Positive & Negative Impact of Safta on Bangladesh
6. 0. Positive Impact of SAFTA in Bangladesh
I. Increases Bangladesh’s Trade Volumes with SAARC
The volumes of imports from SAARC countries as well as the exports of Bangladesh to
SAARC countries from fiscal year 1997/98 until fiscal year 2007/08 is provided in following (Table-1) and graphically illustrated in Figure 1. Clearly, as part of the overall increase in trade volumes, Bangladesh’s exports to SAARC countries have grown moderately and Bangladesh’s imports from SAARC countries have increased significantly, both in nominal terms.
Table: 1-Bangladesh's Exports & Imports with SAARC Countries & Rest of the World
(In million of US$, unless otherwise indicated)
The first important observation is that SAARC plays a very marginal role in Bangladesh’s exports. The share of Bangladesh’s exports to SAARC amounts to less than 4 percent of Bangladesh exports to the rest of the world. The shares are slightly more significant for imports, amounting to just below 12 percent for fiscal year 2007/08, but are still not as high as one might have expected. Second, the shares of imports and exports have grown only marginally over the ten year period: a) for exports from 2.4 percent to 3.3 percent, b) for imports from 13.8 percent to 18.1 percent, and c) for the sum of exports and imports from 9.1 percent to 11.6 percent.
II.Employment Opportunity and Poverty Reduction
If the markets are opened and prices are determined by the demand and supply factors, then the consumer stands to gain supremely as he would get the best prices. Since the demand would be more given that the number of consumers is greater than the number of producers, the supply would also increase or would encourage new producers from entering the market. This would mean that more people would be employed as factors of production will also be needed. Since more number of people will be employed, the standard of living and the over all levels of poverty will decrease in its absolute sense.
I. Increases Bangladesh’s Trade Volumes with SAARC
The volumes of imports from SAARC countries as well as the exports of Bangladesh to
SAARC countries from fiscal year 1997/98 until fiscal year 2007/08 is provided in following (Table-1) and graphically illustrated in Figure 1. Clearly, as part of the overall increase in trade volumes, Bangladesh’s exports to SAARC countries have grown moderately and Bangladesh’s imports from SAARC countries have increased significantly, both in nominal terms.
Table: 1-Bangladesh's Exports & Imports with SAARC Countries & Rest of the World
(In million of US$, unless otherwise indicated)
The first important observation is that SAARC plays a very marginal role in Bangladesh’s exports. The share of Bangladesh’s exports to SAARC amounts to less than 4 percent of Bangladesh exports to the rest of the world. The shares are slightly more significant for imports, amounting to just below 12 percent for fiscal year 2007/08, but are still not as high as one might have expected. Second, the shares of imports and exports have grown only marginally over the ten year period: a) for exports from 2.4 percent to 3.3 percent, b) for imports from 13.8 percent to 18.1 percent, and c) for the sum of exports and imports from 9.1 percent to 11.6 percent.
II.Employment Opportunity and Poverty Reduction
If the markets are opened and prices are determined by the demand and supply factors, then the consumer stands to gain supremely as he would get the best prices. Since the demand would be more given that the number of consumers is greater than the number of producers, the supply would also increase or would encourage new producers from entering the market. This would mean that more people would be employed as factors of production will also be needed. Since more number of people will be employed, the standard of living and the over all levels of poverty will decrease in its absolute sense.