Bangladesh Studies
Bangladesh Studies
  • Home
  • Bangladesh
    • Foreword
    • Acknowledgements
    • Preface
  • Country Profile
    • Country
    • Geography
    • Society
    • Economy
    • Transportation and Communications
    • Government and Politics
    • National Security
  • Introduction
    • bangladesh studies>
      • Chapter 1 - Historical Setting >
        • EARLY HISTORY, 1000 B.C.-A.D. 1202
        • Islamization of Bengal, 1202-1757
        • European Colonization, 1757-1857>
          • Early Settlements
          • The British Raj
        • Pakistan Period , 1947-71>
          • Transition to Nationhood, 1947-58
          • The "Revolution" of Ayub Khan, 1958-66
          • Emerging Discontent, 1966-70
          • The War for Bangladeshi Independence, 1971
        • Birth of Bangladesh>
          • Early Independence Period, 1971-72
          • Fall of the Bangabandhu, 1972-75
          • Restoration of Military Rule, 1975-77
          • The Zia Regime and Its Aftermath, 1977-82
      • Chapter 2 - The Society and Its Environment>
        • Geography>
          • The Land
          • Climate
          • River Systems
        • Population>
          • Population Structure and Settlement Patterns
          • Migration
          • Population Control
        • Social System >
          • Transition to a New Social Order
          • Rural Society
          • Urban Society
          • Women's Role in Society
          • Social Classes and Stratification
        • Religion>
          • Islam
          • Hinduism
          • Buddhism
          • Christianity
        • Education>
          • The British Legacy
          • Education System
          • Religious Education
          • Education Planning and Policy
        • Health>
          • Disease and Disease Control
          • Health Care Facilities
          • Medical Education and Training
      • Chapter 3. The Economy>
        • Economic Context >
          • Historical Perspective
          • Economic Reconstruction after Independence
        • Managing the Economy>
          • Economic Policy and Planning
          • Government Budget Process>
            • Revenue Budget
            • Development Budget
        • Joint Ventures and Foreign Investment
        • Money and Banking>
          • Currency Fluctuation
          • The Banking System
        • Foreign Assistance >
          • Test Case for Development
          • Aid Dependence>
            • International Banks
            • United Nations
            • Foreign Governments and Private Donors
        • Agriculture>
          • Structure of Agricultural Production
          • Food Crops
          • Industrial Crops
        • Industry>
          • Traditional Sectors
          • Ready-made Garments
          • Other Industries
          • Mineral Development
          • Technological Advances
        • Foreign Trade >
          • Export Sectors
          • Balance and Terms of Trade
        • Transportation and Communications>
          • Inland Waterways and Ports
          • Road Transportation
          • Railroads
          • Civil Aviation
          • Telecommunications
          • Tourism
        • Problems and Prospects
      • Chapter 4 - Government and Politics>
        • Structure of Government>
          • Constitution
          • Legislature
          • Executive>
            • Presidency
            • Council of Ministers
          • Judiciary
          • Civil Service
          • Local Administration
        • The Ershad Period>
          • Achieving Stability, 1982-83
          • Emerging Opposition, 1983-86
          • Relaxation of Martial Law, 1986-87
          • More Opposition Pressure
        • Political Dynamics >
          • Local Elites
          • The National Party
          • Party Politics>
            • Awami League
            • Bangladesh National Party
            • Islamic Parties
            • Alliances
            • Workers and Students
            • Women in Politics
        • The Media
        • Foreign Policy >
          • South and Southeast Asia>
            • India
            • Pakistan
            • Other Nations
          • China and Other Asian Nations
          • The Islamic World
          • The Superpowers>
            • United States
            • Soviet Union
          • Western Europe, Canada, Australia, and New Zealand
          • International Organizations
      • Chapter 5 - National Security>
        • Armed Forces and Society>
          • Colonial Origins
          • Pakistan Era
          • The Liberation War
          • Postindependence Period
        • Organization of the Armed Forces>
          • Legal Basis
          • Recruitment
          • Mission>
            • National Defense
            • Intelligence and Security
          • Security Environment
          • Defense Spending
          • Foreign Acquisitions and Ties
        • The Three Services>
          • Army
          • Navy
          • Air Force
        • Auxiliary Forces >
          • Bangladesh Rifles
          • Ansars
          • Police
          • Village Defence Party
        • Public Order and Internal Security>
          • Violence and Crime
          • Insurgency in the Chittagong Hills
          • Criminal Justice
          • The Military in the Late 1980's
  • Bibliography
  • Glossary
  • About us
  • Contract us
Jute

Jute has long been Bangladesh's major foreign exchange earner, and although other products have become important, in 1987 jute still accounted for more than 50 percent of export revenue, with manufactures accouting for an increasing portion of the total (as compared with raw jute) (see table 13, Appendix; Industrial Crops , this ch.).

