[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

How we could broaden our export base

Diversifying Bangladesh’s export basket has been a high-priority policy objective for many years.

www.thedailystar.net

How we could broaden our export base

VISUAL: SALMAN SAKIB SHAHRYAR

Diversifying Bangladesh's export basket has been a high-priority policy objective and a much-talked-about subject for many years. As the country prepares to graduate from the LDC status in 2026, accelerating export diversification initiatives and strengthening the country's export competitiveness have become urgent needs.

Challenges to export diversification include issues regarding trade policy regime, trade infrastructure, and other crucial business-enabling factors. Despite these challenges, some of the priority sectors have been making significant contributions to Bangladesh's export earnings, including industries with high potential for higher-value products.

Thanks to the rise of RMG, Bangladesh's economy saw a significant structural transformation in the 1980s. Apparel exports have led our transformation from a primary goods-exporting economy to a manufactured goods-exporting country, thus spurring economic expansion and poverty reduction. Over the decades, the country has achieved a notable industrial production base. Now its export portfolio remains highly concentrated in the RMG sector, which accounts for more than 80 percent of total exports.

The country's entry into the global apparel markets was facilitated by the multi-fibre arrangements (MFAs). Duty-free and quota-free market access particularly under the EU's Generalised System of Preferences (GSP) for LDCs, Relaxed Rules of Origins (ROOs), and supportive trade policy adopted by the government have been instrumental in gaining competitive advantage and sustaining export growth. After the MFA quotas were scrapped in 2005, Bangladesh was able to consolidate its export competitiveness on the basis of its cheap labour cost.

However, the overdependence on apparel exports means any adverse impact on the RMG industry would lead to a major setback for our economy. Export concentration in a single sector leaves it vulnerable to the impacts of shocks affecting said industry, such as disruptions in supply chain or production, global demand fluctuations, and changing fashion trends.

As per statistics, knitwear garment products comprise 44.6 percent and woven garments 37.2 percent of Bangladesh's total exports, followed by footwear (2.3 percent), jute products (1.9 percent) and fish (one percent). According to the Asian Development Bank's (ADB) working paper titled "Fostering Export Diversification in Bangladesh," published in June 2024, the country's export structure is among the least diversified in the world.

Because the success of the RMG sector has not been replicated in other sectors, export concentration has become a long-standing challenge, signalling significant risk for long-term export sustainability. Moreover, Bangladesh's export items consist primarily of labour-intensive products with limited value addition.

Leather and leather goods industry is the second highest export-earning sector in Bangladesh. According to the Export Promotion Bureau (EPB), the total leather exports registered a 12.55 percent growth year-on-year in FY2024-25, amounting to nearly $1.06 billion between July 2024 and May 2025. Noticeably, the export of leather goods registered a 6.11 percent decrease and export of finished leather fell by 6.29 percent between July 2024 and March 2025. On the other hand, leather footwear exports rose by 26.08 percent during the first 10 months of FY25. This significant success of leather footwear exports indicates a shift towards the export of higher-value products.

The global leather goods market, valued at $531.07 billion in 2025 to $855.36 billion by 2032, according to Fortune Business Insights, a global market research and consulting firm. To increase the export competitiveness of Bangladesh's leather industry, it is essential to speed up green transformation of the tanneries to become eligible for the Leather Working Group (LWG) certification. Besides, SMEs that work with leather products must be given easy access to finance. A closer industry-academia integration is indeed necessary for creating skilled human resources for the leather industry.

On the other hand, Bangladesh has succeeded in developing the strongest performing pharmaceutical industry—the most knowledge-intensive and advanced technology-dependent industry in the country—among all the LDCs. Several factors have catalysed the development of the pharmaceutical sector; promulgation of the Drug Control Ordinance, 1982 and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), for example, made way for the country to manufacture generic and branded generic medicines. High level of professional knowledge and skills and the innovative ideas and visionary initiatives of some industry leaders orchestrated the establishment of this high performance pharmaceutical industry. It meets almost 98 percent of the domestic demand and exports drugs to at least 151 countries, including the US.

Bangladesh is also among the top 10 producers of rice, jute, farm fish, vegetables and potatoes, among other harvests. The agriculture sector employs over 36.9 percent of the national workforce and contributes 11.2 percent to the GDP, according to government data. According to Bangladesh Investment Development Authority (BIDA), the country produces over 70 million tonnes of agricultural products annually. Due to a lack of adequate processing and storage facilities, as much as 30 percent of the 40 million tonnes of vegetables and fruits produced in the country is lost after harvesting every year. So, agro-processing has the potential and the opportunity to build upon the country's agricultural strength. The agro-processing sector has high prospects for diversifying exports and reaching a growing global processed food market.

