International Trade
Trade is an integral part of all total developmental effort and national growth of all economies
including Bangladesh. It particularly plays a central role in the development plan of Bangladesh
where foreign exchange trade can largely meet foreign exchange gap, and export growth would
increase the import capacity one of the country that, in turn, would increase industrialization, as
well as overall economic activities. Bangladesh’s import needs are substantial; hence the need to
rapidly increase exports is immediate. In order to finance the imports and also to reduce the
country’s dependence on foreign aid, the Government of Bangladesh has been trying to enhance
foreign exchange earnings through planned and increased exports. However, the global trade
scenario has exposed structural limitations of the Bangladesh economy, posing a variety of
challenges for the country that has under developed technology and a low capital base. In the
process, we examine Bangladesh’s export and import performance compared to various
countries, regions and the world over the years. We also discuss the sources of Bangladesh’s
imports and directions of Bangladesh’s imports and directions of the sources of Bangladesh’s
exports and the dynamic changes over the years, and highlight the trends of exports and import
shares to GDP and trade balance positions.
Primary Objective
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To give a concrete idea about the export and import activities of Bangladesh through
presenting different products
To know the overall performance of export and import and their balance as well as to find
the positive and negative impact on our economy.
Secondary Objective
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

To know the various terms of export and imports.
To know the present, past and future trading of Bangladesh.
To know the Balance of trade of Bangladesh
To know the challenges facing Bangladesh in exporting and importing products and
services at present and recent.
It is known to all that, importing more goods and services than exporting for an economy have
continuous bad effect on its real growth. On the other hand, study of export and import of
international business provides a greater learning opportunity about verities terms, policies, rules
of export and import, products, opportunities as well as the paths for business expansion
throughout the world for Business expansion throughout the world for maximizing profit. We
strongly hope that our report will provide more information that will help those who want to get
an idea on export and import condition in Bangladesh.
Economy of Bangladesh
The market-based economy of Bangladesh is the 42nd largest in the world in nominal terms, and
31st largest by purchasing power parity; it is classified among the Next Eleven emerging
market middle income economies and a Frontier market. According to the IMF, Bangladesh's
economy is the second fastest growing major economy of 2016, with a rate of
7.1%.[28][29] Dhaka and Chittagong are the principal financial centers of the country, being home
to the Dhaka Stock Exchange and the Chittagong Stock Exchange. The financial sector of
Bangladesh is the second largest in the subcontinent.
In the decade since 2004, Bangladesh averaged a GDP growth of 6.5% that has been largely
driven by its exports of readymade garments, remittances and the domestic agricultural sector.
The country has pursued export-oriented industrialization, with its key export sectors
include textiles, shipbuilding, fish and seafood, jute and leather goods. It has also developed selfsufficient
industries
in pharmaceuticals, steel and food
processing.
Bangladesh's
telecommunication industry has witnessed rapid growth over the years, receiving high
investment from foreign companies. Bangladesh also has substantial reserves of natural gas and
is Asia's seventh largest gas producer. Offshore exploration activities are increasing in its
maritime territory in the Bay of Bengal. It also has large deposits of limestone.[30] The
government promotes the Digital Bangladesh scheme as part of its efforts to develop the
country's growing information technology sector.
Bangladesh is strategically important for the economies of Northeast India, Nepal and Bhutan, as
Bangladeshi
seaports
provide
maritime
access
for
these landlocked regions
and
countries.[31][32][33] China also views Bangladesh as a potential gateway for its landlocked
southwest, including Tibet, Sichuan and Yunnan.
In 2018, per-capita income was estimated as per IMF data at US$4,561 (PPP) and US$1,754
(Nominal).[34] Bangladesh is a member of the D-8 Organization for Economic Cooperation,
the South Asian Association for Regional Cooperation, the International Monetary Fund,
the World Bank, the World Trade Organization and the Asian Infrastructure Investment Bank.
The economy faces challenges of infrastructure bottlenecks, insufficient power and gas supplies,
bureaucratic corruption, political instability, natural calamities and a lack of skilled workers.
International Trade in Bangladesh
FY
Export
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
5752
6467
5986
6548
7603
8655
10526
Table - 1
(In million US $)
Export
Import
Growth (%)
8.26
12.43
-7.44
9.39
16.11
13.84
21.63
8374
9335
8540
9658
10903
13146.70
14746.40
Import
Growth (%)
4.60
11.50
-8.50
13.10
12.9
20.58
12.17
Trade-GDP
Ratio(%of
GDP)
29.98
33.63
30.54
31.22
32.76
36.33
40.80
Table 1 indicates that during last 7 years total trade has registered double digit growth except in
FY 2001/02. This has resulted in an increase of trade Trade-GDP ratio reflecting enhanced
importance of foreign trade in the economy and the effort of the government to integrate the
economy to multi-lateral trading system.
