The Business Magazine of the Bangladesh German Chamber of Commerce & Industry (BGCCI)
Emerging Bangladesh Jan.-Mar. 2015
www.bgcci.com
Trade Advocacy From Europe to Bangladesh
H.E. Pierre Mayaudon Ambassador, European Union in Bangladesh
Special Report
3rd GSR Conference Achieving Milestone
From 60 to 600 Now time to consolidate
Christian Ewert Director General, Foreign Trade Association (FTA)
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CONTENTS 04
From the Editor
16
News from BGCCI
06
Opening Remarks
17
Inauguration Intertek Launches New Laboratory
08
Person of Interest H.E. Pierre Mayaudon, EU Ambassador
18
News from GIZ Training of Labor Inspectors
12
Special Interview Christian Ewert Director General, Foreign Trade Association (FTA)
Emerging Bangladesh Volume 3 Issue 1 Jan./ Mar. 2015 The business magazine of the Bangladesh German Chamber of Commerce & Industry Emerging Bangladesh will be published four times p.a. by the Bangladesh German Chamber of Commerce & Industry Publisher Sakhawat Abu Khair on behalf of Bangladesh German Chamber of Commerce & Industry It is distributed free of charge to members and qualified nonmembers in Bangladesh and abroad.
Bangladesh German Chamber of Commerce & Industry German House, 1st
Features & Advertisement Tawhidur Rashid
Floor, House: 10/C, Road 90, Gulshan 2, Dhaka-1212, Bangladesh
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Tel +88 02 8826480, Fax +88 02 8824858
Din Muhammad Shibly
info@bgcci.com,
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www.eurochamber.bangladesh.com, *All opinions expressed in articles do not necessarily reflect the views of BGCCI
Printed at Binimoy Printers Ltd.
20 Follow Up Report
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Foreign Direct Investment What Bangladesh Can Learn from China & India
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Export Diversification Diversify or Perish?
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Health Insurance for RMG Workers
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Feature The Fantastic Seven
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Special Report: Pave Your Way to Success
rd
The 3 GSR Conference: Shareholder Value Vs Social Responsibility A brief follow up report represents recommendations from the national and international panelists
Emerging Sector Leather Industry: The Next Big Thing
Page 36
FROM THE EDITOR
Dear BGCCI Members and Readers, This issue of 'Emerging Bangladesh' is special for a number of reasons. We have brought before you two very important interviews. In one of the interviews, H.E. Pierre Mayaudon, Head of Delegation of European Union to Bangladesh speaks about the prospects of Bangladesh's Blue Economy and Digital upsurge. He has befittingly informed us about the recently formed European Business Council in Bangladesh (EUBCB) and its aims. His Excellency has rightly pointed out the importance to realize Bangladesh’s vision to become a middle-income country by 2021 and how to achieve that. Further, we have inter viewed Christian Ewert, the honorable Director General of the Foreign Trade Association(FTA). He underlines the importance of changing the mindset of the business owners to adopt more responsible business practices. He has explained the experience of business audits by Business Social Compliance Initiative (BSCI) in the RMG Sector. Besides improving the building and electrical safety of factories, it is the duty of entrepreneurs and international brands to focus on secured working environment. As we look forward to commemorate the 2nd Anniversary of Rana Plaza Tragedy in a month, this is very much needed for all of us to understand that there is no alternate to business models which are compliant for workers as well as environment. 2014 was a significant year for all parties: factory owners, brands, policymakers due to all the small and big changes that took place in the RMG sector starting from factories’ load management to fire safety issues to 04
establishment of functioning trade unions of workers; and above all the change of mindset has started. BGCCI is glad that we ended the year with the very successful completion of 3rd G l o b a l S o c i a l Re s p o n s i b i l i t y Conference: Shareholder Value Vs Social Responsibility. The conference dealt with crucial issues like RMG and Fire Safety, Leather Industry, Social Protection of Workers, Proper Use of Waste Water and Technical Vocational Education Training (TVET). A brief of GSR Conference follow-up report will support you to know more about the recommendations that our national and international panelists offered for future. This issue also sheds more lights on Leather industry of Bangladesh. This new sector is supposed to accelerate in the country. This sector can do what RMG did for Bangladesh. A report on Studying Business in Germany as well as European Universities will help the 2nd generation to proceed with a foreign degree. Last but not least, this month Bangladesh is going to celebrate its 45th Independence Day. On behalf of BGCCI secretariat, we wish everyone a glorious and joyful celebration and a peaceful political environment in order to do better business. In partnership,
