Introduction

The predisposition of any distinct and specific export sector has yet remarkable
contribution in Bangladesh export success albeit most salient sectors such as Labor
Migration and Agriculture have enormous contribution in the development of
Bangladesh economy and should assert the factual reason for the success of export
history of Bangladesh but, unfortunately rather than emphasized on Labor Migration or
Agriculture which have net approximately 90% value addition, some others most
talkative sector for instance, Jute, Readymade Garments which has only approximately
19% net value addition industry are considered as prominent emphasized sectors which
are mostly developed due to some advertent global factor, for example, Korea war in
1950s and Recession in world trade in 2007.
So, it is impediment to discourse the success of Bangladesh in global export based on a
certain sector. And therefore, we try to emphasize on overall most salient factors and
issues those are related with the SWTO analysis of Success of Bangladesh in
International Trade.

Preamble the Importance of SWOT Analysis:

SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. SWOT
analysis is a planning tool used to understand the Strengths, Weaknesses,
Opportunities, and Threats involved in a project or in a domain. It involves specifying the
objective of the business or project and identifying the internal and external factors that
are supportive or unfavorable to achieving the objective.

STEP: 01:
SWOT Brief:

STRENGTH

Productive and Highly Fertile Agriculture domain.

Geographical Location: Transit and Transshipment scope.
Relaxed Labor law and Low Labor Cost.
Listed as Least developed country in World Trade Organization (WTO).
Innovative fabric consumption in garments production.
Crop grown around the year.
High young > 30 population.
Huge number of hard-working manpower.
Diligent, Peaceful, Faithful people.
Women participation
Energy at comparatively lower price

Easily accessible infrastructure like sea road, railroad, river and air communication.
Wide ranges port facilities.
Convenience of duty free custom bonded warehouse.

Following short description has given:

Productive and Highly Fertile Agriculture domain

Bangladesh has far more advantage in production of agricultural products in the world
due to its highly fertile land. Despite the reduction of its arable land but still its
agricultural productivity is high with comparisons with other countries.

Relaxed labor Law and Low Labor Cost

One of the strongest strength of success of Bangladesh in international business is low
cost of labor. Bangladesh has a competitive advantage in cost of labor with other
country of the world. Bangladesh has 150% less labor cost in compare with India and
China.
Geographical Location
Others country can create industrial base in Bangladesh which is surrounded by India,
Myanmar and East Asia. It will be easy to do business with these countries from
Bangladesh where transportation is convenient.

Listed as Least developed country in World Trade Organization (WTO)

Bangladesh listed as least developed country in World Trade Organization and enjoying
some advantages like Pharmaceuticals Manufacturing, Country of Origin, and free Use
of Copy Rights Products.

 Crop grown around the year

Bangladesh has competitive advantage with other countries in production of crops.
Bangladesh grows cops around the year whereas others country have seasonal crops
production.
High young > 30 population
Population ratio of Bangladesh is very promising from other countries like Japan. In
Japan old age people ratio is getting high on the other hand Bangladesh has large
number of young population.

Huge number of hard-working manpower

Bangladesh has huge population. Most of the people in Bangladesh is young and they
are hardworking and diligent.

Women participation
Success of readymade garments is not possible without the participation of women.
Women play an important role in the growth of RMG. Bangladesh has a competitive
strength regarding participation of women in garments sector whereas Pakistan failed
to became success in garments sector due to non-participation of women.

Energy at comparatively lower price

Although there is a shortage of gas in Bangladesh but price of gas is very low in
comparison with other countries of the world. The other source of energy is electricity
which price is also low in comparison to the other countries.

Blessed with Sweet Water

Bangladesh by nature has sweet water which is necessary for quality agricultural
production. There is hardly any country in the world naturally gifted with sweet water.
Migrant Workers
Another important strength of success of Bangladesh in international business is its
migrant workers. A large number of migrant workers are sending huge remittances
which help to increase our foreign reserve. Moreover value addition of migrant workers
is 100% which is rare in other sectors.

