Impact of brexit on bangladesh economy a close look

Info icon This preview shows pages 27–30. Sign up to view the full content.

View Full Document Right Arrow Icon
Impact of Brexit on Bangladesh economy: A close look Altap Hossen June 23, 2016, is a black day for the European Union as the people of the United Kingdom voted in favour of leaving the union. Clearly, it is a massive drive to the European experiment in post world war-II. It will have outrageous implications all over the world especially for the developing countries like Bangladesh though the decision of departing the EU will come into effect after 2018. Furthermore, other EU countries may be influenced to leave the bloc subsequent to Brexit. Indeed, European politics and financial markets are thrown into a great turmoil after the referendum in Britain. Bangladesh, a least developed nation, has been enjoying the zero-duty market access since 1971 under the 'Everything but Arms' arrangement. The UK is Bangladesh's third largest importer and second largest provider of remittance. The total export and import volume between Bangladesh and the UK during the FY 2014-15 was valued US$ 3205.45 million and US$ 330.20 million respectively. Export items from Bangladesh to the UK mainly include knitwear, woven garments, engineering products, frozen food, leather etc. Import items from the UK to Bangladesh mostly include textiles and textile materials, prepared foodstuffs, base metals,
Image of page 27

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
machinery and mechanical appliances, electrical equipment, chemical products, etc. The readymade garments products constitute nearly 90 per cent of our total export. Besides these, local businesses also export agro-based products to the UK including fruits and vegetables worth more than Tk.4 billion each year. Nearly 40 per cent of our total export of vegetables, fruits and allied products enter the UK. After the referendum, the pound fell more than 10 percent that is the lowest value since 1985 and devaluation of pound through Brexit might hurt Bangladesh economy in different ways. UK may adopt an immediate conservative move on their financial expenditure as the purchase of goods or services in the UK will be more expensive and goods being sold to other countries from the UK will become cheaper in particular. Again, it could encourage imposition of a huge tariff on imports to raise revenue or to protect their domestic industries. If Brexit is effective, migrant workers and NRBs may defer sending money back home until the currency regains its old position. Racial tension may be raised as vote highlighted disagreement on immigration. Finally, it will echo around the world that may induce further shock in the world economy. As a consequence of Brexit, Bangladesh may lose its competitiveness over its counterparts, especially in the export trade. Thus, Brexit may negatively impact on exports and remittance earnings of Bangladesh. Moreover, it may significantly influence our future plan of expanding export which is linked with Vision 2021. Nobody exactly knows what will be the impact of Brexit
Image of page 28
on the world economy including Bangladesh. However, if the UK continues to allow duty-free market access after its exit, Bangladesh would not have difficulties in export.
Image of page 29

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 30
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern