Bangladesh - The Worldfolio

Transcription

#BangladeshTheWorldfolio
#TheWorldfolio
Thursday, September 24, 2015
BANGLADESH
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A middle-income nation by 2021
Located at the heart of a booming region, Bangladesh is ideally placed to maintain and improve economic growth and
achieve middle-income country status by 2021. Internationally Bangladesh has emerged onto the world stage with key
contributions to the international community’s efforts for peace, stability, and development
B
angladesh achieved
independence in
1971 following a
glorious Liberation
War. This was the
culmination of decades of struggle for freedom and statehood
under the inspiring and resolute leadership of the Father
of the Nation Bangabandhu
Sheikh Mujibur Rahman. In
1974, Bangladesh joined the
United Nations. On 15th August 1975, Bangabandhu along
with most members of his
family was killed and Bangladesh slided into military dictatorship and misrule for long.
Bangabandhu’s elder daughter
Sheikh Hasina was elected as
Prime Minister in 1996 and
started a long journey to complete the unfinished work to
realize Bangabandhu’s dream of
building a ‘Sonar Bangla’ (Golden Bengal). Sheikh Hasina was
again elected as Prime Minister
in 2009 and was reelected to a
third term in 2014.
As announced in 2008,
the Government of Prime
Minister Sheikh Hasina has
embarked upon the ‘Vision
2021’ pledge, an ambitious
but achievable roadmap that
reflects the hopes and aspirations of the citizens of the
country. Along with ensuring
higher per-capita income, the
‘Vision 2021’ lays down a pragmatic development architecture where citizens will have
a higher standard of living,
will be better educated, will
face better social justice, will
have a more equitable socioeconomic environment, and
the sustainability of development will be ensured through
better protection from climate
change and natural disasters.
Though ‘Vision 2021’ does
not seek to completely eradicate poverty in the next six
years, Bangladesh’s national
goal of minimizing the number of people living in poverty
to 14% of the population by
2021 is remarkable. To do so,
the Government will have to
lift some 15 million people out
of poverty. The statistics show
Prime Minister Sheikh Hasina addresses the United Nations General Assembly
that the poverty rate has been
reduced from 56.7% in 1991-92
to 31.5% in 2010. The Government of Sheikh Hasina has further brought it down to 22.4%.
Another key component
of ‘Vision 2021’ is the Digital
Bangladesh program, which
seeks to transform the country into a digitally connected
society through the inclusion
of marginalized people. Bangladesh’s progressive Prime
Minister Sheikh Hasina, who
was re-elected in 2014, has outlined four priorities for Digital
Bangladesh: to develop the
country’s workforce so that it
can compete better in the 21st
century; to connect citizens
in ways that are meaningful to
them; to bring services to citizens’ doorsteps; and to make
the private sector and market
more productive and competitive through the use of digital
technology. Through adopting
a plethora of national, regional
and multilateral initiatives,
the incumbent Government
has made significant strides in
the advancement of technology, and spurred the economic
growth rate by bolstering the
technology sector.
‘Vision 2021’ also envisions
a country that would be built
on principles of democracy,
inclusiveness, justice and fairness, accountability, and good
governance. Through implementing a number of concrete
initiatives and interventions
within the framework of ‘Vision 2021’, the Government
is pledge-bound to turn the
country into a middle-income
nation. The target date to reach
this remarkable milestone is
only six years away in 2021; the
year in which Bangladesh will
celebrate its 50th anniversary
of independence.
Remarkable achievements
Since the historic admission to the United Nations
(UN) in September 1974
under the visionary leader“In the 2008 election
manifesto, I announced
to develop Bangladesh
as a middle-income
country by 2021… In
2014, we declared in
our election manifesto
that Bangladesh
would be a developed
country by 2041”
SHEIKH HASINA,
Prime Minister oF Bangladesh
ship of the ‘Father of the Nation’ Bangabandhu Sheikh
Mujibur Rahman, the UN
remains Bangladesh’s close
and trusted development
partner with its imprint on
almost all spheres of national
efforts in promoting peace,
democracy,
development,
and good governance. Bangladesh has, over the years,
also earned the distinction
of being one of the highest
troop contributing countries
to UN Peacekeeping Missions, including a noteworthy
female police deployment. As
a founding member of the UN
Peacebuilding Commission,
Bangladesh continues to contribute in post-conflict rehabilitation and reconstruction
in different parts of the globe.
Bangladesh, one of the lowincome countries, has gone
a long way in achieving the
MDGs. It has been acclaimed
as a model country regarding
MDGs by the global community. Bangladesh has already met,
or is on track to meet, MDG 1,
2, 3, 4, 5 and 6. Taking into account Bangladesh’s remarkable
achievements in the socioeconomic sphere, the UN Secretary General Ban Ki-moon
termed Bangladesh as ‘a dy-
namic UN Member State’ and
highly commended the country
for making important gains in
achieving the MDGs. Building
on this experience, Bangladesh
was closely involved with the
formulation of the post-2015
development agenda, including
the Sustainable Development
Goals (SDGs).
Meanwhile, Prime Minister
Sheikh Hasina was awarded
with the Indira Gandhi Peace
Prize 2010 for her outstanding contribution to peace and
democracy. Her other notable achievements include
the award for Achievement in
Fighting Poverty 2013 from the
International Organization for
South-South Cooperation, recognition from the Organization
of American States for the Digital Bangladesh initiative, and
the Tree of Peace Award 2014
from UNESCO for outstanding
contribution to promoting girls’
and women’s literacy and education. Prime Minister Sheikh
Hasina has been announced as
one of the winners of the United Nations Champions of the
Earth award this year in recognition of her global leadership
in climate discourse and initiatives to address climate change
nationally and internationally.
Geostrategic importance
Straddled between South and
Southeast Asia and lying between the Himalayas in the
north and the Bay of Bengal in
the south, Bangladesh holds
a very significant position
from a geostrategic perspective. Considered the third
largest Muslim country in the
world and the second largest
in South Asia, the country’s
location within the ‘geo-strategic frontier’ of India, South
Asia’s most powerful country, and its close proximity to
China, Asia’s largest power,
gives Bangladesh undeniable
geostrategic importance.
With the country’s progressive policies having also
helped it become recognized
as one of the fastest growing
countries in the world over
the past few years, Bangladesh
has further grown into its
more prominent role on the
world stage. Bangladesh, for
example, remains on the global forefront in maintaining a
‘zero tolerance’ approach to
all forms of terrorism and violent extremism. Bangladesh is
now recognized as a democratic, pluralistic and stable
country in South Asia. Under
the able and dynamic leadership of Prime Minister Sheikh
Hasina, the Government is
further committed to creating
a stronger, more durable and
ever-flourishing friendship
with all key partners, including its neighbors. Bangladesh’s
recent achievement in resolving land boundary disputes
with India has demonstrated
its ability to successfully defuse critical geopolitical issues. This experience could be
applied to mediate similar disputes elsewhere in the world
in the future.
As Bangladesh strives to realize its ‘Vision 2021’ to build
a middle-income, knowledgedriven economy, it counts on
the unflinching and assuring
hand of support of regional as
well as global partners to forge
ahead in its shared pursuits of
peace and prosperity.
Robust economic performance
leads to ‘Next 11’ status
With a focus on structural reforms, increased revenue and regional competitiveness, Bangladesh’s 10-year GDP growth average of 6% is set to increase to 6.4% in 2015 – an
enviable situation in a time of global uncertainty
B
angladesh is emerging as one of
Asia’s most buoyant countries and
the focus is now
on establishing itself as a
middle-income economy by
2021, with foreign investment a key element of the
growth plan.
The country’s government,
led by Prime Minister Sheikh
Hasina, made history in 2013
when her party was reelected
– a first for the South Asian
country – and there is now a
renewed emphasis on ensuring
that a slew of economic initiatives are brought to fruition.
This element of continuity
is key for Abul Maal Abdul
Muhith, Bangladesh’s Minister
of Finance, who says that the
election triumph is enabling
the prime minister’s wider
economic plans to be implemented more fully.
“I have so many things I started in the last term,” he explains.
“We had a very big and really
detailed agenda, so it was quite
clear at that time that one could
not fully execute the agenda. So
this has given us an opportunity to continue to execute the
agenda, and add to it.”
At the heart of this agenda is
the target of reaching a growth
target of 7%, which Mr. Muhith
admits has been “elusive” over
the past few years. However,
International Monetary Fund
figures from its World Economic Outlook in October
last year lay out plainly the
consistency of the Bangladeshi
economy, which is set to grow
at 6.4% this year. In 2014, the
figure ran at 6.2%, the year
before that 6.1%, and in 2012
GDP grew by 6.3%.
This sustainability is all the
more impressive given that
much of it was built off the
back of the global economic
crisis which, like almost all
countries, hit Bangladesh to
a degree. Despite this, yearon-year GDP growth has remained above the 6% figure.
“At that time global growth
was close to 5% or a little more
and now it is below 4%; it is
around 3.5%. In this period of
meltdown, to be able to maintain 6% plus good growth is truly remarkable,” says Mr. Muhith.
This could prove trickier
than first planned given current
labor disputes, which have seen
opposition parties organizing
a nationwide blockade to certain cities, damaging elements
of the country’s economy. Mr.
Muhith, however, is adamant
that the unrest is temporary
and unpopular amongst the
majority of the Bangladeshi
population, although he admits
it has affected logistics and the
transportation of goods for ex-
port both within the country
and internationally.
“The movement has not
gained that kind of ground
support, but it is affecting the
economy; you see inter-district
transportation being affected
and will in turn soon lead to
shortages of food, in particular
perishables,” he says. “This is
harming all people, so it is in the
interest of everyone that this
blockade is stopped as quickly
as possible.”
Despite this, Mr. Muhith
is confident that the country
can rise to prominence and
reach many of the goals of its
Vision 2021 project, with the
transition to become a middleincome country within six
years at the plan’s core.
“It means that there is a literal improvement in the living
standards in the country,” Mr.
Muhith explains, adding that he
expects that this target will be
reached early – potentially by
2018. “Under the present rules
and regulations it takes three
years for the United Nations to
assess the graduation of a country. In three years you will see
whether it is sustainable or not.”
Growth is being driven from
a number of areas, including
agriculture, with recent investments during the past five years
now paying dividends as food
production rises. In turn, this
bulks out domestic growth and,
to some extent, international
incomes. Technological developments have also been identified as a key sector for improvement, but Mr. Muhith is clear
that his country will need the
support of international institu-
tions such as the World Bank to
help the country reach its economic and social targets.
The finance minister is also
introducing root and branch
tax changes, including revamping the country’s VAT system.
At present, a large number of
rates are charged depending on
which sector the goods belong
to, but the aim is to reform the
VAT law by introducing a flat
rate of 15%. The reform, which
was passed into law in 2012, is
now in the final stages of implementation with the rate set
to be introduced nationwide
during 2016.
Continues on page 2
A UNITED WORLD SUPPLEMENT PRODUCED BY:
Geoffrey Flugge, Julieta Juarez, Laia Marsal, Leandro
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2
BANGLADESH
Continued from page 1
There are also new economic zones being created that are
helping to provide support for
local entrepreneurs, while infrastructure projects are being
developed across the country,
including the creation of a deep
sea port at Sonadia, a new liquefied natural gas terminal, and
a series of highways linking the
capital city Dhaka with towns
across the country.
The country’s debt pile is
also being cut down and the
trade deficit is being narrowed
thanks to improving export
numbers. Indeed, it is estimated
that exports from Bangladesh
have quadrupled over the past
decade, with its ready-made
garments (RMG) sector helping to drive growth, although
international concerns remain
in some quarters with regards
to labor practices. However,
manufacturing will undoubtedly be one of the keys that ensure
the further development of the
Bangladeshi economy, with the
sector making up almost 20% of
GDP in 2014.
Energy is also a vital concern
for Bangladesh and it is here
that private finance is being
targeted to assist with development. Public-private partnerships are becoming a bigger
part of the government’s program in priority areas such as
power, gas and infrastructure,
and Mr. Muhith is keen to see
further cooperation between
public and private organizations but readily admits that to
date projects have been slow to
get off the ground.
“I was probably much too
ambitious, I didn’t realize that
moving towards this new strategy would take such a long
time,” he explains. “We do have
a number of small projects
that are running. For example,
setting up dialysis centers, as
there was much demand and
the government had land so
they have given the land to an
investor who is investing in the
dialysis center.
“It is a small example I’m giving because I think three or four
dialysis centers have been done
all over the country, and financially it has been good for both
parties. I think public-private
partnership now will start to
take off. With more funds and
a closer look at implementation, I expect good moves on
public-private partnerships in
the coming years.”
Chinese companies have
already proven to be keen investors in the region and have
spent money on projects across
the country, primarily in infrastructure, power and trade
sectors. Four 450-megawatt
power plants are being built at a
cost of $1.8 billion, powered by
either gas or coal, while a $1.5
billion thermal power plant is
also being developed. On top of
that two nuclear plants are being erected at Rooppur, with a
capacity of 2,000 megawatts of
electricity, which it is hoped will
be operational by 2020.
Such projects demonstrate
the ambition of Bangladesh
and its closer neighbors, including regional powerhouse
India, which regards the country as one of South Asia’s most
respected economies – again,
partly based on its regular, predictable GDP growth figures.
It is also this commitment to
sustainable growth and investment in large infrastructure
developments that is helping to
prove that the country’s inclusion on the ‘Next 11’ list from
investment bank Goldman
Sachs was a good call more
than a decade ago.
Prospects are also positive
when it comes to foreign investment, with the country predicted to enjoy a steady supply
of investment inflows during
the next five years, in contrast
to some of its neighbors such as
India and Sri Lanka. This is also
helping raise the living standards
amongst the Bangladeshi community and the uptick in per
capita income during the past
decade has been stark. In 2004
GDP per capita stood at around
$480, which has since increased
to $1,179 last year, and improved
economic conditions for the
country’s communities is one of
Mr. Muhith’s top objectives.
“I want our people to live in a
country which is not poor, and
live in a country where they
can do whatever they want,” he
says. “That is freedom, that is
democracy. The greatest gift of
democracy is that it allows you
to do what you want to do. It is
not the best system, but it is the
most acceptable system.”
