Bangladesh is an emerging economy with a large and increasingly skilled workforce. Government infrastructure investments are building on its strategically strong position on Global Shipping routes to drive their Economic strategy. Making it a good choice for any strategic sourcing strategy to investigate.
Background:
Bangladesh is a country in South Asia. Bordered by India to the west, north, and east, and by Myanmar to the southeast. The Bay of Bengal lies to the south. Bangladesh was formerly known as East Bengal and was part of British India until 1947. A population of over 150miliion makes it the most densely populated country in the World.
The strategic location has been a huge benefit and driver of economic growth and foreign investment in the country with the USA, Japan and China all major investors.
Proximity to India and Myanmar gives easy access to over 1.5b consumers and the Bay of Bengal coastline supports access to major shipping routes.
Bangladesh is emerging as a dynamic, fast-growing market. This growth is driven by a large domestic consumer market, a rapidly expanding middle and affluent class, and an impressive digital adoption rate. The country is now home to more than 2,500 startups, with about 200 more being added each year, focusing on a wide range of industries, from FinTech to E-Commerce. The traditional trading base of companies continues to thrive continuing to play an important role in domestic and global supply chains for textile, apparel and garments.
Economy:
“The government is managing relatively well against the impact of external adversities and has embarked on the reform programs as precautionary measures,” said ADB. Country Director for Bangladesh Edimon
Bangladesh made a strong recovery from C-19 impact but is now suffering from a slowdown in trade from the Ukraine War, cost inflation and softening of demand in many markets. The implementation of a range of key initiatives in its economic strategy will foster economic growth and development in the medium term. manufacturing, and aquaculture .
The country’s economic strategy focuses on various structural reforms designed to make the country an easier and more accessible country to do business with and to reduce reliance on Garments and Apparel. Currently accounting for over 80% of exports from the country the dominance of these categories in export trade are recognised as a potential weakness/risk for the country
Economic Strategy:
The implementation of these seven strategic planks will make Bangladesh a more attractive country to trade with and a sourcing destination worthy of serious consideration in any sourcing strategy.
- Export-Oriented Industrialization: Bangladesh places a strong emphasis on export-oriented industries as a key driver of economic growth. Garments and textiles are well established. Pharmaceuticals, leather goods, jute, and agriculture products are among the sectors targeted for development. The government provides policy support, infrastructure development, and financial incentives to promote export-oriented industries.
- Human Resource Development:Bangladesh recognizes the importance of human capital development for sustained economic growth. The government has made efforts to improve education, vocational training, and skill development programs to enhance the quality of the workforce. It aims to produce skilled labour that meets the needs of various industries, particularly in the manufacturing and services sectors.
- Infrastructure Development:Prioritizing infrastructure development to create a conducive business environment and attract both domestic and foreign investment. Focus areas include improving transportation networks, such as roads, ports, and airports, as well as energy infrastructure, such as power generation and transmission.
The government has identified deep water ports as a key priority for economic development. The country has two deep water ports: Chittagong and Mongla. Chittagong is the larger of the two ports, and it is the main gateway for international trade. Mongla is a newer port, and it is located in the south of the country.
The government is investing in expanding and upgrading both ports. The expansion of Chittagong port is expected to be completed by 2023. The expansion will include the construction of a new container terminal and a new oil terminal. The expansion of Mongla port is expected to be completed by 2025. The expansion will include the construction of a
new container terminal and a new coal terminal.
There is further investment in the construction of a new deep-water port in Sonadia. The Sonadia port is expected to be completed by 2030. The port will be located on the Bay of Bengal, and it will be able to handle large container ships and tankers.
The investment in deep water ports is expected to boost trade and economic growth in Bangladesh. The ports will provide a gateway for international trade, and they will also help to attract foreign investment. The ports are also expected to create jobs and boost economic development in the coastal regions of Bangladesh.
Investment and Business-friendly Policies: Bangladesh has implemented policies to attract domestic and foreign direct investment. These policies include providing tax incentives, simplifying procedures for business registration and licensing, ensuring investor protection, and establishing special economic zones (SEZs) to promote industrial development.
- Investment and Business-friendly Policies: Bangladesh has implemented policies to attract domestic and foreign direct investment. These policies include providing tax incentives, simplifying procedures for business registration and licensing, ensuring investor protection, and establishing special economic zones (SEZs) to promote industrial development.
- Financial Sector Reforms:Reforms in the financial sector have been undertaken to enhance access to finance, support entrepreneurship, and encourage investment. This includes strengthening the banking sector, improving access to credit for small and medium-sized enterprises (SMEs), and promoting the development of capital markets.
- Social Safety Nets:Bangladesh has also focused on implementing social safety net programs to alleviate poverty and improve social welfare. These programs aim to provide support to vulnerable populations, such as the extreme poor, through initiatives like cash transfers, food assistance, and healthcare services.
- Regional and International Cooperation: Bangladesh actively engages in regional and international cooperation to foster economic integration, expand trade opportunities, and attract investment. The country is a member of regional organizations such as the South Asian Association for Regional Cooperation (SAARC) and participates in initiatives like the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC).
Summary
Bangladesh is an emerging economy with a large and increasingly skilled workforce. Government infrastructure investments are building on its strategically strong position on Global Shipping routes to drive their Economic strategy. Making it a good choice for any strategic sourcing strategy to investigate.
However, it’s important to note that sourcing from Bangladesh can also come with challenges. Language barriers, cultural differences, intellectual property protection, and ensuring supply chain transparency are factors that require careful consideration and management.
ET2C International
We are a leading Global Sourcing company with over twenty year’s experience working with our clients. Our team of 250 colleagues are based in seven offices in key sourcing markets across Asia.
We work with our clients to create and deliver their global sourcing strategies, becoming their bridge to their supply partners. Where time zones, language, business communication expectations or QC can become challenging.
Our team of experts can help you build and deliver your sourcing strategy and ensure you are working with the right factory partners. Giving you independent feet on the ground and confidence with fast responses, removing time zone and language challenges. If you would like to explore sourcing opportunities within Bangladesh or to discuss your future supply chain challenges. Please contact@et2cint.com