WEAKNESS
Industrial Management Inefficiency: If the number of labor exceed 10,000 then
management capability decline therefore, specially garment owner, interests in
small factory rather than lager factory.
Lower economize of Scale.
Very wide trade gap that is unfavorable balance of trade & balance of payment
position: US based export but Asia based Import policy.
Unstable Government Policy.
Lack of vertical integrated industry.
Proper Negotiation Incapability.
Low Productivity and Quality.
Corrupted & inefficient Bureaucracy.
Serious problem of time and cost overruns of project implementation; especially in
Repairing of roads and highways.
Corruption.
Confrontational politics: Lack of democratic processes and values.
Lack of judicial independence: Lack of independence, and politicization of the justice
sector agencies.
Serious Brain Drain: Transfer of resources in the form of human capital.
The term "brain drain" designates the international transfer of resources in the form of
human capital i.e., the migration of relatively highly educated individuals from the
developing to developed countries.
High degree of irresponsibility, callousness & indifference on the part of project
managers of public sector projects.

Following short description has given:

Industrial Management Inefficiency

If the number of labor exceeds 10,000 then management capability decline therefore, specially
garment owner, interests in small factory rather than lager factory.

Very wide trade gap

A very wide trade between importing and exporting countries that creates unfavorable
balance of trade & balance of payment position. Bangladesh has basically USA based
export but Asia based Import policy.

 Unstable Government Policy

Another important weakness of Bangladesh in international business is unstable
government policy. Government frequently changes policy which has an adverse effect
in success of international business. Ruling party always neglects and do not continue
good policy which was taken by last ruling party.
Lack of vertical integrated industry
Lack of vertical integrated industry is another weakness of success international
business. An example is RMG sector which dependent on other countries for raw
materials. Thats why value addition in economy is only 19% relative other sectors like
leather which has above 90% value addition in economy of Bangladesh.
Proper Negotiation Incapability
The negotiation power and capability is also a weakness of Bangladesh in international
business. Due to use of proper knowledge and ability and some bilateral contract
impede to win the negotiation table.

Low Productivity and Quality

Bangladesh has a high rate of unskilled labor thats why productivity is low from other
countries. However Bangladesh has lack of ability to produce quality products.
Corrupted & inefficient Bureaucracy
Bangladesh has been losing its competitive advantage in international business due to
its highly corrupted and inefficient bureaucracy. Recently World Bank refuse to help in
develop energy sector due to corruption.

Time and Cost of implementing Projects

Recent reports shows that construction of road building cost among the countries
Bangladesh as positioned themselves in top position. It is a very big concerning issue for
Bangladesh, because when this type of cost is high revenue become low. When
implementation of projects takes longer time than estimated time it also raise cost.

OPPORTUNITIES

Remittance earning scope: Labor Migration.

FOB (Freight on Board) based High Value Textile and Garments business instead of
only CM (Cost of Making) based.
Pharmaceuticals Manufacturing.
Exemption of TRIPS.
Fisheries: Fish and prawn exports, Shrimp processing and export
Tourism.
Relaxed Labor law.

Following short description has given:

Remittance earning scope

Remittance is one of the major earning sources of Bangladesh which value addition
is 100%. High numbers of migrant workers are sending remittance from around the
world. An opportunity of manpower export is mainly depend on other countries
human policy. Recently India takes a vision to make India successful which assumes
that there is a high possibility of increase in export of manpower in India.
Pharmaceuticals Manufacturing
Due to the exemption of TRIPS, pharmaceutical industries in Bangladesh is growing
by taking advantage. By this agreement Bangladesh makes parallel medicine in the
other country. The country now exports about 500 pharmaceutical items. After
expiring the agreement, Bangladesh will retain the right to exports the medicine in
those countries where Bangladesh exports medicine during the time of agreement.

