This has emerged as a binding constraint on investment

Fiscal and National Policy

Exporters Association of Bangladesh (EAB) has termed the proposed budget for 2012 13 fiscal as growth oriented and industry friendly and has welcomed the government for prioritising key sectors like power and energy, agriculture, communication and physical infrastructure.

canada goose store Giving its post budget reaction at a press conference in Sonargaon Hotel in the capital on Sunday, the leaders of the EAB, the apex trade body of export sector, also hailed the government initiative to protect the local industry as well as support the export oriented sectors. canada goose store

higher export growth will help to attain the key budgetary goal of achieving GDP growth to 7.2 per cent and inflation within 7.5 per cent for the next fiscal, it added.

Reading out a written statement, the EAB President Abdus Salam Murshedy said steps like reducing tax on capital machinery imports for export sector and for Effluent Treatment Plant (ETP), withdrawal of VAT from the canada goose factory outlet toronto location rented factory premises and continuation of incentive package for exploring new markets will certainly boost up export earnings.

canada goose coats on sale Besides, emphasising on human resources development, block allocation canada goose outlet niagara falls for employment generation, incentive package for capital market, setting up a hi tech park in Gazipur and API park in Munshiganj and incentive for ship building industry are also some bold steps proposed in the budget for the upcoming fiscal, he said. canada goose coats on sale

Canada Goose Jackets Murshedy, however, expressed dismay canada goose outlet vancouver over the budgetary provision of hiking tax at source on export proceed and put forward 5 point recommendations to the government its kind consideration also urged the government canada goose outlet online uk to consider some proposals for the interest of the export sector. The proposals are withdrawal of 1.2 per cent tax at soucre on exports uninterrupted power and gas supply to the export oriented industries, cut in bank interest rate to single digit, unified exchange rate for exporters and a enhance rate of cash incentive (tax free). Canada Goose Jackets

Canada Goose Outlet in tax at source fro, 0.6 per cent to 1.2 per cent will adversely impact the export sector by reducing competitive edge of local goods in the international market. It will also hurt profitability of the entrepreneurs, Murshedy added. Canada Goose Outlet

He pointed out that export sector is passing through a critical time influenced largely by various external and internal threats. On the other hand, he said a significant hike in power and fuel prices hit hard the industry by rising cost of production.

such a situation, the industry cannot afford a leap of canada goose outlet hong kong tax at source because it will be an extra burden for it, he noted.

canada goose clearance sale Foreign direct investment (FDI) has made enormous leaps since the 1990s in terms of its growth in the global economic landscape. Due to paucity of resources in developing and least developed countries, FDI has become an important component of their development strategies and in many cases it proved to be a win win situation to both host and home countries. Host countries want to gain from FDI in multiple canada goose outlet ontario ways such as through having capital, technology and knowledge. Home countries also benefit through investing as they can penetrate into markets, gain access to raw materials and diversify business activities. They can also overcome trade barriers and reduce transport costs. canada goose clearance sale

buy canada goose jacket Bangladesh is considered to be one of the potential economies despite being besieged by multi faceted adversities such as frequent natural disasters, high density of population, political turmoil and a low production capacity. The resilience and inherent strength of the economy, mainly due to its robust sectors such as agriculture, readymade garments and remittances, canada goose outlet vip have been the basis of such optimism. However, in order to make its graduation to the next level of growth and fully exploit the growth potential, the country investment scenario has to be improved. The lack of adequate investment is one of the important canada goose shop uk reasons for the growth below the potential of the economy. The domestic investment rate canada goose outlet germany has been stagnant at around 24 percent to canada goose outlet price 25 percent of canada goose outlet mall the country gross domestic product (GDP) for the last ten years which is far below the level required for a country aiming to be become a middle income country by 2021 with a growth rate of 10 percent. The sixth five year plan (2011 15) of Bangladesh targets a GDP growth of 8 Canada Goose Outlet percent by the end of the plan period. This requires that the total investment has to grow by 8.1 percent per year and the share of investment in GDP has to be 32.5 percent by fiscal 2015. Low domestic investment has been a matter of concern as it holds back foreign investment as well. buy canada goose jacket

