Bangladesh Country Risk Report Q1 2016, New Report Launched

Core Views

  • Bangladesh’s trade balance is likely to worsen slightly in FY2015/16 (July-June) as imports will continue to surge on the back of a strong taka. However, a modest recovery in the export sector and strong remittance growth will lend support to the current account balance, which should in turn help to maintain external stability. As such, we forecast Bangladesh’s current account deficit as a share of GDP to come in at -0.5% of GDP, versus -0.2% in FY2014/15. This reflects a relatively well-balanced economy, which should be positive for medium-term growth.
  • Bangladesh’s economy will likely grow by 6.5% in FY2015/16 (July-June), similar to the rate in FY2014/15, on the back of robust expansions in the industrial and services sectors. However, the global economic slowdown and domestic security threats pose downside risks to our optimistic view.
  • Bangladesh’s budget deficit as a share of GDP will widen to 4.3% in FY2015/16 as expenditure growth will likely outstrip revenue growth over the coming months. This will bode poorly for Bangladesh’s economy over the medium term as increased government borrowing will likely raise deposit and lending rates, which will in turn crowd out private investments.
  • Bangladesh Bank (BB) will likely hold off on interest rate cuts in FY2015/16 (July-June) as it remains handcuffed by volatile headline inflation and rising core inflation in the economy. Moreover, the central bank’s intervention in the foreign exchange market will continue to exert upside pressure on money supply growth, which will likely keep the consumer price index elevated. Over the coming months, BB will sustain its selective easing measures to support growth in the Bangladeshi economy.
  • The recent series of domestic terror attacks in Bangladesh could pose downside risks to political stability as the ruling Awami League appears to be trying to gain political mileage by blaming the opposition, Bangladesh Nationalist Party. The rise of domestic security threats could also have an adverse impact on the country’s economic recovery by deterring investors and weighing on the tourism sector.

Major Forecast Changes

We have revised Bangladesh’s real GDP growth forecast upwards to 6.5% in FY2015/16 (from 6.0% previously) as the stabilisation of the political climate will likely boost investor confidence and provide support for the country’s industrial and services sectors.

The Bangladesh Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Bangladesh. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Bangladesh’s economic, political and financial prospects through end-2019, just published by award-winning forecasters, Publisher Research.

Key Uses

  • Forecast the pace and stability of Bangladesh’s economic and industry growth through end-2019.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Bangladesh’s country risks against regional peers using Publisher’s country comparative Risk Index system.
  • Evaluate external threats to doing business in Bangladesh, including currency volatility, the commodity price boom and protectionist policies.
  • The Bangladesh Country Risk Report by Publisher Research includes three major sections: Economic Outlook, Political Outlook and Operational Risk.

Economic Outlook:

How will the Bangladesh’ economic policy-making and performance impact on corporate profitability over 2015-2019?

Publisher provides our fully independent 5-year forecasts for Bangladesh through end-2019 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Bangladesh Country Risk Report features Publisher’s forecasts with supporting analysis for 2015 through to end-2019, set against government views and Publisher’s evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data – for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • Publisher’s comprehensive Risk Index system – rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis

  • Economic Activity – real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments – trade and investment, current and capital account.
  • Monetary Policy – interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy – currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy – macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment – approvals, inflows and climate.
  • External Debt – debt profile (short and long-term plus public and private sector obligations).
  • Global Assumptions – forecasts for each year to end-2019 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon Publisher’s 100% independent forecast scenarios for Bangladesh and underlying assumptions – we take no advertising and are privately-owned.
  • Exploit the benefits of Publisher’s comprehensive and reliable macroeconomic database on Bangladesh, sourced and fully maintained by Publisher from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company’s business prospects, from Publisher’s team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Bangladesh over the next 5-years?