The agro-processing industry currently contributes 1.7 percent to GDP and 13 percent to the country's manufacturing value. Value-added food products such as frozen fish, spices, potato flakes, fruit juice, and dry food are exported across the world, including the EU, Middle East, and Japan. Given the projections showing a gradual growth of global food markets, there are significant opportunities for Bangladeshi suppliers to supply agro-processed products.

Light engineering is another potential industry that can contribute to export diversification. This industry produces machinery spares and small tools for automobiles, railways, mills and factories, textiles, agro-machinery, construction equipment, the shipbuilding industry, etc. The sector meets approximately 50 percent of the domestic demand for light engineering products, significantly reducing dependency on imports.

The sector's domestic market size is estimated at $8.2 billion, as of FY2023-24. In 2022, light engineering product export reached $795.63 million. Key export items include bicycles, industrial machinery, refrigerators, optical lenses, and batteries. Industry insiders say Bangladesh's share in the global market is less than one percent. With targeted export promotion and improved market access, this industry has significant potential to support export diversification.

Therefore, policymakers in the country can consider the potential of these sectors to urgently diversify the range of Bangladesh's exports.

T.I.M. Nurul Kabir is a business, technology and policy analyst.​

 

[Saif]

Attention economy: a new horizon of opportunities and challenges

Herbert A. Simon made a groundbreaking observation in his 1971 landmark article "Designing Organisations for an Information-Rich World: Information abundance means attention scarcity." His insight has become increasingly relevant in today's digital age. Simon foresees that as the flow of informati

thefinancialexpress.com.bd

Attention economy: a new horizon of opportunities and challenges

Matiur Rahman
Published :
Jul 10, 2025 22:26
Updated :
Jul 10, 2025 22:26

Herbert A. Simon made a groundbreaking observation in his 1971 landmark article "Designing Organisations for an Information-Rich World: Information abundance means attention scarcity." His insight has become increasingly relevant in today's digital age.

Simon foresees that as the flow of information grows infinitely, human attention will emerge as the most precious resource. Currently, attention is more than a psychological aspect; it functions as an economic commodity-- limited, in high demand, and readily tradable. This idea forms the foundation of the attention economy.

The idea of the attention-based economy was later clarified and solidified in the works of Thomas H. Davenport, Michael Goldhaber, and John C. Beck. Specifically, Goldhaber predicted in his 1997 article "The Attention Economy: The Natural Economy of the Net" that the exchange of attention would drive the future economy. His analysis correctly explains the rise of today's social media platforms, including YouTube and Google Search, as well as the dominance of ad-supported content.

These digital platforms constantly compete for our attention. In this context, information producers urge users to spend time on their content, click, like, and share it. Such user responses are the main driving force of today's digital economy.

Advertising is the main source of income for modern digital platforms, including Facebook, YouTube, TikTok, and Instagram. But advertisers don't just want to promote their products or services; they want to keep users' eyes, ears, and minds engaged for as long as possible. To achieve this, digital platforms employ techniques such as advanced algorithms, recommendation systems, autoplay videos, and personalised notifications.

These techniques activate the 'novelty' and 'reward' centres of the user's brain, keeping people engaged on the platform and motivating them to return repeatedly. This "infinity scrolling" method, which allows users to scroll to discover new content, has become a universal digital standard today.

These attention-grabbing designs have profound social and psychological effects. Various studies have shown that these techniques reduce people's concentration, increase anxiety, cause depression, and weaken their ability to think deeply and critically about politics and society.

This trend is also growing in Bangladesh, especially among urban youth. As the young generation spends hours on social media, their real-life interactions and learning processes are disrupted, which can hurt their mental health in the long run.

The global digital advertising market is currently valued at over $700 billion and is expected to reach $1 trillion by 2025. Google, Meta (which includes Facebook and Instagram), Amazon, Tencent, ByteDance (TikTok), and YouTube are the key players in this expansive market. These platforms leverage their advanced technology and algorithms to transform users' attention into a product sold to advertisers.

People's daily screen time is a key indicator in this assessment. In the United States, the average adult spends over 11 hours a day on a screen. This increase is also quickly growing in South Asia, especially in India, Bangladesh, and Pakistan. In Bangladesh, urban youth spend about 7-9 hours daily on a smartphone or laptop, mostly watching videos on Facebook, YouTube, or TikTok.

These statistics clearly show that human attention has become a valuable asset and a core source of revenue for the world's biggest technology companies. These companies are investing billions to capture and retain users' attention, as it is the key driver of their revenue.

