Import, Export and Remittance

8/9/2019 Import, Export and Remittance

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Trend of Import, Export & Remittance:

An analysis of Bangladesh Economy.

Date of Submission: November 18, 2012


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University of Dhaka

Department of Banking

Course name: isk !anagement " #nsuran$e

Course $o%e: B&208

Submitted To :

!%' Na(mu) *asan

+e$turer

Department of Banking an% #nsuran$e

University of Dhaka'

Submitted By:

S)

no'

Name #D No' Signature

1' !onia -hatun 1.&001

2' San(i%a Begum 1.&002

/' !st' Samsunnaher -hatun 1.&00/

' Shatab%i Cho%ury 1.&02' 3rfanu) 4)am Si%%i5uee 1.&06


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Letter of Transmittal

Date: 18 7$tober, 2012

he Course ea$her

!%' Na(mu) *asan

Department of Banking " #nsuran$e

University of Dhaka'

Subject: Term paper on Trend of Export, Import & Remittance: An Analysis of

Banlades! economy

Dear Sir,

9e rite this )etter to inform that e have prepare% the report that you have assigne% us an% it is

an ana)ysis of 3port #mport " emittan$e of Bang)a%esh 3$onomy' #t gave us an opportunity to

kno the tren% of 3port #mport an% emittan$e of our Country;s 3$onomy sin$e 2001&2010'

9e have trie% our best in preparing this term paper an% hope it i)) satisfy your %esire'

9e re5uest you to e$use us for any mistake that may o$$ur in the term paper %espite of our best

effort' 9e be)ieve you i)) vie our mistakes ith your generous $onsi%eration'


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Ac"no#ledement

4t first, e ou)% )ike to thank the 4)mighty 4))ah' hen e epress our thanks to our

%epartment an% authorities for granting su$h an opportunity in these )eve)s' 9e ou)% )ike to

epress our gratitu%e to our honorab)e Sir, !%'Na(mu) *asan $+e$turer, Dept' of Banking an%

#nsuran$e, University of Dhaka= for giving us su$h kin% of report' his report is a part of %Ris"

anaement & Insurance %' his $ourse is very important for our stu%y' 4n% this report is one

of the most important parts of this $ourse' he topi$ of the report is (Trend of Export, Import &

Remittance: An Analysis of Banlades! Economy') 9e are rea))y gratefu) to our tea$her to

give us su$h kin% of report' #t as tota))y assert for us to finish this report ithout your he)p' 9e

have )earne% a )ot of things from this report' #t as a ne $on$ept to us that>s hy probab)y e may

%o some mistakes' 9e epe$t your kin% $onsi%eration'


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Table of *ontents

Executive ummary vi

!"#ective of the study $

%ethodology $

imitation $

Introduction '

An overvie( of imports in Bangladesh )

*ommodities++++++++++++++++++++++++++++++++

++++++++++++++++

)artners++++++++++++++++++++++++++++++++++

++++++++++++++++..)

An overvie( of exports in

Bangladesh++++++++++++++++++++++++++++++++++++.

++-

*ommodities++++++++++++++++++++++++++++++++

++++++++++++++.

+..-artners++++++++++++++++++++++++++++++++

++++++++++++++++.++.-ro(th of

export+++++++++++++++++++++++++++++++++++++++++++++../

An overvie( of remittance in

Bangladesh++++++++++++++++++++++++++++++++++++..

0

Types of

remittance+++++++++++++++++++++++++++++++++++++

+++++++.0 Remittance sending

system++++++++++++++++++++++++++++++++++++++

++0 %igration fromBangladesh++++++++++++++++++++++++++++++++++++

+++..1 Remittance &

reserve++++++++++++++++++++++++++++++++++++++

+++++2


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A revie( of Trade

Balance++++++++++++++++++++++++++++++++++++++

+++..+++$$

Trend analysis of Export, Import &

Remittance++++++++++++++++++++++++++++++++..$'

Impact of Export, Import & Remittance on Bangladesh

economy++++++++++++++++++++++.$-

*orrelation of Import, Export & Remittance (ith

3++++++++++++++++++++++++++++.$1

Recommendation+++++++++++++++++++++++++++++++++

++++++++++++++++.$2

*onclusion+++++++++++++++++++++++++++++++++++++

++++++++++++++++.'4

Reference+++++++++++++++++++++++++++++++++++++

+++++++++++++++++'$

Annexure+++++++++++++++++++++++++++++++++++++

+++++++++++++++++.''

Executi+e Summary

his report fo$uses on an ana)ysis the tren% of 3port #mport an% emittan$e of Bang)a%esh

3$onomy' 9e have %is$usse% about the overa)) s$enario of eport, import an% remittan$e of our $ountry;s

e$onomy' he tota) report $an be %ivi%e% into / boar% hea%' he first part in$)u%es a$kno)e%gement, )etter of

transmitta)' his part a)so in$)u%es the )imitation of the stu%y' #n 2n% part hi$h is main part of the report' #n the

fina) part e have trie% to ana)ysis the report an% make re$ommen%ation' 9e a)so %ra a $on$)usion on the above

ana)ysis'

3port, #mport an% emittan$es have a)ays p)aye% important ro)es to Bang)a%esh;s e$onomy'

his stu%y has ana)y(e% the tren%, stru$ture an% $hanging features of the eterna) se$tor of

Bang)a%esh' he e$onomi$ %eve)opment of Bang)a%esh is a)so, to a signifi$ant etent, affe$te%

by the tra%e f)os ith partner $ountries'#mport is one of the moist important fa$tors responsib)e for tra%e ba)an$e' Due to tra%e %efi$it

here import is higher than eport, the imports of Bang)a%esh nee% to )ook from %ifferent