Publisher’s Bangladesh country Risk Index evaluates the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Bangladesh Market – Political Strengths, Weaknesses, Opportunities and Threats facing Bangladesh.
  • Political Stability and Risk Assessment – Publisher’s Risk Index assesses explicit short- and long-term risks to political stability; latest positioning and trends for Bangladesh’s risk are compared with regional and global averages.
  • Current Administration and Policy-making Publisher assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.
  • Long-Term Political Outlook Publisher examines the structural risks to the stability of Bangladesh’s political system and the dominant public policy issues likely to affect decision-makers, and outlines scenarios for how the state could evolve in the medium to long term.

Key Benefits

  • Benchmark Bangladesh’s risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company’s current operations and future plans.
  • Gain valuable insights into government and policy-making, through Publisher’s specialist team of analysts and economists, and their network of private and public sector sources.

Operational Risk

What are the current operational risks and difficulties associated with doing business in Bangladesh?

The Operational Risk section gives an evaluation of current risks and difficulties associated with operating in the market. It also provides a brief overview of the regional Operational Risk Index which benchmarks Bangladesh against its neighbours.

Operational Risk Contents

The chapter provides a summary of the main threats in the country, within:

  • Labour Market Risk (Education; Availability of Labour; and Labour Costs)
  • Logistics Risk (Market Size and Utilities; Quality and Extent of the Transport Governance)
  • Trade and Investment Risk (Economic Openness; Government Intervention; and Legal Risks)
  • Crime and Security Risk (Crime; Terrorism; and Interstate Conflict risks).

The report also drills down in greater depth to address key issues in one of the following segments most critical to the market:

  • Transport network, economic openness, cost and availability of labour, crime risks, bureaucratic environment, market size and utilities, and interstate conflict.
  • Assess your company’s exposure to country specific operational and business risks, using Publisher’s insight on the current dangers of operating in the market.
  • Evaluate Bangladesh’s risk profile against its regional peers, helping you understand the market’s strengths and weaknesses in relation to other countries.

Spanning over 39 pages Bangladesh Country Risk Report Q1 2016” report covers Executive Summary, Political Outlook, Economic Outlook, 10-Year Forecast, Operational Risk, Global Macro Outlook.

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With mobile growth slowing, Bangladesh looks to 3G to give the market new life, New Report Launched

Bangladesh has discovered a way to grow its telecom sector in spite of the odds. It remains one of the poorest, most densely populated, least developed countries in the world; yet it has somehow managed to show considerable spirit in the development of its telecoms and associated activity. This nation of almost 160 million people, with its comparatively low GDP per capita, has been involved in the creation of a very competitive mobile telephone market, especially its mobile market segment. Most noticeable also has been the willingness of Bangladesh to encourage foreign participation in these endeavours.

Following a number of boom years of expansion, the Bangladesh mobile market started showing signs of the growth moderating in 2009. This easing has continued through 2012 and into 2013. There had been a truly stellar year in 2007 with the mobile subscriber base increasing by 70%. Growth eased to around 30% and eased further to less than 20% by 2012, with the country’s mobile subscriptions reaching almost 100 million by end-2012. By late 2014 the subscriber numbers were approaching 120 million.

The strong growth in mobiles has been helped enormously by the deregulation of the country’s telecom sector. The rapid uptake of mobile services was no doubt at the expense of the struggling fixed-line sector, with low levels of teledensity and general shortcomings in fixed network infrastructure. The success of the mobile market, however, has been achieved in a country that continues to struggle with its lowly economic status, its frequent natural disasters such cyclones and floods and the slow implementation of much-needed economic reforms.

Despite a progressive regulatory regime, the country was slow to move forward with 3G mobile services. The first 3G licence in the country was awarded to Teletalk, the state-owned operator launching a pilot 3G offering in late 2012. The 3G licensing process for private operators was meant to follow quickly but became bogged down. The planned auction was finally held in September 2013. Four operators – GrameenPhone Banglalink, Robi Axiata and Bharti Airtel – acquired 3G spectrum in the auction, setting the scene for further developments in the market place. The operators moved quickly to launch their respective offerings and by March 2014 there were around 2.5 million 3G subscribers in total.

