Bangladesh – Country Profile

General Information

Source: Economic Intelligence Unit, Bank of Canada (Currency Conversion 28/01/2014)

Political Information

Source: Economic Intelligence Unit

Economic Information

Note: 2013 data in Canadian dollars ($CAD)
Source: IMF World Economic Outlook, World Bank Data, CIA World Factbook, Bank of Canada (Currency Conversion 15/12/2015).

Political and Economic Stability

Bangladesh has been a democratic republic since 1991, and since then the two major political parties have alternated power. Despite political instability, Bangladesh has emerged as an expanding economy and the government has been able to focus on reducing poverty, expanding energy capacity, and stabilizing the economy, in addition to difficulties with infrastructure, bureaucracy, and corruption.

As one of the world’s most densely populated countries, the population pressures are huge. In the past decade, Bangladesh has been committed to improving growth and development. In this time, the economy has grown at nearly 6 percent per year, poverty has dropped by nearly a third and life expectancy has increased. However, poverty is still substantial with 47 million people living below the poverty line. Many more face the risk of falling into poverty as a result of natural disasters that are a constant threat in the region.

Bangladesh has high hopes of turning things around and aspires to be a middle-income country by 2021 (the 50^th anniversary of its independency). Such progress will require an increase in public and private investment and more effective management of the urbanization process. Bangladesh also has the potential to become an export powerhouse due to growth in its labour-intensive manufactured goods and service exports, if these are supported by efficient government decision-making.

Security

The Department of Foreign Affairs, Trade and Development Canada (DFATD) recommends that Canadians exercise a high degree of caution when traveling in Bangladesh due to the fragile political situation. While there is no national advisory in effect for Bangladesh, DFATD advises against all non-essential travel to Chittagong Hill Tracts due to politically motivated violence and kidnapping, as well as sporadic ethnic clashes. For detailed and up-to-date information on travel security, please refer to the DFATD Travel Report for Bangladesh.

Trade Information

Note: Data in millions of Canadian dollars ($CAD)
Source: Trade Data Online (Industry Canada), Trade Map (International Trade Centre), World Integrated Trade Solution (World Bank), United States Trade Representative

Business Climate

The World Bank’s annual Doing Business report ranks economies from 1 to 189 (with 1 being the best) on their ease of doing business. In the 2014 report, Bangladesh ranked 170 overall and 140 for Trading Across Borders, which measures the ease with which a standardized shipment of goods can be imported or exported across its borders. The average time to ship goods out of Bangladesh is similar to the regional average at approximately 29 days, with an average estimated cost of $1,192.09 CAD per 20-foot container. To complete the export process, six forms of documentation are required: Bill of Lading, Certificate of Origin, Commercial Invoice, Customs Export Declaration, Packing List and Pre-Shipment Inspection Clean Report of Findings.

Although there are many reputable exporters in Bangladesh, Canadian importers should be aware that corruption could be an issue when doing business in the country. Bangladesh ranked 145 out of 175 in Transparency International’s 2014 Corruption Perceptions Index where 1^st place indicates least corrupt. Canadian companies are advised to exercise strict due diligence before working with a company from Bangladesh to ensure that it is a bona fide and reputable entity. It is suggested that Canadian importers commission a report by a credit information provider to verify the financial strength of the partner.

Sustainability Initiatives

After the collapse of Rana Plaza building, in which over a thousand people lost their lives, Bangladesh launched the Sustainability Compact in partnership with the EU, the United States and the International Labour Organization. The purpose of this initiative is to improve labour, health and safety conditions for workers as well as to encourage businesses to become more accountable in the ready-made garment industry. Bangladesh has made much progress since its launch. Labour laws have been amended to strengthen rights to freedom of association, collective bargaining, and occupational safety and health. New trade unions have been established and, as a result, workers are more aware and assertive of their rights. Furthermore, establishing minimum standards for factory inspections is an ongoing effort with results being made publicly available.

Trade Opportunities

Since Bangladesh is the second exporter of textiles and garments to the world as well as the Canadian market, these products offer the most trade opportunities, followed by fish and seafood. As Bangladesh intends to become a middle-income country by 2021, additional efforts are being made to boost exports in other sectors. Leather products are among the country’s 10 most exported products to the world and could present favourable trade opportunities for the Canadian market.1. Apparel & Textiles

As the largest product group of Canadian imports from Bangladesh, the market opportunities for apparel items are well- known to Canadian importers. Most of the products imported into Canada are suits, jackets and shirts. In 2014, the import value of goods coming from Bangladesh reached CAD $4.6 million, an 8% increase compared to 2013. Bangladesh has openly committed to doubling its garment exports by 2021, which will result in considerable investments and improvements in the sector not only in infrastructure and business regulation but most importantly in labour, health and safety regulations. The next five years should therefore provide increased opportunities in apparel for the Canadian market.

2. Footwear

Within the footwear sector, the main product exported from Bangladesh to Canada is leather footwear. In 2014, imports in this sector have increased up to 4% compared to 2013, reaching CAD $2.3 million. In the last couple of years, Bangladesh’s share of leather exports to Canada reached CAD $1 billion in value. Experts say that the industry has the capacity to produce and export more, but recent political unrest have prevented some countries from placing new orders. The government is also creating a “Leather Zone” to concentrate industries in an organized production environment.

3. Fish and Seafood

Within this sector, shrimp and frozen fish are the main products imported from Bangladesh to Canada. In 2014, imports amounted to CAD $2 million with a 7% increase from 2013. Frozen fish are the second most profitable export product for Bangladesh, for which the European Union and the United States are the primary destinations. Complying with import product regulation is barrier that most producers have already overcome, but there are still some technical and management challenges for the industry to achieve its full potential.

4. Emerging sector: ICT services

ICT services are a rapidly growing sector in Bangladesh, while computer services are among the top five most exported products by the country. With an annual rise of 24%, ICT exports are projected to reach over CAD $500 million in industry value by 2020.  The government’s efforts are certainly the main contributor to the sector performance, as the country aims to become a “Digital Bangladesh” by 2021. According to the Global Information Technology Report 2014, Bangladesh ranks 119^th among 148 countries, and there are still important improvements to be reached within the political and regulatory environment.

TFO Canada Export Offers

TFO Canada provides an information service for Canadian importers interested in sourcing products from developing and emerging economies such as Bangladesh. This includes practical advice on sourcing from developing country exporters, a customized news bulletin including new leads from Bangladesh as they come in, and a searchable database for sourcing new products and suppliers. The chart below provides a rough idea of the number of supplier profiles from Bangladesh, available online with contact information through TFO Canada’s searchable Supplier Database.

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