%imensions'

he re$ent performan$e of the eport se$tor of Bang)a%esh ith spe$ia) emphasis on appare)

eports to the maor markets %uring the re$ession' 4n essentia) aspe$t of eport tra%e is that the


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%eman% for a $ountry;s eports %epen%s on the import propensities of the peop)e of other

$ountries' Su$h propensities are knon to be inf)uen$e% by their e$onomi$ groth'

emittan$e is the se$on% )argest se$tor of foreign e$hange earnings after garments se$tor' #f $ost

of importe% ra materia)s is %e%u$te% from the foreign e$hange earning of garments se$tor,

remittan$e is the sing)e )argest se$tor of foreign e$hange earnings' emittan$e earning is

in$reasing %ay by %ay but at a )oer rate than the in$rease in emigration from Bang)a%esh'

emittan$e he)ps in re%u$ing %epen%en$e on foreign assistan$e' #t in$reases nationa) savings an%

nationa) investment'

he paper suggests that Bang)a%esh nee%s a stea%y groth base% on foreign investment, servi$e

in$ome an% tra%e' he report a%%s that future groth of Bang)a%esh i)) %epen% on promoting

eport, sustaining remittan$es, an% triggering eport'

bjecti+es of t!e Study

4ssessment of 3port, #mport " emittan$e ren% in the year of 2001&2010'

o rea)i(e the $orre)ation among 3port, #mport, emittan$e an% ?D@'

o ana)y(e the ra%e Ba)an$e of Bang)a%esh 3$onomy'

o kno about the impa$t of 3port, #mport an% emittan$e on Bang)a%esh 3$onomy'

o investigate the prob)ems regar%ing %ifferent aspe$ts of 3port, #mport an%

emittan$es' o fin% out the ays for so)ving these prob)ems'

et!odoloy of t!e study


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9e trie% to $o))e$t %ata from se$on%ary sour$es' he information presente% in the report is from

the mu)tip)e sour$es an% some other ebsites' 9e have use% statisti$a) too) S@SS to ana)ysis the

$orre)ation among 3port, #mport, emittan$e an% ?D@'

Limitation of t!e study

hough the topi$ of the term paper is broa%, e %i%n;t $on%u$t any survey or resear$h' 9hi)e

preparing this report e ha% fa$e% some prob)ems' hose are as fo))os: & be$ause of broa% topi$

e $an;t un%erstan% ho to $omp)ete the report' 9e $an;t arrange the %ata proper)y be$ause the

tren% ana)ysis as on a )engthy perio%'

Introduction:

he e$onomy of Bang)a%esh is a rapi%)y %eve)oping market&base% e$onomy' #ts per $apita

in$ome in 2010 as est' USA1,.00 a%uste% by pur$hasing poer parity=' 4$$or%ing to the

#nternationa) !onetary un%, Bang)a%esh ranke% as the /r% )argest e$onomy in the or)% in

2010 in @@@ terms an% .th )argest in nomina) terms, among the Net 3)even or N&11 of

?o)%man Sa$hs an% D&8 e$onomies, ith a gross %omesti$ pro%u$t of USA26'/ bi))ion in @@@

terms an% USA10' bi))ion in nomina) terms' he e$onomy has gron at the rate of 6&.E per

annum over the past fe years' !ore than ha)f of the ?D@ is generate% by the servi$e se$torF

hi)e near)y ha)f of Bang)a%eshis are emp)oye% in the agri$u)ture se$tor' 7ther goo%s pro%u$e%

are teti)es, ute, fish, vegetab)es, fruit, )eather an% )eather goo%s, $erami$s, rea%y&ma%e goo%s'

3ports of garments an% teti)es are the other main sour$es of foreign e$hange earnings' Ship

bui)%ing an% $ane $u)tivation have be$ome a maor for$e of groth' ?D@>s rapi% groth %ue to

soun% finan$ia) $ontro) an% regu)ations has a)so $ontribute% to its grothF hoever, foreign

%ire$t investment is yet to rise signifi$ant)y' Bang)a%esh has ma%e maor stri%es in its human

http://en.wikipedia.org/wiki/Economyhttp://en.wikipedia.org/wiki/Economyhttp://en.wikipedia.org/wiki/Bangladeshhttp://en.wikipedia.org/wiki/Developing_countryhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capitahttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capitahttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capitahttp://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/Next_Elevenhttp://en.wikipedia.org/wiki/Next_Elevenhttp://en.wikipedia.org/wiki/Next_Elevenhttp://en.wikipedia.org/wiki/Goldman_Sachshttp://en.wikipedia.org/wiki/Developing_8_Countrieshttp://en.wikipedia.org/wiki/Developing_8_Countrieshttp://en.wikipedia.org/wiki/Developing_8_Countrieshttp://en.wikipedia.org/wiki/Foreign_direct_investmenthttp://en.wikipedia.org/wiki/Foreign_direct_investmenthttp://en.wikipedia.org/wiki/Bangladeshhttp://en.wikipedia.org/wiki/Developing_countryhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capitahttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capitahttp://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/Next_Elevenhttp://en.wikipedia.org/wiki/Next_Elevenhttp://en.wikipedia.org/wiki/Goldman_Sachshttp://en.wikipedia.org/wiki/Developing_8_Countrieshttp://en.wikipedia.org/wiki/Foreign_direct_investmenthttp://en.wikipedia.org/wiki/Foreign_direct_investmenthttp://en.wikipedia.org/wiki/Economy


