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October 09, 2014 |
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In their latest report titled “South Asia Economic Focus Fall 2014”, the World Bank has commented that Bangladesh has continued to make “remarkable progress in poverty reduction and shared prosperity”. It noted with appreciation that Bangladesh has been able to maintain macroeconomic stability, it’s export earnings & foreign exchange reserves are on a consistent upward path, trade deficit and inflation are low and the GDP will continue to grow over 6.2% due to the current climate of political stability. The report then went on to make a number of suggestions for accelerating Bangladesh’s economic growth.
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The UK’s Foreign and Commonwealth Office (FCO) in a report titled “Bangladesh’s Path to Prosperity: Persistence Paramount” has highlighted the advantages for UK businesses to further boost their trade relations with Bangladesh. In the report, the FCO noted, among others, that Bangladesh is a potential “regional economic hub with good market access to world’s largest economies”. The report highlighted UK’s growing exports and investment in Bangladesh as well as earmark areas like manufacturing goods and machineries; telecommunications and IT; pharmaceuticals and education sector where UK companies can further explore opportunities.
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Microsoft chief Bill Gates has commented that Bangladesh is a shining example of digital technology being used for delivering financial services to the poor. According to the Wall Street Journal , the richest person of the world described the Bangladesh experience as ‘wild adoption of technology’ at a banking-industry conference he was attending in Boston, USA. It should be noted that Bangladesh’s central bank was recently honored with the ' Alliance for Financial Inclusion (AFI) Policy Award ' for promoting mobile-banking services in Bangladesh.
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Growth and Development
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According to the World Bank’s Migration and Remittance Unit, Bangladesh has once again taken a spot among the top ten remittance-earning countries on the back of an upgrade in the legal status of migrant workers in Gulf countries. The country is expected to receive $15.05 billion in 2014, enough to retain the eighth position it held last year. Remittance is forecast to grow by 8.62% this year. Remittance inflow into Bangladesh grew by 22% the in first quarter of the current fiscal compared to the same period last year. Currently, Bangladesh’s foreign exchange reserves stand at a record $22.02 billion according to Bangladesh bank’s data of Wednesday.
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Bangladesh has launched new poverty maps, which visually identify poor areas with greater accuracy and thereby improves planning in terms of policy and resource allocations. These maps, launched jointly by the Bangladesh Bureau of Statistics (BBS) in collaboration with the World Bank and the World Food Programme (WFP), uses powerful visuals to help policy makers make better-informed decisions about poverty reduction initiatives and design programs that serve those who need them most.
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State owned Bangladesh Power Development Board (BPDB) would set up a 400 MW gas fired power plant at Bibiyana, Habiganj with its own funds. The project would cost more than US$ 324 million to complete. The government has also decided to set up an 850 MW liquefied natural gas (LNG) power plant in Khulna in collaboration with GAIL India for which an agreement has already been signed for the import of LNG from India. In a related development, Dhaka would see more renewable energy being used, as the government under a new draft Feed In Tariff (FIT) policy, is aiming to supply around 500 MW of power to the national grid bought directly from private solar roof top panels.
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Bangladesh, with assistance from Japan, will set up an Oceanography Research Centre at Cox’s Bazaar aiming to gain knowledge about Blue Economy. The government has adopted a blue economy outlook as the Bay of Bengal is becoming strategically important for progress in Bangladesh, especially since the maritime boundary wins against Myanmar and India and with increased regional cooperation surrounding the Bay. The government is also working on preparing a National Strategy on blue economy to tap marine resources in a sustainable manner.
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The South Korean government will provide Bangladesh with TK 10 billion (almost US$13 million) as soft loan to build a Multi-Disciplinary and Specialized Hospital under Bangabandhu Sheikh Mujib Medical University (BSMMU) in Dhaka. A joint Memorandum of Declaration (MoD) was signed between Bangladesh and South Korea in this regard last Thursday. The South Korean government, through their Exim Bank, will give the loan for 40-years on easy terms for building the hospital, which will provide for treatments for several major diseases as well as conduct world-class medical research.
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Trade and Investment
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In a sign of growing international investors’ confidence in Bangladesh’s capital market, foreign funds in Dhaka Stock Exchange (DSE) has increased 34 times to a record TK 4.26 billion (around US$ 56 million) year-on-year in September 2014. According to market insiders, favourable economic factors, political stability, positive market outlook and proactive overseas marketing have encouraged foreign investors to inject money into Bangladesh’s local securities.
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According to the new draft Export Policy 2015-2018, Bangladesh government is aiming to increase its exports earnings to US$ 50 billion by the year 2018. The draft policy offers various incentives to help broaden markets and products base as well as make the export system modern and liberal in conformity with World Trade Organization (WTO) rules. The commerce ministry will hold a meeting with stakeholders next month to finalize the draft policy and send it to the Cabinet for final approval.
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Bangladesh on the International Stage
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Bangladeshi born Professor Dureen Shahnaz has won the Joseph Wharton Award for Social Impact 2014. The award is presented annually to the alumnus of the prestigious Wharton Business School who has made a significant impact in public services, social enterprise or philanthropy. Professor Shahnaz is Founder and Chairperson of Impact Investment Exchange Asia (IIX), and also Impact Investment Shujog (Shujog), both of which have been at the forefront of driving impact investing, particularly across the Asia Pacific region.
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Bangladesh’s central bank has been nominated as a member of the Alliance for Financial Inclusion (AFI)’s Steering Committee. The nomination was given in its Global Policy Forum (GPF) meeting on September 8 2014 held in Trinidad and Tobago. Bangladesh was recommended by the central bank of Philippines, and was fully supported by the Steering Committee. Bangladesh will represent the Asian Region in the Steering Committee.
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Digital Bangladesh
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With assistance from Japan International Cooperation Agency (JICA), Bangladesh government will introduce ‘Smart Card’, one payment system for all modes of public and mass transportations. To that end, the government will set up a clearing house, which will keep records of each such card for distributing payment information to respective transport service providers. The move is expected to greatly increase convenience of commuters.
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Bangladesh’s digitization has now been extended to cattle markets as well. Before every Eid-Al-Adha, the people of Bangladesh flock to massive open-air markets known as ‘haats’ for buying sacrificial animals like cows and goats. However, that may be about to change for good as online market places have now started offering cleaner and more convenient ways to accomplish the task.
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