Still, the report has said, Bangladesh is making progress as the nation's economy has managed "to grow more than 6 percent a year for much of the last decade".
Thanks to expanding middle class, growing manufacturing sector and steady inflow of remittances remain the driving forces for economic growth in Bangladesh.
The newspaper has quoted economists at Standard Chartered Bank to say that Bangladesh could join what have been called the '7 percent club' of economies that expand at least 7 percent annually for an extended period, allowing their economies to double every decade.
Current members of the "club" include China, Cambodia, India, Mozambique and Uganda, the influential newspaper said.
The report said HSBC has included Bangladesh in a group of 26 economies — along with China, India and several Latin American and African countries — where it expects particularly strong growth.
The United States and much of Europe, by contrast, are likely to remain merely stable, according to HSBC's projections, the report said.
Expansion of the nation's middle class is a good news for Bangladesh, the report observed, quoting an official of the Asian Development Bank.
It quoted principal economist at the Asian Development Bank in Dhaka, Zahid Hossain, as saying that the growth in the country "mirrors the developments in other emerging economies".
"Domestic demand is growing and becoming an important driver of economic activity," Hossain was quoted as saying.
Bangladesh's economic prospect lies on China's fate, especially in the manufacturing sector amid stiff global competition, it said.
The report maintained that the gradual shift in global production to low-cost countries, from developed economies in Europe and North America, is driving much of Bangladesh's growth. The trend, which began turning parts of Asia — notably China — into manufacturing hubs in the 1980s and 1990s, has started to take root in Bangladesh.
For now, Bangladesh's manufacturing prowess is primarily focused on the garment sector, which has grown into a multibillion-dollar industry that employs 3.6 million people and accounts for 78 percent of the country's exports, it said.
Bangladesh has seen particularly strong growth in the last few years, partly because of rising labour costs in China, where manufacturing is moving into higher-margin activities like product design, it observed.
"For many years, China was almost always the hands-down answer to all buyers' needs," the newspaper quoted a recent report of the consulting firm McKinsey.
Now, Western wholesale buyers of garments are looking for the "next China," and Bangladesh "is clearly the preferred next stop for the sourcing caravan."
McKinsey forecast that Bangladesh's garment industry would grow by as much as 9 percent a year over the next decade, the report said.
Quoting BGMEA (Bangladesh apparel manufacturers' and exporters' association) statistics, the report said Bangladesh exported nearly $18 billion worth of garments in the 12 months through June 2011, $10.5 billion of that to the European Union and $4.6 billion to the United States.
Referring to sourcing company Li & Fung, a giant Hong Kong trading company that supplies retailers including Walmart with clothing mostly purchased from Asia, it said last year the company bought $1 billion worth of apparel from manufacturers in Bangladesh, 41 percent more than in 2010.
Bangladesh overtook Vietnam and Indonesia in 2011 to become the second-largest source of such products for Li & Fung, after China, it said.
About Bangladesh's prospect in garment sector, the newspaper quoted Li & Fung chief executive Bruce Rockowitz as saying that despite bottlenecks the company intends to increase the business it does in Bangladesh.
"The prognosis is good," Rockowitz was quoted as saying by the newspaper.
The report said the annual inflow of remittance is also expected to rise to $20 billion in five years' time while more than $11 billion worth of remittances flowed into Bangladesh last year.
Last year's figure is more than 10 times the amount the country got from foreign investment, it said.
Attracting foreign direct investment still remains a big challenge, the report observed.
Foreign direct investment in Bangladesh has languished at about $1 billion a year — less than what Albania or Belarus each receive, and about one-tenth of foreign investments in Thailand or Malaysia, the report said.
Inadequate power and transportation infrastructures, political infighting, bureaucracy, corruption and a shortage of skilled labourers contribute to a challenging investment climate, the report said.
News: BDNews24, Wed, 25/04/2012
If you liked the post then,
Click here to Join us for FREE email updates from "www.apparelmakers.org", so that you do not miss out anything that can be valuable to you and your business!!
0 comments:
Post a Comment