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%eve)opment 'he performan$e of Bang)a%esh;s eport se$tor in re$ent years is 5uite impressive

espe$ia))y in the 10s hen e $ompare it ith that of or)% an% S44C $ountries' he

average annua) groth rate of Bang)a%esh eport 11'1E= is higher than those of the or)%

'8E= an% S44C $ountries 10'6E= %uring 10&200/' Be$ause of the )oer eport

performan$e in the 180s, annua) average groth rate of this se$tor %uring 180&200/ is not as

impressive $ompare% to other 4sian $ountries an% the or)%, though this se$tor sho

emittan$es from Bang)a%eshis orking overseas, main)y in the !i%%)e 3ast, is the maor sour$e

of foreign e$hange earningsF s $ompetitiveness $ompare% to other S44C $ountries '

he remittan$e, a %river of groth of the e$onomy of Bang)a%esh, has be$ome a $ause of

$on$ern, parti$u)ar)y against the ba$k%rop of %in%)ing $urrent a$$ount ba)an$e an% vo)ati)ity in

the e$hange rates, having imp)i$ations over the ma$roe$onomi$ stabi)ity an% prospe$ts of

groth' he gap beteen a$tua) f)o of remittan$e an% the government;s target arti$u)ate% in the

me%ium term ma$roe$onomi$ frameork !!= is on the rise an% might gro sharp)y in the

up$oming years' #n < 2010&11 the a$tua) re$eipt of remittan$e tota)s USD 11,60'/0 mi))ion

than that of the !! proe$tion of USD'

Bang)a%esh #mports ere orth 28/'10 !i))ion USD in Gu)y of 2012' *istori$a))y, from 1

unti) 2012, Bang)a%esh #mports average% ./'18 !i))ion USD rea$hing an a)) time high of

2021'0 !i))ion USD in Gune of 200 an% a re$or% )o of 12'20 !i))ion USD in 4ugust of

200' Bang)a%esh imports most)y petro)eum pro%u$t an% oi), ma$hinery an% parts, soybean an%

pa)m oi), ra $otton, iron an% stee) an% heat' Bang)a%esh main imports partners are China 1.E

of tota)=, #n%ia, #n%onesia, Singapore an% Gapan' his page in$)u%es a $hart ith histori$a) %ata

for Bang)a%esh #mports'

An o+er+ie# of import in Banlades!

4n import is any goo% or servi$e brought into one $ountry from another $ountry in a )egitimate

fashion, typi$a))y for use in tra%e' #mport goo%s or servi$es are provi%e% to %omesti$ $onsumers

by foreign pro%u$ers' 4n import in the re$eiving $ountry is an eport to the sen%ing $ountry'

#mports, a)ong ith eports, form the basis of internationa) tra%e' #mport of goo%s norma))y

re5uires invo)vement of the Customs authorities in both the $ountry of import an% the $ountry of

eport an% is often sube$t to import 5uotas, tariffs an% tra%e agreements' 9hen the HimportsH are

the set of goo%s an% servi$es importe%, H#mportsH a)so means the e$onomi$ va)ue of a)) goo%san% servi$es that are importe%' he ma$roe$onomi$ variab)e # usua))y stan% for the va)ue of these

imports over a given perio% of time, usua))y one year'

he e$onomy of Bang)a%esh %epen%s on imports both for $onsumer items an% in%ustria) ra

materia)s' Bang)a%esh #mports ere orth 28/'10 !i))ion USD in Gu)y of 2012' *istori$a))y,

from 1 unti) 2012, Bang)a%esh #mports average% ./'18 !i))ion USD rea$hing an a)) time


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high of 2021'0 !i))ion USD in Gune of 200 an% a re$or% )o of 12'20 !i))ion USD in

4ugust of 200' Bang)a%esh imports most)y petro)eum pro%u$t an% oi), ma$hinery an% parts,

soybean an% pa)m oi), ra $otton, iron an% stee) an% heat' Bang)a%esh main imports partners

are China 1.E of tota)=, #n%ia, #n%onesia, Singapore an% Gapan'

Bangladesh Imports: Commodities• !a$hinery an% e5uipment

• Chemi$a)s

• #ron an% stee)

• eti)es

• oo%stuffs

• @etro)eum pro%u$ts

• Cement

Bangladesh Imports: Partners• China: 1'8E

•

#n%ia: 1'.E

• -uait: 8'1E

• Singapore: .'6E

• Gapan: 'E

An o+er+ie# of Exports in Banlades!

3ports measure the amount of goo%s or servi$es that %omesti$ pro%u$ers provi%e to foreign

$onsumers by' #t is a goo% that is sent to another $ountry for sa)e'

Bang)a%esh eports ere orth 100'8 !i))ion USD in September of 2012' *istori$a))y, from

1 unti) 2012, Bang)a%esh 3ports average% /1'2 !i))ion USD rea$hing an a)) time high of

16'20 !i))ion USD in Gune of 200 an% a re$or% )o of 102'00 !i))ion USD in 7$tober of

200' Bang)a%esh eports main)y rea%y ma%e garments in$)u%ing knit ear an% hosiery .E of

eports revenue=' 7thers in$)u%e: Shrimps, ute goo%s in$)u%ing Carpet=, )eather goo%s an% tea'


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Bang)a%esh main eports partners are Unite% States 2/E of tota)=, ?ermany, Unite% -ing%om,

ran$e, Gapan an% #n%ia' his page in$)u%es a $hart ith histori$a) %ata for Bang)a%esh 3ports'

Bangladesh Exports: Commodities

*ere are the maor eport $ommo%ities of Bang)a%esh:

• ?arments tota)ing A12'/ bi))ion in


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reforms over the perio%' 3port pro%u$ts %uring the ear)ier perio% e'g' ute an% ute goo%s= %i%

have a signifi$ant effe$t in )imiting the overa)) eport groth, espe$ia))y starting ith the mi%&