Daniel Seidl Executive Director
{Emerging Bangladesh} January - March 2015
OPENING REMARKS
On 28 May of 2013, BGCCI did something extra ordinary. The biggest bilateral business chamber of the country led other six bilateral chambers to come forward and declare its position against violent hartals. The political turbulence that caused much trouble to the economy then however ended by beginning of 2014. Nevertheless, little did we know that we would found ourselves in the same or to much extent even worse critical juncture due to another political deadlock. Similar kind of mindless arson attacks and violent hartals have already crippled the economy of the country. BGCCI is a non-political chamber yet we condemn such conditions because we believe for the betterment of the private sector that is the driving force of our economy, such conditions should not prevail. Hartal is a constitutional right but violent hartals as we have said time and again should not be tolerated. Politicians must seek out a long lasting solution; otherwise, the prospects of our emerging economy cannot be utilized properly. We the businessmen have made our stand clear in this regard. Pessimism aside, this issue of BGCCI's quarterly magazine, 'Emerging Bangladesh' talks more about possibilities of Bangladeshi economy in case of trade and CSR. Around the world, free trade is becoming more and
more popular. Economic balance of the world is shifting from the west to the east and Asian countries are coming up with more time-appropriate strategies to embrace the possibilities. Countries like China, which attracted the most FDI in the world surpassing USA offers a wide range of lessons for Bangladesh to learn. World Bank's doing business in Bangladesh 2015 on the other hand reminds us about the slow economic reforms that is causing Bangladesh lag behind in the country index. To attract more FDI, Bangladesh must ensure its ease of doing business or someone else from the neighboring countries will grab that share of the pie for sure. We all know that business as usual is no more an option! To suit the need of time, to ensure sustainability, we need to adopt business models that fuel innovation and encourage compliance. This is where BGCCI's Global Social Responsibility Conference provides the best possible platform to exchange ideas. Last year's conference was a revelation for many businessmen as industry experts share plenty of best business practices. We must not forget that action should speak louder than words and it is time to implement sustainable business ideas for a greener and better tomorrow.
Q
You have been in Bangladesh for a while now. How has the experience been so far? I am really glad that I got posted in Bangladesh, and got to work for EU in Bangladesh. I find the country fascinating and inspiring. Before coming here I was posted in several Asia Pacific countries including Japan, Korea and Singapore. Until last August, I was the Deputy Head of EU delegation in Pakistan. But I found
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{Emerging Bangladesh} January - March 2015
that Bangladesh has quite interesting specificities, and it is very rewarding for me to be posted in Dhaka. In addition, EU in Bangladesh benefits from a quite unique exposure. Therefore, whatever happens in Bangladesh matters a lot to EU. You just mentioned about many specificities of Bangladesh. Would you like to mention a few? I admire the fantastic achievements of
PERSON OF INTEREST
H.E. Pierre Mayaudon Head of Delegation European Union in Bangladesh
“
In my opinion, the distinctive feature of Bangladesh is the collective will of its people to move the country forward. The country is also facing great challenges of various natures. Climate change is
“
Bangladesh in recent years in terms of meeting some of the Millennium Development Goals (MDG) and economic progress. The GDP growth has not been under 6% in the last decade which is in stark contrast to many Asia Pacific countries. In my opinion, the distinctive feature of Bangladesh is the collective will of its people to move the country forward. The country is also facing great challenges of various natures. Climate change is definitely one of them.
