Project report on Bangladesh
1
A Project Report On Bangladesh
Submitted to: Prof. Surta Mehta
Submitted to: Bhaumik Shiroya (M00139)
XCELLON INSTITUTE OF B-SCHOOL
Project report on Bangladesh
Table of content Particular 1. Introduction 2. About country 2.1. Geography/Statistics 2.2. Economy 2.3. Currency and Banking 2.4. Government/Politics 2.5. Legal system 3. Quality of life 3.1. Housing 3.2. Rental accommodation 3.3. Hotels 3.4. Education 3.4. a. Primary stage 3.4. b. Secondary stage 3.4. c. Higher secondary education 3.4. d. Higher education 4. Communication and transport 4.1. Road 4.2. Air 4.3. Rail 4.4. Waterway 5. Graphical information 5.1. Bangladesh government budget 5.2. Bangladesh GDP growth rate 5.3. Bangladesh GDP 5.4. Bangladesh GDP annual growth rate 5.5. Bangladesh gross national product 5.6. Bangladesh GDP per capita 5.7. Bangladesh balance of trade 5.8. Bangladesh terms of trade 5.9. Bangladesh current account to GDP 5.10. Bangladesh consumer spending 5.11. Bangladesh unemployment rate 6. Questions 7. Bibliography Page No 3 3 3 3 5 5 5 5 5 6 6 6 6 6 7 7 7 7 8 8 8 9 9 9 10 11 11 12 12 13 13 14 14 15 17
2
XCELLON INSTITUTE OF B-SCHOOL
Project report on Bangladesh
1. Introduction: Bangladesh is a combination of competitive market, business-friendly environment and cost structure that can give the best returns. Bangladesh offers a well-educated, highly adaptive and industrious workforce with the lowest wages and salaries in the region. 57.30% of the population is under 25, providing a youthful group for recruitment. The country has consistently developed a skilled workforce catering to investors needs. English is widely spoken, making communication easy. Bangladesh is strategically located next to India, China and ASEAN markets. Bangladesh has proved to be an attractive investment location with its 146.6 million populations and consistent economic growth leading to strong and growing domestic demand. Energy prices in Bangladesh are the most competitive in the region. Bangladesh offers the most liberal FDI regime in South Asia, allowing 100% foreign equity with unrestricted exit policy, easy remittance of royalty, and repatriation of profits and incomes. Bangladesh offers export-oriented industrial enclaves with infrastructural facilities and logistical support for foreign investors. 2. About the country: 2.1. Geography/Statistics:
3
Bangladesh is located in the Southern Asia, bordering the Bay of Bengal with the coastline covering 580 km between Burma & India with the land boundaries 4,246 km where Burma covered 193 km and India covered 4,053 km. The time difference is GMT+6. The Total area is 147,570sq km and the total population is 164,425,491.The climate of the country is focused as tropical; mild winter (October to March); hot, humid summer (March to June); humid, warm rainy monsoon (June to October). Official language is Bangla (Bengali). English is widely used in Government, Business and Universities. Out of total population, Muslim 89.6 %, Hindu 9.3 %, Buddhist 0.5%, Christian 0.3% and Other 0.3%. 2.2. Economy:
The economic position of the country is GDP/PPP (2011 est.): $100 billion; per capita $664, Real growth rate: 6%, Inflation: 11.3%. The Industries are Textiles, Jute, Garments, Tea Processing, Paper Newsprint, Cement, Chemical Fertilizer, Light Engineering, Sugar, Ceramics and Pharmacy. Natural resources are Gas, Timber and Coal. Arable land covered 55.39% and permanent crops covered 3.08% of total land area. Bangladesh exports mainly Ready Made Garments including Knit Wear (75% of exports revenue). Others include: Shrimps, Jute Goods (including Carpet), Leather Goods and Tea. Bangladesh imports mostly Petroleum Product and Oil, Machinery and Parts, Soybean and Palm Oil, Raw Cotton, Iron, Steel and Wheat.
XCELLON INSTITUTE OF B-SCHOOL
Project report on Bangladesh
Economic indicators GDP $ mn.
2007 68415.4
2008 79554.4
2009 89359.8
2010 100357.0
4
GDP growth
%
6.4
6.2
5.7
6.1
Inflation (CPI)
%
9.1
8.9
5.4
8.1
Unemployment Foreign direct investment
%
-
-
-
-
% of GDP
1.0
1.3
0.8
1.0
Export growth
%
13.0
7.0
0.0
0.9
Import growth
%
16.0
-2.1
-2.6
0.7
Current account balance
$ mn.
856.9
926.2
3556.1
2502.4
Sources: The World Bank, World Development Indicators 2011 | International Monetary Fund (IMF), World Economic Outlook 2011 | Stockholm International Pease Research Institute (SIPRI), Military Expenditure Database 2011.