Distributed by USA TODAY
Strengthening of ties with India indicative
of successful approach to foreign relations
A giant leap forward in cooperation between the two countries has generated substantial dividends for both sides
S
ince Bangladesh became independent in
1971, there has been
hardly any country
of more strategic
importance to policy makers
in Dhaka than India. Both were
allies during the struggle for independence. Since 2009, under
Prime Minister Sheikh Hasina’s
leadership, relations and cooperation between the two countries have gone from strength to
strength and now have reached
a new height. In fact, the governments of Prime Minister
Sheikh Hasina and Prime Minister Narendra Modi are on
very good terms. As many as
52 bilateral documents have
been signed between the two
neighbors in the past six and
half years alone, covering areas as diverse as energy, trade,
investment, connectivity, development cooperation, infrastructure, education as well
as the blue economy and environmental protection. This
speaks of the depth, dimension
and evolution of the relationship – a relationship that has
never been better.
Successful resolution
of boundary issues
Both governments have successfully worked together
to tackle the long-standing
boundary demarcation issue,
a legacy from colonial times.
This has set in motion a sustainable and effective solution for maintaining security
and stability along the 2,598mile border. As evidence of
the success of this cooperation with India, as recently
as July 31 this year, the two
countries peacefully exchanged 162 enclaves along
their shared frontier.
By virtue of this remarkable diplomatic endeavor
more than 50,000 stateless
residents received their citizenships. This amicable settlement of borders has also
extended to the sea, where
long-standing issues over
maritime border limits have
that Bangladesh would be
able to benefit from hydropower projects in countries
such as Nepal and Bhutan.
Surplus electricity generated
from hydropower projects in
these mountainous regions
could transit through India to
reach homes and businesses
in Bangladesh.
Indian Prime Minister Narendra Modi with Bangladesh’s Prime Minister Sheikh Hasina
been resolved, opening up
vast economic opportunities.
Through peaceful resolution
of these land and sea boundaries, Bangladesh and India have
proven that issues between
neighbors, however difficult
and complex they might seem,
can be resolved through effective diplomacy, building goodwill, and establishing mutual
trust. The pragmatic and farsighted leadership and policy
consistency of Prime Minister
Sheikh Hasina has been instrumental in this regard.
Robust security and law
enforcement cooperation
In today’s world of dangerous
non-state actors and terrorist
groups, the improvement of
border demarcation, management and control between
Bangladesh and India has resulted in important security
gains and the buildup of mutual trust for both countries.
It was Prime Minister Sheikh
Hasina’s
uncompromising
stand and ‘zero tolerance
policy’ against terrorism and
extremism that has brought in
this wholesale change in the
security scenario. Her government has taken concrete steps
to improve security control.
Following on this, enhanced
Bangladesh-India security ties
achieved through high-level
agreements have led to the
implementation of effective
measures against trans-national crimes. Resolution of
the long standing boundary
demarcation issues, and effective security cooperation have
had a deep, salutary effect on
other areas of cooperation.
Management of
shared water resources
Hydro-politics is becoming
increasingly discussed across
the world, and South Asia is no
exception. The sharing of water resources, mostly consisting of the 54 rivers that course
through India and Bangladesh,
is extremely important and
sensitive for both sides. On this
topic, Prime Minister Sheikh
Hasina’s government is looking
forward to signing an agreement between the two countries on sharing the waters of
the Teesta River. Resolution
of this long-running issue will
improve the livelihoods of millions of people in Bangladesh.
India is currently examining the Bangladesh-proposed
Ganges Barrage project which
would see Bangladesh retain
approximately 2.9 billion cubic meters of water for use in
the dry season to the benefit
of both the countries.
The movement towards
comprehensive development
of common water resources
indicates that basin-wide
collaboration in the management of trans-border waterways is the best solution for
sharing this precious, lifegiving endowment.
Excellent power
sector cooperation
Bangladesh finds a major
partner in India to complement Prime Minister Sheikh
Hasina’s untiring efforts in
improving the power situation in Bangladesh. As a part
of this, India began exporting
500 megawatts of electricity
to Bangladesh through grid
interlink as recently as 2013
which is a unique kind of
operation in this part of the
world. There has been continued and diverse developments and cooperation in
the power and energy sectors
between the two countries
and several important joint
power sector schemes are in
the pipeline. These include
the provision of an additional
600 megawatts of electricity to Bangladesh through a
grid link and connection to a
power plant in India.
The Indian government
is favorably disposed to allowing Bangladesh import
electricity from countries in
the sub-region. This means
Bright future for
connectivity and trade
Existing cooperation, as
well as emphatic declarations from Mr. Modi to work
“saath-saath (together)” with
Bangladesh is further proof
that the country is continuing
to enjoy excellent relations
with India. These enthusiastic sentiments have been
echoed by Prime Minister
Sheikh Hasina, who recently
stated, “Bangladesh and India
will be able to do ‘great things’
if their big markets could be
tapped together.”
Prime Minister Sheikh Hasina is an ardent proponent for
establishing seamless connectivity for collective prosperity
and economic development
of the region. The recent visit
to Bangladesh by Prime Minister Modi in June resulted in
22 agreements being signed
between the two countries.
Some of these were related
to bolstering connectivity via
land and sea to reduce the
cost of bilateral trade, which
stands at approximately $6.6
billion and continues to grow
at a steady pace.
Connectivity
initiatives
include the signing of the
Bangladesh-Bhutan-IndiaNepal (BBIN) Motor Vehicles
Agreement to improve the
ease of movement for overland transport, as well as an
agreement on Coastal Shipping for two-way coastal port
trade and renewing the Protocol on Inland Water Transit
and Trade (PIWTT). An increase in trade through water
ways could take the pressure
off land transport infrastructure linking the countries.
Cooperation with China reaches all time high as
nations mark 40th anniversary of diplomatic relations
Although Bangladesh and China have interacted for millennia, this year marks the 40th anniversary of the formal establishment of diplomatic relations
between the two countries
D
uring modern
times, Bangladesh-China relations have largely
been dominated
by economic and trade cooperation. Within the framework
of a vital cooperation agreement, Bangladesh and China
are working to create sustainable institutional architectures
for accelerating social and economic development, mitigating
the effects of natural disasters
and adverse impacts of climate
change, safe guarding the environment, boosting human
capital, developing vital infrastructure and expanding commercial and trading relations.
Under the leadership of
Prime Minister Sheikh Hasina,
relations have dramatically expanded and reached to a newer height to touch on almost all
aspects of modern life.
This achievement was
largely made possible by
the ratification of the historic “Closer Comprehensive
Partnership of Cooperation
Agreement”, signed during the
visit of Prime Minister Sheikh
Hasina to Beijing in March,
2010. This historic agreement
has laid the groundwork for
an all-encompassing bilateral
relations strategy. The vision
of this agreement was further
developed during the official
visit by Prime Minister Sheikh
Hasina to China in June, 2014.
This event has since been
recognized as one of most
important landmarks in the
development of BangladeshChina bilateral relations.
The Comprehensive Partnership of Cooperation
Agreement
The cooperation framework
was created from a strategic
perspective, based on long-
Prime Minister Sheikh Hasina with China’s President Xi Jinping
standing friendship, equality,
and mutual benefit. Core
points have seen both sides
commit to the following
goals: growing regional, international and multilateral
cooperation, collaborating
on natural resource management and natural disaster reduction, intensifying
knowledge exchange, and
enhanced economic and infrastructure development.
Joint regional and multilateral cooperation has been focused on encouraging peace,
stability and respect for sovereignty – an issue close to the
hearts of both Bangladeshis
and Chinese alike. It includes
a closer cooperation on the
international stage, including
the United Nations, with recognized joint interests in addressing climate change and
the post-2015 development
agenda. Furthermore both
sides have pledged to play a
constructive role in deepening regional peace and progress in South Asia, utilizing
the framework of the South
Asian Association for Regional
Cooperation (SAARC).
Collaboration in environmental and disaster reduction
touches on the vulnerability of
the region to climate change
and the associated catastrophes it can generate, especially
floods. Additionally the sustainable development of the
blue economy and maritime
resources is paramount to both
countries’ food security and
economic futures.
Intensified knowledge exchange will focus on developing
commerce, education, science
and health through people-topeople exchanges.
In line with this, enhanced
economic exchange and infrastructure development have
brought about the involvement of Chinese companies
in developing communications, energy, transportation
infrastructure and industry
in Bangladesh. This includes
critical installation and construction of roads, railways,
bridges, and water treatment
plants. A plethora of Memorandums of Understanding
(MoU) has been signed to ensure the timely completion of
these assets.
Economic development,
trade and investment
China has become the largest
trading partner of Bangladesh
since 2007, with the movement of goods totaling $10
billion annually. Although
small in comparison, exports
to China from Bangladesh
reached a value of $746 million in 2014, an increase of 85%
from 2011. These were mainly
generated from the sale of jute
and jute goods, leather and
leather products, Ready Made
Garments, textile articles and
fibre, fish, crustaceans, mollusks, aquatic invertebrates,
plastics, raw hides and skins,
vegetables, etc. Overall volumes have been boosted by a
duty free access agreement in
place since 2010.
The establishment of Chinese enterprises in the Bangladesh Export Processing Zone
Authority (BEPZA) has generated significant employment
and economic development.
Currently, 75 Chinese enterprises are operating in these
areas, having invested in excess
of $ 657 million. Almost 78,000
jobs have been created for locals as a result.
Following the success of
these enterprises, during
the visit of Prime Minister
Sheikh Hasina to China in
June 2014, an MOU was
signed to establish Special
Industrial and Economic
Zones (Chinese Economic
and Industrial Zones - CEIZ)
catering to Chinese investment. Bangladesh Economic
Zone Authority (BEZA) allocated land for the proposed
economic zone, which is situated in Anwara Upazila of
Chittagong district on 774
acres of land. The Chinese
Government
nominated
China Harbour Engineering
Company Limited (CHECL)
to work on their behalf for
the establishment of the economic zone. Another Chinese company titled China
National Machinery Import
and Export Corporation
(CMC) has shown interest to
establish an economic zone
at a different site in Anwara
Upazila on 504 acres of land.
The company is interested in
developing the site following
the G2G model. It also submitted a draft Memorandum
of Understanding for formalizing the process.
The tempo of collaboration
has not diminished. Currently,
a total of 291 Chinese investment projects are in various
stages of implementation approximately worth around
$642 million. These offer the
potential to create employment for 59,000 Bangladeshis.
Joint Venture agreements
with China have resulted in
remarkable economic development leading to increased
fertilizer production, the introduction of 3G and expansion
of 2.5G networks, other ICT
infrastructure development
and the construction of a vital
water treatment plant.
China has made a substantial
contribution to the power sector development of Bangladesh,
which has also been created
through joint ventures and direct investment. The effect of
additional electricity generation
on the other areas of the economy is also significant.
Wider prosperity is expected to take place following the
development of the Bangladesh-China-India-Myanmar
Economic Corridor (BCIM
EC). Such a move would create an important vehicle to
complement various regional
connectivity initiatives.
BANGLADESH
3
Japan to provide $6bn over next five years
as part of the industrial growth initiative
Prime Minister Shinzo Abe has praised Bangladesh for its spectacular success in economic and social sectors and lauded Prime Minister Sheikh Hasina’s dynamic and visionary leadership
J
apan is the single largest development partner
of Bangladesh. The two
countries are also engaged for the promotion
of peace and prosperity through
various bilateral and multilateral mechanisms. Financial
and technical assistance from
Japan has proved a force multiplier for Bangladesh in advancing its national development
agenda. Now recent leaps forward in business relations have
led to a rapid growth of trade
and investment.
Development partners
The maiden visit by Bangabandhu Sheikh Mujibur Rahman as the President of an
independent country in 1973
set the tone for an influx of
official Japanese development
assistance for the war-ravaged
Bangladesh. This assistance
has been focused on key areas
including power, roads and
bridges, telecommunications,
agriculture, health, education,
water supply and sanitation,
rural development, environment, and human resource
development. This flow of
development assistance from
Japan has never diminished
since then. In total Japan has
committed more than $12 billion in aid during the last four
decades, in the form of grants,
loans, and technical assistance.
The historic official visit of
Prime Minister Sheikh Hasina
to Japan in May 2014 elevated
the bilateral relationship to
a level of ‘Comprehensive
Partnership’. During the visit,
noted her appreciation of Japan’s valuable contribution towards the socio-economic and
infrastructural development of
Bangladesh.
In turn, Prime Minister
Shinzo Abe praised Bangladesh for its spectacular success
in economic and social sectors and lauded Prime Minister Sheikh Hasina’s dynamic
and visionary leadership in
guiding Bangladesh towards
becoming a middle-income
country by 2021. During the
visit, Mr. Abe made an announcement to provide up to
600 billion Yen (approximately
$6 billion) to Bangladesh during the next four to five years
under the initiative of the Bay
of Bengal Industrial Growth
Belt (Belt-B). Mr. Abe paid a
return visit to Bangladesh on
September 6-7, 2014, within
five months of Prime Minister Sheikh Hasina’s visit
to Japan.
Prime Minister Sheikh Hasina meets with Japanese Prime Minister Shinzo Abe
ments are working together to
develop a specially designed
training facility in Dhaka – the
proposed Peace Building Centre. In line with existing initiatives, implemented through
the framework of Japan-Bangladesh-UN tripartite training
cooperation, these efforts in
addition to the Peace Building Centre are focused on
capacity building for personnel deployed on UN missions.
Such policies are in line
with a belief by both prime
ministers that a proactive
contribution to peace is a necessary approach to the resolution of international disputes.
They both underscored the
need for renewed efforts by
Agents of peace
and prosperity
Mr. Abe further reaffirmed
that Japan would remain a
trusted friend and partner
of Bangladesh in promoting
peace, stability, and progress
at a regional and global level.
Currently the two govern-
international actors to resume
the Middle East Peace Process
to ensuring sustainable peace
and security in the region. Mr.
Abe has also lauded Bangladesh’s long-term hosting of
a large numbers of refugees
from Myanmar. Key initiatives for an inclusive agenda
for Sustainable Development
by Bangladesh for both peacemaking and peace building
has been staked and supported by Japan.