The major five items exported are Woven garments, Knitwear, Frozen food, Jute goods and
Leather. In 2005-06 these items exported 4083.82, 3816.98, 459.11, 361.03 and 257.27 million
US $ respectively.
The five major imported items are Food products, Crude Petroleum & petroleum products,
Chemical & fertilizer, Raw Materials & Accessories of RMG and Capital Machinery. In 2005-06
these items earned 1449.34, 2126.65, 969.01, 3928.89 and 1630.74 million US $ respectively.
Impact of International Trade
The following points will highlight the empact of International Trade. These are as follows:
1. Dual Economies:
International trade has resulted in creating ‘dual economies’ in underdeveloped countries as a
result of which the export sector became an island of development while the rest of the economy
remained backward. The effects of foreign factor movements have been that of creating a highly
unbalanced structure of production of these countries. No doubt, the opening up of the export
markets gave a fillip to their export sector which led to the development of this sector while
ignoring other sectors of the economy. Although export increased but they did not contribute
much to the development of the rest of the economy.
Moreover, excessive dependence on exports leads to cyclical fluctuations in the advanced
countries. During depression, terms of trade become adverse and their foreign exchange earnings
fall steeply. They are also not able to take advantage of world boom because any improvement in
their balance of payment does not lead to increased output and employment due to market
imperfections and non-availability of capital goods.
2. Not Much Beneficial for Poor Countries:
The foreign trade has also not been entirely beneficial to poor countries because of the adverse
effects of foreign investments on their economy. It has been maintained that the inflow of foreign
capital and developed a country’s natural resources only for export purposes, to the neglect of
production in the domestic sector. In these countries the export sector remains an island of
development surrounded by a backward low-productivity sector. Thus, the inflow of foreign
capital in underdeveloped countries has not resulted either in the development of the domestic
sector or of the people in these countries. Despite huge foreign investments, the people have
remained backward in their countries.
Prof. H.W. Singer is also of the opinion that the benefits of technological progress have gone
disproportionately to the advanced countries. According to him, “Benefits of foreign trade and
investment have not been equally shared between the two groups of countries. The capital
exporting countries have received their repayment many times. Thus foreign investment of the
traditional type has formed part of a system of ‘economic imperialism’ and ‘exploitation.’
3. Limited Possibility of Gain:
According to Prof. Nurkse the possibility of gain from foreign trade to underdeveloped countries
is restricted or limited. It is simply due to the reason that underdeveloped countries export mainly
primary goods. These exports suffer losses on account of:
(i) Fall in their demand due to the tendency on the part of developed countries to establish heavy
industries,
(ii) Contribution of services in the aggregate production of developed countries has been
increasing,
(iii) Income elasticity of demand for agricultural production is less in developed countries,
(iv) Many developed countries have been adopting policy of protection in respect of agricultural
products,
(v) Use of synthetic goods in place of agricultural products has been on the increase.
4. Adverse Effect on ‘Demonstration Effect’:
Another harmful effect is that the international operation of the ‘demonstration effect’ has been a
handicap for the poor countries. It has been responsible for reducing the capacity for capital
formation. The desire for luxury, show-off for higher standard of living and patterns of
consumption of advanced countries has been an important factor responsible for low level of
domestic savings in underdeveloped countries.
Higher income groups in these countries are trying to adopt the consumption standards of
advanced countries which have pushed up their propensity to consume and thereby limited
capital accumulation and economic growth. This leads to corruption and black marketing. Thus,
these evils have adverse effect on the economy.
5. Secular Deterioration in the Terms of Trade:
Another important criticism of foreign trade has been that it has resulted in an international
transfer of income from the poor to the rich countries through a secular deterioration in the
commodity terms of trade of the poor countries. In the opinion of Prof. Raul Prebisch, there has
been a secular deterioration in the terms of trade of underdeveloped countries.
How maintains that underdeveloped countries have suffered with fatal effects of a continuous
weakening in their capacity to import. It has led to the weakening of the capacity of their existing
primary producing industries to support their growing population. It has resulted in a failure to
transmit to them the benefits of technical progress. This deterioration in terms of trade for
underdeveloped countries has been the result of differences in the distribution of gains from
increased productivity, diverse cyclical movements of primary product and industrial prices, and
disparities in the rates of increase in demand for imports between the industrial and primary
producing countries.
As a result, their secular terms of trade have deteriorated, unemployment increased and balance
of payments turned adverse.