XCELLON INSTITUTE OF B-SCHOOL
Project report on Bangladesh
2.3. Currency and Banking: Currency of the country is Bangladeshi Taka (Tk). The financial system of Bangladesh consists of Bangladesh Bank (BB) as the central bank, 4 State Owned Commercial Banks (SCB), 5 government owned specialized banks, 30 domestic private banks, 9 foreign banks and 29 non-banking financial institutions. The financial system also embraces insurance companies, stock exchanges and co-operative banks. Bangladesh Bank is both the Government’s banker and the banker’s bank, a “Lender of the Last Resort”. Bangladesh Bank, like most of the central banks of different countries, exercises monopoly over the issue of currency and the banknotes. 2.4. Government/Politics: The conventional long form is “People's Republic of Bangladesh” and the conventional short form is “Bangladesh”. The government type is parliamentary democracy. Capital is Dhaka and the administrative 7 divisions are Barisal, Chittagong, Dhaka, Khulna, Rajshahi, Rangpur and Sylhet. 26 March 1971 is the date of independence and 16 December 1971 is known as Victory Day and commemorates the official creation of the state of Bangladesh. 2.5. Legal system: Bangladesh seceded from Pakistan in December 1971. The British-era legislation applied in Pakistan after 1947 and post-partition legislation enacted in Pakistan continued to form the basis of Bangladeshi personal status laws, but legal developments since 1972 have been distinct. Constitution adopted 4 November 1972. Amended in 1977 to remove principle of secularism included in Part II entitled Fundamental Principles of State Policy. After the emergence of Bangladesh in 1971, a rigid constitution has been adopted which came into force on 16 December 1972. The basic law of Bangladesh is the constitution of the People's Republic of Bangladesh, 1972 as amended from time to time. Till 2010, fifteen amendments to the constitution have been made. All laws of the country are subordinate laws made by the elected Sangsad (the legislature consists of 350 members) conforming to the tenets of the Constitution. To try offences committed by children below the age of 16 years, juvenile courts have been formed with the magistrates and sessions judges, and juvenile courts follow the special procedure laid down in the children's Act. 3. Quality of life: 3.1. Housing: Expatriates living in Dhaka have found it to be an affordable, safe and comfortable place to live in, with a good range of expatriate housing readily available in centrally located apartments. Popular places to live in include Gulshan, Baridhara and Banani. Most expatriates live in these areas. A quality apartment rents for $700-$1,000/month. Luxury houses rent from $1,000-$1,500 (luxury units). In several suburban areas, quiet and secluded housing are also available for rent. For XCELLON INSTITUTE OF B-SCHOOL
5
Project report on Bangladesh
those visiting Bangladesh, Dhaka offers several international standard hotels including the Dhaka Sheraton and the Sonargaon (a Pan-Pacific Hotel). These hotels provide deluxe accommodation, restaurants, health clubs and entertainment facilities. In addition there are a number of medium standard hotels and guest houses in Dhaka and Chittagong to accommodate the expatriates. 3.2. Rental accommodation: Expatriates in Bangladesh have found it to be an affordable, safe and comfortable place, with acceptable expatriate housing readily available in centrally located apartments. Many expatriates live in the Dhaka areas of Gulshan, Baridhara, and Banani. A typical apartment will rent for $800-$1,200/month, houses for $1,200$1,500 (luxury units). 3.3. Hotels: Dhaka offers several 5 star hotels. They include the following: ? Pan Pacific Sonargaon Hotel ? Radisson Water Garden Hotel ? The Westin Hotel ? Seagull Hotel 3.4. Education: The three main educational systems in Bangladesh: ? General Education System ? Madrasah Education System ? Technical - Vocational Education System 3.4. a. Primary stage: Five-year compulsory primary education for the 6-10 age group is imparted mainly in government and non-government primary schools. In metropolitan cities, however, government and non-government primary schools cater to the educational needs mainly of the poorer sections of the people, as the better-off families usually send their children to Private English Medium schools/ secondary schools that run primary sections as well. There, however, exist some NGO-run non-formal schools catering mainly for the dropouts of the government and non-government primary schools. 3.4.b. Secondary stage: On completion of primary education, students (11+) enrol for junior secondary education that spans over 3 years. At the end of this phase, some students switch over to join the vocational stream, offered at Vocational Training Institutes (VTI) and Technical Training Centres (TTC) run by the Ministry of Education, and the Ministry of Labor and Employment respectively, while students in the mainstream continue in XCELLON INSTITUTE OF B-SCHOOL
6
Project report on Bangladesh
government and non-government secondary schools for a 2 year secondary education in their respective areas of specialization i.e. humanities, science, commerce, etc. At the end of 10th class, the students sit for their first public examination called Secondary School Certificate (S.S.C.) examination under the supervision of seven education boards. The students of religious education and English medium streams also sit for their respective public examinations, Dakhil and O’ level, conducted by the Madrasha Education Board and London/Cambridge University respectively. 3.4. c. Higher secondary education: After 10 years of schooling (primary and secondary), students (16+) who succeed in passing the Secondary School Certificate (S.S.C.)/Dakhil/O’ Level examination have the option of joining a college for a 2 year higher secondary education in their respective areas of specialization, or enrol in technical/ poly technical institutes for technical education. After 2-year higher secondary education, one has to sit for another public examination called Higher Secondary Certificate (H.S.C.) examination conducted by the education boards. Students of Religious and English Medium streams also sit for their respective public examinations, Alim and A' level, conducted by the Madrasha Education Board and London/Cambridge University respectively. 3.4. d. Higher education: Under-graduate education of various duration (2 to 5 years) are offered to 18+ students at a number of public and private universities / degree colleges/technical colleges/ specialized institutions. Successful completion of a degree course is a prerequisite for appointment to a white-collar civilian job. Post-graduate education normally of 1-2 year duration is provided at the universities and selected degree colleges and institutions. 4. Communication and transport: The transport sector of Bangladesh consists of a variety of modes. As the country is essentially a flat plain all three modes of surface transport, i.e. road, railway and water, are widely used in carrying both passengers and cargo. The airline network is also extensive and effective. 4.1. Road: In Bangladesh, among the various modes of transport, road transport system has been playing a significant role in transporting passengers and goods. The Roads and Highways Department (RHD) manage several categories of road. RHD has total length of 20,948 Km road unders its control. RHD also control a total number of 4,659 bridges and 6,122 culverts. RHD are currently operating about 161 ferry boats in 81 crossings (13 on national highways, 11 on regional highways and 57 on feeder roads) on its road network throughout the country. As of January 2010, Local Government Engineering Department (LGED) has so far constructed a total of XCELLON INSTITUTE OF B-SCHOOL
7
Project report on Bangladesh
133,514 km (64,691 km dirt road and 68,823 km paved roads) upazila and union roads and 971,498 bridges/culverts. The 4.8 km long Bangabandhu Bridge, which was opened to traffic in 1998, is the eleventh longest in the world. It has established a strategic link between the East and the West of Bangladesh. It is generating multifaceted benefits to the people and promoting inter-regional trade. Apart from quick movement of goods and passenger traffic, it is facilitating transmission of electricity and natural gas and has integrated the telecommunication links. 4.2. Air: The Civil Aviation Authority is a public sector entity entrusted to construct, maintain and supervise airports and regulate air traffic. The national flag carrier Biman flies to 26 international and eight domestic destinations. There are now 13 operational airports and Short Take-off and Landing (STOL) ports in Bangladesh. These are Dhaka, Barisal, Chittagong, Comilla, Cox's Bazar, Ishurdi, Jessore, Rajshahi, Syedpur, Sylhet and Thakurgaon. Of these, the airports at Dhaka, Chittagong and Sylhet serve international routes. Air cargo and STOL services have been handed over to the private sector by the government. 4.3. Rail: About 32% of the total area of Bangladesh is effectively covered by railways. Bangladesh Railway had a total network of 2,835.04 km (Broad Gauge 659.33 km, Dual Gauge 374.83 km and Meter Gauge-1,800.88 km) and a total of 440 stations at the end of the year 2008-2009. Train services between Dhaka-Kolkata have been commenced on 14 April 2008 in order to establish communication between Bangladesh and India. After inclusion of railway track over the Jamuna Bridge, railway link between east and west zone has been established. 4.4. Waterway: Country made crafts are the most widely used carriers on the rivers. These carry passengers and merchandise on a large scale. The landscape of Bangladesh is dominated by about 250 major rivers which flow essentially north-south. The alluvial flood plain formed by these rivers covers most of the country. Wherever there is a river and a village, a launch or steamer will play for trade. Bangladesh Inland Water Transport Authority (BIWTA) has been established by the Government for maintenance of navigability of ports and channels while the stateowned BIWTC provides passenger and cargo services in inland waterways and coastal areas of the country. The entire coast along the Bay of Bengal is 710 km long. There are two major ports in the country. Chittagong, the oldest port, has been an entry-port for at least 1,000 years. The Mongla port in Khulna region serves the western part of Bangladesh.
