Besides preferential access to the European market, the Bangladeshi garment industry benefits from a large labour pool while wages at USD 95/month are significantly lower than those in competing nations like Cambodia, China and Vietnam. A combination of these factors has now made Bangladesh the second biggest garment exporter after China. Worker remittances have also played a big role in building up foreign exchange reserves and these have rebounded in the latest financial year ended June 2018 by 17% to USD 15 billion (6% of GDP) due to a weaker currency and in the first five months of this financial year, they are up by 9% year over year.
Politics, which has in the past led to violent protests especially in the run up to national elections, appear to be a thing of the past with the current government having a firm grip on overall affairs which has led to a relatively stable environment in the run up to national elections on 30th December 2018. Given the economic and political expectations over the next few years it was a good time to visit Dhaka to get a feel of things by being on the ground.
Despite some of the perceptions, Bangladesh’s relatively stable economy offers a huge potential given its GDP of around USD 260 billon and population of 165 million which makes it amongst the larger economies in the region after China and India. Perceptions aside, this market should not be ignored as income levels rise for a large young population with a median age of 26 who will be a large consuming market over the next decade. In fact, Bangladesh is expected to have one of the fastest growing middle and affluent class populations just after Vietnam.