Since independence, Bangladesh's largest customer for jute products has been the United States; the bulk of sales has been divided fairly evenly between burlap and carpet backing. But, consistent with the global pattern, the United States market has eroded fairly steadily over the years. Sales to the United States reached a low of US$81.8 million in 1986 but increased again to US$104.5 million in 1987, when both prices and volume rose. The market for jute sacking was assisted by the fact that some recipient countries of American food aid specified burlap for their United States imports because they had a secondary market for the bags.


Seafood

In the 1980s, Bangladesh emerged suddenly and dramatically as a major producer of shrimp, frog legs, and fish for export. The seafood industry's sudden success resulted primarily from private entrepreneurial initiatives, in response to a hospitable international market. The natural resources to support a growing fisheries sector are abundant, including enormous potential to develop inland water bodies, as well as even greater productive areas of coastal and offshore waters. Coastal brackish-water shrimp farming was more developed and was likely to grow further as investment increased, higher technology was brought to the activity, and the world market continued buoyant.

The pace of fishery development was impressive in the 1980s. At the beginning of the 1970s, frozen seafood was responsible for less than 1 percent of exports or US$3.4 million per year. The figure rose to US$40 million in FY 1981, US$113 million in FY 1986, and US$86 million in the first 6 months of FY 1987. At that point, it was suddenly second only to jute as Bangladesh's most valuable export.

Fresh and frozen shrimp accounted for two-thirds of Bangladesh's seafood exports in the mid-1980s; Japan purchased more than half. The United States, Belgium, and Britain were the other major buyers; the United States was the prime customer for frog legs, the largest category after shrimp.




Garments

The first ready-made garment factories in Bangladesh aimed at the export market were opened in the late 1970s by investors from other Asian countries whose exports had been restrained by quotas imposed by importing nations. By the mid-1980s, the ready-made garment industry had become a strong export earner. Garment exports brought receipts of only US$3 million in FY 1981, but by 1984 exports had risen to US$32 million, and the following year revenue soared to US$116 million. For FY 1985 and FY 1986, ready-made garments were the second biggest foreign exchange earner for Bangladesh after jute.

The surge in Bangladeshi exports eventually caused a reaction among some industrial nations. Canada, the European Economic Community, and the United States expressed concern that inexpensive Bangladeshi garments were flooding their markets. In 1985, after a series of notices as called for by multilateral agreements, the United States--which was the destination of about 25 percent of Bangladesh's garment exports--began imposing quotas on Bangladeshi garments, one category at a time.

Bangladeshi manufacturers, working with the government, organized with remarkable speed and efficiency to adapt to changing conditions. They policed themselves to stay within quotas, allocating production quotas according to equitable criteria, and began diversifying their production into categories where there were not yet quotas: for example, cotton trousers, knitwear, dresses, and gloves. After a period of adjustment, during which some of the least well-established firms closed and workers were laid off, the industry began stabilizing, and growth continued at a more moderate pace. Exports in FY 1986 rose another 14 percent, to US$131 million, and prospects were good for continued growth at about that rate.



Other Export Industries

The quality of Bangladesh's tea, grown in the Sylhet hills area, is not competitive with tea grown elsewhere in Asia, and during the Pakistan period sales were increasingly restricted to West Pakistan. The war of independence raised a question about whether alternative markets could be found for Bangladesh's tea. Production in FY 1973 was 24 million kilograms, down from 31 million kilograms in FY 1970. Pakistan remained interested in Bangladeshi tea and again became the chief customer, followed by several Arab countries. In the 1980s, production returned to the pre-1971 level and was relatively stable from year to year, but prices were not. Bangladesh received less than half the value in FY 1986 for virtually the same amount sold in FY 1984 (US$33 million versus US$69 million). As with jute, Bangladesh could hope for little more than to preserve--but not expand--its small niche in the world's tea trade.

Bangladesh also holds a small place in the international leather trade. World prices were somewhat less volatile than for tea, and in the 1980s Bangladesh could count on annual earnings of between US$56 million and US$90 million, primarily because of the high quality and premium prices of skins from Bangladesh. There was little scope for increasing production because competition over land and feed kept down the population of cattle and goats.

In the mid-1980s, fruits, vegetables, and spices also began to become important export items. Previously negligible in export accounts, in FY 1986 this category brought in nearly US$15 million, chiefly from Middle Eastern and British customers. Prospects were bright for continued growth of this diversification of Bangladeshi agriculture, as external demand was expected to remain lively.

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