8
XCELLON INSTITUTE OF B-SCHOOL
Project report on Bangladesh
5. Graphical information:
9
5.1.
BANGLADESH GOVERNMENT BUDGET
Bangladesh recorded a Government Budget deficit equal to 2.90 percent of the country's Gross Domestic Product in 2011. Government Budget in Bangladesh is reported by the Bangladesh Bank. Historically, from 1994 until 2011, Bangladesh Government Budget averaged -3.3 Percent of GDP reaching an all time high of -1.6 Percent of GDP in December of 2009 and a record low of -5.3 Percent of GDP in December of 2008. Government Budget is an itemized accounting of the payments received by government (taxes and other fees) and the payments made by government (purchases and transfer payments). A budget deficit occurs when 4a government spends more money than it takes in. The opposite of a budget deficit is a budget surplus.
5.2.
BANGLADESH GDP GROWTH RATE:
XCELLON INSTITUTE OF B-SCHOOL
Project report on Bangladesh
The Gross Domestic Product (GDP) in Bangladesh expanded 6.30 percent in 2012 from the previous year. GDP Growth Rate in Bangladesh is reported by the 10 Bangladesh Bank. Historically, from 1994 until 2012, Bangladesh GDP Growth Rate averaged 5.58 Percent reaching an all time high of 6.70 Percent in June of 2011 and a record low of 4.08 Percent in June of 1994. Bangladesh is considered as a developing economy. Yet, almost one-third of Bangladesh’s 150m people live in extreme poverty. In the last decade, the country has recorded GDP growth rates above 5 percent due to development of microcredit and garment industry. Although three fifths of Bangladeshis are employed in the agriculture sector, three quarters of exports revenues come from producing ready-made garments. The biggest obstacles to sustainable development in Bangladesh are overpopulation, poor infrastructure, corruption, political instability and a slow implementation of economic reforms.
5.3.
BANGLADESH GDP:
The Gross Domestic Product (GDP) in Bangladesh was worth 110.61 billion US dollars in 2011. The GDP value of Bangladesh represents 0.18 percent of the world economy. GDP in Bangladesh is reported by the the World Bank. Historically, from 1960 until 2011, Bangladesh GDP averaged 30.3 USD Billion reaching an all time high of 110.6 USD Billion in December of 2011 and a record low of 4.3 USD Billion in December of 1960. The gross domestic product (GDP) measures of national income and output for a given country's economy. The gross domestic product (GDP) is equal to the total expenditures for all final goods and services produced within the country in a stipulated period of time.
XCELLON INSTITUTE OF B-SCHOOL
Project report on Bangladesh
5.4.
BANGLADESH GDP ANNUAL GROWTH RATE:
11
The Gross Domestic Product (GDP) in Bangladesh expanded 6.30 percent in 2012 from the previous year. GDP Annual Growth Rate in Bangladesh is reported by the Bangladesh Bank. Historically, from 1994 until 2012, Bangladesh GDP Annual Growth Rate averaged 5.6 Percent reaching an all time high of 6.7 Percent in June of 2011 and a record low of 4.1 Percent in June of 1994. In Bangladesh, services are the biggest sector of the economy and account for 50 percent of total GDP. Within services the most important segments are: wholesale retail and trade (14 percent of total GDP); transport, storage and communication (11 percent) and real estate, renting and business activities (7 percent). Industry accounts for 30 percent of GDP. Within industry, the manufacturing segment represents 18 percent of GDP while construction accounts for 9 percent. The remaining 20 percent is contributed by agriculture and forestry (16 percent), and fishing (4 percent).
5.5.
