A remarkable export performance

Posted in economics by jrahman on November 23, 2009

At the onset of the global recession last year, exports were considered to be a major channel through which Bangladesh would have been affected.  After the recession hit its most virulent phase after the Lehman collapse, within weeks the world trade collapsed.  Exports from Asia shrunk heavily.  But surprisingly, Bangladeshi export fell by much less.  Then it started recovering much earlier than other comparable countries.  A year after Lehman, while most Asian exports were still 15-20% lower, our exports were 5% higher. 

The first chart shows all this. 

The second chart shows the same information — export values indexed to Sep 2008 — for various types of exports from Bangladesh.  Ready-made garments, accounting for 2/3rds of our exports, hardly suffered through the recession. 

At the onset of the recession, optimists suggested that because our RMG exports were geared towards the budget end of the western market (characterised by Wal Mart), we would be relatively unaffected by the recession.  The Wal Mart effect seems to have been vindicated by the data. 

Overall, a remarkable export performance for Bangladesh. 

(All data sourced from CEIC Asia database, and are smoothed with a 3 month moving average).

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  1. […] Rahman at Mukti narrates about a remarkable export performance of Bangladesh this year: “A year after Lehman, while […]

  2. Diganta said, on November 24, 2009 at 3:25 am

    excellent!! Actually each recession drives the world towards more productivity and efficiency. Bangladesh export chart reaffirms that.

    • jrahman said, on November 26, 2009 at 7:03 am

      That’s a very Schumpeterian ‘creative destruction’ view of the world, which is at one level self-evidently true. But at another level, is the cost of dislocation worth the enhanced efficiency?

      • Diganta said, on December 1, 2009 at 3:54 am

        Whether it’s worth or not is a different question, but it’s evident that capitalism embraces efficiency whenever it’s in trouble. As a result of production costs in inefficient regions becoming a burden, countries such as Bangladesh would always gain as a result of increased efficiency (i.e. less investment for same output).
        Coming back to the question, if the existing is not destroyed, how would the globalization take place? The destruction at the first place creates a level-playing field for developing nations to compete and show their efficiency. So, what’s destroyed in developed world, is created in the developing/poor countries. This is a facet of Schumpeterian equation that benefits us.

      • jrahman said, on December 5, 2009 at 12:28 pm

        Yeah, can’t disagree with any of that.

  3. Unheard Voice » Blog Archive said, on November 26, 2009 at 7:15 am

    […] (More at Mukti) […]

  4. fugstar said, on November 26, 2009 at 5:50 pm

    what is your reading on ‘enhanced political stability’s’ influnce on export orders and productivity?

    whats the latest on growth of internal markets.

    is stuff like this significant ?

    • jrahman said, on November 27, 2009 at 11:57 am

      Not sure if political stability has had as much to do with export performance as our low cost advantage has. Part of the cost advantage is the Wal Mart effect story, but there is also an exchange story — taka is pegged to the dollar, and has depreciated against our competitors in recent months. I should explore this more.

      Political stability should, in theory, help with investment, which will help with productivity. The army-driven anti-corruption drive had a sharp negative impact on investment. Are businessmen feeling more secure without the threat of instability? Unfortunately, formal data come with a lag, and anecdotes don’t suggest an investment boom.

      Yes, resorts like that (their environmental and cultural effects aside, which is a legitimate but separate debate) seem to be great developments. Our rich spending their extra money in Sylhet instead of Singapore or Shimla, providing jobs in the local economy which can have further multiplier/trickle down effects — definitely a good thing.

  5. On the remittance performance « Mukti said, on December 9, 2009 at 12:19 pm

    […] jrahman @ 12:19 pm Tags: Migrant workers Couple of weeks ago, I looked at Bangladesh’s exports performance during the global recession.  Remittance was another channel through which Bangladesh was likely […]

  6. […] of weeks ago, I looked at Bangladesh’s exports performance during the global recession. Remittance was another channel through which Bangladesh was likely to […]

  7. […] currencies.  This can help our export — indeed, this may well be a major factor behind our strong export performance. And our major export competitors like China or Vietnam (but crucially, not India) maintain some […]

  8. Good news from exports « Mukti said, on May 5, 2011 at 5:46 pm

    […] share declined to 66%.  It’s not that garments exports fell — recall the Wal-Mart effect.  Rather, other products grew even […]

  9. Exports « Unheard Voice said, on May 8, 2011 at 5:50 pm

    […] share declined to 66%.  It’s not that garments exports fell — recall the Wal-Mart effect.  Rather, other products grew even […]

  10. A cold peace « Mukti said, on September 6, 2011 at 2:25 pm

    […] has built a strong export industry without access to the Indian market.  Exports held up remarkably well during the Great Recession.  And there are further positive signs.  Access to the Indian market […]

  11. […] exporters proved remarkably resilient during the first wave of the global recession in 2008-09.  As the chart shows, exports grew at a […]

  12. Mei Zi Tang said, on June 30, 2014 at 5:12 pm

    A remarkable export performance | Mukti

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