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					                                                Industry
Bangladesh will have within a decade a sizable industrial sector where manufacturing will account for at
least 25 per cent of the GDP and at least 20 per cent of the employed workforce. This will mean a
considerable rise from the figure of 10 per cent around which the sector's share in GDP and employed
population have hovered for most of the past two decades.

A vibrant and dynamic private sector will be the principal actor in Bangladesh's industrial arena. The
industrial sector of Bangladesh will be competitive in the liberalized internal market as well as in the
external market. The industrial sector of Bangladesh shall have a dominant export orientation.

The goal of external competitiveness implies the pursuit of industrialization in accordance with the dynamic
comparative advantage of the economy. Given Bangladesh's resource endowment, the principle of dynamic
comparative advantage means production of labor intensive manufactures with skill up-gradation and
productivity growth as its cutting edge. This however, does not preclude the possibility of Bangladesh
having a niche high-tech industrial sub-sector that may be externally competitive.

Dispersal of small and medium industries will constitute an important element in the industrial policy
approach. Industrial development will be sustainable from the point of view of environmental concerns and
resource availability.

Industrial Policy 1999 aims at addressing these concerns building on earlier efforts and gains towards
industrialization of Bangladesh economy.

Traditional Sector:

The industrial sector produces around 10 percent of GDP, and long-term national strategies in the late 1980s
did not anticipate a major increase in that percentage. The greatest need and the greatest opportunities
remained predominantly in the agricultural sector.

Eastern Bengal was known for its fine muslin and silk fabric before the British period. The dyes, yarn, and
cloth were the envy of much of the pre modern world. Bengali muslin, silk, and brocade were worn by the
aristocracy of Asia and Europe. The introduction of machine-made textiles from England in the late
eighteenth century spelled doom for the costly and time-consuming handloom process. Cotton growing died
out in East Bengal, and the textile industry became dependent on imported yarn. Those who had earned their
living in the textile industry were forced to rely more completely on farming. Only the smallest vestiges of a
once-thriving cottage industry survived.

At independence Bangladesh was one of the least industrially developed of the populous nations. Annual per
capita consumption of steel and cement was only about one-third that of India, for example, and electric
power consumption per capita was less than one-fifth.

INFRASTRUCTURAL FACILITIES AND UTILITY SERVICES IN BANGLADESH

GENERAL:
The investors will, in general, find the infrastructural facilities and utility services available in Bangladesh to
be adequate. Bangladesh is now trying to establish itself as the next rising star in South Asia as a location for
foreign investment. The government has implemented a number of policy reforms designed to create a more
open and competitive climate for private investment, both foreign and domestic. The issues relating to
infrastructural facilities and utility services have been given high priorities in those policy reforms and
implementations.

COMMUNICATION:
The transport sector of Bangladesh consists of a variety of modes. The country being a flat plain, all three
modes of surface transport i.e. road, railway, and water are widely used in carrying both passengers and
cargo.

More than half of Bangladesh has access to an all-weather hard surface road within three miles distance.
There has been a dramatic expansion of road network in recent years. In 1997, the total length of paved road
under the Roads and Highways Department stood at more than 20,000 kilometers. It is increasing over time.
It is estimated that mechanized road transport carry about 70% of the country's total passenger and cargo
volume. Ports and important business centers are well connected by roads and highways.

In recent years, construction of a number of bridges such as the Bangabandhu Jamuna Bridge, Meghna
Bridge, Meghna-Gumti Bridge, Bangladesh-China Friendship Bridge, Shambhuganj Bridge and Mahananda
Bridge have been completed. The 4.8 kilometer long Bangabandhu Bridge which has been opened to traffic
in June, 1998, is the eleventh longest in the world. It has established a strategic link between the East and
West of Bangladesh, has integrated the country, is generating multifaceted benefits to the people and
promoting inter-regional trade. Apart from quick movement of goods and passenger traffic, it is facilitating
transmission of electricity and natural gas and has integrated the telecommunication link.

About 32% of the total area of Bangladesh is effectively covered by the railways. It connects all the
administrative and business points of the country. Railway container services from Chittagong port to Dhaka
are available.

About two-thirds of Bangladesh is a wetland laced with a dense network of rivers, canals and creeks. The
navigable waterways vary between 8372 kilometer during the monsoon to 5200 kilometer during the dry
season. Bangladesh Inland Water Transport Authority has been established by the government for
maintenance of navigability of ports and channels.

The entire coast along the Bay of Bengal is 710 Kilometer long. There are two major ports in the country.
Chittagong Port, the oldest port, has been an entry point for at least 1000 years. The Mongla Port in Khula
region serves the western part of Bangladesh. World’s reputed shipping lines are operating through these
two ports.

There are now 11 operational airports in Bangladesh. Of these, the airports at Dhaka, Chittagong, and Sylhet
serve international routes.

WATER:
Water is supplied by the Water and Sewerage Authority (WASA) in the metropolitan areas. Very high
priority is attached regarding availability of water in industrial areas.