BANGLADESH GROSS NATIONAL PRODUCT
XCELLON INSTITUTE OF B-SCHOOL
Project report on Bangladesh
Gross National Product in Bangladesh increased to 4496.26 BDT Billion in 2012 from 4200.96 BDT Billion in 2011. Gross National Product in Bangladesh is reported 12 by the. Historically, from 2003 until 2012, Bangladesh Gross National Product averaged 3475.54 BDT Billion reaching an all time high of 4496.26 BDT Billion in June of 2012 and a record low of 2483.46 BDT Billion in June of 2003. 5.6. BANGLADESH GDP PER CAPITA
The Gross Domestic Product per capita in Bangladesh was last recorded at 588.12 US dollars in 2011. The GDP per Capita in Bangladesh is equivalent to 5 percent of the world's average. GDP per capita in Bangladesh is reported by the World Bank. Historically, from 1960 until 2011, Bangladesh GDP per capita averaged 298.9 USD reaching an all time high of 588.1 USD in December of 2011 and a record low of 210.3 USD in December of 1972. The GDP per capita is obtained by dividing the country’s gross domestic product, adjusted by inflation, by the total population. 5.7. BANGLADESH BALANCE OF TRADE
Bangladesh recorded a trade deficit of 977 USD Million in November of 2012. Balance of Trade in Bangladesh is reported by the Bangladesh Bank. Historically, from 1995 until 2012, Bangladesh Balance of Trade averaged -1209.67 USD Million XCELLON INSTITUTE OF B-SCHOOL
Project report on Bangladesh
reaching an all time high of -56.40 USD Million in August of 2009 and a record low of -5370.60 USD Million in June of 2008. Bangladesh exports mainly readymade 13 garments including knit wear and hosiery (75% of exports revenue). Others include: Shrimps, jute goods (including Carpet), leather goods and tea. Bangladesh main exports partners are United States (23% of total), Germany, United Kingdom, France, Japan and India. Bangladesh imports mostly petroleum product and oil, machinery and parts, soya bean and palm oil, raw cotton, iron and steel and wheat. Bangladesh main imports partners are China (17% of total), India, Indonesia, Singapore and Japan. 5.8. BANGLADESH INTEREST RATE
The benchmark interest rate in Bangladesh was last recorded at 7.75 percent. Interest Rate in Bangladesh is reported by the Bangladesh Bank. Historically, from 2008 until 2013, Bangladesh Interest Rate averaged 7.25 Percent reaching an all time high of 8.75 Percent in February of 2009 and a record low of 4.50 Percent in July of 2010. In Bangladesh, interest rates decisions are taken by the Bangladesh Bank. The Bangladesh Bank controls two policy interest rates: the repo rate (repurchase rate), which it uses to inject money into the banking system, and the reverse repo rate. 5.9. BANGLADESH CAPITAL FLOWS
XCELLON INSTITUTE OF B-SCHOOL
Project report on Bangladesh
Capital Flows in Bangladesh decreased to 3.08 BDT Billion in October of 2012 from 8.01 BDT Billion in September of 2012. Capital Flows in Bangladesh is reported by 14 the. Historically, from 1997 until 2012, Bangladesh Capital Flows averaged 33.31 BDT Billion reaching an all time high of 679.50 BDT Billion in March of 2007 and a record low of -12.72 BDT Billion in May of 1998. In Bangladesh, international capital flows are measured using the Capital and Financial Account Balance of the Balance of Payments.
5.10.
BANGLADESH INFLATION RATE
The inflation rate in Bangladesh was recorded at 7.38 percent in January of 2013. Inflation Rate in Bangladesh is reported by the Bangladesh Bureau of Statistics. Historically, from 1994 until 2013, Bangladesh Inflation Rate averaged 6.58 Percent reaching an all time high of 12.71 Percent in December of 1998 and a record low of 0.02 Percent in December of 1996. In Bangladesh, the inflation rate measures a broad rise or fall in prices that consumers pay for a standard basket of goods. 5.11. BANGLADESH UNEMPLOYMENT RATE
XCELLON INSTITUTE OF B-SCHOOL
Project report on Bangladesh
Unemployment Rate in Bangladesh decreased to 4.50 percent in 2010 from 5.10 percent in 2009. Unemployment Rate in Bangladesh is reported by the Bangladesh 15 Bureau of Statistics. Historically, from 2003 until 2010, Bangladesh Unemployment Rate averaged 4.6 Percent reaching an all time high of 5.1 Percent in December of 2009 and a record low of 4.3 Percent in December of 2006. In Bangladesh, the unemployment rate measures the number of people actively looking for a job as a percentage of the labour force. 6. Questions: 1. What are the advantages/strengths of that economy from an investor’s point of view? Analyze the country? ? Above I analyze the country and base on that here I give the answer. ? There are many advantages of that economy from an investor’s point of view like as I mention over here in this report. ? Growth Domestic Rate ? Interest rate ? Growth National Product ? Prices of human resource are still low in Bangladesh 2. What are the weaknesses of that economy from an investor’s point of view? ? One of them 1st is inflation rate and 2nd one is unemployment. In this country inflation rate is nearly 7.38. ? Establishment of good governance is the foremost condition for economic development. Due to lack of indiscipline we cannot get the expected success. For the lack of good governance investors are not interested to invest our country. ? Lack of proper government policy ? High production cost ? Political instability
XCELLON INSTITUTE OF B-SCHOOL
Project report on Bangladesh
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3. Identify the fastest growing / most promising sector of the economy in Bangladesh? ? Readymade garment industry ? I.T sector is the promising sector in Bangladesh. ? In this sector accounting and financial management, webside and web application and hr software is the right to invest because there developing respectively 69%, 57% and 58%. ? In Bangladesh, the systems and services of telecommunication have been expanded. Government has already allowed private operation in this sector and has plans to increase the number of fixed telephone lines by 1.6 million. As a result, it has emerged as one of the largest sectors having huge growth potential in the reform environment of telecom sector. ? Both the sector are promising for investment in Bangladesh. 4. If you want to invest in those identified sectors, what economic factors would affect your decision? ? Since economic growth is determined by a country’s productivity, we will evaluate the different factors that affect productivity. These factors include: physical capital per worker, human capital per worker, natural resources per worker, and technological knowledge. We will also examine the economic freedom and the budget deficit/surplus because both of these factors can greatly affect the long-run economic growth of a country. ? Government policy will affect to the garment industry because Bangladesh do the more export to readymade garment so that custom duty and other tax will may be do increase, in that matter government will affect. ? Competitors of same business ? Price factor ? Rules and regulation of government This type of factor which I mention above and also many more economy factor would be affect to my decision.
