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Bangladesh: An Emerging Market



As an emerging market, Bangladesh is fast becoming a booming business destination in South Asia. Its progress has clearly been rapid over the years and with the prospect of high return, capitalizing on this rapid growth is paired with well-positioned timing and localization strategy.

Considered today as a frontier market, there are a lot of sectors in Bangladesh, which are continuously accelerating. For a nascent economy, it offers interesting investment opportunities but can be heavily skewed to just some sectors leaving the other industries under-invested. Cheap valuation and fast growth rate along with stronger purchasing power of the masses can be commonly seen in Bangladesh’s market, making it an appealing and attractive investment lure to investors.

With stocks rising to 40 and 38 percent in 2009 and 2010, respectively, one can see that there is minimal market liquidity. Tagged as one of the 11 countries to look out for by Goldman Sachs, Bangladesh is slowly turning heads. The country has had favorable advancement when it comes to development especially in terms of infrastructure. This is because the roads, power and water sectors saw a vast improvement compared from over a decade ago, making it a more appealing lure to interested investors.

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Over the years, the country also saw a significant progress in its education and health due to the fresh infusion of investments allocated by the new move of the government to privatize more of their properties. Mortality rate has been falling, which invariably spells that there are better living conditions for the majority of the public. Despite the fact that the lower lying areas of Bangladesh remains susceptible to extreme climate changes, the country is slowly learning to manage the disasters that come along their way.

On another note, its agricultural industry has experienced robust growth and is one of the biggest factors at play in fueling the country’s steady rise in its GDP. Its microfinance program translated into success as it enabled both SMEs and farmers to get closer in attaining global industry standards that’s more comparable to the world at large.

When it comes to export rate stability, Bangladesh is certainly one of the frontrunners in theemerging market with a yearly consistent increase of almost 30%. However, the government deficit remains a large problem for the country and the fact that its external debt remains at an all-time high. Although the country has been wrought with catastrophes and political unrest in the past decade, its growth remains a steady force over the years as its annual average growth rate is at a consistent 6%.

Other countries are therefore taking notice, including the West and China. As of 2011, China has put in about 200 million US dollars as part of the two’s loan agreement while in April 2012, the country has invented as much as a third of the US$659 million for construction expenses in one factory of Bangladesh’s province. The majority of the latter amount was heavily invested in the country’s telecommunications sector although the combined total of the two it remains as one of the most substantial sum the country has received from one country alone in direct foreign investments. In addition to this, the West remains as the top investor in Bangladesh with over a billion dollars at stake in various industries.



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