Growth of economic ties,
trade and investment
During Prime Minister Sheikh
Hasina’s time in office commercial ties between Bangladesh and Japan have grown
remarkably. Meeting with her
Japanese counterpart, Prime
Minister Sheikh Hasina has
ensured the implementation
of key business-linking strategies generated during the Joint
Bangladesh-Japan Public-Private Economic Dialogue. This
initiative has been critical to
improving economic engagement. During this process Mr.
Abe himself emphasized that
location, competitive incentives, improvement of infrastructure, and labor supply are
critical factors for Special Economic Zones (SEZs).
Emphasizing the importance of expanding overall
bilateral economic relations
including bilateral trade, the
two prime ministers also supported high level events to link
business groups. These include
the prestigious Bangladesh-Japan Business Forum organized
by key stakeholders: the Japan
External Trade Organization
(JETRO), the Board of Investment (BOI) of Bangladesh and
the Federation of Bangladesh
Chamber of Commerce and
Industry (FBCCI).
Japanese
entrepreneurs
and business people have
also shown a keen interest in
investment opportunities in
Bangladesh. Recently Japanese
companies have made important business deals pertaining
to textiles, garments, IT, power
generation and distribution
systems, infrastructure and
communication networks as
well as banking and insurance
operations. The huge interest
of Japanese firms in undertaking business initiatives has
raised the overall value of Japanese investment in Bangladesh
to almost $1 billion.
Considerable progress has
been made so far in the establishment of an SEZ for
Japanese investors in close
proximity to the capital Dhaka. Bilateral trade in 2014
was estimated at $2.1 billion.
Bangladesh’s exports to Japan
amounted to $862 million during this period. In fact Japanbound exports have doubled
since Prime Minister Sheikh
Hasina was elected in 2009.
U.S.-Bangladesh relationship evolves from
one of aid to that of strategic partnership
America’s partnership with Bangladesh is broader, deeper, and stronger than ever
B
angladesh and the
United States continue their deep
and sustained diplomatic engagement. The mutual respect and
close friendship was characterized by President Barack
Obama in 2010: “The people
of Bangladesh earned their independence, and since then,
our two nations have shared
a commitment to democratic
values and created an enduring friendship.”
Indeed, when the Awami
League Government led by
Prime Minister Sheikh Hasina assumed office in 2009,
Congressman Joe Crowley
spearheaded passage of a
resolution expressing the
U.S. House of Representative’s support for Bangladesh’s democracy. “The
Bangladeshi people have
shown remarkable resilience, creativity, and principle. This is exactly the
kind of country the United
States should work with,”
said Mr. Crowley during
the passage of the bill in the
House in 2010.
The same sentiment
was echoed by former U.S.
Secretary of State Hillary
Clinton during her visit to
Bangladesh in May 2012:
“There is a tremendously
positive path for this country – the changes, the economic growth – all of these
Shared values
Another sign of the strength
of the relationship between
the two countries is the
annual dialogue meetings
that have been conducted
by Dhaka and Washington
since 2012. The agreement
setting up the talks, which
was signed by then Bangladesh Foreign Minister
Dipu Moni and her U.S.
counterpart, Secretary of
State Hillary Clinton, states
the existence of “the strong
bonds of friendship and
shared values that exist between our two countries”
and the desire to “deepen
our partnership in addressing bilateral, regional and
global issues to the mutual
are very encouraging. I am
betting on Bangladesh. The
United States wants to be
your partner”.
Trade and commerce
Indeed, relations between
the two countries have
reached new heights during the past few years. Today, the U.S. is Bangladesh’s
largest export destination,
a major source of FDI, the
second largest source of
remittances, and an important development partner.
Despite some challenges, including the suspension and non-renewal of
GSP benefits, the business
and economic partnership
has remained sustainable
and grown at a remarkable pace. The signing
of the Trade and Investment Cooperation Forum
Agreement (TICFA) in
November, 2013, ushered
in a new era of economic
cooperation between the
two countries. The U.S.
State Department praises
Bangladesh for the “significant progress” it has made
“toward a more prosperous
and pluralistic society since
its independence in 1971”.
It has also pointed out that
Bangladesh’s economy has
shown a tremendous resilience to sustain an annual
GDP growth rate of more
than 6% in recent times.
benefit of both Bangladesh
and the United States.” The
agreement further affirms
that, “We believe that a
strong partnership between
Bangladesh and the United
States, working together to
further mutual peace, security, and development, is in
the interests of the people
of Bangladesh, the United
States and the world.”
The fourth BangladeshU. S. Partnership Dialogue
was held in Dhaka in April
this year. It covered topics
ranging from democracy
and governance, trade and
investment, security cooperation, sustainable development, counter-terrorism,
migration, and climate
change. The latter, although
a global issue, is one which
Bangladesh with its low elevation and high frequency
of floods and storms, is particularly vulnerable to.
Peace and security
Another encouraging development is that President Barack Obama invited
Prime Minister Sheikh Hasina to co-host the 2015
Summit on UN PeaceKeeping on the sidelines of
the upcoming UN General
Assembly. Further highlevel engagements between
the two countries to encourage coordination and
cooperation on combating
terrorism and extremism
would do much to mitigate
the problem in South Asia.
Furthermore this would
also help to ensure peace
and stability across the
globe and would certainly
pave the way for a stronger
partnership surrounding
these core interests of both
the countries.
For all of these reasons, it
is evident that Bangladesh
is the partner of choice of
the U.S. in South Asia. Its
progressive
government
has proven that it is open to
collaboration for the benefit of both the American
and Bangladeshi people, for
the stabilization of South
Asia and for international
peace-building.
bangladesh’s leading role in the organiZation of islamic cooperation (OIC)
Since independence, Bangladesh
has strived hard to become an
active and visible member of
the International community.
By 1974, Bangladesh had
become member of the United
Nations and OIC. Father of the
Nation Bangabandhu Sheikh
Mujibur Rahman participated
in the Second Islamic Summit
in 1974 fostering ties within
the 57-member states of the
OIC. Since then, it has been
a driving force in achieving
the organization’s goals of
peace, stability and progress
and transforming the Ummah
into a platform for economic,
religious, social, and cultural and
educational issues. Bangladesh
leadership has acted as a voice
of moderation, constructively
and strongly advocating for
development, progress and rights
of the Muslim peoples around
the world. Bangladesh’s image
of moderation in Islam and
image of a country of religious
harmony is well reflected in
the OIC. Bangladesh has taken
advantage of its leadership role
to remain actively involved in
important issues confronting the
Ummah over the past decades,
including the peace processes
in Palestine and the Middle
East, the Iran-Iraq War, the
Gulf War, Bosnia-Herzegovina
crisis as well as in Southern
Philippines. In recognition
of its pragmatic role, it has
been an important member
on many OIC Committees,
such as Al Quds Committee on
Palestine, OIC Peace Committee
on Southern Philippines and
OIC Contact Group on Rohingya
Minority Muslims. In its
effort to strengthen economic
cooperation among the Muslim
countries, Bangladesh became
a founding member of the
Islamic Development Bank
(IDB), and was also behind
the proposed Islamic Common
Market (ICM) starting with
establishment of free trade
areas at the sub-regional and
regional levels. Bangladesh has
actively supported calls for the
establishment of an autonomous
trade financing entity named
Islamic Trade Financing
Corporation (ITFC).
Bangladesh Social Indicators
Poverty Reduction
Progress in Human Development
Poverty rate will come down to a single digit before 2030.
The slide is expected to be even faster if infrastructure building can be expedited
Bangladesh shows remarkable progress in recent years, outperforming
regional peers in several key social indicators
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1970
1980
1990
2000
2010
2020
2030
Bangladesh 1991
Literacy rate, adult total (% of people ages 15 and above) 35.3% 57.7%
Life expectancy at birth, total (years)
60.5 69.9
Mortality rate, infant (per 1,000 live births) 95.8
33.0
Immunization, DPT (% of children 12-23 mths) 74% 97%
2040
SOURCE: Bangladesh Bank
2013
BANGLADESH
4
Russia to help build
2,000-megawatt nuclear power plant
With strong relations dating back to the war of liberation in 1971, Bangladesh and Russia are seeing a closer and more comprehensive partnership spanning over law and justice, counter terrorism, education, culture, healthcare and medical sciences, agriculture as well as nuclear energy
B
angladesh
has
historically very
strong ties with
Russia. In 1971
the former Soviet
Union stood by the country
in its journey towards independence, later supporting
Bangladesh’s reconstruction
and rehabilitation efforts and
development of its war-damaged economy. Relations are
set to expand rapidly with the
proposed establishment of an
intergovernmental commission for cooperation in the
areas of trade, economic and
scientific and technical issues.
In recent years, the Bangladesh government has decided
to widen and deepen Dhaka’s
engagements with Moscow
in a mutually beneficial manner. In line with this policy,
Prime Minister of Bangladesh
Sheikh Hasina paid an official
visit to the Russian Federation
at the invitation of Russian
President Vladimir Putin in
January 2013.
President Putin and Prime
Minister Sheikh Hasina held
detailed discussions on the
status of existing bilateral relations and prospects of further
cooperation between their
two nations in various fields
and on a number of important regional and international issues. Both sides have
acknowledged the consistent development of political
dialogue between the countries and the considerable
progress achieved in deepening bilateral ties, which
hold significant potential for
further collaboration.
During the visit, a number
of important legal instruments were signed, including
an Inter-Ministerial Memoranda of Understanding in
Russia is also assisting
Bangladesh in building
a 2,000MW power
plant in Rooppur.
The first of its kind
in Bangladesh, it is
considered to be a
milestone in tackling
the increasing power
demand in the
backdrop of a rapidly
growing economy
President Vladimir Putin shakes hands with Prime Minister Sheikh Hasina
ties which were established
with Russian assistance and
in the construction of new
power generation facilities.
Other areas of priority for
cooperation include boosting the inter-parliamentary
mechanisms of cooperation
and more frequent contacts
in the fields of culture and
mass media.
Russia is assisting Bangladesh in building a 2,000MW
power plant in Rooppur. The
first of its kind in Bangladesh,
it is considered to be a milestone in tackling the increasing power demand in the
backdrop of a rapidly grow-
the areas of law and justice,
education, culture, healthcare
and medical sciences and agriculture. An agreement on
creating a Nuclear Energy
Information Center in Dhaka
was also reached.
Inter-governmental agreements on providing state
credit to Bangladesh to finance the preparatory works
of the Rooppur Nuclear Power Plant construction were
also signed. The Russian side
confirmed the intention of its
engineering company Technopromexport to take part
both in the reconstruction of
the power generation facili-
ing economy. Apart from
technical assistance, Russia
is providing a loan of $500
million to offset the total
construction cost of $2 billion. Moreover, Russia’s stateowned energy firm Gazprom
has been awarded contracts
for drilling wells in existing
gas fields in Bangladesh, in
collaboration with the Bangladesh state-owned exploration company, BAPEX.
Both countries are also
enjoying growing trade relations, where the current bilateral trade is worth more
than $700 million, which is
much less than the potential.
Talks to allow Bangladesh
duty-free access to the Russian Federation market look
promising, particularly after
its accession to the World
Trade Organization (WTO)
and in keeping with the commitments made in the WTO
in respect of the LDCs like
Bangladesh.
Furthermore,
Bangladesh is seeking Russia’s assistance in getting duty-free, quota-free access for
its products into the recently
established Russian-led Eurasian Economic Union (other
members include Kazakhstan, Belarus, Armenia and
Kyrgyzstan).
The future: further
cooperation and growth
It is clear that the visit of
has placed the relationship on
a firm footing. The establishment of an intergovernmental commission, co-chaired
by the two respective foreign
ministers, would be the basis
for an expanded relationship
between the two countries.
In addition, a Bangladesh-CIS
Joint Chamber of Commerce
has been created, while agreements for on-arrival visa facilities have also been signed.
Both countries are engaged
in discussions about various
ways of broader economic
engagements, especially engaging the private sectors,
particularly creating more
congenial two-way trade and
investment opportunities including exchange of cultural
delegations.
The robust bilateral relations between Bangladesh
and the Russian Federation
are transforming fast into a
truly comprehensive and cooperative relationship – one
that has already attained great
dimensions and will continue
to grow further in the years
ahead for the mutual benefit
of the people of both nations.
Bangladesh ECONOMIC Indicators
GDP by sector
Growth of Exports and Imports
Exports are outperforming imports in a steady fashion
11,00
10,50
10,00
9,50
9,00
8,50
8,00
7,50
7,00
6,50
6,00
Agriculture (16.3%)
Sector share
(percentage of GDP)
1980
1986
1992
1998
Export (in Log)
2006
Services (54.1%)
2014
Import (in Log)
Industry (29.6%)
GDP Growth %
Growth by Sector %
Bangladesh’s growth trend is the most robust in the region
Parallel growth of all three sectors
8
10
7
8
6
6
5
4
4
2
3
0
2
-2
1995
2000
2005
2010
India
Bangladesh
2015
2019
1981
Sri Lanka
Pakistan
1987
GDP Per Capita Growth
1,179
800
600
400
402
415
449
1,033
480
490
517
580
655
729
808
858
916
200
0
2001
2003
2005
2007
2009
2005
2013
Services
Foreign Direct Investment
Middle-Income Threshold USD 1,101
1,000
1999
Industry
Agriculture
Steady rise in GDP per capita bodes well for future economic growth; GDP per capita has crossed USD 1,100
1,200 GDP per capita (USD)
1993
2012
2014
Million USD
1800
1600
1400
1200
1000
800
600
400
200
0
FY05
FDI is rising though slowing. The FDI-GDP ratio is comparable with neighbors.
Further measures are being taken to attract and facilitate FDI
FY06
FY07
FY08
FY09
FY10
FY11
SOURCE: Bangladesh Bank
FY12
FY13
FY14
BANGLADESH
5
‘If Bangladesh is confident, it will thrive’
United World gathers the opinions of some of Bangladesh’s most important business leaders from across the economic spectrum, from textiles and pharmaceuticals to aviation,
telecoms, and finance. They share their thoughts on the country’s progress, its image in the global media and the vital role the private sector is playing in the country’s development
Salman F. Rahman, Vice
Chairman,
Beximco
Group: Bangladesh’s successes have been absolutely unbelievable. When
we became independent in
1971, we were very much
reliant on food imports.