XCELLON INSTITUTE OF B-SCHOOL
Project report on Bangladesh
7. Bibliography: 1. http://en.wikipedia.org/wiki/Bangladesh 2. www.mgiworld.com 3. www.worldbank.org 4. www.tradingeconomics.com 5. http://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/03/07/00 0442464_20130307102650/Rendered/PDF/ICR248000PUBLIC0http://data.world bank.org/country.pdf 6. http://sonjibtalukder.wordpress.com/2011/08/11/%E2%80%9Cproblems-andprospects-of-foreign-direct-investment-in-bangladesh/
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XCELLON INSTITUTE OF B-SCHOOL
doc_202609528.pdf
1
A Project Report On Bangladesh
Submitted to: Prof. Surta Mehta
Submitted to: Bhaumik Shiroya (M00139)
XCELLON INSTITUTE OF B-SCHOOL
Project report on Bangladesh
Table of content Particular 1. Introduction 2. About country 2.1. Geography/Statistics 2.2. Economy 2.3. Currency and Banking 2.4. Government/Politics 2.5. Legal system 3. Quality of life 3.1. Housing 3.2. Rental accommodation 3.3. Hotels 3.4. Education 3.4. a. Primary stage 3.4. b. Secondary stage 3.4. c. Higher secondary education 3.4. d. Higher education 4. Communication and transport 4.1. Road 4.2. Air 4.3. Rail 4.4. Waterway 5. Graphical information 5.1. Bangladesh government budget 5.2. Bangladesh GDP growth rate 5.3. Bangladesh GDP 5.4. Bangladesh GDP annual growth rate 5.5. Bangladesh gross national product 5.6. Bangladesh GDP per capita 5.7. Bangladesh balance of trade 5.8. Bangladesh terms of trade 5.9. Bangladesh current account to GDP 5.10. Bangladesh consumer spending 5.11. Bangladesh unemployment rate 6. Questions 7. Bibliography Page No 3 3 3 3 5 5 5 5 5 6 6 6 6 6 7 7 7 7 8 8 8 9 9 9 10 11 11 12 12 13 13 14 14 15 17
2
XCELLON INSTITUTE OF B-SCHOOL
Project report on Bangladesh
1. Introduction: Bangladesh is a combination of competitive market, business-friendly environment and cost structure that can give the best returns. Bangladesh offers a well-educated, highly adaptive and industrious workforce with the lowest wages and salaries in the region. 57.30% of the population is under 25, providing a youthful group for recruitment. The country has consistently developed a skilled workforce catering to investors needs. English is widely spoken, making communication easy. Bangladesh is strategically located next to India, China and ASEAN markets. Bangladesh has proved to be an attractive investment location with its 146.6 million populations and consistent economic growth leading to strong and growing domestic demand. Energy prices in Bangladesh are the most competitive in the region. Bangladesh offers the most liberal FDI regime in South Asia, allowing 100% foreign equity with unrestricted exit policy, easy remittance of royalty, and repatriation of profits and incomes. Bangladesh offers export-oriented industrial enclaves with infrastructural facilities and logistical support for foreign investors. 2. About the country: 2.1. Geography/Statistics:
3
Bangladesh is located in the Southern Asia, bordering the Bay of Bengal with the coastline covering 580 km between Burma & India with the land boundaries 4,246 km where Burma covered 193 km and India covered 4,053 km. The time difference is GMT+6. The Total area is 147,570sq km and the total population is 164,425,491.The climate of the country is focused as tropical; mild winter (October to March); hot, humid summer (March to June); humid, warm rainy monsoon (June to October). Official language is Bangla (Bengali). English is widely used in Government, Business and Universities. Out of total population, Muslim 89.6 %, Hindu 9.3 %, Buddhist 0.5%, Christian 0.3% and Other 0.3%. 2.2. Economy:
The economic position of the country is GDP/PPP (2011 est.): $100 billion; per capita $664, Real growth rate: 6%, Inflation: 11.3%. The Industries are Textiles, Jute, Garments, Tea Processing, Paper Newsprint, Cement, Chemical Fertilizer, Light Engineering, Sugar, Ceramics and Pharmacy. Natural resources are Gas, Timber and Coal. Arable land covered 55.39% and permanent crops covered 3.08% of total land area. Bangladesh exports mainly Ready Made Garments including Knit Wear (75% of exports revenue). Others include: Shrimps, Jute Goods (including Carpet), Leather Goods and Tea. Bangladesh imports mostly Petroleum Product and Oil, Machinery and Parts, Soybean and Palm Oil, Raw Cotton, Iron, Steel and Wheat.
XCELLON INSTITUTE OF B-SCHOOL
Project report on Bangladesh
Economic indicators GDP $ mn.
2007 68415.4
2008 79554.4
2009 89359.8
2010 100357.0
4
GDP growth
%
6.4
6.2
5.7
6.1
Inflation (CPI)
%
9.1
8.9
5.4
8.1
Unemployment Foreign direct investment
%
-
-
-
-
% of GDP
1.0
1.3
0.8
1.0
Export growth
%
13.0
7.0
0.0
0.9
Import growth
%
16.0
-2.1
-2.6
0.7
Current account balance
$ mn.
856.9
926.2
3556.1
2502.4
Sources: The World Bank, World Development Indicators 2011 | International Monetary Fund (IMF), World Economic Outlook 2011 | Stockholm International Pease Research Institute (SIPRI), Military Expenditure Database 2011.
