the latter period (198586 to 199900) it had no significant growth trend Raw jute exports on the other hand had statistically significant negative growth trends for the whole period as well as for the second period The reasons for the decline were the growth of jute manufacturing industry in the country and falling demand for raw jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
- Frozen food
- Frozen food (mainly frozen shrimps) was one of the major product groups which had a highly satisfactory trend growth rate of 1611 percent for the whole period However its growth remained uneven a spectacularly high rate of 31 percent during the period till 198485 along with a sharp drop to about 84 percent during 198586 to 199900 The drop in the growth rate in the later period may be attributed to a fall in demand in the EU markets in the late 1980s and early 1990s which recovered only during the second half of the 1990s The dwindling growth of frozen foods in the later period may also be attributed to supply constraints
- Exports of traditional goods (composed of jute jute goods tea and leather) constituted most of Bangladeshrsquos total exports around 97 percent in 197273 These exports precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute and jute goods in the export trade of Bangladesh has weakened considerably and some non-traditional items have made inroads For example the share of raw jute in export earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900 Over the same period the share of jute goods declined from 52 percent to less than 5 percent Another traditional exports item tea declined from 27 percent to 03 percent during the period Tearsquos relative export share did increase in some of the years in the 1980s but it declined sharply in later years Leatherrsquos share in total exports showed a significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s but declined to a level of 34 percent in 199900
- On the other hand nontraditional exports (ie exports of goods other than traditional ones) dramatically grew in importance from 3 percent of total exports in 197273 to more than 90 percent in 199900 Among the nontraditional exports RMG including knitwear rose to 54 percent during 199900 from an insignificant level in the early 1980s The share of frozen food increased from less than 1 percent to 6 percent during the years Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected a deceleration in its growth performance in recent years Residual export category showed a big jump in export importance from 18 percent in 197273 to 31 percent in 199900
-
Conclusion
Bangladesh economy has passed through a heightened pace of global integration in the
1990s The degree of openness of the Bangladesh economy is now higher than many
developing countries ndash exports and imports of goods and services currently account for
about a-third of the countryrsquos GDP Thus by definition the state of the global economy
is likely to have a stronger impact on the Bangladesh economy now than at any time in
the past The impact of the state of the global economy would continue to be increasingly
felt in terms of the countryrsquos macroeconomic performance GDP growth rate external
sector performance foreign exchange reserves and health of the financial institutions
This is perhaps one of the most important legacies that the Bangladesh economy has
inherited through its developmental practice and reforms of the 1990s
Bangladeshrsquos export sector registered double-digit real growth rate throughout the 1990s
As a matter of fact real export sector growth rate was almost three times the real GDP
growth rate during this period Even during FY 1990 and FY 1991 a period which
coincided with the last major global recession Bangladeshrsquos export sector posted robust
growth rates of 179 and 127 respectively The structure of export was different
though at the time Raw jute jute goods and leather were some of the major export
commodities in the early 1990s their combined share being equal to the share of RMG in
total exports of Bangladesh A relatively diversified base and market provided some sort
of a cushion against sudden fluctuations of the global market
Exporters and trade experts attribute Bangladeshrsquos export success to the
lsquocompetitivenessrsquo of the countryrsquos readymade garment sector and availability of cheap
labor although exports of frozen food leather and jute fell Garment manufacturers
produced lower-end products whose demand did not fall significantly in global markets
Remaining competitive in these days of difficulties since the quota system was
withdrawn and the ongoing lingering economic slide worldwide is rewarding for
Bangladesh
17
Bangladesh maintains export trends
YEAR EXPORT IN (MILLION US$)
Export (M US$)
CURRENT CUMULATIVE
1983-84 016 016
1984-85 445 461
1985-86 759 1221
1986-87 1527 2747
1987-88 1393 4140
1988-89 1608 5748
1989-90 3421 9169