The growth of digital connectivity and the rapid expansion of mobile internet in Bangladesh have added a new dimension to the attention-based economy. As of early 2025, the country had over 77 million internet users and more than 60 million social media users. Of these, Facebook alone had over 60 million users, and YouTube had about 44.6 million active users. The advertising industry in Bangladesh has undergone a significant transformation to capture the attention of this large audience.

Where once most advertising money was spent on television, newspapers, and billboards, now about one-third of it goes to digital platforms. The digital advertising market in Bangladesh was worth approximately $1.3 billion in 2025 and is expected to surpass $1.78 billion by 2027. Various sectors within digital advertising, such as search ads, social media marketing, influencer marketing, video ads, and mobile ads, are experiencing rapid growth.

The social media advertising sector alone is projected to spend $85 million in 2025. Additionally, the influencer marketing market is valued at around $35 million. These figures indicate that Bangladesh's attention-based economy is a robust and dynamic sector, presenting new opportunities for the country's economic growth. This growth is not just financially important but also crucial for creating new jobs and boosting digital skills.

Bangladesh's youth are central to the economy. Over 60 million young people aged 15 to 35 use smartphones, create content, watch videos, share memes, go live on Facebook, or run YouTube channels. Their influence and presence on social media not only enable self-expression but also generate an alternative economic space.

Influencers' sources of income include sponsored content, affiliate marketing, earnings from video views, live streaming gifts, and promoting digital products. These income streams serve as an alternative route to employment for young people, especially in areas where the unemployment rate stays around 11.3 percent.

In this attention-driven sector, youth are not only making money but also gaining technology-based skills that prepare them for future careers. They are developing abilities such as video editing, graphic design, digital marketing, and content creation, which make them competitive in both local and international markets.

Although the attention-based economy has created new opportunities in Bangladesh, it also has some negative effects. Excessive screen time, addiction to clickbait content, confusion caused by information overload, violations of personal privacy, lack of focus, and mental exhaustion are impacting a large portion of today's youth.

Experts say that young people are unknowingly becoming addicted to digital platforms because these platforms profit from capturing attention and use psychological techniques to keep users engaged longer. As a result, users are losing their normal thinking, concentration, and analytical skills.

This addiction is impairing students' education and decreasing their productivity at work. Misinformation and rumors are spreading quickly in society, leading to social unrest. Privacy violations are also increasing, as user data is being sold to advertisers, which raises cybersecurity risks.

Policy, education, and public awareness are crucial to making the attention economy sustainable and equitable. As part of the Bangladesh government's 'Smart Bangladesh' initiative, digital education is being emphasized, which integrates technology with digital health, fact-checking, and awareness.

Media literacy programs in schools and colleges can teach students how to manage notifications, verify unbiased information, and recognise content that can harm their mental health. Similarly, social media platforms need to be held accountable; there should be transparency about how their algorithms work and where user data is stored. The government should enact strict data protection laws and ensure user privacy.

If Bangladeshi tech entrepreneurs, media, NGOs, educational institutions, and civil society collaborate, they can advance the attention economy in a fair, integrated, and sustainable way. This effort is not only for economic growth but also for developing talent, critical thinking, and human values. The involvement of the government, educational institutions, and all levels of society is crucial in creating a healthy digital environment. Users must be educated about responsible digital behavior, and platforms should be held accountable for their actions.

The face of the global economy is undergoing rapid change. Now, it is not just about determining the price of products or services-people's attention, time, and awareness are also becoming commodities that can be sold individually. The future of digital platforms depends on who can hold this attention.

Bangladesh has already entered this rapidly evolving attention economy. The digital advertising industry, young people's creativity, the widespread use of social media, and the government's technology-focused policies all contribute to positioning Bangladesh at the edge of new economic opportunities. However, this journey is not without challenges. While there is great potential on one side, there are also mental health risks and concerns about information overload on the other.

Now is the time to view attention not just as a means to make money, but as a national resource. It must be protected and used responsibly, and its fair use should be ensured at all levels of society. Only then can Bangladesh go beyond participating in the digital attention economy and become a leading nation. If this attention economy is managed effectively, Bangladesh will benefit economically and develop a healthy, informed digital society.

Dr Matiur Rahman is a researcher and development professional.​

 

[Saif]

NBR reform aims at boosting revenue collection upholding fiscal discipline: Finance Minstry

Bangladesh continues to grapple with one of the lowest revenue-to-GDP ratios in the world, hovering around 8 percent for decades, prompting the government to adopt a series of reforms aimed at strengthening revenue mobilisation and maintaining fiscal discipline. In response, the government has tak

thefinancialexpress.com.bd

NBR reform aims at boosting revenue collection upholding fiscal discipline: Finance Minstry

UNB
Published :
Jul 10, 2025 17:31
Updated :
Jul 10, 2025 17:31

Bangladesh continues to grapple with one of the lowest revenue-to-GDP ratios in the world, hovering around 8 percent for decades, prompting the government to adopt a series of reforms aimed at strengthening revenue mobilisation and maintaining fiscal discipline.

