Bangladesh - few highlights

Economy


Forex

• Garment exports are the main foreign exchange earner (80% of Bangladesh exports are garments)
• Remittances are the second most important mainstay of its economy after garment exports

Exports

• Garments are the main exports (80%). Exported primarily to US, Europe, Canada
• Good growth: Bangladesh's garment exports increased from $6.8 billion in 2005 to $19.9 billion in 2012, recording a compounded annual growth rate (CAGR) of 16.6%. During the same period, India's outward shipments rose from $8.7 billion to $13.8 billion, a CAGR of just 6.8%. 
• Infrastructure support: Bangladesh offers sops like uninterrupted power and a priority at the Chittagong port for shipment. "They have to take it very seriously as the garment exports contribute 80% of Bangladesh's total export earnings." 
• The association surveyed the $20 billion industry, the world's second largest and a mainstay of the Bangladesh economy, to determine which of the 4,500 factories were paying the new legally required wage
• Bangladesh's government agreed last November (2013) to raise the minimum monthly wage for the country's four million garment workers to $68, an increase of 77 percent, after protests and strikes in the crisis-hit industry.
• Riots don't impact negatively in medium-term: Asked if recent events like a spate of fires and collapse of garment factories, which led to some anxiety over safety norms at these units among the Western retailers sourcing goods from the country's eastern neighbour, is favourable for India, Iyer (Exim Bank India Chief General Manager) replied in the negative. 
  
  He said in October 2013, because of these incidents, there was a slowdown in Bangladeshi garment exports, which grew only 3%. But initial trends point out to a robust growth of over 41% in November, suggesting a healthy bounce back by the key sector. 
  
  Iyer said many of the sourcing companies have South Asia offices situated in India, but they source garments from either Bangladesh or Sri Lanka. 
• Tea is the next big export after garments

Economic Growth

• Politics affects economic growth in medium-term: 
• Lower economic growth: Rarely could politics be so damaging to an economy. Bangladesh, whose growth in 2012-13 was a healthy 6.3%, was aiming to achieve 7.2% in 2013-14.The World Bank's half-yearly report says the most Bangladesh can achieve is 5.7% growth in the current fiscal. Disruptions caused by political turmoil were responsible for the drop in growth. The opposition agitation adversely affected the economy, whose fundamentals inspire a lot of confidence.
• Drop in investment - both domestic and foreign capital stays away: The Bank says that the turmoil over elections has led to a drop in investment, with both domestic and foreign capital staying away from investing in Bangladesh.
• Drop in imports as country is not importing manufacturing equipment & capital goods. This affects economy in the long run. Due to rising exports and drop in import costs, Bangladesh registered a huge surplus in foreign transactions in the first half of this fiscal, around $1.38 billion, almost thrice than in the same period last year. But Bangladesh economists are worried. The drop in imports shows the country is not importing manufacturing equipment and capital goods. Zaid Bakht of the Bangladesh Institute of Development Studies says this will affect the economy in the long run.
• Transportation most affected during violence: Failure to transport goods to urban markets hit farmers hard because Bangladesh harvested its third successive bumper crop this season. Exporters were desperate because they were not able to reach garments and other commodities to Chittagong port for shipping because the violence on the Dhaka-Chittagong highway was the worst with hundreds of trucks burned down on the Sitakunda-Satkania stretch.

Mutual Funds

• The mutual fund sector registered a gain of 8.73 percent last year against 5.19 percent by DSEX (2013)
• The biggest gainer last year was the Fourth ICB Mutual Fund, which rose by 37.69 percent, while the ICB Islamic Mutual Fund was the worst loser, plunging by 2.3 percent. 
• The top assent manager in terms of asset under management is Race Asset Management Company having 45 percent market share in the industry, followed by LR Global Bangladesh Asset Management Company and AIMS of Bangladesh.   

Politics

• Hasina - Awami League
• Khaleda Zia - Bangaldesh National Part (BNP)
• Jamaet-e-Islaam - supports BNP
• 22 years equally shared by Hasina and Khaleda Zia: Out of last 22 years (except for 2 years), the country was run for a equal number of years by Hasina and Khaleda Zia. (as on Jan 2014)