1990-91 4799 13967
1991-92 7699 21667
1992-93 12705 34371
1993-94 14560 48932
1994-95 22826 71758
1995-96 33702 105460
1996-97 46277 151736
1997-98 63605 215341
1998-99 71169 286510
1999-00 89082 375592
2000-01 106787 482379
2001-02 107703 590081
2002-03 120022 710103
2003-04 135391 845494
2004-05 154868 1000362
2005-06 183618 1183980
2006-07 206367 206367
2007-08 242958 1633304
2008-09 258170 1891474
2009-10 282254 2173728
2010-11 (January 2011)
194001 2367728
Growth (2009-10) 933
18
References Bakht Z (2001) ldquoTrade Liberalisation Exports and Growth of Manufacturing Industries
in Bangladeshrdquo in M M Huq and Love (eds) Strategies for Industrialisation The Case of Bangladesh University Press Ltd Dhaka
Rab A (1997) ldquoExport Trends and Policies in Bangladesh Some Lessons of Past Performance for Future Policiesrdquo paper presented to a Workshop organized by the Institutional Support to the Ministry of Finance Project (ISMOF) supported by the Asian Development Bank March Dhaka
Rahman S H (1979) ldquoThe Determinants of Change in Trade Balance Some Estimates for Bangladesh 195960 ndash 197475rdquo Bangladesh Development Studies vol 7 pp 71 ndash 84
Ahmed S and Sattar Z (2004) ldquoTrade Liberalization Growth and Poverty Reduction The Case of Bangladeshrdquo Working Paper World Bank South Asian Region May 01 2004 The paper was also presented in the ABCDE Bangalore Conference in May 2003
Bangladesh Bank (2002-2003) Annual Report 2002-2003 Dhaka Bangladesh Bangladesh Bank (2007) Quoted in wwwbanglaembassycombhFDI20in
20Bangladeshhtm Downloaded on 31 October 2007 BBS (2000) Statistical Pocketbook of Bangladesh Bangladesh Bureau of Statistics
Dhaka Bangladesh CPD (1997) Growth or Stagnation A Review of Bangladeshrsquos Development 1996
Centre for Policy DialogueUniversity Press Limited Dhaka CSB (2003) Country Study of Bangladesh A Paper Presented at the Country Studies
Workshop on lsquoTrade Cooperation and Economic Policy Reform in South Asiarsquo Bangladesh Institute of Development Studies Dhaka Bangladesh March 30
EPB (Export Promotion Bureau) (2004) Bangladesh Export Statistics 2002-2003 Export Promotion Bureau Dhaka Bangladesh wwwepbbdcomExportStathtml
GOB (2002) lsquoForeign Trade Exchange Rate Management and External Sectorrsquo Bangladesh Economic Review Finance Division Ministry of Finance the Government of Bangladesh Dhaka
GOB (2003) Export Policy 2003-2006 Ministry of Commerce Government of Bangladesh December 2003
GOB (2006) Trade Policy Review by Bangladesh World Trade Organization Report No 06-3754 downloaded on 10907
World Bank (1999) World Development Indicators Database World Bank Washington D C
World Bank (2000) World Development Indicators Database World Bank Washington D C
Bangladesh International trade Information about International trade in Bangladesh httpwwwnationsencyclopediacomeconomiesAsia-and-the-PacificBangladesh-INTERNATIONAL-TRADEhtmlixzz1GOf4e1tc
Bangladesh Export Promotion Bureau
19
- Bangladesh Trade Balance and Export-Import Price Indices
- Growth of Exports
- Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of 1424 percent during 198586 to 199900 compared to an annual trend growth rate of below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through 198485 Such a pattern of export growth over time largely reflects the effects of progress in Bangladeshrsquos policy reforms over the period Export products during the earlier period (eg jute and jute goods) did have a significant effect in limiting the overall export growth especially starting with the mid-1980s The export upturn in the latter period also reflects the fact that the export setback in jute and jute goods was more than recouped by remarkable growth in the export of a new product group ready-made garments
- Jute goods
- Among jute and jute goods only jute goods had a statistically significant low annual trend growth rate of more than 6 percent during the early period and around 1 percent for the entire period In the latter period (198586 to 199900) it had no significant growth trend Raw jute exports on the other hand had statistically significant negative growth trends for the whole period as well as for the second period The reasons for the decline were the growth of jute manufacturing industry in the country and falling demand for raw jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
- Frozen food
- Frozen food (mainly frozen shrimps) was one of the major product groups which had a highly satisfactory trend growth rate of 1611 percent for the whole period However its growth remained uneven a spectacularly high rate of 31 percent during the period till 198485 along with a sharp drop to about 84 percent during 198586 to 199900 The drop in the growth rate in the later period may be attributed to a fall in demand in the EU markets in the late 1980s and early 1990s which recovered only during the second half of the 1990s The dwindling growth of frozen foods in the later period may also be attributed to supply constraints
