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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.

 

Bangladesh: Status of logistics market driver

Tuesday, January 27, 2015 > 10:14:35
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(Financial Express)

The potential of Bangladesh as an emerging logistics market driver has been recognised. A 2015 global index, prepared by Agility, a publicly traded global logistics company headquartered in Kuwait, has placed the country at 28th on a total ranks of 45. The ranking is based on the economic performance of the concerned countries in 2014. It was a year during which Bangladesh witnessed almost no major political instability. As such its position in the afore-said index reflects its growing external and internal economic resilience, supported by 6.0 plus per cent growth of its gross domestic product (GDP) in recent years. Private investment, which was stagnant in the earlier three years, appeared to be regaining some momentum, as witnessed by rising private sector credit growth towards the end of 2014. Sustained remittance inflow last year helped offset large trade deficits. Under such circumstances, Bangladesh's ranking was made on the basis of computations of findings through a survey of 1,000 global logistics and supply chain executives.

The emerging markets were evaluated on the basis of their size, business conditions, infrastructure and other factors that make them attractive for investment by logistics companies, air cargo carriers, shipping lines, freight forwarders and distribution companies. The index also identified BRICS member-states -- Brazil, Russia, India, China and South Africa -- as having accounted for much of the growth and investment in emerging markets. Saudi Arabia climbed to No. 2 in the 2015 Index, ranking behind only China. Indonesia (No. 4 in the Index), Nigeria (27), Bangladesh (28) and Pakistan (25) climbed in the index rankings.

The economic activities in Bangladesh, to note again, began to normalise last year as social unrest abated from a spike in the run-up to the national elections. Consumer confidence returned to their near-normal levels. As a result, private consumption demand recovered from its somewhat depressed level the previous year, supported by good agricultural harvests, rebound in remittances and a smooth functioning of the services sector, particularly transport and trade. Exports started badly in the first quarter, but bounced back in the second quarter of the year. The strong economic performance came from higher public investment and exports.

For fiscal year (FY) 2015, growth of the Bangladesh economy has been projected at 6.4 per cent, slightly higher than the earlier forecast. The projection is based on a likely revival in worker remittances which bolster private consumption, while private sector investment picks up on greater political stability. But the latest political turmoil provides now some strong reasons for a re-think. If the troubles continue unabated for a longer period, this will have some serious bearing on prospects of Bangladesh still remaining a logistics market growth driver as ranked by the Agility. Blockades, now being enforced by the opposition parties, have already shattered supply chain and other logistics, jeopardising the recently-gained status of the country.

Unfortunately, an end to political confrontation is not in sight because of complex nature of the impasse with both the rival sides remaining adamant on their respective positions on issues afflicting statecraft. Non-stop blockades, mixed with local and nationwide strikes, have badly hit farm incomes, disrupted inter-district road and rail transport, weakened buyers' confidence in the exporters' ability to deliver on time and halted the rebuilding of investor and consumer confidence. Under such circumstances, achieving the projected growth will be quite challenging.


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