Bangladesh

Europeans began to set up trading posts in the area of Bangladesh in the 16th century; eventually the British came to dominate the region and it became part of British India. In 1947, West Pakistan and East Bengal (both primarily Muslim) separated from India (largely Hindu) and jointly became the new country of Pakistan. East Bengal became East Pakistan in 1955, but the awkward arrangement of a two-part country with its territorial units separated by 1,600 km left the Bengalis marginalized and dissatisfied. East Pakistan seceded from its union with West Pakistan in 1971 and was renamed Bangladesh. About a third of this extremely poor country floods annually during the monsoon rainy season, hampering economic development.

Main Airports

Chittagong (CGP) (MA Hannan International Airport), Dhaka International (DAC) (Zia International), Syhlet (ZYL) (Osmani International Airport)

U.S. Embassy

Madani Avenue, Baridhara, Dhaka 1212, Bangladesh
tel: (880) (2) 885-5500

Statistics

GDP: purchasing power parity:

$304.3 billion (2005 est.)

GDP - real growth rate:

5.7% (2005 est.)

GDP - per capita: purchasing power parity:

2,100 (2005 est.)

Inflation rate (consumer prices):

7% (2005 est.)

Labor force:

66.6 million
note: extensive export of labor to Saudi Arabia, Kuwait, UAE, Oman, Qatar, and Malaysia; workers' remittances estimated at $1.71 billion in 1998-99 (2005 est.)

Exports:

$9.372 billion (2005 est.)

Exports - partners:

US 23.6%, Germany 13.5%, UK 9.4%, France 6.4% (2005)

Imports:

$12.97 billion (2005 est.)

Imports - partners:

India 14.1%, China 13.5%, Kuwait 8.5%, Singapore 6.2%, Japan 4.1%, Hong Kong 4.1% (2005)

Population:

147,365,352 (July 2006 est.)

Population growth rate:

2.09% (2006 est.)

Population Below Poverty Line:

45% (2004 est.)

Major Industries:

cotton textiles, jute, garments, tea processing, paper newsprint, cement, chemical fertilizer, light engineering, sugar

Employing Workers: 75*

Registering Property: 167*

Enforcing Contracts: 174*

Closing a Business: 93*

*2006 World Bank rank out of 175 countries

Starting a Business

The table below shows the number of steps and the amount of time needed to start a business, on average

Indicator	Bangladesh	Region
Procedures (number)	8	7.9
Time (days)	37	32.5

Bangladesh Risk Assessment

Country Rating

Rating: C

A very uncertain political and economic outlook and a business environment with many troublesome weaknesses can have a significant impact on corporate payment behaviour. Corporate default probability is high.

Risk Assessment

In fiscal 2006/07 starting 1 July, economic growth, the disturbances linked to electoral-period instability and the institution of a state of emergency early last year had little effect on GDP growth, up 6.5 per cent. Beyond the human toll, the cyclone in November 2007 should, however, have a significant impact on economic growth in 2007/08, which should drop below six per cent due to the damage done in the main rice production region. In conjunction with rising prices for farm products, the inflationary pressures resulting from the cyclone should affect household consumption. Grain imports, reconstruction spending, and higher subsidies of petrol prices should, moreover, undermine public finances.

The difficulties faced in recent months by textiles, a sector that generates 75 per cent of exports, compound the effects of the natural catastrophe. Recurrent social unrest, a severe lack of infrastructure and skilled labour, along with a relatively difficult business environment for private companies explain why some foreign buyers have sought alternative sources of supply. The sector nonetheless continues to enjoy assets that bolster its competitiveness, notably a low-cost, hardworking labour force.

Political uncertainties have also contributed to the low investment rate. Instituting a state of emergency in January 2007 and postponing the elections to end 2008 at the earliest undeniably enabled the country to overcome the political gridlock. The challenge for government officials now is to restore democratic institutions without triggering a resumption of violence, particularly between the two traditional parties, the Bangladesh Nationalist Party and the Awami League.

STRENGTHS

• The clothing manufacturing sector has contributed to the country's development since the early nineties.
• Transfers from emigrant workers, employed mainly in the Gulf region, and international aid, allow the country to compensate for the trade imbalance.
• The country has moderate foreign debt.

• Bangladesh is very vulnerable to natural catastrophes.
• The economy is very sensitive to how world competition develops in the textiles sector.
• The business climate has major shortcomings.
• A lack of infrastructure (particularly electricity) has impeded growth.
• The fiscal deficit remains large.

• Agriculture
• Apparel
• Arts & Crafts
• Automobile
• Bags, Cases & Boxes
• Chemicals
• Computer Hardware & Software
• Construction & Real Estate
• Consumer Electronics
• Electrical & Electronics
• Energy & Environment
• Food & Beverage
• Furniture & Furnishing
• Health & Medicine
• Home Supplies
• Industrial Supplies
• Lights & Lighting
• Machinery
• Mineral & Materials
• Office Supplies
• Security & Protection
• Service
• Sports & Entertainment
• Telecommunications
• Textile
• Toys
• Transportation