- Exports of traditional goods (composed of jute jute goods tea and leather) constituted most of Bangladeshrsquos total exports around 97 percent in 197273 These exports precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute and jute goods in the export trade of Bangladesh has weakened considerably and some non-traditional items have made inroads For example the share of raw jute in export earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900 Over the same period the share of jute goods declined from 52 percent to less than 5 percent Another traditional exports item tea declined from 27 percent to 03 percent during the period Tearsquos relative export share did increase in some of the years in the 1980s but it declined sharply in later years Leatherrsquos share in total exports showed a significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s but declined to a level of 34 percent in 199900
- On the other hand nontraditional exports (ie exports of goods other than traditional ones) dramatically grew in importance from 3 percent of total exports in 197273 to more than 90 percent in 199900 Among the nontraditional exports RMG including knitwear rose to 54 percent during 199900 from an insignificant level in the early 1980s The share of frozen food increased from less than 1 percent to 6 percent during the years Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected a deceleration in its growth performance in recent years Residual export category showed a big jump in export importance from 18 percent in 197273 to 31 percent in 199900
-
Bangladesh maintains export trends
YEAR EXPORT IN (MILLION US$)
Export (M US$)
CURRENT CUMULATIVE
1983-84 016 016
1984-85 445 461
1985-86 759 1221
1986-87 1527 2747
1987-88 1393 4140
1988-89 1608 5748
1989-90 3421 9169
1990-91 4799 13967
1991-92 7699 21667
1992-93 12705 34371
1993-94 14560 48932
1994-95 22826 71758
1995-96 33702 105460
1996-97 46277 151736
1997-98 63605 215341
1998-99 71169 286510
1999-00 89082 375592
2000-01 106787 482379
2001-02 107703 590081
2002-03 120022 710103
2003-04 135391 845494
2004-05 154868 1000362
2005-06 183618 1183980
2006-07 206367 206367
2007-08 242958 1633304
2008-09 258170 1891474
2009-10 282254 2173728
2010-11 (January 2011)
194001 2367728
Growth (2009-10) 933
18
References Bakht Z (2001) ldquoTrade Liberalisation Exports and Growth of Manufacturing Industries
in Bangladeshrdquo in M M Huq and Love (eds) Strategies for Industrialisation The Case of Bangladesh University Press Ltd Dhaka
Rab A (1997) ldquoExport Trends and Policies in Bangladesh Some Lessons of Past Performance for Future Policiesrdquo paper presented to a Workshop organized by the Institutional Support to the Ministry of Finance Project (ISMOF) supported by the Asian Development Bank March Dhaka
Rahman S H (1979) ldquoThe Determinants of Change in Trade Balance Some Estimates for Bangladesh 195960 ndash 197475rdquo Bangladesh Development Studies vol 7 pp 71 ndash 84
Ahmed S and Sattar Z (2004) ldquoTrade Liberalization Growth and Poverty Reduction The Case of Bangladeshrdquo Working Paper World Bank South Asian Region May 01 2004 The paper was also presented in the ABCDE Bangalore Conference in May 2003
Bangladesh Bank (2002-2003) Annual Report 2002-2003 Dhaka Bangladesh Bangladesh Bank (2007) Quoted in wwwbanglaembassycombhFDI20in
20Bangladeshhtm Downloaded on 31 October 2007 BBS (2000) Statistical Pocketbook of Bangladesh Bangladesh Bureau of Statistics
Dhaka Bangladesh CPD (1997) Growth or Stagnation A Review of Bangladeshrsquos Development 1996
Centre for Policy DialogueUniversity Press Limited Dhaka CSB (2003) Country Study of Bangladesh A Paper Presented at the Country Studies
Workshop on lsquoTrade Cooperation and Economic Policy Reform in South Asiarsquo Bangladesh Institute of Development Studies Dhaka Bangladesh March 30
EPB (Export Promotion Bureau) (2004) Bangladesh Export Statistics 2002-2003 Export Promotion Bureau Dhaka Bangladesh wwwepbbdcomExportStathtml
GOB (2002) lsquoForeign Trade Exchange Rate Management and External Sectorrsquo Bangladesh Economic Review Finance Division Ministry of Finance the Government of Bangladesh Dhaka
GOB (2003) Export Policy 2003-2006 Ministry of Commerce Government of Bangladesh December 2003
GOB (2006) Trade Policy Review by Bangladesh World Trade Organization Report No 06-3754 downloaded on 10907
World Bank (1999) World Development Indicators Database World Bank Washington D C
World Bank (2000) World Development Indicators Database World Bank Washington D C
Bangladesh International trade Information about International trade in Bangladesh httpwwwnationsencyclopediacomeconomiesAsia-and-the-PacificBangladesh-INTERNATIONAL-TRADEhtmlixzz1GOf4e1tc
Bangladesh Export Promotion Bureau
19
- Bangladesh Trade Balance and Export-Import Price Indices
- Growth of Exports
- Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of 1424 percent during 198586 to 199900 compared to an annual trend growth rate of below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through 198485 Such a pattern of export growth over time largely reflects the effects of progress in Bangladeshrsquos policy reforms over the period Export products during the earlier period (eg jute and jute goods) did have a significant effect in limiting the overall export growth especially starting with the mid-1980s The export upturn in the latter period also reflects the fact that the export setback in jute and jute goods was more than recouped by remarkable growth in the export of a new product group ready-made garments
- Jute goods
- Among jute and jute goods only jute goods had a statistically significant low annual trend growth rate of more than 6 percent during the early period and around 1 percent for the entire period In the latter period (198586 to 199900) it had no significant growth trend Raw jute exports on the other hand had statistically significant negative growth trends for the whole period as well as for the second period The reasons for the decline were the growth of jute manufacturing industry in the country and falling demand for raw jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
- Frozen food
- Frozen food (mainly frozen shrimps) was one of the major product groups which had a highly satisfactory trend growth rate of 1611 percent for the whole period However its growth remained uneven a spectacularly high rate of 31 percent during the period till 198485 along with a sharp drop to about 84 percent during 198586 to 199900 The drop in the growth rate in the later period may be attributed to a fall in demand in the EU markets in the late 1980s and early 1990s which recovered only during the second half of the 1990s The dwindling growth of frozen foods in the later period may also be attributed to supply constraints
- Exports of traditional goods (composed of jute jute goods tea and leather) constituted most of Bangladeshrsquos total exports around 97 percent in 197273 These exports precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute and jute goods in the export trade of Bangladesh has weakened considerably and some non-traditional items have made inroads For example the share of raw jute in export earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900 Over the same period the share of jute goods declined from 52 percent to less than 5 percent Another traditional exports item tea declined from 27 percent to 03 percent during the period Tearsquos relative export share did increase in some of the years in the 1980s but it declined sharply in later years Leatherrsquos share in total exports showed a significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s but declined to a level of 34 percent in 199900
- On the other hand nontraditional exports (ie exports of goods other than traditional ones) dramatically grew in importance from 3 percent of total exports in 197273 to more than 90 percent in 199900 Among the nontraditional exports RMG including knitwear rose to 54 percent during 199900 from an insignificant level in the early 1980s The share of frozen food increased from less than 1 percent to 6 percent during the years Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected a deceleration in its growth performance in recent years Residual export category showed a big jump in export importance from 18 percent in 197273 to 31 percent in 199900
-
References Bakht Z (2001) ldquoTrade Liberalisation Exports and Growth of Manufacturing Industries
in Bangladeshrdquo in M M Huq and Love (eds) Strategies for Industrialisation The Case of Bangladesh University Press Ltd Dhaka
Rab A (1997) ldquoExport Trends and Policies in Bangladesh Some Lessons of Past Performance for Future Policiesrdquo paper presented to a Workshop organized by the Institutional Support to the Ministry of Finance Project (ISMOF) supported by the Asian Development Bank March Dhaka
Rahman S H (1979) ldquoThe Determinants of Change in Trade Balance Some Estimates for Bangladesh 195960 ndash 197475rdquo Bangladesh Development Studies vol 7 pp 71 ndash 84
Ahmed S and Sattar Z (2004) ldquoTrade Liberalization Growth and Poverty Reduction The Case of Bangladeshrdquo Working Paper World Bank South Asian Region May 01 2004 The paper was also presented in the ABCDE Bangalore Conference in May 2003
Bangladesh Bank (2002-2003) Annual Report 2002-2003 Dhaka Bangladesh Bangladesh Bank (2007) Quoted in wwwbanglaembassycombhFDI20in
20Bangladeshhtm Downloaded on 31 October 2007 BBS (2000) Statistical Pocketbook of Bangladesh Bangladesh Bureau of Statistics
Dhaka Bangladesh CPD (1997) Growth or Stagnation A Review of Bangladeshrsquos Development 1996
Centre for Policy DialogueUniversity Press Limited Dhaka CSB (2003) Country Study of Bangladesh A Paper Presented at the Country Studies