XCELLON INSTITUTE OF B-SCHOOL
Project report on Bangladesh
2.3. Currency and Banking: Currency of the country is Bangladeshi Taka (Tk). The financial system of Bangladesh consists of Bangladesh Bank (BB) as the central bank, 4 State Owned Commercial Banks (SCB), 5 government owned specialized banks, 30 domestic private banks, 9 foreign banks and 29 non-banking financial institutions. The financial system also embraces insurance companies, stock exchanges and co-operative banks. Bangladesh Bank is both the Government’s banker and the banker’s bank, a “Lender of the Last Resort”. Bangladesh Bank, like most of the central banks of different countries, exercises monopoly over the issue of currency and the banknotes. 2.4. Government/Politics: The conventional long form is “People's Republic of Bangladesh” and the conventional short form is “Bangladesh”. The government type is parliamentary democracy. Capital is Dhaka and the administrative 7 divisions are Barisal, Chittagong, Dhaka, Khulna, Rajshahi, Rangpur and Sylhet. 26 March 1971 is the date of independence and 16 December 1971 is known as Victory Day and commemorates the official creation of the state of Bangladesh. 2.5. Legal system: Bangladesh seceded from Pakistan in December 1971. The British-era legislation applied in Pakistan after 1947 and post-partition legislation enacted in Pakistan continued to form the basis of Bangladeshi personal status laws, but legal developments since 1972 have been distinct. Constitution adopted 4 November 1972. Amended in 1977 to remove principle of secularism included in Part II entitled Fundamental Principles of State Policy. After the emergence of Bangladesh in 1971, a rigid constitution has been adopted which came into force on 16 December 1972. The basic law of Bangladesh is the constitution of the People's Republic of Bangladesh, 1972 as amended from time to time. Till 2010, fifteen amendments to the constitution have been made. All laws of the country are subordinate laws made by the elected Sangsad (the legislature consists of 350 members) conforming to the tenets of the Constitution. To try offences committed by children below the age of 16 years, juvenile courts have been formed with the magistrates and sessions judges, and juvenile courts follow the special procedure laid down in the children's Act. 3. Quality of life: 3.1. Housing: Expatriates living in Dhaka have found it to be an affordable, safe and comfortable place to live in, with a good range of expatriate housing readily available in centrally located apartments. Popular places to live in include Gulshan, Baridhara and Banani. Most expatriates live in these areas. A quality apartment rents for $700-$1,000/month. Luxury houses rent from $1,000-$1,500 (luxury units). In several suburban areas, quiet and secluded housing are also available for rent. For XCELLON INSTITUTE OF B-SCHOOL
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Project report on Bangladesh
those visiting Bangladesh, Dhaka offers several international standard hotels including the Dhaka Sheraton and the Sonargaon (a Pan-Pacific Hotel). These hotels provide deluxe accommodation, restaurants, health clubs and entertainment facilities. In addition there are a number of medium standard hotels and guest houses in Dhaka and Chittagong to accommodate the expatriates. 3.2. Rental accommodation: Expatriates in Bangladesh have found it to be an affordable, safe and comfortable place, with acceptable expatriate housing readily available in centrally located apartments. Many expatriates live in the Dhaka areas of Gulshan, Baridhara, and Banani. A typical apartment will rent for $800-$1,200/month, houses for $1,200$1,500 (luxury units). 3.3. Hotels: Dhaka offers several 5 star hotels. They include the following: ? Pan Pacific Sonargaon Hotel ? Radisson Water Garden Hotel ? The Westin Hotel ? Seagull Hotel 3.4. Education: The three main educational systems in Bangladesh: ? General Education System ? Madrasah Education System ? Technical - Vocational Education System 3.4. a. Primary stage: Five-year compulsory primary education for the 6-10 age group is imparted mainly in government and non-government primary schools. In metropolitan cities, however, government and non-government primary schools cater to the educational needs mainly of the poorer sections of the people, as the better-off families usually send their children to Private English Medium schools/ secondary schools that run primary sections as well. There, however, exist some NGO-run non-formal schools catering mainly for the dropouts of the government and non-government primary schools. 3.4.b. Secondary stage: On completion of primary education, students (11+) enrol for junior secondary education that spans over 3 years. At the end of this phase, some students switch over to join the vocational stream, offered at Vocational Training Institutes (VTI) and Technical Training Centres (TTC) run by the Ministry of Education, and the Ministry of Labor and Employment respectively, while students in the mainstream continue in XCELLON INSTITUTE OF B-SCHOOL
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Project report on Bangladesh
government and non-government secondary schools for a 2 year secondary education in their respective areas of specialization i.e. humanities, science, commerce, etc. At the end of 10th class, the students sit for their first public examination called Secondary School Certificate (S.S.C.) examination under the supervision of seven education boards. The students of religious education and English medium streams also sit for their respective public examinations, Dakhil and O’ level, conducted by the Madrasha Education Board and London/Cambridge University respectively. 3.4. c. Higher secondary education: After 10 years of schooling (primary and secondary), students (16+) who succeed in passing the Secondary School Certificate (S.S.C.)/Dakhil/O’ Level examination have the option of joining a college for a 2 year higher secondary education in their respective areas of specialization, or enrol in technical/ poly technical institutes for technical education. After 2-year higher secondary education, one has to sit for another public examination called Higher Secondary Certificate (H.S.C.) examination conducted by the education boards. Students of Religious and English Medium streams also sit for their respective public examinations, Alim and A' level, conducted by the Madrasha Education Board and London/Cambridge University respectively. 3.4. d. Higher education: Under-graduate education of various duration (2 to 5 years) are offered to 18+ students at a number of public and private universities / degree colleges/technical colleges/ specialized institutions. Successful completion of a degree course is a prerequisite for appointment to a white-collar civilian job. Post-graduate education normally of 1-2 year duration is provided at the universities and selected degree colleges and institutions. 4. Communication and transport: The transport sector of Bangladesh consists of a variety of modes. As the country is essentially a flat plain all three modes of surface transport, i.e. road, railway and water, are widely used in carrying both passengers and cargo. The airline network is also extensive and effective. 4.1. Road: In Bangladesh, among the various modes of transport, road transport system has been playing a significant role in transporting passengers and goods. The Roads and Highways Department (RHD) manage several categories of road. RHD has total length of 20,948 Km road unders its control. RHD also control a total number of 4,659 bridges and 6,122 culverts. RHD are currently operating about 161 ferry boats in 81 crossings (13 on national highways, 11 on regional highways and 57 on feeder roads) on its road network throughout the country. As of January 2010, Local Government Engineering Department (LGED) has so far constructed a total of XCELLON INSTITUTE OF B-SCHOOL