180s' he eport upturn in the )atter perio% a)so ref)e$ts the fa$t that the eport setba$k in ute

an% ute goo%s as more than re$oupe% by remarkab)e groth in the eport of a ne pro%u$t

group, rea%y&ma%e garments'

Jute goods:

4mong ute an% ute goo%s, on)y ute goo%s ha% a statisti$a))y signifi$ant )o annua) tren%

groth rate of more than 6 per$ent %uring the ear)y perio% an% aroun% 1 per$ent for the entire

perio%' #n the )atter perio%, 18I86 to 1I00=, it ha% no signifi$ant groth tren%' a ute

eports, on the other han%, ha% statisti$a))y signifi$ant negative groth tren%s for the ho)e

perio% as e)) as for the se$on% perio%' he reasons for the %e$)ine ere the groth of ute

manufa$turing in%ustry in the $ountry an% fa))ing %eman% for ra ute in %eve)ope% $ountries

%ue to etensive use of syntheti$ fibers *essian, 16='

Frozen food:

ro(en foo% main)y fro(en shrimps= as one of the maor pro%u$t groups, hi$h ha% a high)y

satisfa$tory tren% groth rate of 16'11 per$ent for the ho)e perio%' *oever, its groth

remaine% uneven, a spe$ta$u)ar)y high rate of /1 per$ent %uring the perio% ti)) 18I8 a)ong

ith a sharp %rop to about 8' per$ent %uring 18I86 to 1I00' he %rop in the groth rate in

the )ater perio% may be attribute% to a fa)) in %eman% in the 3U markets in the )ate 180s an%

ear)y 10s, hi$h re$overe% on)y %uring the se$on% ha)f of the 10s' he %in%)ing groth of

fro(en foo%s in the )ater perio% may a)so be attribute% to supp)y $onstraints'

Tea:

ea fa))s in the $ategory of an e$eptiona) eport pro%u$t sin$e it ha% a signifi$ant groth of 1/

per$ent %uring the ear)y perio% up to 18I8' *oever, its groth as so )o an% errati$

subse5uent)y that it shoe% a negative groth tren% %uring the )ater perio%' 9hi)e Bang)a%esh

su$$essfu))y re$oupe% the )oss of tea eport earnings $ause% by the %is)o$ation %uring the

$ountry;s ar of #n%epen%en$e, it )ost the momentum in its ra$e ith #n%ia an% Sri +anka in the

)ate 180s an% ear)y 10s'

Leather and leather products:

Bang)a%esh;s eports of hi%es, skins, an% )eather, an% )eather pro%u$ts have in$rease% sin$e the

ear)y 1.0s' he pro%u$t group, in$)u%e% in the tra%itiona) eport $ategory, ha% a tren% groth

rate of about per$ent %uring the entire perio%, hi$h as $)ose to the average groth for a))

eports' #ts groth rate as more than 1/ per$ent %uring the first perio% but the rate s)oe% to

per$ent %uring the se$on% perio%'

Readymade garments:


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Starting from a virtua))y (ero base %uring the )ate 1.0s, rea%yma%e garments eports gre at a

very rapi% rate of about per$ent %uring the ear)y perio% up to 18I8, an%, from a si(eab)e

base, at a mo%erate but fair)y high rate of 20'/. per$ent %uring the )ater perio%' -nitear

pro%u$ts ne)y entere% the eport market ith some signifi$an$e on)y in 18I0 an% sin$e then

its eport gre very rapi%)y J at a mu$h faster rate than other rea%yma%e garments' he very fast

groth of the !? pro%u$t group as a maor eport earner in gross terms= as the most

remarkab)e %eve)opment for Bang)a%esh, an% ithout this phenomena) groth, Bang)a%esh;s

tota) eports hi$h ha% a setba$k in the tra%itiona))y important eports of ute an% ute goo%s,

$ou)% not have gron at %oub)e %igit in the )ate 180s an% 10s'

Knitwear products ne)y entere% the eport market ith some signifi$an$e on)y in

18I0 an% sin$e then its eport gre very rapi%)y J at a mu$h faster rate than other rea%yma%e

garments' he very fast groth of the !? pro%u$t group as a maor eport earner in gross

terms= as the most remarkab)e %eve)opment for Bang)a%esh, an% ithout this phenomena)

groth, Bang)a%esh;s tota) eports hi$h ha% a setba$k in the tra%itiona))y important eports of

ute an% ute goo%s, $ou)% not have gron at %oub)e %igit in the )ate 180s an% 10s'

An o+er+ie# of remittance in Banlades!


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emittan$e is the sum of money that is sent to somebo%y in or%er to pay for something or it is

the a$t of sen%ing money to somebo%y to pay for something' #t genera))y means money sent by

migrant orkers in foreign $ountries to their former homes' 4$tua))y, remittan$e is a mu$h

broa%er $on$ept' #t has many %imensions an% $ategories'

Types of remittancehere are main)y to types of remittan$e:

Nationa) or %omesti$ remittan$e an%

#nternationa) or foreign remittan$e'

Nationa) or %omesti$ remittan$e is remittan$e ithin $ountriesF internationa) remittan$e is the

remittan$e from one $ountry to another $ountry' 4$$or%ing to its %ire$tion internationa)

remittan$e is again of to types: inar% remittan$e an% outar% remittan$e'

Remittance sending system Formal system : emittan$e is sent forma))y through various ays su$h as %eman% %raft,

trave)er;s $he$k, te)egraphi$ transfer, posta) or%er, %ire$t transfer, 4utomati$ e))er !a$hine