WATER:
Water is supplied by the Water and Sewerage Authority (WASA) in the metropolitan areas. Very high
priority is attached regarding availability of water in industrial areas.

GAS:
Natural gas supply is available in major industrial areas.

TELECOMMUNICATION:
Comprehensive telecommunication services such as fully automatic telex, fax, e-mail, internet, telephone
including international direct dialing are available.

ELECTRICITY:
In Bangladesh, electric power is generated in hydro, steam, gas-turbine, and diesel power plants. All the
generating stations are interconnected through a national grid.

INDUSTRIAL LAND
Once an industrial project is registered, the entrepreneur is eligible to apply for allotment of land to the
government. Price of land in most of the industrial estates/ areas is relatively lower than the market rate.
These estates are developed with necessary infrastructure facilities such as electricity, gas, water, sewerage,
etc.

Industrial plots are allotted by Bangladesh Export Processing Zones Authority (BEPZA) and Bangladesh
Small and Cottage Industries Corporation (BSCIC) in industrial areas developed by them. Plots in other
industrial estates/areas, owned by the government or owned/controlled by any local authority, are allotted on
the recommendation of the Board of Investment (BOI).

Industrial Policy:

The Fifth Five Year Plan of Bangladesh envisages that Bangladesh will have within a decade a sizable
industrial sector where manufacturing will account for at least 25 per cent of the gross domestic product
(GDP) in place of present 11.3 percent and at least 20 per cent of the employed workforce in place of
present 7.7 percent. A vibrant and dynamic private sector will be the principal actor in Bangladesh's
industrial arena. The goals of export orientation and external competitiveness imply the pursuit of
industrialization in accordance with the dynamic comparative advantage of the economy. Given
Bangladesh's resource endowment, the principle of dynamic comparative advantage means production of
labor intensive manufactures with skill up-gradation and productivity growth as its cutting edge.
Decentralized small and medium industries will constitute important elements in the industrial scene of
Bangladesh. Industrial Policy, 1999 aims at addressing these concerns and build on earlier efforts and gains
towards industrialization of Bangladesh economy.

Main Objectives:

       1. To expand the production base of the economy by significantly raising the level of industrial
           investment
       2. To promote the private sector to lead the growth of industrial production and investment
       3. To define the role of the government as facilitator in creating an enabling environment for
           expanding private investment
       4. To focus public undertaking in those industrial activities where public sector involvement is
           essential to facilitate the growth of the private sector.
       5. To attract foreign direct investment in both export and import substitute industries
       6. To ensure rapid growth of industrial employment by encouraging investment in labour intensive
           manufacturing industries including investment in efficient medium, small and cottage industries
       7. To generate female employment in higher skill categories through special emphasis on skill
           development
       8. To raise industrial productivity and to move progressively to higher value added products
           through skill and technology up-gradation
       9. To enhance operational efficiency in all remaining public manufacturing enterprises through
           appropriate management restructuring and pursuit of market- oriented policies
       10. To diversify and rapidly increase export of manufactures
       11. To encourage the competitive strength of import substituting industries for catering to a growing
           domestic market
       12. To ensure the process of industrialization this is environmentally sound for preventing
           environmental pollution and maintaining ecological balance
       13. And to encourage balanced industrial development throughout the country by introducing
           suitable measures and incentives.

SECTOR WISE INDUSTRY OVERVIEW

Bangladesh, traditionally known for jute and tea exports, has recently attracted world- wide attention for
readymade garments, leather exports and pharmaceutical products. Bangladesh foresees an expansion of her
agricultural sector, as well as increased diversity in non traditional industries and business.
Textile

The fastest growing industry in Bangladesh with RMG accounting for more than 75% of total exports.

Bangladesh is best placed in the region for textiles and garments because of cheap labor and trade status
with the EU.

Government incentives for the spinning and weaving industries include a 15% cash subsidy of the fabric
cost to exporters sourcing fabrics locally.

There is a huge fabric demand supply gap in the RMG industry which is being me by imports.

Thus the potential for backward linkage industry is enormous.

RMG and Backward Linkage:

The phenomenal growth in RMG was experienced in the last decade. With about 2,600 factories and a
workforce of 2 million, RMG jointly with knitwear accounted for more than 70% of total investments in the
manufacturing sector during the first half of the 1990's.


Pharmaceutical industry in Bangladesh

In Bangladesh the pharmaceutical sector is one of the most developed hi-tech sectors which are contributing
in the country's economy. After the promulgation of Drug Control Ordinance - 1982, the development of this
sector was accelerated. The professional knowledge, thoughts and innovative ideas of the pharmacists
working in this sector are the key factors for this development. Due to recent development of this sector it is
exporting medicines to global market including European market. This sector is also providing 97% of the
total medicine requirement of the local market. Leading pharmaceutical companies are expanding their
business with the aim to expand export market. Recently few new industries have been established with high
tech equipments and professionals which will enhance the strength of this sector.

				
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