Vibrant South Asian nation among world’s 10 fastest-growing economies for past 10 years
The Dasherkandi Sewage Treatment Plant in Dhaka, capital of Bangladesh, which adopts Chinese standards and is built by Chinese companies, treats the domestic sewage of nearly 5 million people in the city every day. (PHOTO / XINHUA)
Vehicle horns break the silence as a new working day dawns in Dhaka, the capital of Bangladesh.
To many observers, the incessant traffic is a sign of a vibrant economy in one of the world’s most densely populated countries, where there is an average of 1,119 people per square kilometer.
According to a report by the World Bank, Bangladesh has made remarkable economic and development progress in the past five decades.
The nation’s GDP growth rose from an average of 3.8 percent in the 1980s to more than 6 percent in the 2010s, and the country has ranked among the world’s 10 fastest-growing economies for the past 10 years.
Amid this rapid progress, Bangladesh continues to eye investment from China, its largest source of foreign direct investment.
Al Mamun Mridha, acting secretary-general of the Bangladesh China Chamber of Commerce & Industry, or BCCCI, said, “Investment from China is of paramount importance in terms of future ambitions for rapid export growth.”
Mridha said that with Bangladesh joining the Belt and Road Initiative in 2016, new headway is being made in accelerating export growth to China.
Song Yang, economic and commercial counselor at the Chinese embassy in Dhaka, said in December that China ranks top among overseas countries in having 104 investors at eight export-processing zones in Bangladesh.
In June, the BCCCI signed a memorandum of understanding, or MoU, with the Bangladesh Investment Development Authority, or BIDA, to jointly increase Chinese investment in the South Asian country, according to Xinhua News Agency.
Speaking at the signing ceremony, BIDA Executive Chairman Mohammad Sirazul Islam said China is one of Bangladesh’s major development partners, and has been working directly on many government projects.
“Chinese investors are investing hugely in the outside world, and we need to take this opportunity,” Islam said.
However, he added that compared with government investment from China, that from the Chinese private sector is much lower.
Mridha said that through the MoU, the BCCCI is aiming to work with the BIDA to expand trade and investment between Bangladesh and China, and foster greater cooperation and economic dialogues between business communities, researchers and trade bodies in both countries.
Such efforts require an effective cooperation mechanism, a delegated authority in both countries to be responsible for regular communication, and the prompt exchange of relevant information on the two nations’ economic development, Mridha said.
The BCCCI is considering signing similar MoUs with the Bangladesh Economic Zones Authority, the Bangladesh Export Processing Zones Authority, and the Bangladesh Ministry of Commerce’s Export Promotion Bureau.
Noting that China lifted quarantine requirements for overseas arrivals after adjusting its COVID-19 response policies on Jan 8, Mridha said this is one of the country’s most important steps toward resuming cross-border travel, and the BCCCI applauds the initiative.
“We are eagerly looking forward to attracting foreign investors to provide a much-needed stimulus, and we will undertake various initiatives to increase Chinese investment,” Mridha said.
Key sectors for cooperation include information technology, health, services, public safety, engineering project management, and disaster management, he said.
Syed Naved Husain, group director and CEO of Beximco, said that with the number of Chinese investors rising in Bangladesh, there are numerous opportunities for cooperation between business players from both countries.
Founded in the 1970s, Beximco Group is one of the oldest and most recognizable brand names in Bangladesh. Its total revenue is more than $2 billion per year, making it the country’s biggest corporate organization.
Beximco evolved from being primarily a commodities trading company to a leading, diversified group with operations and investments in a wide range of industries, including textiles, pharmaceuticals, real estate development and media.
Husain said Beximco wants to gain from China’s knowledge, experience and technology by using these assets in Bangladesh, as well as tapping global finance.
Beximco used to buy equipment from Western countries, but recently started to try Chinese alternatives, which are less than half the price of such supplies from the West, and also work better, Husain said.
He added that Beximco will soon launch a joint venture with Chinese companies to make fabrics in Bangladesh.
The Chinese and Bangladeshi governments have attached great importance to the bilateral relationship.
On Jan 10, Chinese Foreign Minister Qin Gang had a brief meeting with Abul Kalam Abdul Momen, his Bangladeshi counterpart, at an airport in Dhaka during a technical stopover on his way to Africa.