4!= et$'

Informal system: *un%i or money $arrier system is preva)ent as informa) pro$e%ure of

remittan$e sen%ing in most of the $ases' *un%i refers to the i))ega) money e$hange not

supporte% by the internationa) or nationa) )ega) stru$ture' he e$hange rate offere% by the hun%i

operators is 1&2E higher than the offi$ia) e$hange rate' hey %o not $harge anything for

transa$tion' #t is the fastest metho% of transa$tion' #n urgent situations this is the 5ui$kest metho%

for sen%ing money' he hun%i operators provi%e %oor to %oor servi$es' #t as interesting to note

that there are other so$ia) reasons for sen%ing remittan$e through hun%i' e mentione% they

sen% money to ives, fathers or brothers separate)y an% preferre% to keep the amounts sent

se$ret, as it $reates tension among the fami)y members' *un%i provi%es the opportunity to

maintain su$h $onfi%entia)ity'

Migration from Bangladesh!igration has be$ome an important )ive)ihoo% strategy for the peop)e of Bang)a%esh' #t has

remarkab)e positive impa$t on so$ia) %eve)opment an% empoerment through ski)) transfer an%

by fostering many $ommunity %eve)opment initiatives' Bang)a%esh has a )ong history of

internationa) migration' During British ru)e some peop)e migrate% to U- an% a)so US4 for tra%e

an% higher stu%y' But after in%epen%en$e of Bang)a%esh in 1.1, the f)o of migration to other

$ountries a)so in$rease%' During mi% 1.0s %ue to oi) ep)oration of !i%%)e 3ast $ountries, there


15/29

as tremen%ous %eman% for ski))e% an% unski))e% orkers' he 2higher in$ome of the migrate%

person not on)y $hanges his %estiny, but has a)so improve% the )ives of his fami)y in the home

$ountry' Bang)a%esh is $onsi%ere% as a resour$efu) $ountry of a huge )abor&for$e' 4bout 60

mi))ion peop)e $onstitute this vast reservoir of a$tive manpoerF Bang)a%esh is stea%i)y turning

her manpoer into an asset through training an% ski)) %eve)opment ith a vie to meeting the

nee%s of overseas emp)oyment' #t is not possib)e for Bang)a%esh to absorb the fu)) range of

avai)ab)e )ess&ski))e%, semi&ski))e%, ski))e% an% professiona) manpoer ithin the $ountry in an

appropriate manner an% hen$e it is nee%e% to fin% emp)oyment opportunities abroa%' here are

a)so a number of foreign $ountries ho are in nee% of importing manpoer from other $ountries'

7verseas emp)oyment from Bang)a%esh starte% offi$ia))y in 1.6 ith a mo%est number 6,0.8=

of orkers' @resent)y about .'m Bang)a%eshi migrants are orking a)) over the or)%'


16/29

Remittance and reservesSatisfa$tory )eve) of reserves of foreign $urren$ies has positive impa$t on the ma$ro e$onomi$

$on%ition of a $ountry' 9e have )imite% sour$es of earning of foreign $urren$ies' 7ur import is

high but eport is )o' 3very year e have to take )oan an% to ait for it to make up B7 %efi$it'

But no remittan$es he)p a great to have the reserves at satisfa$tory )eve)' #n re$ent times, it is

re$or%e% that our reserve is at the maimum )eve) here remittan$e is the )argest $ontributing

se$tor' *en$e there is no %oubt that remittan$es an% reserves have a positive $orre)ation'

!oreover, reserves an% remittan$e are rising over time'

igure 1 shos tren% )ines of remittan$e, ba)an$e of tra%e an% ba)an$e of payments' he tren%

)ine of remittan$e is in the positive 5ua%rant an% is upar% s)oping, hi)e that of ba)an$e of

tra%e is in the negative 5ua%rant an% is %onar% s)oping an% the tren% )ine of ba)an$e of

payment has ups an% %ons aroun% the hori(onta) ais' his imp)ies that remittan$e great)y he)ps

to re%u$e the %efi$it in the ba)an$e of tra%e an% some times make the ba)an$e of payment surp)us'

!oreover, remittan$e is in$reasing at an in$reasing rate' Sin$e in $ase of Bang)a%esh ba)an$e of

tra%e is a)most in a)) years negative, therefore amount of remittan$es has signifi$ant inf)uen$e onthe ba)an$e of payments' #t is the amount of remittan$e hi$h makes B7@ either %efi$it or

surp)us'


17/29


18/29

Trend analysis of export import and remittance

-ear Import

$Billion .S / 0

Export

$Billion .S / 0

emittan$e

Bi))ion USA=

1223421 8' ' 2'0.

1221425 '66 6' 2'8

1225426 10'0 .'60 /'18

1226427 1/'1 8'6 /'6

1227428 1'. 10'/ '2

1228429 1.'16 12'18 '8

122942 20'/. 1'11 6'.