definitely one of them. {Emerging Bangladesh} bgcci.com
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“EUBCB is already an existing and running entity. The members are the EU delegation to Bangladesh and the 8 heads of diplomatic missions representing the member states of EU based in Dhaka. We have also invited the corresponding bilateral Chambers of Commerce. So, this is an informal hybrid setup of both diplomats and business people.� You have been to investor friendly countries like Japan, Singapore which have a very stable economy. On the other hand, Bangladesh is lagging behind in terms of investor friendliness according to several World Bank reports. What is your take on that? If we look back, decades ago, Bangladesh was mired in extreme poverty. But with individual and collective efforts, this issue has been addressed even though a lot remains to be done. Bangladesh is now moving towards becoming a middle income country. Effective trade and investment, not just exports, can be a strong driver of this demarche. Addressing the issue of tariff and non-tariff barriers is key to becoming an investment-friendly country. Is there any particular sector where Bangladesh should look to reform, w i t h a s s i s t a n c e f r o m E U, considering the current political situation, which has inevitably discouraged FDI inflow? Investors hate uncertainty, that's a universal reality. This being said, the EU has a strong will to be a partner in the transfor mation of Bangladesh's economy. With a view to redefining the economic relation with Bangladesh, the
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EU Delegation, in close partnership with our Member States' diplomatic missions, has created the EUBCB (European Union Business Council Bangladesh). The EUBCB will help us answering the pivotal question you are raising: what are the specific sectors, but also institutions and procedures that need to be revisited for Bangladesh to become a knowledge-based economy? Who will be members of this business council and what will the setup be like? EUBCB is already an existing and running entity. The members are the EU delegation to Bangladesh and the 8 heads of diplomatic missions representing the member states of EU based in Dhaka. We have also invited the corresponding bilateral Chambers of Commerce. So, this is an informal hybrid setup of both diplomats and business people. We have a simple but still challenging ambition: to identify the obstacles to doing business in Bangladesh and to learn to cope with them. We are in the process of defining an 'Advocacy Platform' that will provide us with the technical elements allowing constructive discussions with the local relevant stakeholders, starting with the Government. The honorable Prime
{Emerging Bangladesh} January - March 2015
Minister Sheikh Hasina has been very appreciative of the initiative and so is the honorable Commerce Minister Tofail Ahmed. Can you name a project of the 'Blue Economy' initiative which has already started and where you see a lot of promise? Blue Economy is indeed a very inspiring concept and, more than a concept, a vision. We are willing to contribute to this vision becoming a reality. Dhaka University has recently opened a department of Oceanography. The EU Delegation will financially support some activities that have been initiated by the French Embassy, mostly related to professors visiting from France to give lectures at this department. We have other ideas that I would be glad to share with you at a later stage. What about the projects regarding 'Digital Bangladesh'? This is another quite inspiring vision. Contrary to Blue Economy which is still in the conceiving phase, this country is already doing well on its own to become 'Digital Bangladesh'. Going further would probably make access to more advanced technologies a necessity. EU has a lot of experience in this field and
PERSON OF INTEREST
would be willing to make Bangladesh benefit from its experience and expertise. How can Bangladesh help these projects to materialize and how can EU reciprocate? At this stage, we are very much in the identification process. The RMG industry is today the prominent industry of Bangladesh but we have noted the interest for diversification in some specific sectors that include ship building, IT, pharmaceutical and leather industry. EU has launched a 7 year development program (2014-2020) where one of the components, "skills development", can obviously serve this purpose. Is EU happy with the worker safety issues in the RMG factories in Bangladesh after the tragic incidents of 2013 and 2014? 60% of the RMG exports of Bangladesh go to the EU market. So, EU has always been concerned about anything and everything that is happening in the RMG industry of Bangladesh. EU has taken a firm stance those tragedies like Rana Plaza tragedy to never occur again. The Sustainability Compact among four actors (Government of Bangladesh, EU, ILO
and the US) was precisely agreed upon to prevent further tragic incidents. There are two major areas where the EU and other signatories of the Compact are focusing their attention: the issuance of the amended rules and regulation related to the revised Bangladesh labor Act and the updating of the EPZ law. What is your take on the leather industry of Bangladesh and does EU have any plans regarding the industry? Our support to "skills development" can obviously benefit the leather industry. Environmental issues also need to be looked at when dealing with leather. On this note, let me remind you that environment is a key component of the new EU GSP Plus market access regime. One day not too far ahead, Bangladesh will graduate from the EBA regime and will be eligible to the EU GSP Plus. However the ultimate decision to grant Bangladesh GSP Plus will be taken on the account that 27 core UN conventions are properly implemented in this country. They relate to human rights, labor rights, governance and ‌ environment.