The fixed-line segment of the local telecom market has had a very difficult time of late. For years teledensity has remained essentially stagnant at less than 1%, by far the lowest in South Asia. The country had been struggling with its underdeveloped telecommunications infrastructure and heavy bias towards the four main cities. Then, as the country struggled to put an effective telephone network in place, the fixed market experienced a major setback in 2010. The regulator shut down five of the country’s fixed-line operators because of their alleged illegal activities. As a consequence, within a two month period the number of fixed services in operation had fallen from 1.7 million to around one million. The market has since recovered to some extent but it was nevertheless a major setback for the telecom sector and there were ongoing repercussions.

The internet usage has been growing quickly in Bangladesh, although obviously this was happening from a very low base. With an estimated internet user-base of close to 10 million (a 7% user penetration) coming into 2014, the number of people using the internet had more than doubled in just three years. The local internet industry was obviously preparing to move into the next stage of its development. The country must work hard, however, to overcome obstacles associated with the country’s lowly economic status and still developing ICT infrastructure. Broadband internet is in its infancy, but the country has started moving on a number of fronts into wireless based services and has embraced mobile internet in a big way. This is important because the range of technologies on offer help overcome some of the infrastructure limitations and left the nation into a broadband regime.

One initiative to note, the government has launched what it calls the Digital Bangladesh (DB) strategy; this is aimed at creating a digitised government, ICT-enabled services, nationwide internet connectivity, a high-tech park for businesses and ICT-trained human resources by 2021.

Spanning over 84 pages, 41 Tables, 5 Charts and 5 Exhibits “Bangladesh – Telecoms, Mobile, Broadband and Forecasts” report Covering Key Statistics, Telecommunications Market, Regulatory Environment, Fixed Network Operators, Telecommunications Infrastructure, Internet Market, Broadband Market, Digital Media / Digital Economy, Mobile Communications, Forecasts.

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Future of the Bangladeshi Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2018, New Report Launched

The Future of the Bangladeshi Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2018 offers the reader an insight into the market opportunities and entry strategies adopted by foreign original equipment manufacturers (OEMs) to gain market share in the Bangladeshi defense industry.

What is the current market landscape and what is changing?

After decades of independence from Pakistan, Bangladesh remains an emerging market-based economy, and intends to concentrate significantly upon economic, social, and human development in order to transform itself into a prosperous country over the upcoming decades. To protect its national integrity, and maintain internal and external stability, the government apportioned an average of 1.4% of its GDP for defense purposes over the review period, a cumulative figure of US$8.2 billion. During the forecast period, the defense budget is expected to be US$11.1 billion and increase at a CAGR of 6.95%.As Bangladesh has just two state-controlled defense equipment manufacturing units, the country has no other option but to import military hardware from foreign defense operators. In this regard, China holds the leading position as the arms exporter of Bangladesh, primarily due to the dynamics and diplomatic relations shared between the two governments. Bangladesh is expected to embark upon an arms procurement program in the future years that will also lead the government to enter into contracts and orders with other nations.

What are the key drivers behind recent market changes?

Certain factors pertaining to the security of Bangladesh are expected to drive the nation’s defense expenditure in the coming years. These include the risk of attacks from internal and external terrorist groups and border conflicts with the Algeria and Spain. Additionally, ammunition modernization initiatives will be an area of focus for military expenditure over the forecast period.

What makes this report unique and essential to read?

The Future of the Bangladeshi Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2018 provides detailed analysis of the current industry size and growth expectations from 2014 to 2018, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides a detailed understanding of emerging opportunities in specific areas.

