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Dependency Of Bangladesh

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Autor:   •  January 24, 2011  •  2,616 Words (11 Pages)  •  586 Views

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1. Trade Dependency:

Bangladesh is dependent on many countries of the world for a lot of commodities and this dependency arises out of the local incapacity to produce these goods. Some of the areas in which Bangladesh is dependent are food items, petroleum, capital goods, mineral products, different kind of chemicals, raw materials for the textile industry and the pharmaceutical industry, plastic products etc.

1.1 Food Dependency

In the year 2003-2004 the total amount of food imports amounted to Tk.58,713,105 (in thousands). Food items include live animals, grains, edible fruits and vegetables, sugars, dairy products.

Live animals, e.g. cow are a major sector of dependency in particular time of the year (Eid-ul- Adha). Large numbers of cows are imported from mainly India to meet the excess demand at that time. India is our largest supplier of edible fruits and vegetables, sugar and dairy product. In 2003-2004, crops worth Tk.6,693,978(in thousands) and, sugar worth Tk. 1,650,323(in thousands) were imported. It can be easily said that for food items Bangladesh is dependent to a large extent on India.

It is quite unnatural that Bangladesh, being an agriculture-oriented country still has to import a large amount of food items. This is due to the mounting difficulty for the domestic crop producers to satisfy the needs of the increasing population. It can also be said that the dependence for food items depends on particular situations. For example, in the summer large quantities of mango are imported from India, in times of flood or drought rice, sugar and other staple foods have to be imported.

There are also a number of luxury food items that are imported e.g. coffee, cereals. These items are not produced locally. Due to increasing demand for these items, they are imported.

1.2 Petroleum and Capital Goods Dependence

Bangladesh is 100% dependent on other countries for petroleum or crude oil. Bangladesh imports crude oil from a number of sources, the main one being Saudi Arabia. This is one of the major sectors of dependency as crude oil is needed for almost every sector in the economy.

Bangladesh is also dependent on the western world countries for various types of capital machinery and equipment. The machinery used in agriculture, different factories and industries are all imported. All medical apparatus and equipment are also imported. The main reason for this dependence is the lack of technological know-how needed to produce these goods.

1.3 Mineral and Chemical Dependencies

Mineral products and other chemicals are needed for various industrial processes. They are used as either raw materials or other processing materials. In the year 2003-2004 Tk.66,843,822(in thousands) were imported and the major countries of dependence were India, China, and Indonesia etc. Our reason for dependence in this sector lies in the fact that mineral products and other elements required to make chemicals is not present in adequate quantities in Bangladesh.

Leather and pharmaceuticals are two of the fastest growing industries of Bangladesh. Products from these two sectors have gained considerable competitiveness in the international market. But the unfortunate part is that the raw materials for both these industries are imported from India and China. If Bangladesh could overcome dependence in these sectors, these industries’ products could become far more competitive in the international market as the cost of production would reduce significantly.

1.4 Textiles Goods and Miscellaneous

Among all the individual sectors, textiles & textile articles has been the biggest contributor for the last few years. The bulk of these huge imports in textile is due to cotton yarn, threads and cotton fabrics of Tk. 7380 crore, which is the biggest single item in terms of cash imports. Other than that, textile articles like silk, wool, woven fabrics, man made filaments and staple fibres, ropes, knitted fabrics and carpets are also imported. Consumer items like footwear, headgear, artificial flowers & umbrellas, which are mostly luxury goods, add a small amount to the total. Cement, asbestos, plasters, ceramic products, stone articles and glassware constitutes nearly Tk. 266 crore of imports.

Rare & Luxury items like natural pearls, stones, precious metals, imitation jewellery are imported in very small amount. But other metals like the base metals push the imports totals higher (Tk. 2826 crore). This includes iron, steel, copper, nickel, aluminium, zinc & their articles such as tools and cutleries.

1.5 Transportation Dependency

Another important segment where Bangladesh consumes in a very large scale depending completely on foreign imports is the transportation sector. The number of vehicles imported each year is increasing every year in such a way that most of the city roads are not enough to contain so many vehicles. But Bangladesh still doesn’t have any manufacturing plant to roll out vehicles and stop this huge bulk of local currency from moving away. The total value of all vehicles imported during the year, including aircraft, vessels and associated transport equipment stands at over Tk. 3144 crore. The same situation prevails in the shipping as well as CNG driven vehicle industries.

All the relevant financial data on import payments presented here has been taken from details of imports under cash as reported to the Bangladesh Bank by the banking sector. Total import payments of Bangladesh, including imports of EPZ, during 2003-2004 amounted to Tk. 64256 crore (US $ 10,903 million), reflecting a 12.9% increase in dollar terms.

2.0 Foreign Aid

External assistance has, over the years, bridged the savings вЂ" investments and exports вЂ" import gaps in the economy of Bangladesh. Thus it has played a significant role in the economic development of Bangladesh. Since the country’s independence in the year 1971, till 30 June 2004, the donors committed a total of about US$ 50.57 billion of external assistance. The foreign aid disbursed is either in the form of grants or loans and mainly in three sectors вЂ" food, commodity or project, as food aid, commodity aid, and project aid.

2.1 Food Aid

Bangladesh has been a food deficit country. Although food productions has increased and recently near self-sufficiency

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