Bangladesh, an Emerging Economy in Export and Import
Students of global economy are familiar with specific terms defining the economic powers that influence trade and industry beyond their borders. The Asian Tigers, for example, are the four highly-developed countries (Hong Kong, Singapore, South Korea, and Taiwan) that account for a good percentage of market exports around the planet. Whether these nations will remain on top is up for debate, but as implied by Goldman Sachs those included in the Next Eleven group may prove competitive in the future. One such country is Bangladesh.
Your first thought of Bangladesh might be of the Third World. In the 1970s the country – formerly known as East Pakistan – suffered the ravages of civil war and extreme weather conditions. The plight of her people moved musicians George Harrison and Ravi Shankar to organize a benefit concert to raise funds for relief – the first such charitable event, years before Live Aid. Today, while Bangladesh maintains its rank among nations with high poverty levels, it is slowly developing an economy that has shown impressive growth over the years.
One might think, given the assumed paucity of natural resources and industry in the country, that Bangladesh doesn’t offer much in the way of goods to export. Quite the contrary, though this neighbor to India doesn’t enjoy the same GNP level of the United States or nearby Asian nations, Bangladesh exported in 2009 more than $18 billion worth of supplies annually, a significant growth from $5 billion seven years prior. With the United States as top customer (claiming almost a third of overall product), Bangladesh is known primarily for these goods:
Textiles and Apparel: In proving its place among the Next Eleven, Bangladesh has made quite a mark in the textile export industry. Apparel exports, the nation’s top industry, surpassed that of India for the first time in 2009, accounting for one-eighth of the country’s overall export product.
Leather Materials:Hides used for clothing and other products are a popular product for trade, and are usually included in the totals for textile and apparel exports.
Jute:; Jute is a specific vegetable fiber, similar to hemp and flax, which is used in the manufacture of textiles. Native to the region, jute is used in the production of coarser fabrics like burlap.
Seafood and Fish By-products: Recent issues with the Gulf oil spill have no doubt boosted Bangladesh’s role in the seafood trade. Always a popular export, fish by-products and seafood are shipped stateside and to Europe regularly.
Ceramics:Pottery for decorative and practical purposes are created and traded around the world.
Domestically, Bangladesh relies upon rice production to keep the economy strong. Other items imported in, primarily from neighbors China, India, and Singapore, help stimulate various industries. These include:
Crude Oil and Petroleum: What Bangladesh lacks in natural resources for production, her trade neighbors provide to allow for smooth operations.
Cotton: Perhaps the most important element of the textile industry, cotton imported into Bangladesh becomes the apparel that is exported around the globe.
Food: Though two-thirds of the country’s workers have jobs in agriculture, Bangladesh relies on imports to supply foodstuffs.
Machinery: Equipment for refining rice and textiles are especially needed, and provided for by more developed countries.
Metals: For domestic manufacturing, Bangladesh trades with metal rich nations to achieve these goals.
Inexpensive labor and a growing GNP have helped Bangladesh reach a spot in the Next Eleven. This is certainly a country to watch in the next decade or so to see if their exponential growth will continue and impact neighboring nations.
An emerging economy refers to a country that is in the process of rapid industrialization, modernization, and economic growth, often with the potential to become a major global player in the future. These economies typically exhibit increasing levels of economic development, improvements in infrastructure, rising per capita income, and expanding middle-class populations.
Characteristics of emerging economies may include:
- High economic growth: Emerging economies often experience robust GDP growth rates that outpace those of developed economies. This growth is driven by factors such as increased domestic consumption, foreign investments, expanding industries, and technological advancements.
- Urbanization and industrialization: Emerging economies typically witness a significant shift of their population from rural to urban areas as industries develop and job opportunities arise. This urbanization leads to the growth of cities, the development of infrastructure, and the expansion of manufacturing and service sectors.
- Increasing foreign direct investment (FDI): Emerging economies often attract substantial foreign investments due to their growth potential, low labor costs, natural resources, or favorable business environments. FDI plays a vital role in stimulating economic development, promoting technology transfer, and creating employment opportunities.
- Rising middle class: As emerging economies grow, there is often a significant expansion of the middle class. This demographic shift leads to increased consumer spending, which further drives economic growth and stimulates domestic industries.
- Improved infrastructure: Emerging economies typically invest in infrastructure development to support their growing populations and facilitate economic activities. This may include constructing transportation networks, power plants, communication systems, and other essential facilities.
- Structural reforms: Many emerging economies undertake structural reforms to improve their business environments, attract investments, and enhance competitiveness. These reforms may include deregulation, trade liberalization, financial sector reforms, and measures to strengthen governance and institutions.
Examples of emerging economies include countries like China, India, Brazil, Russia, South Africa, Mexico, Indonesia, Turkey, and several others. However, it’s important to note that the classification of an economy as “emerging” can change over time as countries progress and move into the category of developed economies.
The term “economy” refers to the system of production, distribution, and consumption of goods and services in a particular region or country. It encompasses various factors, such as the production of goods and services, the allocation of resources, employment levels, income distribution, and overall financial conditions.
Economies can be classified into different types, including market economies, command economies, mixed economies, and traditional economies, each with its own characteristics and mechanisms of operation.
Key elements of an economy include:
- Gross Domestic Product (GDP): GDP is a measure of the total value of goods and services produced within a country during a specific period. It is commonly used as an indicator of a country’s economic performance.
- Employment and Unemployment: The level of employment and unemployment is crucial in determining the health of an economy. Low unemployment rates indicate a robust labor market and potentially higher consumer spending.
- Inflation: Inflation refers to the increase in the general price level of goods and services over time. Moderate inflation is generally considered beneficial for economic growth, while high inflation can erode purchasing power and create economic instability.
- Fiscal and Monetary Policy: Governments use fiscal policy (taxation and government spending) and monetary policy (interest rates, money supply) to manage the overall health of the economy, stabilize prices, and promote growth.
- Trade and International Relations: Global trade plays a significant role in the economy of many countries, influencing factors such as exports, imports, balance of trade, and foreign exchange rates. International relations and trade agreements can impact economic growth and stability.
- Income Distribution: The distribution of income within an economy can impact social equality and economic stability. Disparities in income distribution can affect consumer spending patterns and social cohesion.
- Business Cycles: Economies go through cycles of expansion (increased economic activity), contraction (reduced economic activity), and recession (a significant decline in economic activity). Understanding and managing these cycles is crucial for economic policymakers.
- Economic Indicators: Various indicators, such as consumer confidence, business investment, housing market activity, and stock market performance, provide insights into the overall state of an economy and its future prospects.
It’s important to note that economic conditions can vary significantly across countries and regions, and the performance of an economy is influenced by numerous factors, including government policies, technological advancements, natural resources, demographics, and global economic trends.
Prepare and write by:
Author: Mohammed A Bazzoun
If you have any more specific questions, feel free to ask in comments.
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