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Project report on Bangladesh
133,514 km (64,691 km dirt road and 68,823 km paved roads) upazila and union roads and 971,498 bridges/culverts. The 4.8 km long Bangabandhu Bridge, which was opened to traffic in 1998, is the eleventh longest in the world. It has established a strategic link between the East and the West of Bangladesh. It is generating multifaceted benefits to the people and promoting inter-regional trade. Apart from quick movement of goods and passenger traffic, it is facilitating transmission of electricity and natural gas and has integrated the telecommunication links. 4.2. Air: The Civil Aviation Authority is a public sector entity entrusted to construct, maintain and supervise airports and regulate air traffic. The national flag carrier Biman flies to 26 international and eight domestic destinations. There are now 13 operational airports and Short Take-off and Landing (STOL) ports in Bangladesh. These are Dhaka, Barisal, Chittagong, Comilla, Cox's Bazar, Ishurdi, Jessore, Rajshahi, Syedpur, Sylhet and Thakurgaon. Of these, the airports at Dhaka, Chittagong and Sylhet serve international routes. Air cargo and STOL services have been handed over to the private sector by the government. 4.3. Rail: About 32% of the total area of Bangladesh is effectively covered by railways. Bangladesh Railway had a total network of 2,835.04 km (Broad Gauge 659.33 km, Dual Gauge 374.83 km and Meter Gauge-1,800.88 km) and a total of 440 stations at the end of the year 2008-2009. Train services between Dhaka-Kolkata have been commenced on 14 April 2008 in order to establish communication between Bangladesh and India. After inclusion of railway track over the Jamuna Bridge, railway link between east and west zone has been established. 4.4. Waterway: Country made crafts are the most widely used carriers on the rivers. These carry passengers and merchandise on a large scale. The landscape of Bangladesh is dominated by about 250 major rivers which flow essentially north-south. The alluvial flood plain formed by these rivers covers most of the country. Wherever there is a river and a village, a launch or steamer will play for trade. Bangladesh Inland Water Transport Authority (BIWTA) has been established by the Government for maintenance of navigability of ports and channels while the stateowned BIWTC provides passenger and cargo services in inland waterways and coastal areas of the country. The entire coast along the Bay of Bengal is 710 km long. There are two major ports in the country. Chittagong, the oldest port, has been an entry-port for at least 1,000 years. The Mongla port in Khulna region serves the western part of Bangladesh.
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5. Graphical information:
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5.1.
BANGLADESH GOVERNMENT BUDGET
Bangladesh recorded a Government Budget deficit equal to 2.90 percent of the country's Gross Domestic Product in 2011. Government Budget in Bangladesh is reported by the Bangladesh Bank. Historically, from 1994 until 2011, Bangladesh Government Budget averaged -3.3 Percent of GDP reaching an all time high of -1.6 Percent of GDP in December of 2009 and a record low of -5.3 Percent of GDP in December of 2008. Government Budget is an itemized accounting of the payments received by government (taxes and other fees) and the payments made by government (purchases and transfer payments). A budget deficit occurs when 4a government spends more money than it takes in. The opposite of a budget deficit is a budget surplus.
5.2.
BANGLADESH GDP GROWTH RATE:
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Project report on Bangladesh
The Gross Domestic Product (GDP) in Bangladesh expanded 6.30 percent in 2012 from the previous year. GDP Growth Rate in Bangladesh is reported by the 10 Bangladesh Bank. Historically, from 1994 until 2012, Bangladesh GDP Growth Rate averaged 5.58 Percent reaching an all time high of 6.70 Percent in June of 2011 and a record low of 4.08 Percent in June of 1994. Bangladesh is considered as a developing economy. Yet, almost one-third of Bangladesh’s 150m people live in extreme poverty. In the last decade, the country has recorded GDP growth rates above 5 percent due to development of microcredit and garment industry. Although three fifths of Bangladeshis are employed in the agriculture sector, three quarters of exports revenues come from producing ready-made garments. The biggest obstacles to sustainable development in Bangladesh are overpopulation, poor infrastructure, corruption, political instability and a slow implementation of economic reforms.
5.3.
BANGLADESH GDP:
The Gross Domestic Product (GDP) in Bangladesh was worth 110.61 billion US dollars in 2011. The GDP value of Bangladesh represents 0.18 percent of the world economy. GDP in Bangladesh is reported by the the World Bank. Historically, from 1960 until 2011, Bangladesh GDP averaged 30.3 USD Billion reaching an all time high of 110.6 USD Billion in December of 2011 and a record low of 4.3 USD Billion in December of 1960. The gross domestic product (GDP) measures of national income and output for a given country's economy. The gross domestic product (GDP) is equal to the total expenditures for all final goods and services produced within the country in a stipulated period of time.
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Project report on Bangladesh
5.4.
BANGLADESH GDP ANNUAL GROWTH RATE:
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The Gross Domestic Product (GDP) in Bangladesh expanded 6.30 percent in 2012 from the previous year. GDP Annual Growth Rate in Bangladesh is reported by the Bangladesh Bank. Historically, from 1994 until 2012, Bangladesh GDP Annual Growth Rate averaged 5.6 Percent reaching an all time high of 6.7 Percent in June of 2011 and a record low of 4.1 Percent in June of 1994. In Bangladesh, services are the biggest sector of the economy and account for 50 percent of total GDP. Within services the most important segments are: wholesale retail and trade (14 percent of total GDP); transport, storage and communication (11 percent) and real estate, renting and business activities (7 percent). Industry accounts for 30 percent of GDP. Within industry, the manufacturing segment represents 18 percent of GDP while construction accounts for 9 percent. The remaining 20 percent is contributed by agriculture and forestry (16 percent), and fishing (4 percent).
5.5.