with the business community? I observe that they are already doing quite well. And this message of appreciation certainly applies to the German Chamber of Commerce. Proper infor mation, dynamic mobilization and strong advocacy are critical to the success of the chambers of commerce. Despite its informal and flexible structure, or thanks to it, these are qualities that the EUBCB will try to emulate. Right now we are going through a political instability. Is it just in Bangladesh or do you think that this is a global trend across the countries having a huge population and lack of education? Regardless of their level of education, people want peace. And the more numerous they are on a single territory, peace is essential to the preservation and the improvement of their livelihood. Whatever the reasons may be, the political violence needs to stop as it makes the life of millions quite miserable and hampers the economic development. A sustainable solution needs to be figured out to ensure that peace and stability prevail.
How can bilateral chambers play a more engaging and dynamic role
Our support to "skills development" can obviously benefit the leather industry. Environmental issues also need to be looked at when dealing with leather. On this note, let me remind you that environment is a key component of the new EU GSP Plus market access regime. One day not too far ahead, Bangladesh will graduate from the EBA regime and will be eligible to the EU GSP Plus. {Emerging Bangladesh} bgcci.com
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SPECIAL INTERVIEW
“We need to shift the mindset of the garment sector to move beyond audit compliance to embedding a culture of responsible business practices.� Christian Ewert FTA Director General
In December 2014 you became the new Director General of the Foreign Trade Association (FTA). Can you explain what role FTA plays in the international trade scene and the values and principles the association advocates? FTA is the business association of European and International commerce that promotes the values of free trade and sustainable supply chains. We believe these two elements are key and work in tandem to enhance growth and development all along the supply chain, including producers in sourcing countries. For this reason, we advocate policies that facilitate trade and remove barriers to increase ties between businesses, while also promoting responsible business practices that observe compliance with social and environmental legislations and international conventions. To support our more than 1,500 members which include retailers, importers, brands and national trade associations in Europe to meet societal expectations of greater transparency and accountability, FTA created the Business Social Compliance Initiative (BSCI) over a decade ago. This initiative supports companies in improving working conditions in factories and farms from where they source. Furthermore, to fully complement our vision of sustainable trade, we have recently launched the Business Environmental Performance Initiative (BEPI), to address the needs of our members to improve their producers' 12
environmental performance. As FTA Director General, I am looking forward to meeting the challenges and seizing the opportunities that the fastchanging world of global supply chains will face us with. As one of the main sourcing countries for European retailers, how do you perceive Bangladesh and how can trade relations still improve? The relevance the country has for our members is clear since Bangladesh is the world's second largest exporter of Ready Made Garments (RMG). This industry, together with the increased foreign investment and trade established with other countries have contributed greatly to the economic growth of Bangladesh in the last decades and this development should be further promoted. As an association that advocates a liberalised framework for trade, we support all initiatives aimed to strengthen business relations around the world. In this sense, we welcome the recently launched 'EUBangladesh Business Council' that the European Union set up in early 2015 to identify and address obstacles to trade and investment between the EU and Bangladesh. Bangladesh and the RMG sector in particular have a lot of potential, but in order to continue exploiting it, the government and the business sector must as well address certain challenges that are putting growth at risk. The current political unrest is strongly {Emerging Bangladesh} January - March 2015
