[Bangladesh exported
nearly $18 billion worth of garments in the 12 months through June 2011, $10.5
billion of that to the European Union and $4.6 billion to the United States,
according to the Bangladesh
Garment Manufacturers and Exporters Association. The total nearly
doubled from four years earlier, and McKinsey forecasts the garment industry
will grow by as much as 9 percent a year over the next decade.]
 |
G.M.B Akash for the
International Herald Tribune
Bangladeshis go to
Cox's Bazar for a weekend of well-behaved,
fully clad fun by the
seaside.
|
COX’S BAZAR, BANGLADESH — Bangladesh is probably one of the last
places in Asia you would expect to see a thriving beachside resort featuring
luxury hotels.
And yet, Cox’s Bazar is
exactly that — a place where affluent Bangladeshis go for a weekend of
well-behaved, fully clad fun by the seaside. Come here during the high season,
when the monsoon rains are not pounding the country, and you will find the
beach filled with children and their watchful parents and with slightly
dilapidated orange beach umbrellas.
About five years ago,
there were only two or three high-end hotels in this small town on the Bay of
Bengal. Now there are a dozen, and counting. Smaller hotels and guesthouses are
proliferating, and property prices have risen sharply.
The transformation of
Cox’s Bazar from remote backwater to beach El Dorado — Bangladesh-style —
encapsulates the changes that have taken place in this nation of 160 million
people, and many other developing Asian countries, over the past decade or two.
“A middle class is
gradually forming,” said Zahid Hossain, principal economist at the Asian
Development Bank in Dhaka, the capital of Bangladesh. It mirrors the
developments that other emerging economies have been going through, he said.
“Domestic demand is growing and becoming an important driver of economic
activity.”
Progress, of course, has
been uneven. As in other Asian countries, the gap between rich and poor has
widened in Bangladesh, giving rise to social tensions and sometimes violent
protests. The murder this month of Aminul Islam, a prominent labor
rights activist, apparently in retaliation for his advocacy work,
put a spotlight on the low wages and poor working conditions that prevail in
burgeoning sectors like the garment industry.
In Bangladesh’s countryside,
home to more than 70 percent of the population, subsistence farming remains the
norm, and weather-related disasters regularly wreak havoc in the pancake-flat
lowlands.
Foreign direct
investment in Bangladesh has languished at about $1 billion
a year — less than what Albania or Belarus each receive, and
about one-tenth of foreign investments in Thailand or Malaysia. Woefully
inadequate power and transportation infrastructures, political infighting,
bureaucracy, corruption and a shortage of skilled laborers contribute to a
challenging investment climate.
Yet despite this, the Bangladeshi
economy has managed to grow more than 6 percent a year for much
of the past decade.
Economists at Standard
Chartered believe that Bangladesh could join what it has dubbed the “7 percent
club” of economies that expand at least 7 percent annually for an extended period
— allowing their economies to double every decade. Current members of the
“club” include China, Cambodia, India, Mozambique and Uganda.
HSBC, meanwhile, included
Bangladesh in a group of 26 economies — along with China, India
and several Latin American and African countries — where it expects to see
particularly strong growth. The United States and much of Europe, by contrast,
are likely to remain merely stable, according to HSBC’s projections.
The gradual shift in
global production to low-cost countries, from developed economies in Europe and
North America, is driving much of that growth. The trend, which began turning
parts of Asia — notably China — into manufacturing hubs in the 1980s and 1990s,
has started to take root in Bangladesh.
For now, Bangladesh’s
manufacturing prowess is primarily focused on the garment sector, which has
grown into a multibillion-dollar business that employs 3.6 million people and
accounts for 78 percent of the country’s exports.
Bangladesh has seen
particularly strong growth in the past few years, in part because of rising
labor costs in China, where manufacturing is moving into higher-margin
activities like product design.
“For many years, China
was almost always the hands-down answer to all buyers’ needs,” the consulting
firm McKinsey noted in a recent report.
Now, Western wholesale buyers of garments are looking for the “next China,” and
Bangladesh “is clearly the preferred next stop for the sourcing caravan.”
The statistics
illustrate the trend.
Bangladesh exported
nearly $18 billion worth of garments in the 12 months through June 2011, $10.5
billion of that to the European Union and $4.6 billion to the United States,
according to the Bangladesh
Garment Manufacturers and Exporters Association. The total nearly
doubled from four years earlier, and McKinsey forecasts the garment industry
will grow by as much as 9 percent a year over the next decade.
Li & Fung, a giant
Hong Kong trading company that supplies retailers including Walmart with clothing
mostly purchased from Asia, is a case in point. Last year, the company bought
$1 billion worth of apparel from manufacturers in Bangladesh, 41 percent more
than in 2010. Bangladesh overtook Vietnam and Indonesia in 2011 to become the
second-largest source of such products for Li & Fung, after China.
But infrastructure
bottlenecks and power cuts are substantial “negatives,” Bruce Rockowitz, chief
executive of Li & Fung, said at a recent news conference in Hong Kong.
Still, the company intends to increase the business it does in Bangladesh. “The
prognosis,” Mr. Rockowitz said, “ is good.”
Meanwhile, another
driver of economic growth has been the inflow of remittances — money sent home
by Bangladeshis who have sought employment abroad. More than $11 billion worth
of remittances flowed into Bangladesh last year, more than ten times the amount
from foreign investment, and the annual inflow is expected to rise to $20
billion in five years’ time, the government
estimates.
Of course, the fact that
tens of thousands of Bangladeshis go abroad each year highlights a weakness in
the country’s economy: Well-paid jobs are hard to come by.
Manufacturing is mostly
confined to low-level, fairly unskilled assembly work, rather than to high-end
production or design. Moreover, “other sectors, such as shipbuilding and
pharmaceuticals, are only just starting to emerge,” said Agost Benard, who
covers Bangladesh for the ratings agency Standard & Poor’s.
Still, the expansion of
the past few years and improvements in the agriculture sector mean that
domestic demand is growing.
Dhaka, whose population
has ballooned to about 15 million, now boasts car showrooms and a small but
growing number of high-end international hotels. Monthly office rents in the
most sought-after neighborhoods of the capital can be as high as 250 taka per
square foot, or 2,691 taka — $32.80 — per square meter — levels that would not
look out of place in some Western cities, according to the real estate services
firm Jones Lang LaSalle.
In Cox’s Bazar,
meanwhile, construction sites pockmark the once laid-back beachfront. A Best
Western hotel is in the making. Green Delta Housing, a Bangladeshi construction
company, is working on several developments. Carlson Rezidor Hotel Group, which
already operates a Radisson in Dhaka, is planning to open two hotels in Cox’s
Bazar in 2015.
The town is a long way
from turning into Cancún, Mexico, or the Côte d’Azur in France. Rickshaws
trundle along the potholed road between the small airport and the hotel zone
farther south, where shopkeepers sell dried fish and sunglasses, and rickety
stalls on the beach hawk souvenirs crafted from seashells.
“This is not Baywatch or
Hawaii,” said Mikey Leung, a co-author of the Bradt travel guide to Bangladesh.
“You’re not talking international-style resorts.”
But Cox’s Bazar has
changed a great deal over the past five years, Mr. Leung said. “Properties are
popping up like daisies, and the development is moving further and further down
along the beach. The speed and scale of it is unprecedented for Bangladesh.”
Moniruzzaman, a
marketing executive at the Cox’s Bazar office of Green Delta Housing who uses
only one name, concurred.
“Many, many things are
happening,” he said. “Land is like gold now.”