Since then our population
has more or less doubled
and yet our food grain
production has more than
tripled and today we are
self-sufficient in food. In
fact we recently even exported rice to Sri Lanka.
So this is a tremendous
success, and it is a success
very much driven by the
private sector.
Kyle Haywood, Managing Director and CEO,
Biman Bangladesh Airlines: From my perspective, if I use the cycle of
life reference, I think of
Bangladesh as an energetic teenager. It is relatively young, still shaping
its opinions, capabilities
and goals for the future.
A teenager that is keen to
make their mark on the
world and be a relevant
part of it. Equally, teenagers take good counsel to
understand the parameters
of what is considered good
practice and are willing to
make the effort to learn
and study in order to be
the best that they can be.
Teenagers sometimes face
tough choices but as they
grow, experience and wisdom means that they make
informed decisions. As a
country, Bangladesh feels,
at least to me, like that.
How do you see Bangladesh’s progress towards
regional integration?
Salman F. Rahman: Bangladesh is in a very strategic geographic position
and regional integration is
an absolute necessity. We
are currently in talks with
China regarding a road
The Independent
The Independent
Nasir A. Choudhury,
Managing
Director,
Green Delta Insurance:
Bangladesh is improving
a lot, progressing in every field. I didn’t believe it
about two years ago, when
our Prime Minister said
we were self-sufficient in
food. We were entirely dependent on foreign import
of food. So I have every
hope that we’ll improve.
We are improving a lot;
we used to have to go to
London for business, now
the people in London are
also coming to us. From
my own experience, if you
have confidence in yourself then you’ll achieve
anything. If Bangladesh is
confident it will thrive.
The Independent
Bangladesh has come a
long way since it gained
independence in 1971.
How do you assess the
country’s progress in
the past four decades
and how do you see
its future?
“Bangladesh is in a very
strategic geographic
position... There is
going to be a lot of
opportunity for trade
because both India and
China are very large
economies and we are
at the midpoint between
the two of them”
“A negative message is
a good message for the
media, which turns out
to be very unfortunate
for our business given its
strong dependence on
that. So the media has a
vital role for this country
and for the confidence
buildup of the buyers”
Salman F. Rahman,
Vice Chairman of the Beximco Group
md. Atiqul Islam,
President of BGMEA
link through Myanmar,
and we already have a road
connecting the northeastern part of India through
Bangladesh to the rest of
the subcontinent. There is
going to be a lot of opportunity for trade because
both India and China are
very large economies and
we are at the midpoint between the two of them. We
are at the center, alongside
Myanmar, so we are also
working with them to increase our connectivity.
business where you are
making large profits, the
question might be “what
percent should he get?” We
know for sure that the return on our investment is
pretty comfortable.
“It is our
responsibility
to pay taxes. You
need to remember
that unless the
taxpayer pays the
taxes, nothing
is going to work.
Square Group should
be the role model for
small businesses
and the younger
generation”
tapan chowdhury,
Managing Director of
Square Pharmaceuticals
How is your company
impacting and contributing to the wider development of Bangladesh?
Tapan Chowdhury, Managing Director, Square
Pharmaceuticals:
Well
we have not forgotten
where we are from. The
people of the country give
us their support. We do everything for them; it is our
responsibility to pay taxes.
People are always complaining that the government is doing this thing or
that thing. But you need to
remember that unless the
taxpayer pays the taxes,
nothing is going to work.
Square Group should be
the role model for the
small businesses and the
younger generation. I understand if someone has a
very small business and is
struggling for his survival,
but when you have a good
Nurul Islam, Chairman,
Jamuna Group: Our mission is to contribute in the
process of infrastructural
development and business
growth of Bangladesh; and
our vision is to establish
sustainable and environment-friendly, profitable
business and industrial
platform
development.
During 45 years of operations, Jamuna Group has
established a number of
diversified successful enterprises. Now we have
emerged as one of the largest industrial conglomerates of the region. By
establishing about 24 industries and installations,
we have been massively
contributing in the industrial development of Bangladesh. We have created
employment for thousands
of people of the country;
and we have been earning
millions of dollars for the
country in every year.
Rajeev Sethi, CEO, Grameenphone: I think all of
us agree that the Internet
is a great equalizer. That is
where we feel that we have
a solid role to play. Not
only as a provider of access,
but also in terms of how
our services are delivered,
which is in a manner that is
both efficient and effective.
You know the vision statement of Grameenphone
speaks about impacting
societies and empowering
societies and that is such
a powerful vision. We see
that the Internet plays a
huge role in delivering on
that vision and mission
which we have.
One in three Bangladeshi persons uses our
cell phones every single
day – multiple times. So
the impact that we have in
“The whole private
sector of Bangladesh is
united. Since 2009 our
government has had
the vision that we will
achieve our goal and
we’ll be a middle-income
country by 2021”
Kazi Akramuddin Ahmed,
Chairman of Standard Bank
this country is, as I said,
much larger than any other
player in any industry. We
need to continuously keep
on adding value to people’s
lives, multiple things that
we are doing and thinking
about which make business sense to us, and which
are at the heart of empowering society.
Bangladesh has seen
staggering growth, on
average 6% in the last decade. What would you say
to those people looking
to invest in Bangladesh?
Shayan F. Rahman, Director, Beximco Group:
There are a lot of positives
in Bangladesh at the moment; the indicators are
phenomenal. This is really
the right time for people
to come into Bangladesh
and look at it as a country
where you have a very positive approach to international investment and most
multinational companies
that have come into Bangladesh have done tremendously well.
The economy itself is
growing at a very high rate
and the government institutions are very open to
facilitating and receiving
investments from abroad.
It is an environment where
it is very easy for businesses to grow, especially when
there is foreign investment
coming in. It is also fairly
risk free for your investment. There is so much
potential for growth in
this country so it is really
time to join in the journey
of this country becoming a
lot greater and a lot better
and a lot more progressive
than it is today.
Nurul Islam: We believe
that, for us, our country is
the best place for industrial
development. Bangladesh
has innumerable prospects, probabilities, and
possibilities and the only
thing we need is to utilize
those positive things at
“We are improving a lot;
we used to have to go to
London for business, now
the people in London are
also coming to us. From
my own experience, if
you have confidence
in yourself then you’ll
achieve anything”
Nasir A. Choudhury,
Managing Director of
Green Delta Insurance
the right time, in the right
place, and in the right way.
Unlike some other business groups of Bangladesh,
we invest only in Bangladesh but we focus on penetrating both the local and
international markets.
What is your opinion on
Bangladesh’s international image and its portrayal
in the global media?
Shayan F. Rahman: We
feel that when you look at
Bangladesh internationally
there are a lot of negatives
that come out about Bangladesh. We feel that there
are an immense amount
of positive stories that
need to be told. Our tagline (Taking Bangladesh
to the World) really means
that Beximco wants to be
the company that takes
Bangladesh to the outside world and brings out
all the positives that the
country has to offer.
Md. Atiqul Islam, President, Bangladesh Garment Manufacturers and
Exporters
Association
(BGMEA): The media is
very important. After the
Rana Plaza fire, everybody
is talking about Bangladesh
garments, saying that 80%
of the factories are vulnerable, in the talk shows,
the media… everywhere,
and this message goes all
over the world. But what’s
happened? Both the 2013
Accord (on fire and building safety) and Alliance
(for worker safety, which
was founded by a group of
North American apparel
companies and retailers
and brands) expect the
factories to be controlled.
Each and every factory in
Bangladesh has been inspected by the Accord and
the Alliance.
Yes, they can find in
this room something here,
something there, but nothing that is life-threatening
for the workers. Accord
has implemented zero tol-
erance; as has Alliance.
BGMEA also adopts a zero
tolerance policy. So, the
message is that less than
2% of factories are now
vulnerable. But the media
is not saying these kinds
of positive messages; it is
not a good message for the
media. A negative message
is a good message for the
media, which turns out to
be very unfortunate for our
business given its strong
dependence on that. So
the media has a very prime
and vital role for this country and for the confidence
buildup of the buyers.
Through Vision 2021 the
government has come to
power with a very strong
and coherent development agenda. How do
you see the private sector working to realize
this vision?
Kazi
Akramuddin
Ahmed, Chairman, Standard Bank and former
President, Federation of
Bangladesh Chambers of
Commerce and Industry
(FBCCI): With the private
sector in the driving seat
and handling about 85%
of the country’s business,
the vision will definitely be
implemented by the private
sector. The whole private
sector of Bangladesh is
united. Since 2009 our government has had the vision
that we will achieve our
goal and we’ll be a middleincome country by 2021.
And to get there, to achieve
the goal, we need development in all sectors.
In the last 10 years in
Bangladesh we have been
able to maintain impressive growth of 6%. This has
been due to the joint forces
of the government of Bangladesh and the dynamic
private sector. The 160 million people can produce
and they can consume.
There is a huge market in
Bangladesh. We are calling
for outside investment but
we are requesting and we
are encouraging our local
people to invest also. When
you get investment, your
employment level goes up,
and when employment
goes up, poverty levels will
come down.
“The economy itself
is growing at a
very high rate and
the government
institutions are very
open to facilitating
and receiving
investments from
abroad. It is an
environment where
it is very easy for
businesses to grow,
especially when
there is foreign
investment coming
in. It is also fairly
risk free for your
investment”
Shayan F. rahman,
Director of the Beximco Group
6
BANGLADESH
Acclaimed financial inclusion
policies boost SME growth
The award-winning Governor of Bangladesh Bank, Dr. Artiur Rahman, is credited with implementing socially responsible financing and financial inclusion for millions of the
country’s unbanked population
B
angladesh’s fiscal
policy of combining
sound
economics with
social objectives
has steered the country’s
steady 6% growth rate over
the last decade.
“The economy of Bangladesh has maintained a dynamic growth in the midst of
repeated external shocks like
the East Asian crisis and the
subsequent global financial
crisis,” says Dr. Atiur Rahman, Governor of Bangladesh
Bank (the central bank), who
is credited with implementing
socially responsible financing and financial inclusion for
millions of the country’s unbanked population.
One of the central bank’s
most successful initiatives is
the 10 taka program, where
a bank account can be open
with a deposit of only 10 taka,
or the equivalent of 12 U.S.
cents. Since November 2014,
the number of taka accounts
has climbed to around 15
million, with close to 10
million farmers joining the
banking system.
By emphasizing fiscal stability and financial inclusion,
Bangladesh Bank has been a
potent force in the country’s
economy, pushing lenders to
provide credit and loans to
farmers, small and mediumsized enterprises (SMEs), and
female entrepreneurs.
The rest of the
developing world
is taking notice.
Bangladesh is ahead
of its neighbors in
the financial inclusion
movement, ranking
second in South Asia
in the World Bank’s
global financial
inclusion index
“Our monetary policy
strength is that we do not
put money in the air, as many
western countries have done.
We put money on the ground
so that some seeds are sown
and we get products,” Dr. Rahman explains. “These are policies which can really reach
the under-served. Basically
we are not placing money in
unproductive expenditure or
in something speculative. Instead we are providing money
to agriculture, green textiles,
and SMEs.”
The rest of the developing
world is taking notice. Bangladesh is ahead of its neighbors in the financial inclusion
movement, ranking second
in South Asia in the World
Bank’s global financial inclusion index. And earlier this
year, Dr. Rahman received
kudos from the Financial
Times’ magazine, The Banker, which named him 2015
Central Banker of the Year,
for the Asia-Pacific region.
Policies of inclusion are an
effective means for sustainable
growth and a way to uplift the
“missing middle,” he says. But
commercial lenders are still
wary of extending themselves
to this group fearing difficulty
in loan recoveries. A Bangladeshi bank official noted
last year that the total nonperforming loan (NPL) rate
was 7.9% in the SME sector.
A Financial Stability Report
released earlier this year by the
central bank noted a higher
rate of NPLs was behind a decrease in earnings last year.
Still the sector continues to
experience dynamic growth
and is vital to the economy:
90% of private business is
small enterprise, SMEs employ 25% of the overall workforce, and account for 25% of
the country’s GDP.
Over the last five years
credit and loans reached 2.2
million MSMEs, (micro small
and medium enterprises), of
which close to 110,000 were
led by women and 300,000 by
new entrepreneurs, according
to Dr. Rahman.
“More importantly the
MSME sector has successfully
created employment for more
than 1.5 million people during
the span of the last five years,”
says the governor, who hopes
the Business Finance for the
Poor in Bangladesh Project
(BFP-B), a new financing initiative launched in February
2015, will reach thousands of
budding entrepreneurs, giving them access to financing
and business expertise and
services to nurture and grow
new commercial ventures.
“Even though we have
great success so far, we need
more intervention to support
MSMEs, especially for new
and female entrepreneurs,”
explains Dr. Rahman. “I hope
the BFP-B will play a key role
in nourishing micro and small
enterprises to enhance their
productivity and help put our
economy on a firm footing.”
Outreach in the agricultural sector, which makes up 16%
of the country’s GDP, is also a
consistent part of Bangladesh
Bank’s strategy for sustainable
growth. The bank expanded
its agricultural incentives in
an effort to enhance poverty
reduction and food security.
“With a view
to bringing this
unbanked, under
served segment
into the banking
population, BRAC
bank began providing
small loans to these
entrepreneurs”
Syed Mahbubur rahman,
CEO and Managing Director of
BRAC Bank
‘Central Banker of the Year’ for the Asia-Pacific region, Dr. Atiur Rahman
Banks now provide credit io help MSMEs and farmers to grow their businesses
Support for the agricultural
sector not only helps lessen the
impact of the domestic food
supply volatility, but also helps
the central bank do what it is
supposed to do: control inflation, which has dropped to 7%
from a high of 12% in 2011.
“Our agricultural lending
has resulted in keeping the
price of food within the purchasing capacity of the general public. We want to keep
inflation under control. Price
inflation is the biggest enemy
of the poor,” Dr. Rahman explains. The central bank is
also looking to the government to help keep inflation
in check by holding gas and
electricity prices.
Helping to keep the economy on track is the central
bank’s $25 billion in foreign
currency reserves, which have
grown five fold since 2009
thanks to a 7.5% increase in
remittances and improved export earnings. This in turn is
improving the strength of the
Bangladesh taka.