They spoke highly of the friendship between China and Bangladesh, and agreed to strengthen exchanges and jointly work to achieve progress in bilateral relations, according to the Chinese Foreign Ministry.
Yao Wen, the new Chinese ambassador to Bangladesh, said in December that the common goals of both countries “will definitely bring about more powerful dynamics, more vigorous vitality, and an even brighter future for our bilateral relations”.
He said China has embarked on a new journey toward a modern socialist country in all respects, while Bangladesh is following its Vision 2041 plan. The key aim of this plan is to eradicate extreme poverty, achieve upper-middle-class status by 2030, and high economic nation status by 2041.
According to Momen, Bangladesh is now known as a “model for economic development”.
Although the nation, which gained independence in 1971, was once regarded as having no hope of survival, Momen said it is overcoming its painful political history to become a land of opportunity.
Most of its population of 160 million-plus are of working age, and Momen said the country has all the necessary ingredients for investment, thanks to its young and hardworking labor force.
Bangladesh’s rapid growth is led by the manufacturing sector, which has expanded by an average of nearly 10 percent annually in the past decade.
The nation achieved lower-middle-income status in the past 10 years, and its gross national income per capita rose from $519 in the 2000 fiscal year to $2,619 in the 2021 fiscal year.
In November 2021, Bangladesh was given UN approval to lose the least-developed country status by 2026. The nation aims to become an upper-middle-income country by 2031 and a developed country by 2041.
Momen said, “In this country, whatever you produce, there is a market for you,” adding that Bangladesh welcomes anyone investing in the country to jointly explore business opportunities in order to prosper.
Bangladesh’s progress is showcased by its exports, Momen said. When Prime Minister Sheikh Hasina took office in 2009, the nation’s exports were valued at $10 billion to $11 billion, but they are now worth more than $50 billion.
According to the Bangladeshi Ministry of Commerce’s Export Promotion Bureau, domestic exports reached an all-time high in the 2022 fiscal year, rising by more than 34 percent year-on-year to $52.08 billion.
The ready-made garments industry plays an important role in Bangladesh’s economy and exports. It is the single biggest export earner for the nation, accounting for 83 percent of such earnings, according to the Bangladesh Garment Manufacturers and Exporters Association.
Husain, from Beximco, said the main advantage of Bangladesh’s textile manufacturing industry lies in the nation’s large population, its young and cheap labor force, and improved level of automation.
Husain said that when Beximco was incorporated in 1994, the government imported all fabrics, and only basic garments were made domestically.
There are 40,000 workers at the company’s main production base in Beximco Industrial Park. The base, which covers 1.42 square kilometers, is situated in Gazipurin, central Bangladesh, and is also home to the country’s first denim factory.
Husain said that even during the pandemic, when many companies had to fire employees and cut costs, Beximco continued to make new investments. At the height of the pandemic, it invested $640 million.
Bangladesh is the world’s second-largest apparel exporter after China — shipping $34 billion worth of garments and accounting for 6.4 percent of the global apparel trade in 2021, according to the World Trade Organization.
To further encourage economic development, the Bangladeshi government plans to set up some 100 special economic zones and 32 high-tech parks.
In November 2021, M. Erfan Sharif, executive member of the Bangladesh Economic Zones Authority, said the 100 zones are expected to create 10 million jobs and raise the country’s exports by an additional $40 billion by 2030.
In 2019, Bangladesh’s exports stood at $46.36 billion, accounting for just over 15 percent of the nation’s GDP.
Given its rapid growth, Bangladesh needs to invest nearly $25 billion annually until 2030 to meet its infrastructure needs, according to the Dhaka Chamber of Commerce and Industry.
The Dhaka Tribune reported that 1,356 projects will be implemented during the 2023 fiscal year. Of these, 106 concern technical assistance, while the remaining 1,250 involve infrastructure projects.
In recent years, infrastructure has developed rapidly in Bangladesh.
In December, the nation’s first light rail transit line began commercial operations in Dhaka, setting a milestone in the country’s transportation history. The project was undertaken by Dhaka Mass Transit Co, a state-owned enterprise, with work being carried out by Chinese, Bangladeshi, Japanese, Thai and Indian companies.