canadian goose jacket Even though Bangladesh has been trying to bring in FDI since its independence and put in place FDI friendly policies in the early 1980s (Foreign Investment Promotion and Protection Act 1980 was such an attempt) much before some of its neighbours, it has been unable to accelerate FDI at the expected level. In the 1990s, there was an attraction for the East Asian and European investors to invest in the readymade garments industry of Bangladesh, thanks to the Generalised System of Preferences (GSP) and the availability of labour at a competitive price. Currently, the concentration of FDI is mainly on transport, storage and communication, manufacturing and power, gas and petroleum. Other sectors such as agriculture, trade and commerce and, services receive nominal FDI. In 2010, manufacturing sector was the highest recipient at 27.82 percent of total FDI, while the construction sector received the lowest with a share of 0.01 percent. The growth of FDI in Bangladesh has, however, been very inconsistent. A major inflow of FDI was observed in the mid 2000s and rose to $913.32 million in 2010. canadian goose jacket

canada goose deals While discussing the impediments to bringing FDI into canada goose outlet buffalo the country, a host of issues have been raised ranging from infrastructural constraints to bureaucratic complexities to image canada goose outlet in chicago building. However, the crux of the problem does, in fact, lie in three broad areas. First is the limited access to physical infrastructure, particularly supply of gas and electricity. This has emerged as a binding constraint on investment promotion in Bangladesh. For example, the supply of gas between December 2008 and December 2011 has increased only marginally from 1,606 million cubic feet to 1,960 million cubic feet, indicating an average growth of 7.4 percent. On the other hand, the demand for gas rose by 12.3 percent during this period, leading to a wide gap between demand and supply. At present, the demand for power in Bangladesh is around 6,500 megawatt, while the supply is 4,699 megawatt. In the recent times, the FDI rise has been observed mainly in the export processing zones (EPZ) as there is little or no gas and electricity supply constraint like the domestic tariff area. In order to overcome infrastructural bottlenecks, aid for productive capacity needs to be enhanced significantly. However, effective use of these funds has to be ensured. canada https://www.canadagoosesale.info goose factory outlet vancouver Public private infrastructure development policy can also be a powerful tool to tackle the supply side constraints. canada goose deals

The second bottleneck is the culture of confrontational politics, which poses a serious threat for the safety of property and resources of prospective investors. Acrimony and bitterness among political parties often lead to destruction and affect lives and properties of people which in turn deter not only foreign investment but also local private investment. Many investors are even willing to spend on infrastructure to facilitate their investment in other sectors, only if there are political stability and predictability of return on their investment.

Canada Goose Parka The third constraint is the lack of good governance and prevalence of corruption, which have put a canada goose parka outlet scar on the reputation of the country at the global level. Because of advantages such as competitive prices for labour and other services, investors may find Bangladesh a lucrative investment destination. However, predicaments such as delay and a lack of transparency in decision making process, a dearth of effective implementation of regulations and policies, and discriminatory incentive packages act as stumbling blocks in bringing in FDI to the country. Canada Goose Parka

Canada Goose sale FDI is not a panacea for slow growth, and it has several negative implications too. These include capital canada goose factory outlet flight and repatriation of profit, dependency on technologies and limited transfer of technology and transfer pricing. With effective regulatory and oversight mechanism such issues can be addressed. FDI can supplement the local effort to produce goods and services and create jobs. If local businesses flourish, foreign investors will have confidence to bring their resources. Promotion of local businesses through access to adequate finance and creation of an enabling environment should also be a key target. Economic diplomacy is vital at this day and age to attract foreign resources. This has to be accompanied by good marketing canada goose outlet store new york skill which in other words is called Such image building task has to be done primarily by the government but complemented by the private sector and all citizens of the country. Canada Goose sale

canada goose black friday sale When I tell people in Hong Kong, London canada goose outlet seattle or New York that Bangladesh is a land of untapped business opportunities, there are usually some who raise their eyebrows in incredulity or admiration. For those who haven visited in person, it a country they only know from media headlines as a place of natural calamities and social pressures as the population expands. canada goose black friday sale

canada goose clearance Fortunately, I finding that the sceptics and uninformed are increasingly in the minority. As the global business community focuses its attention on Asia, there mounting interest in Bangladesh for its skilled workforce, its thriving economy and the impressive export industry it built in just over 40 years. canada goose clearance