In response, the government has taken initiative to separate tax policy from administration to design fair, growth-friendly tax policies with greater efficiency and accountability.

In line with this move, according to the Medium Term Macroeconomic Policy Statement by the Finance Division of the Finance Ministry, required legislation is being enacted.

It said that the NBR has also adopted the Medium- and Long-Term Revenue Strategy (MLTRS) to boost revenue Mobilisation aiming to raise the revenue-to-GDP ratio to 10.5 percent by FY2035, a target that reflects a relatively modest level of ambition, especially in the context of country’s growing development needs.

Within this context, the revenue outlook for the fiscal sector is projected to follow a steady growth trajectory over the medium-term.

Total revenue is expected to increase gradually from 8.18 percent of GDP in FY24 to 9.09 percent of GDP by FY28.

In FY25, the total revenue target has been revised downward from 9.66 percent to 9.17 percent of GDP, which comes from domestic economic challenges, reduced import demand, tax exemptions on essential food items, and contractionary fiscal measures.

Non-Tax Revenue (NTR), meanwhile, remains relatively low, mainly due to limited administrative fees, service charges, and returns from public assets and is projected to reach only 0.67 percent of GDP by FY28.

The national budget for FY2025–26 has set the revenue collection target at Tk5.64lakh crore, which is equivalent to 9% of the country’s Gross Domestic Product (GDP).

Of the total estimated revenue income of Tk5.64 lakh crore, an amount of Tk4.99 lakh crore is expected to be collected through the NBR, while the remaining Tk65,000 crore is projected to come from other sources.

Of the toral amount of NBR side, the Taxes on Income,Profits and Capital Gains will be Tk 1,82,001 crore, Value Added Tax will be Tk 1,88,518 crore, Supplementary Tax will be Tk 68,244 crore, Import Duty Tk 51,438, Export Duty Tk 78 crore, Excise Duty Tk 6,091 crore and Tk 2,630 will be come from Other Taxes segment.

Of the total Tk 19,000 crore from non-NBR segment, some Tk 11,886 crore will come from stamp (non-judicial), Tk 2723 crore from land tax, Tk 2000 from vehicle tax, Tk 1541 crore from surcharge and Tk 850 crore from narcotics and liquor duty.

Of the total Tk 46,000 crore non-tax revenue, Dividends and Profits will contribute Tk 10,791 crore, Interest Tk 4,890 crore, Administrative Fees Tk 5,070 crore, Fines, Penalties and Forfeiture Tk 486 crore, Service Fees Tk 8,634 crore, Rents and Leases Tk 711 crore, Tolls Tk 1,709 crore, Non-Commercial Sales Tk 3,077 crore, Other Receipts (other than tax) Tk 10,527 crore and Capital Receipts Tk 105 crore.

Bangladesh’s fiscal profile continues to reflect one of the lowest government expenditure-to-GDP ratios globally, in line with its historically low tax-to-GDP ratio, according to official documents.

Over the past decade, total public expenditure has hovered between 12 percent and 13 percent of GDP.

In the FY25 original budget, total expenditure was projected at 14.24 percent of GDP; however, this has been revised downward to 13.18 percent due to persistent macroeconomic challenges, including revenue underperformance, elevated inflationary pressures, and external sector vulnerabilities.

A key factor behind this revision is the reduction in Annual Development Programme (ADP) spending from 4.73 percent to 3.83 percent of GDP, reflecting a deliberate policy shift toward deferring non-essential capital projects to maintain fiscal discipline and support inflation management.

Meanwhile, current expenditure remains broadly stable, which underscores the government’s commitment to sustaining essential services and social protection.

Over the medium-term, expenditure is expected to follow a measured upward path in line with enhanced revenue mobilisation and fiscal space, with total outlays projected to remain around 12.76 percent of GDP by FY28.

ADP expenditure, however, is expected to remain modest, stabilising at 3.83 percent of GDP by FY28.

Currently, the outstanding total public debt (including GPF) remains below 40 percent of GDP, and the fiscal deficit has consistently been maintained below 5 percent of GDP.

Nonetheless, the share of interest payments has been increasing in recent years, driven by a higher volume of external debt and rising interest rates on both domestic and external borrowing.

