The United Kingdom (UK) has said corruption affects many aspects of daily life in Bangladesh and is often cited as a barrier to private sector development.
“One of the biggest challenges facing UK companies in Bangladesh is how to avoid paying speed money,” it says in a guideline report published on Thursday highlighting the challenges in doing business in Bangladesh.
“Speed money’ is unofficial, under the counter payments to minor officials to expedite busi-ness. Politicians, bureaucrats and law enforcement officials often wield significant discretion-ary power and there have been some abuses,” according to the guideline titled ‘Doing business in Bangladesh: Bangladesh trade and export guide’.
Bangladesh aims to become a middle-income country by 2021. The government’s strategic vi-sion for 2021 is a plan for growth through massive investment in infrastructure, skills devel-opment and trade. Cooperation with the private sector and international donor agencies is ex-pected.
Almost 100 UK businesses operate in Bangladesh, including well-known companies like HSBC, Unilever and GSK.
Benefits for UK businesses exporting to Bangladesh include English widely spoken in business British made goods regarded as reliable among end users strong consumer demand for prod-ucts, equipment and services concessionary duty on imported capital machinery.
Strengths of the Bangladesh market include annual growth rate of at least 5.3% over the last 16 years, stable credit rating, close to issuing first Sovereign Bond,poverty levels cut by half in the last decade and competitive labour force, it said.
Bangladesh is 173rd in the World Bank’s ease of doing business ranking.
The guideline mentioned that Bangladesh often lack transparency and have significant bu-reaucratic burden in terms of procurement practices in Bangladesh.
Bangladesh is ranked 145th in Transparency International’s Corruption Perceptions Index.
The Bangladesh market is extremely price sensitive with low price goods from India and China dominating many sectors. UK companies should sell into the market on the basis of quality, life cycle cost and training after sales service, it said.
The GDP grew by 6% in fiscal year (FY) 2013 (fiscal year ends in June).
Industry grew by 9% with strong expansion in construction and small scale manufacturing. 6.7% growth is forecast for 2016.
Inflation slowed to 6.41% in 2015 from 7.35% in 2014 FY.
The balance of payments was USD 5.4 billion in surplus in FY2014 after 10.7% growth in ex-ports and only 0.8% growth in imports.
Bangladesh’s RMG sector is now worth almost USD 25 billion. It is the third largest apparel exporter to the European Union (EU) and fourth largest to the US.
Bangladesh, with a population of 158 million, has the highest density population in the world. Per capita income is USD 1,190, so more than 25.6% of people live below the poverty line.
There has been over 119% growth in bilateral trade in goods and services between 2007 and 2012.
The UK exported £450 million of goods and services to Bangladesh in 2013. 71% of this was services.
Exports of goods were £131 million in 2014.
The UK’s main exports to Bangladesh in 2013 were nuclear reactors, boilers, machinery and mechanical appliances / parts electrical machinery and equipment / parts; sound recorders and reproducers, television image and sound recorders and reproducers, and parts / accessories iron and steel residues and waste from the food industries; prepared animal fodder.