12242; 21' 1'. '01

4

/

$4

$/

'4

'/

Import

Export

Remittance


19/29

nalysis:he Bang)a%esh e$onomy has gron stea%i)y sin$e the beginning of the %e$a%e' 3$onomi$

groth has been a$$e)erate% %uring this perio% for the maor $ontribution of eport an%

remittan$e earnings' Bang)a%esh;s foreign reserves have been great)y augmente% an% its ba)an$e

of payments position is favorab)e, %espite the fa$t that the $ountry imports $onsi%erab)y higher

than it eports' his is part)y %ue to the remarkab)e groth in !? eports an% most)y %ue to

the )arge surge in remittan$e inf)os' But it is important to note that %espite these positive

%eve)opments, the aka has %epre$iate% $onsi%erab)y against the US %o))ar in the )ast $oup)e of

years'

Sin$e < 2002 a stea%y rise in imports is observe%' *oever, finan$ing the rise in imports has

not been a maor prob)em be$ause of the stea%y rise in eport earnings an% surge in remittan$es

%uring the 2000s' Sin$e remittan$es are use% to make import payments, the groing rate of

remittan$es he)p a$hieve a favorab)e ba)an$e of payments an% as e)) as $reating a ne

resour$es base for the $ountry'


20/29

Impact of Export, import & remittance on Banlades! economy:

Impact of Exports

Bang)a%esh;s eport earnings have risen rapi%)y sin$e the ear)y 10s' 3ports have gron from

aroun% . per$ent of ?D@ in 11 to aroun% 18 per$ent in 2006' o main sour$es of e$onomi$

groth have been manufa$turing an% servi$es, both $ru$ia))y %epen%ent on the !? se$tor'

hus, any impa$t on the $ountry;s eport pro$essing se$tor, an% in parti$u)ar on the )arge !?

se$tor, i)) a%verse)y affe$t e$onomi$ performan$e'

he main %river of the eport se$tor is the rea%y&ma%e garments in%ustry !?= hi$h a$$ounts

for a)most four fifth of our tota) eport earnings' 4)most to an% a ha)f mi))ion peop)e, ninety

per$ent of them omen, are emp)oye% in the !? se$tor' 9hi)e a )arge but un%etermine%number of peop)e are invo)ve% in various an$i))ary an% support servi$es e'g' banking, insuran$e,

transport et$' to this se$tor, the orkers are )arge)y %ran from the poorer se$tions of so$iety'

4ny a%verse effe$ts on the !? se$tor i)) thus have far&rea$hing imp)i$ations for the entire

e$onomy an% so$iety'

he eport se$tor is potentia))y vu)nerab)e to the on&going finan$ia) $risis as it heavi)y %epen%s

on the 3U an% US markets hi$h have been ba%)y hit' 4)most ha)f of Bang)a%esh;s eports go to

the 3U, hi)e another 5uarter goes to the US' *igh eport $on$entration is a sour$e of

vu)nerabi)ity for Bang)a%esh;s eports, espe$ia))y in the $ontet of the $urrent re$ession'

Bang)a%esh;s eport performan$e he)% up unti) Gu)y&De$ember 2008&0, but %e$e)erate% 5uite

rapi%)y thereafter' #t i)) be observe% from figure be)o that the eport groth rate p)unge% in

Gan&4pri) 200, $)ear)y marking the impa$t of the ?C' #n other or%s the se$on% an% thir%

roun% effe$ts of the $risis ere beginning to be fe)t'


21/29

igure 1: *a)f


22/29

Impact of ImportsBang)a%esh;s imports as a share of ?D@ have been rising stea%i)y over the past three %e$a%es' 4

va)uab)e portion J about 2. per$ent of ?D@ as spent on import payments in 200.&08' 4roun%

.6 per$ent of eport earnings originate in the !? se$tor, of hi$h per$ent goes into imports

of inputs nee%e% for the !? in%ustry' ?iven the importan$e of imports for Bang)a%esh;s

e$onomi$ groth an% %eve)opment, the imp)i$ations for the ba)an$e of tra%e an% payments, it is

important to assess the )ike)y impa$t of the or)% re$ession on the vo)ume, stru$ture an% of

imports, an% the terms of tra%e' #mport base% revenues a)so $omprise of a signifi$ant part of the

nationa) bu%get an% $ou)% be $ause for $on$ern'

he sharp fa)) in energy an% foo% pri$es in the or)% market has benefite% Bang)a%esh

immense)y' he $ountry is %epen%ent on @7+ imports from the or)% market an% is a)so a

signifi$ant importer of foo%' he %omesti$ e$onomy is therefore 5uite sensitive to movements in

the or)% pri$e of these key $ommo%ities'

Before the onset of the re$ession, Bang)a%esh as ree)ing un%er the pri$e pressures in the or)%

market, )ea%ing to a high %oub)e&%igit= %omesti$ inf)ation rate an% fears of an impen%ing foo%

$risis' he a%vent of the re$ession brought pri$es %on %rasti$a))y, an% as an importer,

Bang)a%esh benefite% great)y ith %omesti$ pri$e pressures fa))ing 5ui$k)y, an% the government

making )arge savings from re%u$e% subsi%ies, espe$ia))y on %iese)'

Bang)a%esh has a)so benefite% from the terms of tra%e effe$t as the import pri$es fa$e% fe)) more

sharp)y than eport pri$es'

Impact of Remittance

Current)y, about 6 mi))ion Bang)a%eshis ork abroa%, an% hen they sen% money to their

fami)ies ba$k home these are in foreign $urren$ies, an% for the government these remittan$es are

one of the most important sour$es of foreign e$hange earnings' 4$$or%ing to the Bang)a%esh

Bureau on !anpoer an% raining B!3=, Bang)a%esh re$eive% more than A bi))ion as

remittan$es in 2008' 4$$or%ing B!3, %uring the )ast // years 1.6&2008= Bang)a%esh

eperien$e% a signifi$ant rise in remittan$e groth && it as on)y A2/'.1 mi))ion in 1.6 hereas

it has rea$he% A'02 bi))ion forma) remittan$e= in 2008'

4s one of the +east Deve)ope% Countries +DC=, foreign $urren$y is nee%e% for so$io&e$onomi$

%eve)opment' emittan$es he)p Bang)a%esh to make investments for in%ustria) %eve)opment,

mo%erni(e its in%ustries by importing high&te$h ma$hineries for eport&oriente% manufa$turing,

mo%erni(e its agri$u)ture, invest in e%u$ation, et$'


