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FTA pats Bangladesh but warns of challenges ahead
16 Oct '15
3 min read
The Foreign Trade Association (FTA), a leading business association of European and international commerce that promotes the values of free trade and sustainable supply chains, has recently released a publication that highlights Bangladesh's extraordinary social and economic development in recent years and the challenges the country needs to address to work toward a brighter future.
The report cites inputs from the European Commission, World Bank and the IMF and points out that the readymade garment (RMG) industry is a vital force for development in Bangladesh. The country is the world's number two garment exporter behind China and exported garments worth $24.5 billion in 2014. The quota- and tariff-free access to the EU, Canada, Australia and Japan supports the export competitiveness.
The RMG sector contributes significantly to trade, employment and economic growth, indirectly supporting the livelihoods of around 40 million people, about a quarter of the country's population. The number of factories increased from 384 in 1985 to over 5600 in 2014, currently employing 4.2 million people, making up 81 per cent of total exports and contributing to around 16 per cent of the country's GDP.
The RMG sector is also a driver of social progress. In the last 25 years Bangladesh has experienced the empowerment of women who now represent 80 per cent of the sector, which has liberated more than four million from the bottom of the development pyramid. By receiving their own income women become more independent and have a voice in their family.
But despite the impressive economic growth, Bangladesh still faces significant challenges from political unrest, labour conditions, environmental issues, building/factory safety, structural reforms and corruption, the report said.
The report also cites a World Bank report to demolish a few myths about Bangladesh. It demolishes the perception of acute poverty in the country and points out that since 1992, the poverty rate has dropped from 57 per cent to 25 per cent in 2014, coupled with increased life expectancy, literacy, and per capita food intake.
Another myth was that a small minority of businessmen raked in high growth profits. The Gini Index is a statistical measure of income distribution, proves that myth wrong. A Gini index of 0 represents perfect equality, while an index of 100 implies perfect inequality. Bangladesh has 32.1. This is impressive compared with China (42.1) and the US (41.1), while Germany (28.3) is in reaching distance.
According to the report, overpopulation is a not really disadvantage for the country and its economy because a high population can be turned into a significant demographic dividend in the coming years, if more and better jobs can be created. The average birth-rate of 6 children per woman (1980) has come down to 2.2 children per woman (2014). (SH)
The report cites inputs from the European Commission, World Bank and the IMF and points out that the readymade garment (RMG) industry is a vital force for development in Bangladesh. The country is the world's number two garment exporter behind China and exported garments worth $24.5 billion in 2014. The quota- and tariff-free access to the EU, Canada, Australia and Japan supports the export competitiveness.
The RMG sector contributes significantly to trade, employment and economic growth, indirectly supporting the livelihoods of around 40 million people, about a quarter of the country's population. The number of factories increased from 384 in 1985 to over 5600 in 2014, currently employing 4.2 million people, making up 81 per cent of total exports and contributing to around 16 per cent of the country's GDP.
The RMG sector is also a driver of social progress. In the last 25 years Bangladesh has experienced the empowerment of women who now represent 80 per cent of the sector, which has liberated more than four million from the bottom of the development pyramid. By receiving their own income women become more independent and have a voice in their family.
But despite the impressive economic growth, Bangladesh still faces significant challenges from political unrest, labour conditions, environmental issues, building/factory safety, structural reforms and corruption, the report said.
The report also cites a World Bank report to demolish a few myths about Bangladesh. It demolishes the perception of acute poverty in the country and points out that since 1992, the poverty rate has dropped from 57 per cent to 25 per cent in 2014, coupled with increased life expectancy, literacy, and per capita food intake.
Another myth was that a small minority of businessmen raked in high growth profits. The Gini Index is a statistical measure of income distribution, proves that myth wrong. A Gini index of 0 represents perfect equality, while an index of 100 implies perfect inequality. Bangladesh has 32.1. This is impressive compared with China (42.1) and the US (41.1), while Germany (28.3) is in reaching distance.
According to the report, overpopulation is a not really disadvantage for the country and its economy because a high population can be turned into a significant demographic dividend in the coming years, if more and better jobs can be created. The average birth-rate of 6 children per woman (1980) has come down to 2.2 children per woman (2014). (SH)
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