1 | Page Shofiur Rahman, MBA Program, Dhaka University As the report is exclusively related with the export trend of Bangladesh, so it will be ideal to know something about the definition of export. Export is one of the most preferable and conventional way to perform international business. In simplest word, export is traditional buying and selling across the border of the country. In economics, an export is any good or commodity, transported from one country to another country in a legitimate fashion, typically for use in trade. Export is an important part of international trade. Its counterpart is import. Export involve anything from transferring physical goods to intangible services with a view to earning profit, sometimes it results from arbitrary practice. According to the Encyclopedia of Britannica, export is To send or transport goods abroad out of a customs territory; to sever them from the mass of things belonging to one country with the intention of uniting them to the mass of things belonging to a foreign country. Brief idea about the Export of Bangladesh Like many other third-world developing countries, Bangladesh relies quite heavily on exports to provide for the needs of its densely populated nation. Today the economy ofBangladesh has largely depends on the export position of the country. Before the independence and after the independence the main source of budget fund came from the export revenue and till now it is the major indicator of countries growth and economic stability for its principle role in exchange rate determination and GDP. In over three decades, Bangladesh has witnessed substantial growth in its export of goods andservices. The volume of export, the no of exporting countries and as well as the range of exporting goods have widen substantially. Bangladesh has experienced not only a substantial increase in the volume of exports but also important changes in the composition of those exports; moving away from traditional items such as jute and jute products and towards new manufactured products such as ready-made garments. Though the export ofBangladesh is growing faster then many countries in South Asia. Its import over-lead the effect of the export, so the trade deficit occurs, if we see the recent balance of payment ofBangladesh it will be clear,
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Balance of Payments- current account [Annual Data]
Items2009-10
July-June
2010-11
July-June
% Changes
3 over 2
1 2 3 4
Trade balance -5155 -7328
Export f.o.b.(including EPZ) 16233 23008 41.74
Of which : Readymade garments 12497 17914 43.35
Import f.o.b (including EPZ) -21388 -30336 41.84
Services -1233 -2398
Receipts 2478 2570 3.71
Payments -3711 -4968 33.87
Income -1484 -1354
Receipts 52 119
Payments -1536 -1473
Of which : Official interest payments -215 -220
Current transfers 11596 12075
Official transfers 127 127
Private transfers 11469 11948 4.18
Of which : Workers' remittances 10987 11650 6.03
Source: Data collected from Bangladesh Bank website.
Notes – It is clearly reflected that exports receives are less than the import payments, sothere is trade deficit occur, it is also important to notice that the percentage [%] increasein import is greater than the [%] increase in export.
Although Bangladesh has achieved a substantial growth rate in export, the commodity
concentration and also the market concentration has been the key concern for government
for the retention of that growth rate. Because the export products and market are notdiversified and export can be diminish with the decrease in need of certain product or as a
result of higher competition. So,
This excessive dependence on a few export items and markets reflects the
vulnerability of Bangladesh’s external sector. So export diversification and
market diversification continue to remain major challenges.
Domestic supply side constraints are major reasons for a narrow export base. To
realize Bangladesh’s potential export opportunities, supply-side constraints need
to be addressed immediately. Supply-side bottlenecks relate to infrastructure,
communications, ports, capacity in implementing export incentive regime,
functioning of export-related institutions, and proper governance.
Appropriate macroeconomic policies including price stability and an appropriate
exchange rate must be ensured. Bangladesh Bank, the central bank of Bangladesh,
must take appropriate steps independently in this regard. The government must
also contribute by playing a helping role to maintain the price stability. Prudent
fiscal policy, for example, would be helpful in this regard.
Adequate infrastructure must be built to facilitate the country’s exports. Sufficient
investments, both from internal and external sources, are vital to improve the
existing infrastructure facilities. Foreign direct investment can play a contributory
role in this regard. The government must create a favorable investment
environment by improving law and order situation and controlling corruption. Proper quality of exportable items must be maintained to meet foreign demand. Better
education and training to the workers and managers in the export industries,
establishment of more technical schools and colleges, import of improved technology
for export industries, and closed and regular product supervision can ensure the