Bangladesh Bank is taking
the lead in financing a cluster of
green-rated factories. The initiative is especially important to
the country’s enormous textiles
industry, one of the largest in
the world, second only to Chi-
“Our monetary policy
strength is that we do
not put money in the
air, as many western
countries have done.
We put money on the
ground so that some
seeds are sown and
we get products”
Dr. artiur rahman,
Governor of Bangladesh Bank
na. Textile factories in Dhaka
currently consume 300 liters of
water to produce 1 kg of fabric
(the global standard is well below 100 liters per 1 kg of fabric).
In an effort to stimulate green
production, the central bank in
March launched a $500 million
fund aimed at helping factory
owners meet the cost of implementing energy efficient measures that will not only lessen
the impact on the environment
but also improve productivity
and profitability.
“We have already allocated $200 million from
the reserve for small and
long-term green financing,”
says Dr. Rahman. “A Green
Textile factory has been established in Narayanganj by
using money from this fund.
With the support of World
Bank we have also allocated
$300 million for medium and
long-term production in new
and old industries.”
The central bank’s initiatives are serving as a model for
commercial banks operating
in Bangladesh. BRAC Bank
became the first private commercial lender in the country
to offer loans to SMEs in a
structured manner, a challenge that required BRAC to
change some of its fundamental lending protocols.
“(SMEs) did not have any formal accounting information, no
balance sheets, many times, no
bank accounts, no credit history and most of the time no collateral, and their success is vital
to the growth of this nation,”
explains Syed Mahbubur Rahman, CEO and Managing Director of BRAC Bank. “With a
view to bringing this unbanked,
under served segment into the
banking population, BRAC
Bank began providing small
loans to these entrepreneurs.”
According to Mr. Rahman,
over the past 14 years BRAC
has loaned $3 billion to 500,000
customers and participated in
the creation of 2 million jobs,
BRAC like all banks in the
country is looking to improve
and expand services through
innovation and technology. “Innovation is a major focus, and
we have been online since day
one,” says the CEO. “We are on
a mission to take the bank to the
customers’ doors. Customers
should not feel forced to come
to the bank, we want to facilitate
services so that customers can
conduct banking transactions
sitting at home or the office.”
One area of interest to
BRAC is tapping into the
customer base of bKash, the
leading provider of mobile
financial services. BRAC, the
parent company with a 51%
stake, is eyeing bKash’s 17 million customers, of which only
4% have bank accounts. The
bKash system, one of the fastest growing in the world has
aligned itself with micro business by providing a tool for users to send payments quickly.
“Now through bKash we
are trying to bring the informal
economy to the formal financial
economy,” says Mr. Rahman.
Users of bKash are introduced a savings vehicle through
the bKash ‘wallet’, which encourages users to save, allowing
them to earn interest on money
they don’t spend.
The area of mobile banking
is a particular strong growth
opportunity, and the latest instrument that is enabling lowincome earners to send money
securely from their working stations to their loved ones in rural
villages. Phone-based banking is catching on like wildfire
in Bangladesh, reducing time,
travel, and the costs associated
with handling money.
Almost 70% of Bangladeshis
now have cell phones and the
central bank has approved licenses for 28 banks to offer mobile banking services to facilitate growth and improve access
to the under served.
A key economic driver is
the remittances that the country receives from the 8 million
Bangladeshis working abroad.
Around $15 billion in remittances were funneled through
the banks between July 2014
and June 2015. The practice has
given rise to the new NRB Bank
(Non Resident Bank).
“I don’t believe in branch
banking, rather I believe in automation and that is why we
have already launched Internet
banking, started call centers
and launched global credit
cards. We are also working in
e-commerce,” says Muklesur
Rahman, Managing Director of
NRB Bank.
While NRB has embraced
the Central Bank’s program
of inclusion, NRB has its own
unique vision for growing
its business. “We have to go
for financial inclusion, and I
want to go in to rural areas
with mobile banking, we’re
planning to put kiosks in the
small rural areas,” says the
managing director.
The bank also wants to promote investment in Bangladesh through its non-resident
customers.
“Bangladeshis
living abroad have created a
platform, they’re asking their
children and friends to invest
here,” he explains. “People
who have invested here are
making money that will ensure and encourage other
foreign investment.”
The non-resident Bangladeshi market is an important one for Exim Bank also,
which became the first bank
to establish an exchange
house in London to facilitate
money transfers.
Exim, the Export-Import
Bank of Bangladesh, founded
in 1999 as a conventional commercial bank, transformed itself in 2004 into a fully-fledged
Islamic bank, offering services
that appeal to the growing interest in Islamic banking. The
change has made Exim one of
the most profitable banks in the
country, posting double-digit
growth over the last few years.
Sharia compliant banking
mobilizes financial resources
and invests them in Islamic
social and financial objectives,
of which one of the guiding
principles is to help the poor
and destitute.
The bank offers a wide range
of products tailored to Muslim
customers. Interest or usury is
prohibited in Sharia banking,
so products like the Mudaraba
cash account, which offers
profit sharing, are popular with
Islamic clients.
“Bangladeshis living
abroad have created
a platform, they’re
asking their children
and friends to invest
here. People who
have invested here
are making money
that will ensure and
encourage other
foreign investment”
muklesur rahman,
Managing Director of NRB Bank
Also appealing to customers
is the bank’s high earning account created for those over the
age of 55, and the Haj account
to help Muslims fulfill one of
the fundamental pillars of Islam, a pilgrimage to Mecca.
Corporate social responsibility (CSR) is an operating
principle at Exim. Among the
charitable projects it supports,
a scholarship program offering
interest free funds to 300 middle school and scholarships to
3,000 students supporting their
education from grade nine up
to a Masters degree.
“We take care of students
for their entire schooling, not
just one year,” says Exim Managing Director and CEO, Dr.
Mohammed Haider Ali Miah.
“Exim is a CSR-friendly bank
with a range of projects geared
toward social development.”
The bank is looking to raise
capital funds and expand its
services. It recently received
permission from the Bangladesh Securities and Exchange
Commission to establish an Islamic Subordinated Bond.
BANGLADESH
7
Banks aim to build
‘sustainable economic model’
United World speaks with Shah A. Sarwar, Managing Director and CEO of IFIC Bank, to discuss the Vision 2021 plan, financial “connection”, and the adoption of new banking
technologies
United World: IFIC Bank
was established in 1976
as a joint venture between the government
and the private sector.
The private sector always has an alignment
with an aspect of the
government vision, and
the government vision at
the moment is its Vision
2021. Do you believe that
achieving the vision of a
middle-income country
by 2021 is possible?
Shah A. Sarwar, Managing Director and CEO,
IFIC Bank: It is definitely
achievable. To achieve
any goals, you need three
things. Number one: you
need commitment, direction and vision. Number
two: you need sustainable
investments. And number
three; you need some kind
of political and social stability. These are the three
things I find as key factors
to any kind of growth and
vision, and especially successful implementation and
successful carrying forward
of any economic vision.
In terms of Vision 2021
and ensuring that Bangladesh becomes a middleincome country, as a commercial bank, we know
how to finance the citybased people and their
commercial loans, their
corporate loans. However,
now there is a serious policy direction and encouragement to build a bridge
with the common population. We have to connect
with the basic economy.
But how do we connect?
Bankers like us are now
challenged to find the
connection. We are try-
ing to build a sustainable
economic model whereby
not only will the city develop, but also rural areas through rural finance,
women’s finance, for SMEs,
for agricultural finance,
and for microfinance.
The governor of the
Central Bank has really
highlighted this effort to
become more inclusive,
which as you said means
better connection. How
do you see IFIC Bank
connecting better with
these isolated areas
and peoples?
We have embarked on
getting the most state-ofthe-art technology, and
we have hired KPMG to
review all of our processes
and systems. Now when we
talk about better connections, we have 120 branches, and as soon as this
technology platform takes
off, which is due in June
and July, we will try and
expand to 400 locations,
brick and mortar, so we
will be able to cover the entire country. So those will
be the hubs, and around
it we will create spokes as
intermediaries who will
scout for those borrowers and bring them to the
bank. Then we will deliver
the entire product through
mobile banking to them.
We are also building a
robust risk management
system where we can
monitor and manage both
our product-based portfolio and individual based
product portfolio.
Remittances are one
of the key drivers for
Bangladesh’s economy.
How is IFIC Bank positioning itself to receive
these remittances?
Remittances are vital to
our economy. We have to
really find a way of facilitating those remittances
so we may deploy them
to the rural areas. So we
are trying to receive the
remittances then distribute them through our
mobile banking.
The banking sector is
getting more and more
competitive, the newest fourth generation
banks are moving into
the cities and taking
some of the market
share of the older and
bigger private commercial banks. Are you finding that there are areas
that are overbanked?
If you were to say that
Bangladesh is an overbanked country, I would
not agree. At this time we
have over 56 banks, but
in terms of coverage, it is
not very high. The trouble
is that these 56 banks are
only geared to 48% of the
economy. So as a bank, to
survive in the future, we
have to connect. So that’s
a point of differentiation
over here, we’re building
long term sustainability for
this organization.
You’ve touched on and
emphasized the need for
change and evolution
and being able to adapt.
In the region there are
many opportunities for
strategic
expansion,
where do you see yourself regionally, looking
beyond Bangladesh?
Shah A. Sarwar, Managing Director and CEO of IFIC Bank
That’s a very interesting question; markets in
the region are certainly
opening up. I can tell you
especially some of the Indian banks have done a
very good job in their own
country in terms of technology, in terms of professionalism, so much so that
some of the conventional
multinational banks could
not compete with them. So
we definitely have that in
mind, therefore, you might
observe that we have taken
the best possible technological platform, we have
hired the best possible
process group to review
our processes, so definitely
we are going to build that
capability constantly, not
just to grow within but to
grow outside.
As a listed company
what is your strategy to
continue to return value
to shareholders, whilst
also maintaining a sustainable business model?
I was trained more as a risk
manager so I really want
to stick to the fundamentals. We do not want to
get into any kind of loans
for the sake of profit when
many become sour three
or four years down the
line. We want to stick to
the fundamentals and basics of banking where you
do business for long-term,
not for today. So for the
stock market, I have only
one message, that we will
grow sustainably.
You are a very well respected figure, particu-
larly in the financial
community. To those
young aspirational Bangladeshis, what would
your advice be to them?
This is a very tricky question. I have two daughters
and one thing I avoid in my
life is advising them, and
that keeps us in peace. I
can share my own life experience. Throughout my life
I tried to stick to the fundamentals. Whenever things
were brought to my table,
I tried to maintain a serious hardworking attitude.
You try to be true to yourself, you must be a person
with integrity. The things
you do, the actions you do,
the relationships you have.
Those must be based on
some kind of honest dignity and integrity.
Penetration rate of 1% leaves
plenty of room for growth
As a leader, Green Delta has set the standard and continues to be innovative, earning
not just its number one ranking in the country but a foothold in the international market.
T
here was a time
when all things
insurance had
to be handled in
Karachi, Pakistan, but since Bangladesh’s
independence the insurance
industry has transformed into
a vibrant, competitive industry with strong participation
from the private sector.
Following independence,
the insurance industry was
nationalized and a handful of state-owned companies handled the insurance
needs of an entire country.
When the government began allowing private companies to compete, one man
with a pioneering spirit, and
a vision, was well-prepared
to make the leap.
With $250,000 that he had
cobbled together from friends,
Nasir Choudhury started the
Green Delta Insurance Company, the first and what would
become the largest private insurer in the country.
As a leader, Green Delta
has set the standard and continues to be innovative, earning not just its number one
ranking in the country but a
foothold in the international
market. One of its notable
achievements in 2013 was attracting investment from the
International Finance Corporation (IFC), a subsidiary
of the World Bank Group,
which purchased a 10% stake
in the company, the first foreign investment in a South
Asian insurance company.
It was a sound vote of confidence that Mr. Choudhury
nearly turned down.
“IFC World Bank approached us,” he says. “I said
we already have sufficient
capital. But they were pursuing me, so I said we would
discuss it.” After a while,
Mr. Choudhury accepted
their offer. Their stake in the
Nasir A. Choudhury receives a Lifetime Achievement Award at the 18th Asia
Insurance Industry Awards in November
company fell from 10% to
8% because of dividends the
company pays.
Green Delta declared a 10%
stock dividend and 15% cash
dividend to its shareholders
for the year 2014, a performance it has maintained fairly
consistently over the last five
years. It continues to hold
its dominant position in the
market with a 12.91% share in
2014, up from 11.9% in 2013.
Despite paying out the largest claim in its history, settling
a fire-related claim for a tobacco company, Green Delta
recorded 4.46% growth in net
profit after taxes in 2014, a
reflection of its high solvency
and liquidity.
With a mere 1% penetration rate, the Bangladesh insurance market offers plenty
of room for growth. Green
Delta continues to mine its
potential by offering innovative products tailored to the
needs of Bangladeshis.
In June 2015 Green Delta
announced an agreement
with IDLC Finance Limited
to offer “Nibedita”, a new
comprehensive insurance
specifically tailored for female entrepreneurs.
“This product is actually
a reflection of the times. We
launched this product to
safeguard their future as they
have multiple challenges to
overcome while doing business,” says Mr. Choudhury
In May of 2014, Green Delta began to offer health coverage to women; it was the first
product in the non-life insurance category to focus exclusively on women.
Green Delta also launched
“Shudin” last year, a health
insurance program to cover
workers in the RMG (Ready
Made Garments) sector, of
which the majority of workers are women. The company
is actively working with labor
organizations to develop a
policy that is truly effective
for the target segment.
“What we also really value
is the fact that we are proactive in our approach to assess a potential account and
share our findings with our
clients so that they can not
only optimize the premium
but also take precautionary
steps towards preventing
possible hazards,” explains
Mr. Choudhury. “This to me
is truly furthering the interests of the customer and the
cause of insurance rather
than only focusing on increasing our collections.”
8
BANGLADESH
Exports predicted to reach $70bn by 2021
on the back of rapid industrial development
Governmental industrial policy has identified several industrial sectors for augmenting rapid industrial growth and economic development, such as the ready-made garment, pharmaceutical,
leather, shipbuilding, jute, furniture, and the ceramic industries, while five special economic zones will be set up under the Bangladesh Economic Zones Development Fund
S
peaking about Bangladesh in 1972,
Henry Kissinger
predicted that
the country was
doomed to become a “basket case”. However, looking at the country in 2015,
this statement could not
be further from the truth.