impacting the garment industry since the beginning of the year and resulted in several casualties. All parties involved must eng ag e in peaceful and constructive dialogue to address the root causes of the discontent and put an end to violence without delay. Moreover, the sector needs to continue cooperating closely with the different initiatives established to improve factories' building and fire safety and ensure workers' protection, such as the Accord, Alliance, Global Sustainability Compact and especially the National Tripartite Plan of Action. Investing in good and safe working conditions is an essential element for the survival of the industry and BSCI participants are firmly engaged with their producers to make this a reality. Through the social compliance initiative BSCI, your association has been engaged in Bangladesh for more than a decade to improve working conditions in the garment industry. Can you explain more what BSCI's work is and, from your perspective and experience, how has the country progressed? BSCI provides companies with a holistic system towards social compliance that not only focuses on independent auditing activities, but complements them with two other essential pillars. The first is the coordination of capacity building activities, both for BSCI participating companies and their producers, to help them build the knowledge and skills required to succeed. The second is
{Emerging Bangladesh} bgcci.com
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Figure: Results of BSCI Audits in Bangladesh per chapter (Producers having gone through a full and re-audit)
“BSCI provides companies with a holistic system towards social compliance that not only focuses on independent auditing activities, but complements them with two other essential pillars.� engaging in dialogue with local stakeholders in sourcing countries. Problems are generally specific to a country and /or sector and solutions must be sought by keeping a close collaboration with local actors. Within BSCI, participants actively engage their producers in our system and support them through a continuous improvement process. This journey is aimed at progressively enabling them to take ownership and address the challenges within their own supply chain. We believe such long-term engagement is key to build strong business partnerships based on mutual trust and to achieve sustainable and durable progress. As you rightly mention, BSCI has been present in the country since its creation 14
in 2003 and during this time, hundreds of garment producers in Bangladesh have been involved and have actively participated in our trainings. Compared to a decade ago, awareness about social compliance has increased significantly and progress is visible, but we still face a bigger challenge ahead: the need to shift the mindset of the garment industry to move beyond audit compliance to embedding a culture of responsible business practices. Only when workers, factory owners and managers truly understand, integrate and implement sustainable policies in the day to day activities, we will be witnesses of a profound and ground-breaking change. What are your prospects for the country in the coming years? I believe the country's outlook is very {Emerging Bangladesh} January - March 2015
positive and that the apparel exports will continue growing and moving up the value chain in the future. But to realise their potential and maintain such a leading position in the garment sector worldwide, certain preconditions must be met. The industry is mature enough to develop good management practices that take into account that compliance is not just about a good social audit result, but about the wellbeing of workers and the success and reputation of their companies and the sector as a whole. Moreover, the environmental performance of these producers and their ability to reduce their environmental impact will as well be decisive to maintain their competitiveness. BEPI will support them in facing this challenge.