While acknowledging that Bangladesh still has much to do to realise the government long term vision, I believe the prospects here are quite bright. So does HSBC Commercial Banking, which handles over 8 percent of the country international trade, and which recently showed Bangladesh to be the Asia Pacific second fastest growing trade partner after Vietnam. In fact, our research indicates that Bangladesh regional commerce will increase by more than 9 percent annually through to 2016.

canada goose Our confidence stems from what we see on the ground, in the cities and in the export processing zones, and from our expectations that Asia will increasingly sit at the heart of the global economy. Bangladesh now ranks higher than India, Indonesia and the Philippines in the World Bank Business report, and it has nurtured companies producing goods for household brands including Levis, Nike, Raleigh and Sony. canada goose

cheap Canada Goose Some have suggested that Bangladesh could become like Mexico, which has established itself as a low cost manufacturing hub for its enormous neighbour to the north. In some ways the analogy is insufficient in that Bangladesh borders India and is also close to China two economies HSBC thinks will become the world third largest and largest respectively by 2050. In other ways, the analogy exaggerates because by 2050, even after a seven fold increase, we expect China income per capita will only be 32 percent of that in the US. cheap Canada Goose

Canada Goose online What we know today is that Bangladesh is a competitive place to do business when benchmarked against its emerging market peers. It has clear cost advantages, and a committed young workforce that keen to learn. With an increasing number of canada goose outlet trillium parka black international companies relying on Bangladesh for the timely delivery of quality garments, the country has a medium term opportunity to win manufacturing investment in this vital export sector. With economic austerity in the West making consumers there more cost conscious, companies here have an opportunity to canada goose outlet store uk promote sales of affordable clothing while investing to rise up the value chain. Canada Goose online

buy canada goose jacket cheap The challenge, of course, is that Bangladeshis want to increase their earning power. They want economic diversification that will bring new job opportunities while reducing the nation reliance on apparel and expatriate remittances. This will require effort to build the infrastructure businesses need to capitalise on Bangladesh location, and it will require effort to attract new industries and the skills transfer that comes with them. buy canada goose jacket cheap

Though the garment industry is likely to provide the backbone of the economy for some time to come, it encouraging to see that companies making goods as diverse as camera lenses, shoes, mobile phone components and car parts have chosen to set up plants in the EPZs. Local entrepreneurs and investors from Canada to Taiwan are starting to recognise Bangladesh potential as a location canada goose outlet usa for light engineering, shipbuilding, agro processing, pharmaceuticals and ICT. Samsung recent opening of a research and development centre in Dhaka is a good case in point.

Like many local businesspeople, HSBC is watching with great interest as the governments of India and Bangladesh negotiate greater access to each other road, rail, sea and air transport networks. For India, a deal will improve domestic links to its north eastern states. For Bangladesh, it could help the country become a regional centre for trade and manufacturing, a gateway to the sea for Nepal and Bhutan, and the hub of a trans Asia highway connecting India to China and South East Asia.

canada goose coats Looking eastwards, Bangladesh is positioning itself to boost trade with China as China rebalances its economy from exports to sustainable domestic demand. Last year, HSBC helped a customer in the Dhaka EPZ to buy yarn from China in Chinese Renminbi. This deal was another sign of things to come, as Bangladeshi firms seek to cement relationships with Chinese partners, cut transaction costs and hedge foreign exchange risk in what is set to be the next global currency canada goose coats.

Leave a Reply

Your email address will not be published. Required fields are marked *

Mail Icon

Get in Touch

If you are interested in learning more about the full range of our risk advisory services and career opportunities, we look forward to discussing how we might be able to work together.

Contact Us