Strong progress towards
the United Nations Millennium Goals and massive improvements in the
living standards of millions of Bangladeshis have
been made possible by
unprecedented
advances in national economic
policy, most specifically
in certain technologically
innovative and sustainable sectors such as textiles, which now produces
high-quality goods.
These adjectives, which
it would have been unthinkable to associate with
Bangladeshi industries in
the past, now accurately
describe an economy that,
over the past 40 years, has
grown massively, and is
The prime objective of
this industrial policy
is to ensure that there
is a 40% contribution
of the industrial sector
to the country’s
national income and
25% employment
generation
predicted to grow even
faster in the coming years.
Key to the economic development of Bangladesh’s
industrial sector is a policy
known as ‘Vision 2021’, a
road which – according to
Minister of Industries Amir
Hossain Amu – will lead to
Bangladesh emerging as a
“modern, industrialized and
middle-income country by
the year 2021 and a developed country by 2041”.
The prime objective of
this industrial policy is to
ensure that there is a 40%
contribution of the industrial sector to the country’s
national income and 25%
employment generation, as
well as boosting investment
in infrastructure from the
current 2% to 6% of GDP
by 2021. The government
is sincerely working alongside numerous stakeholders on both a local, national,
and international level to
ensure the necessary economic stimulus packages,
infrastructure facilities, and
policy support for achieving this objective, and the
results are already apparent.
Exports, which at the
time of Kissinger’s remark
(1972-1973), were a mere
$300 million, this year stand
at $33.2 billion, an increase
of more than 1,000-fold.
Government estimates put
the figure at $70 billion by
2021, according to the Minister of Commerce Tofail
Ahmed – which will make
Bangladesh one of the fastest growing economies in
the world.
In terms of specific industries,
governmental
industrial policy has identified a total of 32 thrust
sectors and 31 industrial
service sectors for aug-
menting rapid industrial
growth and economic development, and five special economic zones will
be set up under the Bangladesh Economic Zones
Development Fund. Key to
these developments are the
ready-made garment, pharmaceutical, leather, shipbuilding, jute, furniture,
and the ceramic industries.
Pharmaceuticals typify the
cutting-edge technological
focus and high quality now
associated with Bangladeshi
manufacturing. Mr. Ahmed
explains, “Our number one
priority is the pharmaceutical industry. If you look at the
industry, at companies like
Square Group and Beximco
Group, which are fantastic
and modern, you will be truly
impressed by Bangladesh’s
achievements. We export
pharmaceuticals to 95 countries all over the world.”
Another sector which exemplifies Bangladesh’s industrial development is the
ready-made garment industry. The country has a repu-
tation for low-cost textiles
produced in huge factories.
However, ready-made garments – with the assistance
of numerous technological
innovations – are not only
increasing in quantity, but
also in quality. This increase
in quality has led to an explosion in ready-made garments exports, which are
predicted to reach $50 billion by 2021.
Ultimately, as Mr. Hossain Amu says, the drive of
the present government is
to “build a knowledge-based
society through hi-tech and
sustainable green industrialization and digitalization”.
And it is a goal that the
country is well on its way
to achieving. A key factor in
this vibrant transformation
is the reform of the manufacturing industry. Manufacturing in Bangladesh
no longer stands for cheap
labor or low quality; the
“Made in Bangladesh” brand
is now founded in compliance, improved safety, and
high-tech innovation.
“Our number
one priority is the
pharmaceutical
industry. If you look
at the industry,
at companies like
Square Group and
Beximco Group,
which are fantastic
and modern, you will
be truly impressed
by Bangladesh’s
achievements”
Tofail Ahmed,
Minister of Commerce
Pharmaceutical sector enjoys
double-digit growth since 2009
With the rising cost of healthcare in the West creating an incentive to source cheaper quality drugs, Bangladesh is poised to become a major player in the global market as
local manufacturers clear international regulatory hurdles to expand their export capacity
T
he jewel in
Bang l a d e s h’s
economy is its
pharmaceutical
industry, a sector helping to drive the country’s steady growth by generating more than $1 billion in
sales and producing enough
medicine to meet nearly all of
its needs.
The sector has enjoyed
double-digit growth annually
since 2009, and is poised to
become a major player in the
global market as local manufacturers clear international
regulatory hurdles to expand
their export capacity.
About 260 companies produce thousands of drugs and
supplements for the domestic
market, valued at approximately $1.3 billion. Products
range from common over the
counter drugs, like aspirin, to
high-tech inhalers, infusers,
and injectables.
“We produce 99% of our domestic requirements and now
we are exporting,” says Salman
F. Rahman, Vice Chairman of
the Beximco Group, one of
the country’s leading producers of pharmaceuticals.
Exports have expanded
since the 1980s when just a
few manufacturers were exporting to a handful of countries in the developing world.
Now Bangladesh’s pharmaceutical companies export
to more than 52 countries
worldwide, including Europe
and Australia.
Exports still represent only
about 5% of production or
about $48 million, but that
is expected to change. Bangladesh is arguably the most
inexpensive source of quality medicine. A generic drug
manufactured in Bangladesh,
for instance, costs one-tenth
the price of the same drug produced in the West and is 20%
cheaper than one produced in
neighboring India.
The rising cost of healthcare has created an incentive to source cheaper quality
drugs. Bangladesh is only too
eager to answer that need.
Most of the export growth
has been concentrated in low
and middle-income countries,
such as Myanmar, Afghanistan,
and Nepal but in recent years
several manufacturers have
proved their competitiveness
by gaining accreditations from
Today Bangladesh’s
pharmaceutical
companies
export to more
than 52 countries
worldwide, including
Europe and Australia
regulatory agencies in the UK
and Australia and now some
manufacturers have set their
sights on the U.S. drug market,
the largest in the world.
Square Pharmaceuticals,
the leading drug maker in
Bangladesh with nearly 20%
of the market, won approval
from the Food and Drug Administration this year for its
Dhaka unit to begin exports
of solid dosage form drugs to
the United States.
Founded in 1958 by Samson H. Chowdhury along with
three of his friends, Square
converted to a limited public
company in 1991, and issued
its first offering of public shares
in 1994. The pharmaceutical
segment remains the flagship
division of Square Group,
which also includes toiletries
and health services.
Mr. Chowdhury remained
active in the company until
his death at the age of 85 in
2012. His influence continues with the ascension of
his sons to company leadership positions, and they have
taken pains to continue their
father’s legacy of business
ethics and patriotism.
“We value discipline, honesty, ethical standards, it is also
important to be nationalistic.
This is the country that has
brought us up, that has given
us so much, so we should be
loyal to the country,” says Anjan Chowdhury, Managing
Director of Square Toiletries.
“Anything we do has to be
quality; it has to be something
good for the country, good for
the people. My father always
thought that a happy family is
very important.”
At Square, “family” includes
the 35,000 employees that the
company employs. “You will
never hear me say “good employees,” says Mr. A. Chowdhury, who prefers to refer to his
employees as colleagues. “We
are one nation, one people of
Bangladesh,” he affirms.
His nationalism is more than
just rhetoric; he was a freedom
fighter during the country’s
war for independence from
Pakistan in 1971. “[We have]
loyalty to the nation and want
to empower others. We have a
huge number of unemployed
in this country and to bring
them up in society we have
to create employment,” he
says. “We are here to stay; our
commitment is to this nation,
nowhere else. We were invited
many times to open factories
abroad; my father always said,
“not now” because we have a
responsibility to our people,
we have the opportunity to do
good here.”
Doing good for Square
means creating jobs and paying its share of taxes. In the
United States griping about
taxes is a common theme, but
the leadership at Square embraces its tax contribution, one
of the highest in the country.
Anjan’s brother Tapan Chowdhury is the Managing Director of Square Pharmaceuticals
and once served as the government’s only business advisor
during Bangladesh’s transition
to independence.
“You need to remember that
unless companies pay taxes,
nothing is going to work,” says
Mr. T. Chowdhury. “We have
been depending on foreign
aid and foreign assistance for
years. I think it’s high time that
we start relying on ourselves.
Square Group should be a role
model for small businesses and
the younger generation.”
In his unique role as a member of the government’s transition team, Mr. T. Chowdhury
learned first hand the consequences of tax evasion. He was
responsible for overseeing the
energy industry, which was
experiencing a supply crisis
in electricity and natural gas.
A closer look at the problem
revealed that many industries
were simply not paying their
bills. “I was shocked, as it was
a huge amount of money. So
we went after them, of course
I did not make friends, but in a
month more than 100 million
(BDT) was collected,” says Mr.
T. Chowdhury. “If you don’t
pay taxes how do you expect
the government to run?”
The Chowdhurys express
the same passion for business
innovation that they have for
their country. “If you stop innovating, your competition
runs over you” is a quote that
appears under their father’s
picture, and reminds the duo
of one of the hallmarks that
helped make their company
such a success.
Square was the first to initiate exports to the African and
Australian markets, and in the
process attracted the brightest
scientific minds in the country.
Now with their sights focused
on the more than $400 billionSquare Pharmaceuticals,
one of the leading
drug makers in
Bangladesh, won
approval from the
Food and Drug
Administration this year
for its Dhaka unit to
begin exports of solid
dosage form drugs to
the United States
a-year North American market, innovation continues to be
a cornerstone of their strategy.
“We have a great domestic
market here, but certainly the
door will be open to North
America,” says Mr. T. Chowdhury. “It is crucial we position
ourselves strategically with
the selection of the products.
We’re really excited about it.”
As an LDC, (Least Developed Country) Bangladesh
enjoys greater flexibility under TRIPS (Trade Related Aspects of Intellectual Property
Rights), an international agreement governing intellectual
property rights. TRIPS provides a 20-year patent protection for drugs, but LDCs enjoy
a waiver until 2016. That is,
Bangladesh drug makers can
manufacture patented drugs
domestically and to a limited
extent export without paying
royalties until 2016. Therefore
a Bangladeshi company could
offer a much lower priced export drug than India or China
or any other country where
patent rights are implemented.
Depending on the country,
that waiver could be extended
for another 10 years. However,
Bangladesh has not yet been
able to beat the prices of drugs
offered by India or China, because it still imports 95% of
the raw materials needed for
finished medicine. These raw
materials referred to as APIs
(active pharmaceutical ingredients) are usually imported at
a premium. In order for Bangladesh to remain competitive in exports, it must begin
manufacturing its own supply
of APIs. Bangladesh’s government is collaborating with
industry to address this challenge. A 200-acre API park,
at Bausia, about 40 kilometers
from Dhaka, is being developed to support production.
Joining forces to build the
API Park isn’t the only initiative the government has taken to secure medicine for its
people. Bangladesh has been
very pro-active even creating
its own manufacturer to secure a steady supply of medicine for its state-operated
clinics and hospitals.
Essential Drugs Company
Limited (EDCL) plays a unique
role in the market place. Fully
state owned, it first began
functioning as a procurement
agency under the authority
of the Ministry of Health and
Family Welfare.
“Initially we bought medicines from private companies
and distributed them to our
citizens free of cost,” says Pro-
In order for Bangladesh
to remain competitive
in exports, it must
begin manufacturing
its own supply of
active pharmaceutical
ingredients (APIs).
Bangladesh’s
government is
collaborating with
industry to address
this challenge
fessor Ehsanul Kabir, Managing Director and CEO of
EDCL. “This was very costly
for the government and private companies could not ensure a regular supply. So the
idea was why not build a pharmaceutical company?”
The plan then became one
in which the government
would purchase the drugs
from its own pharmaceutical
company to minimize costs.
Despite its emphasis on
public policy versus profits,
profit margins were significant
enough to allow the company
to expand and build its own
factory in which it produces a
range of essential drugs. EDCL
not only produces medicines, it also distributes them
throughout the country including its most remote areas.
The drug maker continues
to focus on public health initiatives; therefore it centers
on products aimed at addressing public health concerns.
Among the most challenging
issues facing the country is
birth control. Bangladesh has
a population of 160 million
people and remains one of the
most densely populated countries in the world. EDCL plays
a vital role in providing free
contraception to its citizens.
One of its factories is dedicated to producing condoms,
and another factory capitalizes
on the country’s abundance of
rubber trees, to produce the latex needed for condoms. Plans
are also underway to build a
facility that will produce hormone pills and intravenous infusions for contraception.
While serving its citizens is
the primary objective, profits
don’t hurt the mission, says
Mr. Kabir, who points out
that every decision takes into
account the interest of the
people. “Profit is important in
order to expand our company
without the need to get a loan
or more money from the government. We want to ensure
that every citizen no matter
where they live has access
to quality medicine free of
charge. That is our business.”
BANGLADESH
9
Diversified conglomerate
aims to take Bangladesh to the world
Like Bangladesh itself, the growth of the Beximco Group has been rapid and unprecedented. With a presence in more than 45 countries, the company is charged with being
one of the country’s most important ambassadors internationally
F
ounded in the
1970s by two brothers, Ahmed Sohail
Fasiur Rahman and
Salman
Fazlur
Rahman, Beximco Group is
the largest employer in the
private sector in Bangladesh.
Employing over 48,000 people worldwide, it has evolved
from a modest commodities
trading company to a heavily diversified conglomerate
with operations in sectors as
diverse as textiles, real estate
development, media, ceramics, pharmaceuticals, and
energy. The company operates both domestically and
internationally, and combined, the industries it works
in account for nearly 75% of
Bangladesh’s GDP.
The country produces
99% of its domestic health
requirements, in addition to
now stepping up its exports.
Reflecting the growth of the
sector and indeed the nation, the expansion of the
Beximco Group has also
been rapid and unprecedented. It is now the largest
exporter of pharmaceuticals in the nation, and has
a global presence in more
than 45 countries.
In addition to manufacturing and selling generic
pharmaceutical
formulation products, active pharmaceutical
ingredients
(API), and intravenous
fluids, it began exporting
to the EU market in 2013,
where its ophthalmic products are especially notable.