Key Features and Benefits

  • The report provides detailed analysis of the current industry size and growth expectations from 2014to 2018, including highlights of key growth stimulators, and also benchmarks the industry against key global markets and provides a detailed understanding of emerging opportunities in specific areas.
  • The report includes trend analysis of imports and exports, together with their implications and impact on the Bangladeshi defense industry.
  • The report covers five forces analysis to identify various power centers in the industry and how these are expected to develop in the future.
  • The report allows readers to identify possible ways to enter the market, together with detailed descriptions of how existing companies have entered the market, including key contracts, alliances, and strategic initiatives.
  • The report helps the reader to understand the competitive landscape of the defense industry in Bangladesh. It provides an overview of key defense companies, both domestic and foreign, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.

Key Market Issues

During the forecast period Bangladesh is expected to invest US$11.1 billion in its armed forces, of which US$2.7 billion is forecast to be on the acquisition of military hardware, offering foreign OEMs limited opportunities to cater to the Bangladeshi defense industry. Although the allocation is higher than that of the review period, when it was US$2.2 billion, the budget still remains highly inadequate for the procurement of high-tech defense equipment. Furthermore, the country is expected to focus more on developing its economic conditions and bring in more wealth and prosperity for its people in the coming years. These factors do not make the Bangladeshi defense market an attractive investment destination for foreign companies.

According to Transparency International’s Corruption Perceptions Index 2012, Bangladesh is classified as a highly corrupt country. Failure on the part of parliament and legislature to exercise adequate control over the proceedings of the defense sector, led it to face a high level of corruption. Incidents of malpractice within Bangladesh’s military industrial base may limit the growth of the country’s defense sector. In addition to damaging the country’s image in the global arms market, it also discourages foreign OEMs from market entry. Although a number of laws including the Anti-Corruption Commission Act and Money Laundering Act have been implemented in Bangladesh to prevent corruption within the nation, it has not brought forth large-scale positive changes to date.

Key Highlights

Every country, including Bangladesh, aims to have a prudent and skilled Army, Navy, and Air Force for which a modern military base is essential. To protect the nation from internal and external aggression, as well as to establish and maintain peace within the nation, it is necessary to procure modern and high-tech arms, ammunitions and war-equipment that will enhance the combat capabilities of the armed forces. Furthermore, an efficient military unit also requires necessary training related to the advanced warfare techniques and have a well-connected and secured communication network. To achieve this goal, in 2010 the Bangladeshi government outlined a 10-year modernization program for its armed forces that is expected to value around US$490 million, and will see expenditure on the purchase of foreign military hardware, as well as the development of indigenous ordinance production. While the government intends to bring in more tanks and armored vehicles for the Army, the Air Force is expected to receive helicopters, air defense systems, air-to-air missiles, surface-to-air missiles and radars. Procurement for the Navy will include maritime patrol aircraft and patrol crafts.

Drug smuggling is a growing national concern for Bangladesh. Due to its strategic geographical location of being the central point of the ‘golden triangle’ (Myanmar, Thailand and Laos) and the ‘golden crescent’ (Pakistan, Afghanistan and Iran), the country serves as a transit route with easy land, sea, and air access. Furthermore, the country’s hilly northern and eastern sides, and sea on the southern side make it suitable for illicit drug trafficking. In addition to this, the Bangladeshi Department of Narcotics Control (DNC) has identified around 45-50 points along the borders that are being shared with the two neighboring countries – India and Myanmar through which drugs are smuggled in and out of the country. To combat the threat, in October 2012, Bangladesh and India agreed to share actionable intelligence and implement a coordinated strategy to curb contraband activities across the international borders. The two countries will conduct extensive training programs for the officers working in the arena of drug trafficking as well as exchange resource persons associated with such programs. The government is also working on tightening security along the Bangladesh-Burma border where Border Guard Bangladesh confiscated Yabba tablets at Dum Dum Meah check-post in May 2013. In October, Rapid Action Battalion – the anti-crime elite force of Bangladesh – arrested 10 people including seven Chinese nationals and three Bangladeshis, in Dhaka on charges of narcotics smuggling. In this respect, the country is expected to procure equipment such as surveillance and detection systems, scanning machines, and alarms.