NEWS FROM BGCCI
12th International Textile and Garment Industry Exhibition 2015 ended recently BGCCI Head of Membership Tanzer Siddique and Assistant Manager of Business Development Rafael Stemplewski visited the recently ended 12th Dhaka International Textile and Garment Industry Exhibition 2015. They met different buyers and exchange ideas about Bangladesh’s potential in the sector and discussed about a number of textile relation issues. Despite the political unrest, the exposition witnessed 900 garment and textile machine makers from 33 countries, who have have come with modern machines and technologies --
GDS Fair, the first trade fair worldwide with a clear focus on private labels in the shoe and accessory industry took place in Messe Dusseldorf, Germany
for textiles to accessories, bleaching and washing, dyeing, knitting, cutting and laying and computer software. Finance Minister AMA Muhith inaugurated the four-day event at the Bangabandhu International Conference Centre that is jointly organized by Bangladesh Textile Mills Association in association and Taiwan's Chan Chao Int'l Company and Hong Kong's Yorkers Trade and Marketing Service Company. In the picture: Tanzer Siddique, Head of Membership with Hubert Volk Senior Manager Sales, Groz-Beckert KG; Representative from the same company; Rafael Stemplewski, Asst. Manager, Business Development, BGCCI; Sanjeev Sharma; Sales Director (Bangladesh) Groz-Beckert Asia Pvt. Ltd.; Klaus Hacker, Vice President Sales, Groz-Beckert KG
In the picture you can see Mr. Adnan and Ms Tanzeena with Mr. Joachim Schäfer, Managing Director of Messe Dusseldorf. BGCCI is the local representative of Messe Dusseldorf. To know more about upcoming fairs and b o o k i n g , p l e a s e c o n t a c t Ta n z e e n a K h a n a t tanzeena.khan@bgcci.com
The BGCCI officials Mr. Adnan Nafis, Head of Trade Promotion, CSR and Consultancy and Ms. Tanzeena khan Asst. Manager, Trade Promotion and Messe Dusseldorf representative went to visit Messe Dusseldorf, Germany from 3rd February, to 8th February, 2015 for attending a knowledge sharing session and the GDS fair. There they meet with the heads of different fairs and the Management of Messe Dusseldorf like Mr. Hans Werner Reinhard, Managing Director, Mr. Joachim Schäfer, Managing Director, Jens Steinbach, Area Manager Asia Pacific and others. They have shared knowledge about important fair for Bangladesh and discussed about the strategy to promote the fairs of Dusseldorf in Bangladesh. 16
{Emerging Bangladesh} January - March 2015
INAUGRATION
Intertek Inaugurates Leather and Footwear Laboratory in Dhaka Intertek, a leading quality solutions provider to industries worldwide, has inaugurated a comprehensive leather and footwear testing facility in Bangladesh to support the leather, footwear and leather goods industries in South Asia. The leather and footwear testing lab will be housed in Intertek's Tejgaon, Dhaka, location, which opened last year and is the largest Softlines testing lab in Asia. The new leather and footwear testing capabilities provide additional quality and safety assurance solutions for the leather, footwear and leather goods industries throughout South Asia in countries like India, Bangladesh, Sri Lanka, Nepal and Bhutan. The lab was inaugurated by Hedayetullah al Mamoon, ndc, honourable Senior Secretary, Ministry of Commerce, Govt. of the People's Republic of Bangladesh. Engr. M Abu Taher, Chairman, Bangladesh Finished Leather, Leathergoods & Footwear Exporters' Association Chairman, Fortuna Bangladesh and Syed Nasim Manzur, President, Leathergoods &
Fo o t w e a r M a n u f a c t u r e r s a n d Exporters Association of Bangladesh, Managing Director, Apex Footwear Limited also graced the occasion as special guests. According to the Bangladesh Export Promotion Bureau, the country's leather exports industry is estimated to be approximately $1 billion, as competitive prices and improved quality has attracted an increasing number of importers from Asia and Europe. Approximately 80% of the country's leather production is exported, making quality an important aspect for the industry. This is an environmentally friendly lab with features like energy-efficient lighting, water recycling and effluent treatment plant. The hi-tech testing lab is equipped with state-of-art technology and features centralized monitoring and controlling. Commenting on the launch, Karthik N.D., Director Softlines and Business Assurance for Intertek Bangladesh added, “This dedicated accredited leather and footwear laboratory is a
Karthik N.D., Director Softlines and Business Assurance for Intertek Bangladesh speaking before the audience
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{Emerging Bangladesh} April - June 2014
Key Highlights of the Laboratory: • Performance, mechanical and chemical tests Shoes and shoes materials • Leather and leather goods • Accessories • All major methods including ISO, ASTM, AATCC, BS EN, SATRA, DIN, GB-Chinese standard • National Accreditation Board for Testing and Calibration Laboratories (NABL) by ISO 17025:2005 strategic addition to our existing Softlines facility, empowering us to test and certify leather and footwear products to support this industry in the c o u n t r y. I n t e r t e k a l s o o f f e r s environmental auditing, testing, safety assessments and technical training services to the industry.” The lab will provide competitive edge to regional clients who require high standards of quality and safety for their products, while ensuring they achieve acceptable standards for global buyers. From auditing and inspection, to testing, training, advisory, quality assurance and certification, Intertek adds value for its customers by helping improve the quality and safety of their products, assets and processes. With a network of more than 1,000 laboratories and offices and over 36,000 people in more than 100 c o u n t r i e s, I n t e r t e k s u p p o r t s companies' success in the global marketplace, by helping customers to meet end users' expectations for safety, sustainability, performance, integrity and desirability in virtually any market worldwide.