Fisheries Exports
Fish, prawn, Shrimp which have high demand in international market. Bangladesh
has these resources by naturally. If Bangladesh can process these resources
according to export manual this can create a big market. In Bangladesh export of
shrimp create 97% value.
Tourism
Bangladesh has huge natural beauties. The longest sea port is situated in
Bangladesh. It becomes a major tourist destination in Asia. By improving the
infrastructure and facilities it can be an attractive source for earning

Tax holiday Facility (THF):

* 5 years: For industries located in Dhaka and Chittagong Divisions (excluding 3 Hill
Tract districts of Chittagong Division).
* 7 years: For industries located in Khulna, Sylhet, Barisal, and Rajshahi, Divisions and
the 3 Chittagong hill districts.
Duty Exemption and Concessions on Machinery:
* For 100% export oriented industry, no import duty is charged in case of capital
machinery and spares up to 10% value of such capital machinery.
* Value Added Tax (VAT) is not payable for imported capital machinery and spares.
* Import duty @ 7.5% is secured in the form of bank guarantee or an indemnity bond
is returned after installation of the machinery.

Avoidance of Double Taxation:

* For Foreign Investors, double taxation can be avoided on the basis of Bilateral
Double Taxation Avoidance Treaties (DTTs).
* Exemption of income tax up to 3 years for the expatriate employees in industries
specified in the relevant schedule of Income Tax ordinance.

Incentives to Non Resident Bangladeshi (NRBs):

Tax exemption on the interest on foreign loan under certain conditions.
Exemption of income tax up to 3 years for the foreign technicians employed in
industries specified in the relevant schedule of the income tax ordinance.
Tax exemption on income of the private sector power generation company for
15 years from the date of commercial production.
Multiple entry visa facility for the prospective new investors.
Re-investment of repatriable dividend treated as new investment.
Citizenship by investing a minimum of US$ 500,000 or by transferring US$
1,000,000 to any recognized financial institution (non-repartriable).
Permanent resident ship by investing a minimum of US$ 75,000 (nonrepartriable).
Tax exemption on the capital gain from the transfer of shares of public limited
companies listed with a stock exchange.
Incentives to Export-Oriented and Export-Linkage Industries:

Duty free import of capital machinery and spare parts up to 10% of the value of
such capital machinery.
Back to Back L/C: Bonded warehouse and back to back letter of credit facility.
Loan Facility: Providing loans up to 90% of the value against irrevocable and
confirmed letter of credit/sales agreement.
Duty-free samples: The import of specified quantities of duty-free samples for
manufacturing exportable products.
Scheme Facility: The export Credit Guarantee Scheme facility.
7

 Domestic market Facility: 100% export-oriented industry outside EPZ is allowed

to sell 20% of their products in the domestic market on payment of applicable
duties and taxes.
Exempt Local Taxes: Export-oriented industries are exempt from paying local
taxes such as municipal tax.

THREATS

Emerging Myanmar Economy.

Diversification of Sri Lankan economy i.e. agriculture: 32.7%; industry: 26.3%;
services: 41%
Some African and Caribbean countries have enjoyed zero-tariff facility.
Impact of Dutch Disease in Bangladesh Economy.
Predisposition of unseasonal agriculture tendency i.e. Boro cultivation in winter
season.
Intended to be middle economy country without profound economic stability.
Adverse government involvement and lack of policy reform.
Depleting natural resources base-such as ground water, natural gas etc.
Increasing migration.
Insufficient support towards innovative, fundamental/adaptive research and efforts.
Hidden Momentum.

The Mega-Project New Roadmap: 2016 Bangladesh Budget (estimated cost)

Metrorail: $2.8 billion
The Payra deep seaport: $15.5 billion
Rooppur Nuclear Power Plant: $ 12.65 billion
Padma Bridge: $ 3.00 billion
Sonadia Deep sea port: $2.229 billion
Matarbarhi coal-based power plant: Tk 276.1 core
Following short description has given:

Emerging Myanmar Economy

Emerging of Myanmar economy is becoming a threat for Bangladesh. As Myanmar is
diversifying its trade portfolio. Myanmar is also developing their RMG sector which is a
big emerging threat for Bangladesh.

Zero-Tariff facility in Africa

Some African and Caribbean countries have enjoyed zero-tariff facility which is also a
threat for Bangladesh because some African countries labor cost is also low. This may
create transfer of some business from Bangladesh.

 Intended to be middle economy country without profound economic stability

Bangladesh has recently been upgraded from low income country to lower-middle
income country as per as the World Banks classifications. Its a big threat for
Bangladesh because if World Trade Organization also pushes Bangladesh into lower
middle income level then all the facility especially under TRIPS exemption
(pharmaceutical products, country of origin, copyright, software) will be stop.
Brexit
In terms of export destination UK is one of the largest export destinations after
Germany. About 11% of our export (worth US$3.2) billion. After the Middle East
countries Malaysia and the USA, the UK is the major source of remittance for
Bangladesh. As we see value of pound sterling is depreciating Bangladesh may receive
few revenue when exporting and lower remittance or non-resident may postpone
sending money back home until the currency revives.

STEP: 2:

SWOT Analysis Part:

1) Strength Vs Opportunity: = Favorable for Bangladesh int. trade.

Strength (+)positive

Geographical Location: Transit and Transshipment

scope.
Listed as Least developed country in World Trade
Organization (WTO).
Innovative fabric consumption in garments
production.
Huge number of hard-working manpower.

Opportunity (+)positive

Earning service charge and others related fee.

Pharmaceuticals Manufacturing, Country of Origin,
Free Use of copy rights products.

FOB based high value textile and garments

business i/o CM business.
Remittance earning scope: Labor Migration.

2) Strength Vs Threats: = Unfavorable for Bangladesh int. trade.

Strength(-) negative

Geographical Location: Transit and

Transshipment scope.

Threats (+) positive

Emerging Myanmar and Sri Lankan economy.

Listed as Least developed country in World Trade

Organization (WTO).

Intended to be middle economy country without

profound economic stability

Innovative fabric consumption in garments

production.

Impact of Dutch Disease in Bangladesh economy.

Huge number of hard-working manpower.

Adverse government involvement and lack of

policy reform.
10

3) Weakness Vs Opportunity: = Unfavorable for Bangladesh int. trade.

Weakness (+) positive

Corrupted & inefficient Bureaucracy and Lack of

democratic negotiations ability
Wrong & Unstable Government Policy.

Industrial Management Inefficiency.

Low Productivity and Quality.

Opportunity (-) negative

Earning service charge and others related fee from

Transit.

Pharmaceuticals Manufacturing, Country of Origin, Free

Use of copy rights products.

FOB based high value textile and garments business

i/o CM business.
Remittance earning scope: Labor Migration.

4) Weakness Vs Threats: = Favorable for Bangladesh int. trade.

Weakness(-) negative

Industrial Management Inefficiency and Lower economize

of Scale.
Wrong & Unstable Government Policy.
Low Productivity and Quality.

Corrupted & inefficient Bureaucracy and Lack of

democratic negotiations ability

Threats(-) negative

Emerging Myanmar and Sri Lankan Economy

Intended to be middle economy country without profound
economic stability
Impact of Dutch Disease in Bangladesh economy.

Adverse government involvement and lack of policy

reform.

11

Step: 3:
Decision and Recommendations:

From the discussion so far made, it is clear that there are ample domain that need
for improvement and build up a strong committed structural process. The following
measures may be suggested as identified:

Decision:
We should emphasize on Agriculture based export oriented business and
diversified other the exportable products.

Recommendations:
1. Develop a new export/ import currency exchange policy such as China Renminbi
policy.
2. There is an Inverse economic relations between United States of America and
Bangladesh economy. If the purchase power of American people decreased
then there is a positive possibility to improve Bangladesh foreign trade
especially Readymade Garments sector. So, we always need to update and
conscious about global trade issues, especially on American economy.
3. Develop long term indigenous skills for project implementation.
4. Diversified export items.
5. Emphasize on value added products instead of low value item.
6. Emphasize on Agriculture based industry.

-012