Latanoprost and Timol are
two drugs used to reduce
the pressure inside the eye
for people with open-angle
glaucoma or intraocular hypertension, and are already
available in Germany, Austria, and other parts of the
EU. The Beximco Group’s
budget-friendly generic alternatives have been a welcome addition to governments seeking to reduce
healthcare costs without
compromising on quality.
FDA approval
Beximco Pharmaceuticals
and its facilities are already
also accredited for export
by the regulatory authorities of Australia, Canada,
Taiwan, and Brazil, and as
of June 2015, the company
can boast of having tapped
into another major international market. Following the successful inspection of its oral solid dosage
facility in its production
center at Tongi, the Beximco Group became the
first Bangladeshi company
to be approved by the U.S.
Food and Drug Administration. This achievement will
pave the way for the export
of medicines to the U.S.
market, which is famous
for its exacting standards
and regulations.
Among the drugs Beximco Pharma will export are
its generic version of the
wonder drug, Sofosbuvir,
which is made by Gilead
Sciences Inc. and known
for its effectiveness at
treating hepatitis C (it has a
90% cure rate), as well as its
hefty price tag. The Beximco Pharma version – which
is prescription only – costs
nearly half the price per
tablet, making it the cheapest treatment for hepatitis
C in the world. For an idea
of the market potential of
this drug, it is worth noting that an estimated 170185 million people around
the globe are chronically
infected with the hepatitis
C virus.
According to Salman F.
Rahman, the Vice Chairman of the Beximco Group
and one of its co-founders,
the company’s decision to
move into the pharmaceutical manufacturing business
was its first major milestone,
although in retrospect, this
move aligns perfectly with
the company’s mantra of
‘Taking Bangladesh to the
World.’ He explains that
previously, the company’s
With demand for
electricity rising
rapidly, the Beximco
Group Power
Company is building
a 540MW state-of-theart coal-fired power
plant that will be the
first commercial power
plant in the country
and will pave the way
for using imported
coal for power
generation
technology and environmentally friendly design, it
will pave the way for using
imported coal for power
generation in Bangladesh.
The right time
for investors is now
More broadly speaking, in
terms of balance sheets,
Bangladesh has not been
a disappointment. The
country’s economy has
grown by an average of
6% over the past decade,
and government institutions remain very open to
receiving and facilitating
investments from abroad.
“This is really the right
time for people to come
into Bangladesh and look
at it as a country where
you have a very positive
approach to international
investment,” says Shayan
F. Rahman. “Most multinational companies that have
come into Bangladesh have
done tremendously well.”
“This is really the right
time for people to
come into Bangladesh
and look at it as
a country where
you have a very
positive approach
to international
investment”
Shayan f. rahman,
Director of the Beximco Group
motto was ‘Diversity is Our
Strength’. While this is certainly an idea that continues to ring true through the
highly diversified portfolio
of industries that the Beximco Group is present in, it
is clear that the company is
developing an increasingly
global agenda.
Bangladesh’s ambassador abroad
“My brother and I started
the Beximco Group, but
now we have a family of
65,000 people,” says Mr.
Rahman. Although he asserts that the company’s
success is the product of
everyone’s contributions
and reports that he feels
proud and satisfied by what
the company has achieved,
he admits that one large
challenge remains: “Before
we can sell our company,
we have to sell Bangladesh,”
he says.
Salman F. Rahman’s son
and Director of the Beximco Group, Shayan F. Rahman, echoes his sentiments.
“We feel that when you look
at Bangladesh from abroad,
there are a lot of negatives
that surface,” he says. “Our
tagline means that the Beximco Group really wants to
be the company that takes
Bangladesh to the outside
world and brings out all the
positives that the country
has to offer. There are positive stories to be told.”
The Beximco Group’s
success at taking its brand
abroad is certainly one
positive story that bodes
well for other Bangladeshi
brands eyeing mature international markets, which
would be well-served to
consider, as Shayan F. Rahman suggests, many of the
“positives” that Bangladesh
has to offer.
Geographically, Bangladesh’s enviable location at
the midpoint between India
and China favorably positions it to become the heart
of future trade in the region.
Energy developments
Well aware that developing
power infrastructure will
be a key component in supporting Bangladesh’s future
growth potential, the Beximco Group has also ventured into the energy sector
through the formation of
two companies – Beximco
Group Petroleum Limited
and Beximco Group Power
Company Limited.
Established in 2009, the
former is committed to ensuring Bangladesh’s energy
security by locally processing fuels. It is currently exploring opportunities to
play a crucial role in liquid
fuel supply, and has acquired the land and equipment necessary to bring the
petroleum business in Bangladesh to a new level.
In parallel, with demand
for electricity rising rapidly,
the Beximco Group Power
Company is on the path
to establishing a 540MW
coal-fired power plant that
will be the first commercial
power plant in the country.
Built with state-of-the-art
Added value in garments
As for the Beximco Group
itself, it is clear that its
nimble response to market
changes and its enterprising can-do spirit are the
catalysts of its continued
success. As explained by
Salman F. Rahman, when
the company‘s management first moved into the
garment
manufacturing
industry, they quickly realized that the value in garments was extremely low
because the entire manufacturing process relied on
imports – everything from
fabric to buttons, thread,
and even packaging had to
be imported.
It was a very popular
space that many companies decided to move into,
but essentially, the only
contributions they could
make involved cutting material and sewing or assembling it, which represented
a very low value addition,
since it was basically only
labor cost. It was then that
the Beximco Group decided to make a start on a
backward linkage. They set
up a modern yarn spinning
unit, and then branched
out into weaving and fabric
manufacturing before setting up an entire vertically
integrated textile operation that freed them from
an otherwise debilitating
reliance on imports.
Other companies in the
sector began to follow
suit, and today, the value
addition has increased to
between 50%-60%, since
everything can be produced in Bangladesh, including fabrics, buttons,
and all the accessory bells
and whistles. The country
still relies on the occasional import of material,
but Shayan F. Rahman says
they are more or less selfsufficient when it comes
to denim and yarn – two
staples of the industry.
As for the Beximco
Group itself, it is
clear that its nimble
response to market
changes and
enterprising, can-do
spirit are the catalysts
of its success
Taking Bangladesh
to the world
In addition to using these
materials to make clothing, the Beximco Group
also supplies yarn to the
world’s premier carpet and
rug manufacturers in Europe and the United States.
It also produces twine,
which it exports to manufacturers of tatami mats and
other floor coverings used
in gardening and for household purposes.
To date, the Beximco
Group has also partnered
with some of the world’s
most prestigious design institutes to develop the inhouse design capabilities
of its textiles division. Collaborating with the Fashion
Institute of Technology,
Parsons, and the London
School of Fashion, it has
tapped a pool of talented
designers and has served
the likes of fashion giants
such as American Eagle,
Calvin Klein, H&M, Macy’s,
and Zara.
Beximco became
the first Bangladeshi
company to be
approved by the
U.S. Food and Drug
Administration. This
achievement will
pave the way for the
export of medicines
to the U.S. market
Operating under its own
label, Yellow, the Beximco
Group also sells clothes
through its proprietary
outlets. Aimed at younger audiences, Yellow is a
design-driven brand that
aims to “celebrate creative
and original thinking to
highlight a lighthearted
and optimistic view of life
through a superior quality product,” according
its website. It captures a
modern interpretation of
relaxed, comfortable fashion that stems from the
Beximco Group’s pioneering legacy and openness
to discovery.
Pioneering
corporate culture
Another factor that has
contributed to the success
of the Beximco Group is its
unique corporate culture.
While it is especially common in Bangladesh to reserve important positions
of family-run businesses
for relatives, Salman F. Rahman explains that he and
his brother relied heavily
on professionals when expanding their business, and
were among the first com-
panies to delegate positions
of authority to non-family
members. “You cannot control everything within the
family, because after time
this will limit your growth,”
he explains. “If you want to
really grow, you have to depend on professionals, and
that is what we did.”
The Vice Chairman is
particularly proud of the
results of a recent survey,
which revealed that more
than 50% of the hardware
and software companies
currently operating in Bangladesh are run by chief
executives and other exemployees of the Beximco
Group. Likewise, approximately 40% of the managing
directors of all the banks
in Bangladesh also passed
through the Beximco Group
pipeline. “We have created
entrepreneurs that have left
us and then succeeded on
their own,” he says proudly,
hinting at another key characteristic that differentiates
the Beximco Group from its
business peers: not fearing
the competition.
The pillar behind the
Beximco Group’s relentless
innovation and proliferation into radically different
industries is the unwavering
belief that the more competition there is, the more productive the Beximco Group
must be as a company. It is
this philosophy that drives
the company forward and
keeps the management optimistic. Instead of viewing former employees who
venture out on their own
as turncoats or traitors,
Salman F. Rahman sees this
as a sign that the country
is moving ahead, and that
people want to take risks
and bring greatness to the
country for which they have
fought so hard. Ultimately,
he also sees it as proof that
even beyond Bangladeshi
borders, local companies
will begin to have an impact.
Once again ahead of the
curve, the Beximco Group
already has plans to move
some of its manufacturing
units outside of Bangladesh and more aggressively
market its products in the
foreign countries where
it begins to manufacture.
Nonetheless, true to their
ethos, the brothers hope
they are not the only Bangladeshi company exploring
new frontiers.
“In Bangladesh we were
told that we would never
succeed and that our entire
country was a basket case,”
says Salman F. Rahman. “Although there still remain
many challenges to our success, we know that you cannot succeed only on your
own – you have to have others succeeding with you.”
He emphasizes that success also needs to be collective success – it cannot be
individual, because when
only individuals succeed, a
country has not succeeded.
In order for the latter to
happen, you need hundreds
of companies like the Beximco Group to constitute
success for Bangladesh – a
reality which Salman F.
Rahman hints is closer than
one might expect.
“My biggest satisfaction is
that we have set an example
and now we have so many
companies following us,”
he says. “Today, I firmly believe that the private sector
in Bangladesh is vibrant and
confident, and that we have
a lot to give.”
10
BANGLADESH
Garment makers realign ‘Made in Bangladesh’
brand with quality, care, and worker safety
The Independent
The 2013 Rana Plaza tragedy, in which more than 1,000 people lost their lives, put Bangladesh’s textiles industry in the global spotlight for all the wrong reasons. As the country’s top garment
manufacturers target $50 billion worth of exports by 2021, they argue that such abhorrent breaches in workplace safety compliance are the exception and not the norm
F
ollowing the first
Dhaka Apparel
Summit in December 2014, Bangladesh has set a
goal to reach $50 billion
worth of ready-made garment (RMG) exports by the
time of its 50th anniversary
of independence in 2021.
“Proudly Made in Bangladesh” is the unifying theme
behind this goal, which ambitious industry leaders believe can be achieved with
the right amount of resolve
and responsibility.
At present, ready-made
exports represent 78% of
the country’s export earnings and 10% of GDP. The
sector employs young, urbanized workers, and with
over 30 years of history, it is
developed to a point where
key decision makers have
a solid sense of the industry’s potential, though large
looming challenges must
still be considered.
First and foremost is the
lack of sufficient access to
electricity or gas, according to S. M. Emdadul Islam,
Director of the Babylon
Group, a garment production conglomerate that
currently employs nearly
12,000 people. While many
factories operate almost
exclusively in the daylight
to minimize energy requirements, this energy
deficiency puts them at a
competitive disadvantage.
Beyond these shortages,
Mr. Islam also adds that
compliance tragedies such
as Rana Plaza – a factory
collapse that resulted in a
death toll of more than 1,000
people – have tarnished the
“Made in Bangladesh” label.
“Bangladesh was a
producer for basic
stuff, but now we are
working with brands
like Puma and
G-Star. I am amazed
by the things we do
in our factory”
Mohammed Abdul Jabbar,
Managing Director of the
DBL Group
When the very real possibility of political instability
is added to this equation,
things become even more
complicated, though Mr.
Islam believes that with the
right approach, “$50 billion
is absolutely reachable.”
Recently, the Bangladesh
Garment
Manufacturers
and Exporters Association (BGMEA) held up the
Babylon Group as an example of a company with
an exceptional reputation
regarding its compliance in
health and safety. For Mr.
Islam, who believes that the
workers and the employees
are the core strength of his
business, this was a very
satisfying way to be recognized. “From the very start
of our business in 1986, we
have been focused on taking care of our people,” he
says. “I can now say wages
are enough to ensure workers can provide three square
meals a day and provide for
a small family.”
After nearly 30 years in
the business, one of Mr. Islam’s greatest accomplishments is having helped to
move the Babylon Group up
the value chain to the extent
that it is now supplying top
brands. He stresses that this
requires an entirely new level of commitment to compliance issues because top
class buyers are generally
more concerned that their
products be made under humane conditions, though he
is quick to admit that not all
of these companies follow
through on their good intentions. Often, buyers ask
manufacturers to invest in
terms of worker welfare and
safety, but are not willing to
compensate the factories in
a way that will allow them to
invest accordingly. “This is a
very unfortunate part of our
business here,” says Mr. Islam. “I still have my doubts
about whether most of the
big companies and apparel
buyers have ever thought
about how responsible they
themselves are with regards
to their sourcing.”
Faruque Hassan, Managing Director of the Giant
Group – another garmentcentric conglomerate –
points to a different set of
challenges that must be overcome before Bangladesh can
reach its $50 billion export
mark in 2021. In his mind, a
shortage of skilled workers is
the country’s largest handicap. “There are 30,000 expats
from China, Korea, and the
Philippines working in Bangladesh, but right now we
The damage to
the “Made in
Bangladesh” label
has come as a huge
blow, but diligently
and determinedly,
Bangladeshi
manufacturers have
been working to
show another side of
their industry
still don’t have proper fashion
designers or proper technical
people, and it’s not easy to
become the world’s second
largest garment exporter this
way,” he says.
While India has a huge
cotton supply and other
countries have poly petrochemicals for the production of polyester, none of
these products are produced in Bangladesh. Further adding to costs is the
fact that all textile machinery, as well as most dyes and
chemicals, are being imported from abroad.
Bangladesh does stand
a competitive advantage
when it comes to manpower, argues Mr. Hassan,
but in order to increase
productivity and efficiency, unskilled workers need
to be trained. He cites the
example of young Bengali
women who represent the
majority (80%) of workers
in the country’s garment
factories. “When they start
working in the garment
factories, their health improves because they have
better working conditions.