Workshop on lsquoTrade Cooperation and Economic Policy Reform in South Asiarsquo Bangladesh Institute of Development Studies Dhaka Bangladesh March 30
EPB (Export Promotion Bureau) (2004) Bangladesh Export Statistics 2002-2003 Export Promotion Bureau Dhaka Bangladesh wwwepbbdcomExportStathtml
GOB (2002) lsquoForeign Trade Exchange Rate Management and External Sectorrsquo Bangladesh Economic Review Finance Division Ministry of Finance the Government of Bangladesh Dhaka
GOB (2003) Export Policy 2003-2006 Ministry of Commerce Government of Bangladesh December 2003
GOB (2006) Trade Policy Review by Bangladesh World Trade Organization Report No 06-3754 downloaded on 10907
World Bank (1999) World Development Indicators Database World Bank Washington D C
World Bank (2000) World Development Indicators Database World Bank Washington D C
Bangladesh International trade Information about International trade in Bangladesh httpwwwnationsencyclopediacomeconomiesAsia-and-the-PacificBangladesh-INTERNATIONAL-TRADEhtmlixzz1GOf4e1tc
Bangladesh Export Promotion Bureau
19
- Bangladesh Trade Balance and Export-Import Price Indices
- Growth of Exports
- Bangladeshrsquos total exports got a significant boost with an annual trend growth rate of 1424 percent during 198586 to 199900 compared to an annual trend growth rate of below 10 percent (in nominal US dollar terms) over the earlier period of 197273 through 198485 Such a pattern of export growth over time largely reflects the effects of progress in Bangladeshrsquos policy reforms over the period Export products during the earlier period (eg jute and jute goods) did have a significant effect in limiting the overall export growth especially starting with the mid-1980s The export upturn in the latter period also reflects the fact that the export setback in jute and jute goods was more than recouped by remarkable growth in the export of a new product group ready-made garments
- Jute goods
- Among jute and jute goods only jute goods had a statistically significant low annual trend growth rate of more than 6 percent during the early period and around 1 percent for the entire period In the latter period (198586 to 199900) it had no significant growth trend Raw jute exports on the other hand had statistically significant negative growth trends for the whole period as well as for the second period The reasons for the decline were the growth of jute manufacturing industry in the country and falling demand for raw jute in developed countries due to extensive use of synthetic fibers (Hessian 1996)
- Frozen food
- Frozen food (mainly frozen shrimps) was one of the major product groups which had a highly satisfactory trend growth rate of 1611 percent for the whole period However its growth remained uneven a spectacularly high rate of 31 percent during the period till 198485 along with a sharp drop to about 84 percent during 198586 to 199900 The drop in the growth rate in the later period may be attributed to a fall in demand in the EU markets in the late 1980s and early 1990s which recovered only during the second half of the 1990s The dwindling growth of frozen foods in the later period may also be attributed to supply constraints
- Exports of traditional goods (composed of jute jute goods tea and leather) constituted most of Bangladeshrsquos total exports around 97 percent in 197273 These exports precipitously fell to less than 10 percent in 199900 At present the dominance of raw jute and jute goods in the export trade of Bangladesh has weakened considerably and some non-traditional items have made inroads For example the share of raw jute in export earnings has declined from about 38 percent in 197273 to a meager 1 percent in 199900 Over the same period the share of jute goods declined from 52 percent to less than 5 percent Another traditional exports item tea declined from 27 percent to 03 percent during the period Tearsquos relative export share did increase in some of the years in the 1980s but it declined sharply in later years Leatherrsquos share in total exports showed a significant increase from 46 percent in 197273 to more than 10 percent in the late 1980s but declined to a level of 34 percent in 199900
- On the other hand nontraditional exports (ie exports of goods other than traditional ones) dramatically grew in importance from 3 percent of total exports in 197273 to more than 90 percent in 199900 Among the nontraditional exports RMG including knitwear rose to 54 percent during 199900 from an insignificant level in the early 1980s The share of frozen food increased from less than 1 percent to 6 percent during the years Frozen foodrsquos share in total exports was higher in the 1980s but its later decline reflected a deceleration in its growth performance in recent years Residual export category showed a big jump in export importance from 18 percent in 197273 to 31 percent in 199900
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