GIZ
Strengthening Capacity of Labour Inspectors "The training of 200 new labour inspectors is an important step forward to ensure workplace safety for garments workers after Tazreen and Rana Plaza incidents, which is appreciated worldwide", said Magnus Schmid, Program Coordinator of Promotion of S o c i a l a n d E nv i r o n m e n t a l Standards in the Industry (PSES), i m p l e m e n t e d b y D e u t s ch e Gesellschaft f端r Internationale Zusammenarbeit (GIZ) GmbH. GIZ on behalf of the German Federal Ministry for Economic Cooperation and Development Shipar. Besides, GIZ provides on the job trainings for labor inspectors in factories. 32 laptops in order to ensure a proper reporting system of the inspections, which will be published on DIFE's website in future, has been provided by GIZ.
(BMZ) and in cooperation with ILO is jointly conducting the training courses for the new labor inspectors of DIFE under the MoLE. GIZ provides three permanent trainers, along with ILO who train the new inspectors in labour standards and inspection techniques in Bangla. The orientation programme was attended by the State Minister for Labour and Employment Md. Mujibul Haque Chunnu and the Secretary of the Ministry Mikail 18
{Emerging Bangladesh} January - March 2015
FOLLOW UP
rd
3 GSR Conference: Shareholder Value Vs Social Responsibility 20
{Emerging Bangladesh} January - March 2015
Daniel Seidl, Executive Director, BGCCI; Dr. Shanmuga Sundaram, Managing Director, TUV Rheinland; Dr. Ferdinand von Weyhe, Charge’d Affaires, Ambassdor, German Embassy; H.E. Gerben de Jong, Ambassador, Netherlands Embassy; Sakhawat Abu Khair, BGCCI, President; A.B.M. Khorshed Alam, CEO & Additional Secretary, NSDC Secretariat; Nazma Akter, Executive Director, Awaj Foundation; Amy Yee, independent Journalist & Contributor for The New York Times; Tuomo Poutiainen, Programme Manager, Ready-Made Garment Sector, ILO Dhaka;Rob Wayss, Executive Director, The Bangladesh Accord on Fire and Building Safety; Magnus Schmid, Coordinator, PSES, GIZ Bangladesh; Mesbah Rabin, Managing Director, Alliance for Bangladesh Workers Safety; Abdul Jabbar, MD, DBL group; Olaf Handloegten, Global Initiative on Disaster Risk Management Head of Management Unit, Security, Reconstruction and Peace
The focus of the discussions about 3rd G l o b a l S o c i a l Re s p o n s i b i l i t y Conference was “Shareholder Value Vs Social Responsibility”. Since the last decade, Bangladesh has experienced economic progress with a growth of approximately 6% due to increase in investments in various industrial sectors mainly attracted by low labour c o s t s . Te x t i l e , a g r i b u s i n e s s , construction and service sectors were sectors that were the most impacted by the development. Bangladesh is now
facing enormous challenges in relation to water contamination, energy shortage, waste and social protection issues that if not timely and properly addressed, will undermine its growth path and result in causing potential har m towards society and the environment. In order to respond to t h e s e ch a l l e n g e s, B G C C I , i n cooperation with its partners, aimed to foster a better understanding of social responsibility among the participants of the 3rd Global Social Responsibility {Emerging Bangladesh} bgcci.com
Conference, highlighting the benefit of addressing environmental and social i m p a c t s w i t h i n n o va t ive a n d responsible solutions. Executive Director of BGCCI and the Master of the Ceremony Daniel Seidl opened the first session. He explained the theme of the conference in his opening speech. He briefly reflected on why shareholder value is of utmost importance for the sustainability of a business. The inauguration speech was given by H.E. Pierre Mayaudon, Ambassador, the 21