For FY25, the overall fiscal deficit has been revised down to 4.0 percent of GDP from 4.57 percent in the original budget.

This adjustment reflects expenditure cuts, particularly the postponement of less priority ADP projects. Looking ahead, the overall deficit is projected to decline further to 3.73 percent of GDP by FY28, which is lower than the actual deficits recorded in recent years.

This projection aligns with the government’s medium- term stance of maintaining a contractionary fiscal policy.

Moreover, net foreign financing is estimated at 1.93 percent of GDP in the revised FY25 budget, it is expected to decline to 1.24 percent by FY28, reflecting the government’s effort to reduce external borrowing and discourage reliance on non-concessional loans.​

 

[Saif]

Foreign investment more than doubled in first quarter of 2025

Bangladesh witnessed a significant surge in net foreign direct investment (FDI) in the January-March quarter of 2025, driven by a sharp rise in intra-company loans and strong equity investments. According to data from the Bangladesh Bank (BB), net FDI rose to $864.63 million in the first quarter o

thefinancialexpress.com.bd

Foreign investment more than doubled in first quarter of 2025

Published :
Jul 12, 2025 18:46
Updated :
Jul 12, 2025 18:46

Bangladesh witnessed a significant surge in net foreign direct investment (FDI) in the January-March quarter of 2025, driven by a sharp rise in intra-company loans and strong equity investments.

According to data from the Bangladesh Bank (BB), net FDI rose to $864.63 million in the first quarter of 2025, up by 114.31 per cent from $403.44 million in the same period of 2024.

The latest foreign investment was also 76.31 per cent higher than in the October-December period of 2024, when the country received a net amount of $490.40 million, BSS reports.

The sharp increase came despite a 24.31 per cent year-on-year decline in reinvested earnings, suggesting that fresh capital injections and debt inflows are currently driving investors' interest.

However, the inflow of equity investments also rose significantly year-on-year to $304.38 million during January-March 2025, from $188.43 million in January-March 2024.

At the same time, the inflow of intra-company loans surged to $626.97 million - nearly two and a half times the $253.80 million borrowed by foreign firms here a year ago, data from the BB showed.

Reinvested net earnings fell to $194.71 million in the first quarter of this year, down from $257.26 million a year ago.

Outflows also rose, reaching $711.53 million during the first quarter of 2025 from $651.19 million during the same period a year earlier.​

 

[Saif]

Committed to helping Bangladesh maintain inclusive growth path: WB VP

World Bank’s new Vice President for the South Asia Region Johannes Zutt has said the global lending agency ‘remains committed’ to helping Bangladesh to maintain a ‘sustainable and inclusive growth path and create more and better jobs’ for the two million youths enterin

thefinancialexpress.com.bd

Committed to helping Bangladesh maintain inclusive growth path: WB VP

UNB
Published :
Jul 12, 2025 19:51
Updated :
Jul 12, 2025 19:51

World Bank’s new Vice President for the South Asia Region Johannes Zutt has said the global lending agency ‘remains committed’ to helping Bangladesh to maintain a ‘sustainable and inclusive growth path and create more and better jobs’ for the two million youths entering the job market every year.

“I have very fond memories of Bangladesh, its people and the friendships I have made. I was always impressed by the resilience and creativity of the Bangladeshi people and their determination to build a better future for their children,” said Zutt, who arrived in Dhaka on Saturday, marking Bangladesh as his first official tour in the new role.

During his four-day official visit, Zutt will meet Chief Adviser Prof Muhammad Yunus, Finance Adviser Dr Salehuddin Ahmed, Bangladesh Bank Governor Ahsan H Mansur, and other senior government officials and private sector representatives, according to the WB.

The WB Vice President said he looks forward to seeing firsthand the transformative changes that have been achieved over the ten years since he left his role as Country Director.

Zutt assumed his role as World Bank Vice President for the South Asia Region on July 1, 2025 and he previously served as the World Bank’s Country Director for Bangladesh, Bhutan and Nepal from 2013-2015.

A Dutch national, Zutt joined the World Bank in 1999 and has taken positions of increasing responsibility.

He most recently served as the World Bank’s Country Director for Brazil. Before this he was the Director for Strategy, Results, Risk and Learning in the Operational Policy and Country Services (OPCS) Vice Presidency.

Zutt has also served as Country Director for Türkiye, Comoros, Eritrea, Kenya, Rwanda, Seychelles and Somalia.

The World Bank was among the first development partners to support Bangladesh after its independence.

Since then, the Bank has committed about $46 billion to Bangladesh, mostly in grants or concessional credits.

Bangladesh currently has one of the largest ongoing programs supported by the World Bank Group’s International Development Association (IDA).​