The Bangladeshi defense industry is highly dependent on foreign suppliers to satisfy the demand for military modernization. Underdeveloped domestic defense capabilities, in addition to internal and external security threats, require the nation to import military hardware. As a result, the country has so far been unable to export defense equipment. In comparison with arms imported during the review period, the country’s arms equipment imports are estimated to increase as the government’s defense equipment modernization plans are put into action. Throughout the review period, China emerged as the largest supplier of defense equipment to Bangladesh, while armored vehicles accounted for the majority of imports. During the forecast period, the demand for aircraft will remain high, while the import of air defense systems is expected to increase.

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As Bangladesh’s mobile growth slows, regulator issues series of new licences, including 3G, as per new report

Bangladesh remains one of the poorest, most densely populated, least developed countries in the world; yet it has somehow managed to show considerable spirit in the development of its telecom sector. Bangladesh has discovered a way to grow the sector in spite of the odds. This nation of more than 150 million people, with its comparatively low GDP per capita, has been involved in the creation of a very competitive mobile telephone market. Most noticeable has been the willingness of Bangladesh to encourage foreign participation in these endeavours.

Following a number of boom years of expansion, the Bangladesh mobile market started showing signs of growth moderating in 2009. This easing has continued through 2012 and into 2013. There had been a truly stellar year in 2007 with the mobile subscriber base increasing by 70%. Growth eased to around 30% and eased further to less than 20% by 2012, with the country’s mobile subscriptions reaching almost 100 million by end-2012.

The strong growth in mobiles has been helped enormously by the deregulation of the country’s telecom sector. The rapid uptake of mobile services was no doubt at the expense of the struggling fixed-line sector, with low levels of teledensity and general shortcomings in fixed network infrastructure. The success of the mobile market, however, has been achieved in a country that continues to struggle with its lowly economic status, its frequent natural disasters such cyclones and floods and the slow implementation of much-needed economic reforms.

Despite a progressive regulatory regime, the country was slow to move forward with 3G mobile services. The first 3G licence in the country was awarded to Teletalk, the state-owned operator launching a pilot 3G offering in late 2012. The 3G licensing process for private operators was meant to follow quickly but became bogged down. The planned auction was finally held in September 2013. Four operators – GrameenPhone Banglalink, Robi Axiata and Bharti Airtel – acquired 3G spectrum in the auction, setting the scene for further developments in the market place.

The fixed-line segment of the local telecom market has had a very difficult time of late. For years teledensity has remained essentially stagnant at less than 1%, by far the lowest in South Asia. The country had been struggling with its underdeveloped telecommunications infrastructure and heavy bias towards the four main cities. Then, as the country struggled to put an effective telephone network in place, the fixed market experienced a major setback in 2010. The regulator shut down five of the country’s fixed-line operators because of their alleged illegal activities. As a consequence, within a two month period the number of fixed services in operation had fallen from 1.7 million to around one million. The market has since recovered to some extent but it was nevertheless a major setback for the telecom sector and there were ongoing repercussions.

The internet usage has been growing quickly in Bangladesh, although obviously this was happening from a very low base. With an estimated internet user-base of close to 10 million (a 7% user penetration) coming into 2013, the number of people using the internet had more than doubled in just three years. The local internet industry was obviously preparing to move into the next stage of its development. The country must work hard, however, to overcome obstacles associated with the country’s lowly economic status and still developing ICT infrastructure. Broadband internet is in its infancy, but the country has started moving on a number of fronts into wireless based services and has embraced mobile internet in a big way. This is important because the range of technologies on offer help overcome some of the infrastructure limitations and left the nation into a broadband regime.

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Market Research Reports Inc. is the world’s leading source for market research reports and market data. We provide you with the latest market research reports on global markets, key industries, leading companies, new products and latest industry analysis & trends.