Bangladesh beats Asia-Pacific region in export growth
Riding on the robust growth of garment exports, Bangladesh outperformed the other Asia-Pacific countries in merchandise shipments between 2010 and 2015, according to the latest report by the UNESCAP.
During the period, Bangladesh's exports grew 14 percent while the average export growth of the Asia-Pacific region was 7.5 percent, according to the Asia-Pacific Trade and Investment Report 2016.
The report was unveiled on Wednesday in Bangkok by the United Nations Economic and Social Commission for Asia and the Pacific.
Particularly in 2015, when the region experienced export contraction of 9.7 percent, Bangladesh's shipments grew 6.5 percent. Merchandise trade accounted for 87.3 percent of Bangladesh's total trade in 2015.
Bangladesh's exports are heavily concentrated in the textile and garment sector, which collectively accounted for 72.2 percent of total exports.
The country's strong competitiveness in the labour-intensive textile and garment industries can be explained by the abundance of low-wage workers and the Generalised System of Preferences facility given by large trading partners, especially the European Union.
Subsequently, like in previous years, Bangladesh's exports to the EU in 2015 remained strong.
Countries in the EU accounted for more than 44.5 percent of the total exports by Bangladesh, followed by the US at 17.6 percent and Japan at 3.3 percent.
Although Bangladesh's imports fell 6.6 percent in 2015, the rate was lower than the Asia-Pacific region, where the average import decline was 15 percent.
The largest imports by Bangladesh are petroleum oils and fabrics.
The import contraction was largely driven by declining import bills due to falling prices of oil and petrochemical products. Regarding services sector, the APTIR said service exports grew modestly by 6.4 percent a year during 2010-2015, followed by a slowdown in growth to 3.5 percent in 2015.
In contrast, service imports grew rapidly, especially in 2015, when imports increased 21.5 percent, the survey said. Of the total imports, 76.8 percent were sourced from the Asia Pacific region; China at 39.1 percent and India at 15.5 percent were the largest import sources.
Inflows of foreign direct investment have grown robustly in Bangladesh, averaging 19.6 percent per year during 2010-2015. In 2015, in particular, inflows into Bangladesh soared 44.1 percent to reach a historic peak of $2.2 billion.
The banking, textiles and energy sectors attracted the largest amounts of FDI. The US and the UK were the largest foreign investors, collectively accounting for 27.2 percent of the FDI inflows to Bangladesh.
International trade costs for Bang-ladesh remained considerably higher compared with the most efficient major traders in Asia and the Pacific despite showing a declining trend during 2009-2011. Bangladesh has five preferential trade agreements in force, which is lower than the Asia-Pacific average of 7.6 agreements.
Since exports by Bangladesh were mainly with advanced countries from which Bangladesh received GSP, only 10.4 percent of the total exports were with PTA partners.
However, trade coverage by PTA partners was much higher for imports, with a coverage ratio of 64.5 percent of total imports compared with 44 percent in the Asia-Pacific region.