BANGLADESH GROSS NATIONAL PRODUCT
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Project report on Bangladesh
Gross National Product in Bangladesh increased to 4496.26 BDT Billion in 2012 from 4200.96 BDT Billion in 2011. Gross National Product in Bangladesh is reported 12 by the. Historically, from 2003 until 2012, Bangladesh Gross National Product averaged 3475.54 BDT Billion reaching an all time high of 4496.26 BDT Billion in June of 2012 and a record low of 2483.46 BDT Billion in June of 2003. 5.6. BANGLADESH GDP PER CAPITA
The Gross Domestic Product per capita in Bangladesh was last recorded at 588.12 US dollars in 2011. The GDP per Capita in Bangladesh is equivalent to 5 percent of the world's average. GDP per capita in Bangladesh is reported by the World Bank. Historically, from 1960 until 2011, Bangladesh GDP per capita averaged 298.9 USD reaching an all time high of 588.1 USD in December of 2011 and a record low of 210.3 USD in December of 1972. The GDP per capita is obtained by dividing the country’s gross domestic product, adjusted by inflation, by the total population. 5.7. BANGLADESH BALANCE OF TRADE
Bangladesh recorded a trade deficit of 977 USD Million in November of 2012. Balance of Trade in Bangladesh is reported by the Bangladesh Bank. Historically, from 1995 until 2012, Bangladesh Balance of Trade averaged -1209.67 USD Million XCELLON INSTITUTE OF B-SCHOOL
Project report on Bangladesh
reaching an all time high of -56.40 USD Million in August of 2009 and a record low of -5370.60 USD Million in June of 2008. Bangladesh exports mainly readymade 13 garments including knit wear and hosiery (75% of exports revenue). Others include: Shrimps, jute goods (including Carpet), leather goods and tea. Bangladesh main exports partners are United States (23% of total), Germany, United Kingdom, France, Japan and India. Bangladesh imports mostly petroleum product and oil, machinery and parts, soya bean and palm oil, raw cotton, iron and steel and wheat. Bangladesh main imports partners are China (17% of total), India, Indonesia, Singapore and Japan. 5.8. BANGLADESH INTEREST RATE
The benchmark interest rate in Bangladesh was last recorded at 7.75 percent. Interest Rate in Bangladesh is reported by the Bangladesh Bank. Historically, from 2008 until 2013, Bangladesh Interest Rate averaged 7.25 Percent reaching an all time high of 8.75 Percent in February of 2009 and a record low of 4.50 Percent in July of 2010. In Bangladesh, interest rates decisions are taken by the Bangladesh Bank. The Bangladesh Bank controls two policy interest rates: the repo rate (repurchase rate), which it uses to inject money into the banking system, and the reverse repo rate. 5.9. BANGLADESH CAPITAL FLOWS
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Project report on Bangladesh
Capital Flows in Bangladesh decreased to 3.08 BDT Billion in October of 2012 from 8.01 BDT Billion in September of 2012. Capital Flows in Bangladesh is reported by 14 the. Historically, from 1997 until 2012, Bangladesh Capital Flows averaged 33.31 BDT Billion reaching an all time high of 679.50 BDT Billion in March of 2007 and a record low of -12.72 BDT Billion in May of 1998. In Bangladesh, international capital flows are measured using the Capital and Financial Account Balance of the Balance of Payments.
5.10.
BANGLADESH INFLATION RATE
The inflation rate in Bangladesh was recorded at 7.38 percent in January of 2013. Inflation Rate in Bangladesh is reported by the Bangladesh Bureau of Statistics. Historically, from 1994 until 2013, Bangladesh Inflation Rate averaged 6.58 Percent reaching an all time high of 12.71 Percent in December of 1998 and a record low of 0.02 Percent in December of 1996. In Bangladesh, the inflation rate measures a broad rise or fall in prices that consumers pay for a standard basket of goods. 5.11. BANGLADESH UNEMPLOYMENT RATE
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Project report on Bangladesh
Unemployment Rate in Bangladesh decreased to 4.50 percent in 2010 from 5.10 percent in 2009. Unemployment Rate in Bangladesh is reported by the Bangladesh 15 Bureau of Statistics. Historically, from 2003 until 2010, Bangladesh Unemployment Rate averaged 4.6 Percent reaching an all time high of 5.1 Percent in December of 2009 and a record low of 4.3 Percent in December of 2006. In Bangladesh, the unemployment rate measures the number of people actively looking for a job as a percentage of the labour force. 6. Questions: 1. What are the advantages/strengths of that economy from an investor’s point of view? Analyze the country? ? Above I analyze the country and base on that here I give the answer. ? There are many advantages of that economy from an investor’s point of view like as I mention over here in this report. ? Growth Domestic Rate ? Interest rate ? Growth National Product ? Prices of human resource are still low in Bangladesh 2. What are the weaknesses of that economy from an investor’s point of view? ? One of them 1st is inflation rate and 2nd one is unemployment. In this country inflation rate is nearly 7.38. ? Establishment of good governance is the foremost condition for economic development. Due to lack of indiscipline we cannot get the expected success. For the lack of good governance investors are not interested to invest our country. ? Lack of proper government policy ? High production cost ? Political instability
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Project report on Bangladesh
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3. Identify the fastest growing / most promising sector of the economy in Bangladesh? ? Readymade garment industry ? I.T sector is the promising sector in Bangladesh. ? In this sector accounting and financial management, webside and web application and hr software is the right to invest because there developing respectively 69%, 57% and 58%. ? In Bangladesh, the systems and services of telecommunication have been expanded. Government has already allowed private operation in this sector and has plans to increase the number of fixed telephone lines by 1.6 million. As a result, it has emerged as one of the largest sectors having huge growth potential in the reform environment of telecom sector. ? Both the sector are promising for investment in Bangladesh. 4. If you want to invest in those identified sectors, what economic factors would affect your decision? ? Since economic growth is determined by a country’s productivity, we will evaluate the different factors that affect productivity. These factors include: physical capital per worker, human capital per worker, natural resources per worker, and technological knowledge. We will also examine the economic freedom and the budget deficit/surplus because both of these factors can greatly affect the long-run economic growth of a country. ? Government policy will affect to the garment industry because Bangladesh do the more export to readymade garment so that custom duty and other tax will may be do increase, in that matter government will affect. ? Competitors of same business ? Price factor ? Rules and regulation of government This type of factor which I mention above and also many more economy factor would be affect to my decision.
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Project report on Bangladesh
7. Bibliography: 1. http://en.wikipedia.org/wiki/Bangladesh 2. www.mgiworld.com 3. www.worldbank.org 4. www.tradingeconomics.com 5. http://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/03/07/00 0442464_20130307102650/Rendered/PDF/ICR248000PUBLIC0http://data.world bank.org/country.pdf 6. http://sonjibtalukder.wordpress.com/2011/08/11/%E2%80%9Cproblems-andprospects-of-foreign-direct-investment-in-bangladesh/
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