Since Bangladesh gained independence in 1971, it has faced numerous issues, from natural disasters to the recent influx of refugees from Myanmar. Despite these challenges, the country is on the up.
“Last year, Bangladesh achieved all three criteria to come out of ‘least developed country’ status,” said Consul General of Bangladesh Mehdi Hasan, speaking at a Chamber roundtable on 6 May.
Besides this milestone achievement, Bangladesh has many other positive indicators at present, as Hasan explained. It is the third-fastest growing economy in the world, and its GDP has increased threefold in the past 10 years. The poverty rate is falling and literacy rate is rising, and now stands at 72%. Recent reports from organizations including HSBC and the World Bank have highlighted the country’s continuing and stable economic growth.
However, the Consul General admitted, there are still areas for improvement, such as Bangladesh’s low ranking on the Ease of Doing Business Index.
In terms of industries, textiles continue to dominate, with garments making up around 80% of exports. But as Hasan explained, the country is making efforts to change its reliance on this sector and is increasingly active in other industries including pharma, leather, frozen food – and particularly IT.
“We are diversifying very fast into other areas. We produce everything from chips to ships,” he said. “It is said that the IT sector will be the next garment sector, because it is growing so fast.”
Other benefits include the country’s large and young population – the average age of a worker is 26, compared with 42 in China – and a growing middle class.
“Another aspect, often overlooked, of why Bangladesh has been doing well in the past few years has been ensuring gender equality,” Hasan added. Although it is a male-dominated society, there are women in a number of high-profile roles, including having female prime ministers for much of the past 30 years.
Also at the roundtable, Dewan Saiful Alam provided his insights into the reality on the ground. He has lived in Hong Kong for 26 years and has been doing business in Bangladesh for more than 20 years.
Some hurdles remain, including slow customs procedures, and the lack of adequate port and airport capacity. But he said that the situation has improved greatly during the time he has been active in Bangladesh, and processes have become streamlined.
For example, the banking sector has developed, and there are now three Bangladeshi banks operating in Hong Kong. “If you do business in Bangladesh, your payments will be secure,” Alam said.
He also provided some advice on the business culture of Bangladesh, which is quite different to Hong Kong. For example, Bangladesh people will often not speak directly, and investors should not expect things to happen quickly. “The first meeting will be small talk; you will need subsequent meetings to arrange a deal.”
The low cost of salaries, offices and facilities have been a key draw for investors in the country for many years, particularly in manufacturing. This remains the case, with Bangladesh still considerably cheaper than many of its competitors in terms of costs.
The large young workforce is another attraction, and it is increasingly diverse. Besides low-skilled staff, investors can also expect to find increasing numbers of educated and skilled workers in areas including engineering, technology and management.
Bangladeshi workers “are motivated, and they want to work hard,” Alam said.