At the end of last year, FinanceAsia and HSBC jointly held a roundtable discussion in Dhaka, Bangladesh, to talk about the country’s overlooked potential.
The roundtable was led by Atiur Rahman, the governor of Bangladesh Bank, and included business leaders from Pran-RFL Group, Sunman Group, Sadat Jute Industries, The Daily Star, Graphicpeople, Dewhirst Group, the Institute of Business Administration at the University of Dhaka, Apex Spinning and Knitting Mills, and HSBC.
Rahman opened the discussion with the following introduction:
The Bangladesh story is a well-kept secret. Most of all, it is a story of entrepreneurship. In the early 1970s, there was very little expectation that we would become such a big exporter or that, in effect, every Bangladeshi would become an entrepreneur.
In fact, Bangladesh is the only country in the region that has grown consistently during the past decade, despite political upheavals and natural calamities. The poverty level has halved during the past two decades and income inequality is declining, as shown by the falling Gini coefficient. Other social indices are also improving: levels of immunisation and nutrition are better than in India, for example.
Meanwhile, exports are going from strength to strength, and include apparels, leather, shipbuilding (four ships were exported to Germany during the past few months), pharmaceuticals, software and jute. There is also geographic diversification for the destination of those exports, with new markets found in Japan, Russia and all around the world.
Bangladesh is one of the lowest-cost countries, despite recent inflationary pressures. A flexible exchange rate also helps our exporters. However, there is room for further export growth, which is now gaining 3% share of GDP every year, and a per-capita-income of $800 means the country has massive potential for increased affluence.
Bangladesh is also providing for facilities to be an offshore centre for outsourcing. Today, 50% of our economy is driven by the service sector, so financial intermediation plays a vital role. We at the central bank have taken the initiative by improving automation, while commercial banks such as HSBC can bridge the gap between local and international activities. Bangladesh certainly welcomes foreign investors — and it’s worth bearing in mind that foreigners have always enjoyed a stable operating environment here despite the challenges of being a developing nation.
The strategic geographical position of Bangladesh, as a gateway to India and the Middle East, is also important. Finally, looking ahead, perhaps the key to further progress is to elevate the branding of Bangladesh. Meetings such as this one, sponsored by HSBC and FinanceAsia, can do a lot to help this process.