They’re out of the slums
and able to share and communicate their problems
with a support group of
colleagues and friends,” he
says. The potential for them
to turn their lives around
is tremendous, and well
worth the investment in
their technical education.
For Mohammed Abdul
Jabbar, Managing Director
of the DBL Group, improved
infrastructure is a matter of paramount concern.
“We need good ports, good
roads, and the main thing is
energy,” he says, echoing the
sentiments of Mr. Islam at
the Babylon Group. Mr. Jabbar also believes that sustainability is the pillar of a
successful business, and he
has even gone as far as to divide sustainable growth into
five key areas – people, process, product, community,
and environment.
He explains that although
his company started in
ready-made garments and
then from there branched
out into other sectors, the
bottom line has always
been workers and operators. “When I go to the
factory and see the things
they are doing, sometimes
I do not believe it myself.
Bangladesh was a producer
for basic stuff, but now we
are working with brands
like Puma and G-Star. I am
amazed by the things we do
in our factory,” he says.
Beyond having no doubt
that Bangladesh will meet
its $50 billion target by
2021, Mr. Jabbar also has
great faith in upcoming generations. Already, he sees a
team mentality emerging,
and the realization that the
DNA and vision of a company must shine through each
of its employees. He urges
young workers to concentrate on what they’re doing,
and to have an international
mindset. “They have to
study and be ethical,” says
Mr. Jabbar. “They can’t take
shortcuts, and they have to
concentrate on their work
and have global knowledge
– not just local knowledge.
They have to know what is
going on around the world
and develop their own
mindset in this way. They
have to have vision and go
after what they want.”
“From the very start
of our business in
1986, we have been
focused on taking
care of our people. I
can now say wages
are enough to ensure
workers can provide
three square meals a
day and provide for
a small family”
S.M. Emdadul Islam,
Director of the Babylon Group
Mr. Jabbar’s words and
conviction that generations
of the future will bring a
world-class manufacturing
industry to Bangladesh are
a heartening contrast to the
recent headlines emerging
about the country, many of
them still focused on Rana
Plaza and other deplorable
and dangerous working
conditions in Bangladeshi
garment factories.
The damage to the “Made
in Bangladesh” label has
come as a huge blow, but
diligently and determinedly,
Bangladeshi manufacturers
have been working to show
another side of their industry. “Rana Plaza does not
reflect all of the garment
industries in Bangladesh,
much like Bangladesh does
not reflect Rana Plaza,” says
Md. Atiqul Islam, President
of the BGMEA, a trade organization that represents
the ready-made garment
industry through policy advocacy to the government,
the defense of worker’s
rights, and social compliance. Active since 1978, it
represents over 4,000 member factories, 60% of them
woven garment manufacturers, and the remaining
40% comprised of knitwear
and sweater manufacturers. “This tragedy affected
Bangladesh, and it was
very unfortunate,” says Mr.
Atiqul Islam, but more
unfortunate yet would be
to portray that incident
as representative of an
entire industry.
Rather than dwell on
tragedy, the BGMEA president prefers to stress what
he sees as the strengths of
the Bangladeshi garment
industry, and point out the
ways in which he and his
colleagues are doing everything to prevent the possibility of another Rana Plaza.
He explains that more than
30 years of experience in
garment
manufacturing
have also given Bangladesh
several advantages. The
country’s backward linkage
is difficult to compete with,
as is the youth and vibrancy of its workforce, 70% of
which is under the age of 40.
He states with full confidence that his country will
reach the $50 billion readymade garment export mark
by the year 2021, so long as
its “people, power (energy),
politics, productivity, and
port” all perform as they
are intended to. (By port,
Mr. Atiqul Islam is referring to Chittagong Port,
also known as the principal seaport of Bangladesh.
Handling 92% of the country’s import-export trade
and over 43 million metric
tons of cargo per year, it
is the indisputable jugular
connecting Bangladesh to
the rest of the world). “If we
can continue on the right
path, nobody can stop us,”
he concludes.
Although the general outlook for Bangladesh is positive, very recent developments suggest there may be
some unexpected hiccups
when it comes to reaching
desired export figures. Potentially most threatening
is the fact that the United
States has failed to reinstate
the Generalized System of
Preference (GSP) for Bangladesh since it was suspended after the Rana Plaza
disaster in June 2013.
“I think the U.S. should
reverse that decision. It
was a miscommunication
surrounding an undeniable
tragedy. We have learned
from that and changes have
been made. This is where
the government has focused.” argues Salman F.
Rahman, Vice Chairman of
the Beximco Group, one of
the country’s largest conglomerates with interests in
the textiles industry.
To date, the U.S. has
given no signs of revising
its stance on GSP, which is
essentially a preferential
export scheme allowing
participating countries to
benefit from the tariff-free
treatment of GSP-eligible
imports. Although readymade garments don’t fall
under the umbrella of the
scheme, some 243 other
industries in Bangladesh
including plastic, ceramic, gulf shafts, and carpet
items do, and they all saw
a decrease in exports to the
U.S. following the suspension of GSP. That said, the
ready-made garment sector
appeared unaffected by the
decision, and total exports
to the U.S. are actually higher than they were prior to
the disaster.
“Together with the Bangladesh Garment Manufacturers and Exporters
Association, the other international partners and
the brands, I am confident
we are building a better and
more productive readymade garment sector and
demonstrating to the world
that business success goes
hand-in-hand with workers’ rights and safety,” the
American Ambassador to
Bangladesh, Marcia Bernicat, told Bangladeshi media
at the opening ceremony
of the BGMEA Expo held
in Chittagong. A three-day
event, the expo unveiled
Bangladesh’s roadmap for
reaching the $50 billion
mark – a goal that Ms. Bernicat described as “ambitious, but very possible.”
Few in the ready-made
garment industry are likely
to disagree with her predictions, and many already
have a winning formula to
ensure that they are met.
BANGLADESH
11
The Independent
The Independent
2016 hailed the ‘Year of Tourism’
as mega plan gets under way
With the development of tourism hotspots, new luxury hotels being built and improved air connectivity, ‘Beautiful Bangladesh’ looks set to project itself onto the international tourist map
W
hile the
exoticism
of India
has long
made it a
Mecca for Western travellers keen to experience its
sights, sounds and culinary
delights, its smaller neighbor
to the east has been largely
overlooked. But a new impetus to attract foreign visitors
and develop tourist hotspots
could help Bangladesh, which
can more than match India’s
colorful exoticism, to secure
a greater portion of the global
and regional market.
Currently tourism in Bangladesh (named one of ‘Next
11’ emerging markets by
Goldman Sachs) accounts for
around 2% of GDP and generates approximately 1.3 million jobs. The government
is confident that a thriving
tourism sector will contribute more to an economy that
depends largely on exportled manufacturing, particularly on textiles, and create
thousands of jobs.
The government has
hailed next year the ‘Year of
Tourism’, and a number of advertising and PR campaigns
are under way to attract more
visitors to the country. “[In
2016] we want to project the
real Bangladesh, we want visitors to come here and we will
be organizing some annual
carnivals which will rival the
best in the world, all in our
own way of course,” explains
the Minister of Tourism and
Civil Aviation Rashed Khan
Menon, who has set an ambitious target to increase foreign tourists arrivals by 70%
to 1 million in 2016.
“The decision to announce
2016 as the tourism year was
taken to speed up work to develop and expand Bangladesh’s
tourism sector,” said Prime
Minister Sheikh Hasina’s former press secretary AKM
Shamim Chowdhury, at the
launch of a new tourism mega
plan, in which the government
will invest $26 million.
The plan, approved in
December last year by the
National Tourism Board,
aims to develop present and
potential tourist sites under
a public-private partnership
initiative. One of the most
important sites earmarked
for development is Cox’s Bazaar. Stretching an incredible
78 miles along the eastern
side of the Bay of Bengal, it is
the world’s longest unbroken
beach and home to Bangladesh’s budding surf scene.
“We are developing Cox’s
Bazaar as an exclusive tourist
zone so we can open things
such as casinos and bars
which in the past have been
a barrier for tourism,” says
Minister Menon. “We are
working on an international
airport in Cox’s Bazaar so
people can fly direct.”
Ecotourism sites also fall
under the plan, sites such
as Sundarbans, the largest
mangrove forest in the world
and a UNESCO World Heritage Site where visitors can
catch a glimpse of the Royal
Bengal Tiger, and St. Martin’s Island, the only coral
island in Bangladesh.
“We are looking to develop
ecotourism and communitybased tourism. This will give
a much needed economic
boost to some of the smaller
more isolated communities,”
explains the minister. Community projects already established include eco resorts such
as the Shuktara Nature Retreat
and the luxurious DuSaia Resort and Spa, both located in
the north-east of the country.
There is also a focus on
health and religious tourism.
“The decision to
announce 2016 as
the tourism year was
taken to speed up
work to develop and
expand Bangladesh’s
tourism sector”
rashed khan menon,
Minister of Tourism and
Civil Aviation
Bangladesh is home to several
important Buddhist, Muslim,
and Hindu archeological sites,
like the Mahasthangarh in
Bogra; the single largest Buddhist monastery, and the temple city of Puthia in Rajshahi.
“We have something for all
tourists; for lovers of nature,
for those interested in history,
even spiritual tourism because we have so many Buddhist sites and Hindu temples
as well as unique mosques,”
adds the minister.
Other proposals put forward in the plan are the establishment of tourist trains
on routes such as DhakaChittagong, Dhaka-Sylhet,
Dhaka-Khulna and DhakaRajshahi; and five modern
tourist marine vessels to attract foreign visitors.
The hotel industry will be
integral to the success of the
tourism mega plan. Testament to Bangladesh’s burgeoning tourism industry is
the presence of the world’s
biggest hotel chains, which
will be ready to cater for the
anticipated increase in both
business and leisure travellers in the coming years.
“I think that in the next
three to five years we will find
another minimum five to seven five-star facilities in Dhaka,” says Mustafa Kamal Khan,
Managing Director of Hotels
International, which operates
the Pan Pacific Sonargaon hotel in the capital.
“I know the (700-room) J. W.
Marriott construction is over
the ground now, and the Hyatt
has already started their construction in Dhaka. The Four
Point Sheraton is here. Pan
Pacific will be putting up a new
facility – a five-star operation.
There is a realization among
people that this is a good sector for investment, and that is
what is important.”
Up to now investment has
been naturally centered in
Dhaka, but luxury hotels have
begun to pop up outside the
capital. In March, the Radisson opened the first five-star
facility in the port city of Chittagong, where Cox’s Bazaar is
located. The 22-storey Radisson Blu Chittagong Bay View
has 241 suites and is the chain’s
second hotel in Bangladesh.
The government aims to leverage the significant presence
of luxury hotels to kick start
MICE (meetings, incentives,
conferencing,
exhibitions)
tourism. “We have excellent
MICE facilities in terms of hotels and conference and convention centers,” says Minister
Menon. The successful hosting of the ICC Cricket World
“We are hopeful that
the (U.S.) Federal
Aviation Authority
audit will deliver a
positive outcome. This
then opens the door
for Biman to connect
Bangladesh directly
with North America”
kyle haywood,
CEO and Managing Director of
Biman Bangladesh Airlines
Cup in 2014 demonstrated
Bangladesh’s ability to put on
large scale events, something
it hopes to do much more of in
the future.
But indeed all of these ambitious plans to attract more
foreign visitors rest on the aviation industry; and improving
regional and international air
connectivity is another priority for the government and the
national carrier Biman Bangladesh Airlines, which plans
to increase flight frequencies
on financially viable routes
and expand its network to all
key commercial and capital
cities in the region.
The company is also working closely with Bangladesh’s
Civil Aviation Authority
(CAA) and the U.S. Federal
Aviation Authority (FAA) in
order to acquire the FAA’s
‘Category 1’ rating that carriers must have to operate direct flights to the U.S.
“We are hopeful that the
FAA audit will deliver a positive outcome. This then opens
the door for Biman to connect Bangladesh directly with
North America,” says the airline’s CEO and Managing Director Kyle Haywood.
“It is a highly competitive
market so we have to be sure
it is the right decision. From a
strategic and political standpoint it is good to have a direct connection with North
America. The government is
keen to see more connectivity with North America and
Bangladesh. So we are doing
a lot of preparation work to
evaluate the most effective
ways to do this from summer
next year.”
Biman recently upgraded
its fleet with the acquisition of
four new Boeing 777-300 ER
aircrafts and two new 737-800
aircrafts. “Additionally, we are
leasing two 777-200ER’s until
2019. The two oldest aircraft
in our fleet, both A310’s will be
retired from service early next
year,” says Mr. Haywood.
“To help manage interim
further capacity growth, we
are currently reviewing additional lease aircraft to take
advantage of growing market
demand in key strategic markets for us.” The company is
keen to fly to Sydney and several destinations in China, as
well as adding additional frequency to Saudi Arabia and
Malaysia routes.
As Biman prepares to go
long haul, its base, Shahjalal International Airport in Dhaka,
is to undergo a massive overhaul. Last year the CAA announced plans for a new terminal and new runway for the
country’s busiest airport. Once
completed in 2020, the new
terminal will be four times the
size of the existing one with 32
boarding bridges, allowing the
airport to accommodate the
landing of 1000 flights per day,
up from the 240 flights per day
the airport currently handles.
So as Bangladesh gears
up for the Year of Tourism
in 2016, the development of
tourism hotspots such as Cox’s
Bazaar and Sundarbans, the
construction of new hotels and
greater air connectivity look
set to put the country firmly on
the international tourist radar.
Taking Bangladesh
to the world
Industry Verticals: Textiles | Pharmaceuticals | Ceramics | Real Estate
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Committed to excellence and quality, BEXIMCO is the largest diversified
conglomerate in Bangladesh. Across four continents and present in
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forward as Bangladesh’s most progressive and innovative company.
CORPORATE OFFICE
17 Dhanmondi, Road No. 2, Dhaka 1205, Bangladesh, Phone : 8611891-5, 8618220-7, 9677701-5
Fax: 880-2-8613470, 9615523
BANGLADESH EXPORT IMPORT CO. LTD.
BEXIMCO PHARMACEUTICALS LTD.
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Bangladesh - The Worldfolio

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