Bangladesh is an economic success story now! It celebrated a pivotal moment in 2018 after the United Nations announced that it had met the criteria to graduate from an least developed country status by 2024. It was a significant boost to the nation's self-image. This came after private companies like Beximco Group, Square Group, Navana Group boosted the industrial sector.
The ready-made garment industry is a key factor in the country's phenomenal success story. The industry is the country's largest employer, providing about 4.5 million jobs, and accounted for nearly 80% of Bangladesh's total merchandise exports in 2018. It has undergone seismic changes since the watershed Rana Plaza disaster in 2013, when a multi-story garment factory complex collapsed, killing more than 1,130 workers. In the aftermath, the industry was forced by international apparel brands to implement sweeping reforms; including factory upgrades, inspections, and improved worker conditions. Precisely, Bangladesh's economic performance has even exceeded government targets on many fronts. With a national strategy focused on manufacturing—dominated by the garment industry—the country has seen exports soar by an average annual rate of 15-17% in recent years; reaching a record $36.7 billion in the year through June. This sector is on track to meet the government's goal of $39 billion in 2019, and Prime Minister Sheikh Hasina has urged industry to reach a $50 billion valuation by 2021.
Bangladesh is hoping to challenge India in pharmaceuticals, too. With its "least developed country" status, the country has enjoyed a waiver on drug patents. This has fueled intensifying competition between India and Bangladesh in the field of generic and bulk drugs. Among local star performers are Beximco Pharmaceuticals and Incepta Pharmaceuticals.
The PM Sheikh Hasina launched a Digital Bangladesh strategy in 2009 backed by generous incentives. Now, Dhaka, the nation's capital, is home to a small but growing technology sector led by CEOs who talk boldly about leapfrogging neighboring India in IT. Pharmaceutical manufacturing—another Indian staple—is also on the rise. The government is now implementing an ambitious scheme to build a network of 100 special economic zones around the country; 11 of them have been completed while 79 are under construction.
Bangladesh's textile industry could benefit if China's garment exports are hit by a prolonged US-China trade war. However, other garment centers are also taking aim at a vulnerable China, including: Vietnam, Turkey, Myanmar, and Ethiopia. Intensifying international competition has already sparked consolidation in Bangladesh's garment industry, reducing the number of factories by 22% in the last five years to 4,560, according to the BGMEA. The government has moved to streamline the investment process with the creation of a "one-stop" investor service intended to replicate similar services in Singapore and Vietnam. This has yet to gain momentum. More successful is Sheikh Hasina's digital push. With her son, a US-educated tech expert, as a key adviser, the program has introduced generous tax breaks for the information and communications technology sector; and a sweeping scheme to build 12 high-tech parks across the country.
One of Bangladesh's competitive disadvantages is its poor infrastructure, and the country has turned to China for help. Under its Belt and Road Initiative, China has financed various megaprojects in Bangladesh, including most of the nearly $4 billion Padma Bridge rail link, which will connect the country's southwest with the northern and eastern regions. In all, China has committed $38 billion in loans, aid, and other assistance for Bangladesh.
The ready-made garment industry is a key factor in the country's phenomenal success story. The industry is the country's largest employer, providing about 4.5 million jobs, and accounted for nearly 80% of Bangladesh's total merchandise exports in 2018. It has undergone seismic changes since the watershed Rana Plaza disaster in 2013, when a multi-story garment factory complex collapsed, killing more than 1,130 workers. In the aftermath, the industry was forced by international apparel brands to implement sweeping reforms; including factory upgrades, inspections, and improved worker conditions. Precisely, Bangladesh's economic performance has even exceeded government targets on many fronts. With a national strategy focused on manufacturing—dominated by the garment industry—the country has seen exports soar by an average annual rate of 15-17% in recent years; reaching a record $36.7 billion in the year through June. This sector is on track to meet the government's goal of $39 billion in 2019, and Prime Minister Sheikh Hasina has urged industry to reach a $50 billion valuation by 2021.
Bangladesh is hoping to challenge India in pharmaceuticals, too. With its "least developed country" status, the country has enjoyed a waiver on drug patents. This has fueled intensifying competition between India and Bangladesh in the field of generic and bulk drugs. Among local star performers are Beximco Pharmaceuticals and Incepta Pharmaceuticals.
The PM Sheikh Hasina launched a Digital Bangladesh strategy in 2009 backed by generous incentives. Now, Dhaka, the nation's capital, is home to a small but growing technology sector led by CEOs who talk boldly about leapfrogging neighboring India in IT. Pharmaceutical manufacturing—another Indian staple—is also on the rise. The government is now implementing an ambitious scheme to build a network of 100 special economic zones around the country; 11 of them have been completed while 79 are under construction.
Bangladesh's textile industry could benefit if China's garment exports are hit by a prolonged US-China trade war. However, other garment centers are also taking aim at a vulnerable China, including: Vietnam, Turkey, Myanmar, and Ethiopia. Intensifying international competition has already sparked consolidation in Bangladesh's garment industry, reducing the number of factories by 22% in the last five years to 4,560, according to the BGMEA. The government has moved to streamline the investment process with the creation of a "one-stop" investor service intended to replicate similar services in Singapore and Vietnam. This has yet to gain momentum. More successful is Sheikh Hasina's digital push. With her son, a US-educated tech expert, as a key adviser, the program has introduced generous tax breaks for the information and communications technology sector; and a sweeping scheme to build 12 high-tech parks across the country.
One of Bangladesh's competitive disadvantages is its poor infrastructure, and the country has turned to China for help. Under its Belt and Road Initiative, China has financed various megaprojects in Bangladesh, including most of the nearly $4 billion Padma Bridge rail link, which will connect the country's southwest with the northern and eastern regions. In all, China has committed $38 billion in loans, aid, and other assistance for Bangladesh.