23/29

7n the one han%, these fa$tors $reate more emp)oyment in the $ountry an%, on the other, he)p the

$ountry to in$rease its eport of manufa$ture% goo%s as oppose% to agri$u)tura) pro%u$ts, ra

materia)s, )o 5ua)ity finishe% pro%u$ts et$', as they ere in the past'

#n 2008, the tota) va)ue of eports from its agri$u)tura), in%ustria) an% servi$e se$tors as A1/'.

bi))ion hereas in 2008 it re$eive% A'02 bi))ion from its overseas orkers as forma) remittan$es'

hus, e must $onsi%er remittan$e as a very important sour$e of foreign e$hange earnings for

the $ountry' #f e $ombine both forma) an% informa) remittan$es the tota) e$ee%s the tota)

earnings from its eports'

emittan$es a)so he)p Bang)a%esh in making the ba)an$e of payments favorab)e, or make up the

%efi$it beteen tota) eport an% import' or eamp)e, in 2008, Bang)a%esh eporte% A1/'.

bi))ion orth of goo%s an% servi$es an% in turn importe% A1' bi))ion orth of goo%s an%

servi$es' his gave a %efi$it of A'62 bi))ion in Bang)a%esh>s Ba)an$e of @ayment B7@='

*oever, in 2008, the amount of remittan$es that Bang)a%esh re$eive% from its migrant orkers

abroa% amounte% to A'02 bi))ion an% that he)pe% Bang)a%esh $orre$t its B7@ %efi$it to a surp)us

of A/' bi))ion' #n Gu)y 200, Bang)a%esh>s B7@ surp)us rea$he% A1'/ bi))ion' emittan$e in the

first 11 months of the fis$a) year 2008&200 as A8'.6 bi))ion, hi$h he)pe% boost the $ountry>s

B7@'

*orrelation of Import, Export & Remittance #it! :

o sho the impa$t of import eport " remittan$e on Bang)a%esh e$onomy e fin% out the

$orre)ation of these variab)es ith ?D@ as e have se)e$te% ?D@ to represent the e$onomy'


24/29

*ere,

Depen%ent variab)es: ?D@'

#n%epen%ent variab)es: 3port, #mport an% emittan$e'

Correlation !etween Import and G"P:

r:0'826

r 2:0'682

4%uste% r 2:0'618

Correlation !etween Export and G"P: r:0'800

r 2:0'6/

4%uste% r 2:0'6.

Correlation !etween Remittance and G"P: r:0'88

r 2:0'./6

4%uste% r 2:0'68/

rom the above r va)ue it is shon that there is a positive re)ationship beteen eport, import

an% remittan$e ith ?D@' #n a)) $ase a%uste% r 2 O r 2, that means there is no nee% of another

variab)es to %etermine the ?D@'

Recommendations:

o))oings are some re$ommen%ations on ho Bang)a%esh $ou)% over$ome the hur%)es in

enfor$ing effe$tive $ontro) over eports imports an% remittan$e'

• !aintain @rofi)e of the 3porters


25/29

• Systemati$ Certifi$ation pro$ess u)es of origin, 5ua)ity et$'=

• #ntro%u$tion of 3ffe$tive isk !anagement te$hni5ues for @hysi$a) #nspe$tion

• 3ffe$tive use of S$anner

• #n$rease 3nfor$ement Capa$ity

• #mpart raining

• #n$rease Cooperation among the ra%ing Countries through some !utua) Customs

Cooperation

• @ena)i(e the 3porter for Brea$hing u)es an% egu)ation

• Creation of #nternationa) Consensus an% 4areness to 3nsure Kua)ity in 3port

• e%u$tion in import $ontro) an% gra%ua) %e$rease in import tariff an% not tariff barriers'

• @roper information about ob opportunities in the overseas $ountries has to be sprea% a))

over the $ountry time)y an% ob se$urity shou)% be ensure% in the foreign $ountries'

• emittan$e $on$erne% information $enters have to be setup an% arrangement is ma%e for

provision of proper kno)e%ge regar%ing a%ministrative a$tivities, passport an% visa

pro$essing et$'• raining $enters are to be setup for the peop)e ho ant to go overseas $ountries for

emp)oyment opportunities'

• !oreover, a)) types of migration re)ate% a$tivities shou)% be $omp)ete)y free from

$orruption' Kui$k pro$essing system of issuing passport an% visa shou)% be %eve)ope%

an% bureau$rati$ prob)ems shou)% be so)ve% ithin very short time'

• easonab)e $osts shou)% be ensure% by the $on$erne% authority'

• #nf)uen$e of the mi%%)emen an% their interest shou)% be $ontro))e% an% prob)ems $reate%

by them shou)% be $he$ke%'

• #nspirations to go abroa% an% other favorab)e inf)uen$es have to be provi%e% to the

migrant orkers an% emp)oyees'• ?overnment has to make a $)ose re)ationship ith the $on$erne% overseas $ountries to

sear$h ob opportunities in those $ountries'

• emittan$e sen%ing pro$e%ure shou)% be %eve)ope% to make it se$ure%, 5ui$k an%

effe$tive' 4vai)ab)e forma) $hanne)s for sen%ing money to the native $ountry have to be

reorgani(e% to take as short time as possib)e' !oreover the remittan$e sen%ing pro$ess

shou)% be )ibera)i(e% so that irregu)ar emigrants $an a)so sen% remittan$e through regu)ar

$hanne)s'

*onclusion:

Bang)a%esh stoo% ta)) ith 11'88 per $ent eport groth unti) !ay 200 ami% tumb)ing

shipments from maor 4sian $ountries be$ause of the )ingering g)oba) finan$ia) re$ession' 4s

re$or%e% in offi$ia) %ata, goo%s orth USA1'1 bi))ion ere eporte% by the $ountry beteen

Gu)y 2008 an% !ay 200, $ompare% to USA12'6/ bi))ion %uring the same perio% of )ast year'


26/29

#n%ia, China, @akistan, !a)aysia, Lietnam an% hai)an% ere strugg)ing to stop the free fa)) in

eport shipments as the g)oba) re$ession $ut %eman% of goo%s in both si%es of the 4t)anti$'

China;s eport fe)) by a re$or% margin in !ay' 3ports tumb)e% 26' per $ent from a year ear)ier,

e$ee%ing previous re$or% %rop in ebruary of 2'. per $ent' he groth in #n%ia;s mer$han%ise

eports %ippe% to 12' per $ent for !ay 200' @akistan;s eports a)so $ame %on by '1 per

$ent %uring the same perio%'

3porters an% tra%e eperts attribute Bang)a%esh;s eport su$$ess to the P$ompetitiveness; of the

$ountry;s rea%yma%e garment se$tor an% avai)abi)ity of $heap )abor, a)though eports of fro(en

foo%, )eather an% ute fe))' ?arment manufa$turers pro%u$e% )oer&en% pro%u$ts hose %eman%

%i% not fa)) signifi$ant)y in g)oba) markets' emaining $ompetitive in these %ays of %iffi$u)ties

sin$e the 5uota system as ith%ran an% the ongoing )ingering e$onomi$ s)i%e or)%i%e is

rear%ing for Bang)a%esh' here are other fa$tors for Bang)a%esh remaining ta)), Better %e)ivery,

)oer pri$e an% seing 5ua)ity kept Bang)a%esh sti)) high an% attra$tive hen its riva) $ountries

ha% to pump in bi))ions of %o))ars in stimu)us pa$kages to ha)t the eport s)i%e' Bang)a%esh

ou)% have to keep up the tren% in the $oming %ays for $ontinuing its ho)% on the garment eport

markets to regain the a$$e)erate% eport groth rate'

he Bang)a%esh e$onomy emerge% re)ative)y uns$athe% from the g)oba) e$onomi$ $risis though

the $ountry remains vu)nerab)e be$ause its eports are not %iversifie% an% it %epen%s heavi)y on

migrant orkers> remittan$es' 4)though the e$onomy has be$ome in$reasing)y open in re$ent

years, tota) mer$han%ise eports have remaine% )imite%, averaging 18E of ?D@ sin$e 2006'

3ports remain high)y $on$entrate% both in terms of pro%u$ts an% %estinations, hi$h $arries

some risk, ith rea%yma%e&garment !?= eports to the 3U an% the U'S' the $urrent mainstay'

*oever, as a reputab)e )o&$ost pro%u$er of garments, Bang)a%esh has gaine% g)oba) marketshare in re$ent years' his tren% is epe$te% to $ontinue over the me%ium term, hi$h $ou)%

partia))y mitigate the impa$t of s)o groth in a%van$e% e$onomies' 2' he average annua) rea)

?D@ groth of the Bang)a%esh e$onomy %uring the )ast si years as over 6E, ai%e% by

$on%u$ive ma$roe$onomi$ po)i$ies, strong eport groth an% favorab)e eather' ?D@ groth

as broa% base% ith agri$u)ture, in%ustry an% servi$e se$tors performing e))' 4$$or%ing to

pre)iminary estimates, ?D@ groth in


27/29

www.datacraftbd.com/dcci/inde

www.gistnet.com/cidb

importer.alibaba.com

www.mincom.gov.bd

www.tdrju.net/index.php

blogs.worldbank.org. www.migrationinformation.org

www.unnayan.org/reports.

www.bb.org.bd/investfacility/drawing.php

Annexure

?D@ groth in Bang)a%esh

1222 6'56

1223 '81221 '..61225 6'1081226 6'/021227 6'21228 6'/0

http://www.datacraftbd.com/dcci/indehttp://www.gistnet.com/cidbhttp://www.mincom.gov.bd/http://www.tdrju.net/index.phphttp://www.migrationinformation.org/http://www.unnayan.org/reportshttp://www.unnayan.org/reportshttp://www.bb.org.bd/investfacility/drawing.phphttp://www.datacraftbd.com/dcci/indehttp://www.gistnet.com/cidbhttp://www.mincom.gov.bd/http://www.tdrju.net/index.phphttp://www.migrationinformation.org/http://www.unnayan.org/reportshttp://www.bb.org.bd/investfacility/drawing.php


28/29

1229 '

*ategory5(ise 6'44$5'4$47 8ear9orer;s *ategory Total rofessional illed emisilled ess silled


29/29

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of

the Est!ate

"ha#$e Statst%s

R Square

"ha#$e & "ha#$e df1 df2

S$. &

"ha#$e

1 .826a .682 .618 .41498 .682 10.708 1 5 .022

a. 'red%tors( )"o#sta#t*+ ,!-ort

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of

the Est!ate

"ha#$e Statst%s

R Square


S$. &

"ha#$e

1 .800a .639 .567 .44179 .639 8.860 1 5 .031

a. 'red%tors( )"o#sta#t*+ E-ort

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of

the Est!ate

"ha#$e Statst%s

R Square


S$. &

"ha#$e

1 .858a .736 .683 .37811 .736 13.921 1 5 .014

a. 'red%tors( )"o#sta#t*+ Re!tta#%e

Documents

Import, Export and Remittance