“I trust that among the EU states here in Dhaka, Germany is certainly one of those, which can play a really big role in accompanying Bangladeshi economy on its way towards Modernity. German's strength in vocational training is acknowledged worldwide and can make wonders in this country. For the next 7 years, I'd like to highlight the priority of the EU's investment in skills development, and these with cross-partnership between Europe, in fact Germany and the private sector of Bangladesh, in order to achieve even better growth.” H.E. Pierre Mayaudon, EU Ambassador in Bangladesh
“Assure our consumers that we are improving the standards, we are cooperating with our workers, we are accepting trade unions, we are reducing waste waters, and we are consuming less energy. We should promote this, and do this.” Dr. Ferdinand von Weyhe, Charge d'affaires, German Embassy
“We need more companies who will partner in piloting this so called 'Mini Fire brigade' approach.” Olaf Handloegten, Global Initiative on Disaster management, Head of Management Unit, Security, reconstruction and Peace
“The and most important development is the change of the mindset of the business people. They now understand that making their business safe is a part of good business model.” Rob Wayss, Executive Director, The Accord on Fire & Building Safety
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{Emerging Bangladesh} January - March 2015
“A report states that some 19000 fire doors have been imported of which only 11000 had credible certificates. Similar incidents happened in case of fire extinguishing materials. Factory owners are being misguided and we need to impart proper knowledge about that.” Mesbah Rabin, Alliance for Bangladesh Workers Safety
“Another important things is we need to look beyond the Accord and Alliance; we need to already start inventing for tomorrow to have the right engineering core in place; educate young professionals about the safety and compliance issues.” Tuomo Poutiainen, Program Manager of Ready Made Garment sector, ILO Dhaka
“Implementing social protection measures is a lengthy process, but the key is to be resilient and maintain a gradualist/incremental approach.” Johanna Knoess, Head of sector project 'System of Social Protection' GIZ
“Skill, knowledge and innovation are driving forces of economic growth and social development globally.” Magnus Schmid, Coordinator, PSES, GIZ, Dhaka
{Emerging Bangladesh} bgcci.com
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Head of Delegation of the European Union to Bangladesh. “Bangladesh proudly stands on its own two feet. This is thanks to the hard work,” he said, “one could even say to the sacrifice, of millions of men and women.” “It is not the country that it was in the eightieswhen international assistance contributed for more than 10 percent 24
of the GDP. Now it is less than 2 percent,” he added. The ambassador cited ongoing development activities and said, “it is certainly not even the country it will be in 10 years from now if you judge from so many mega projects in the making”. The EU is the largest trade partner of Bangladesh where all goods enjoy duty-free market {Emerging Bangladesh} January - March 2015
access. BGCCI President Sakhawat Abu Khair in his inaugural speech thanked the cooperation partners and sporsors. He also thanked BGCCI members for their relentless support in the form of advice and initiatives. The chamber celebrated 600 memberships in 2014, a milestone, he mentioned.
Dr. Ferdinand von Weyhe, Charge de affaires of German Embassy in Bangladesh in his speech discussed about the importance of social responsibility for various businesses. He said,” I think one business man can talk to another business man in promoting social responsibility, because they speak in the same language.” According to him, doing socially and environmentally compliance activities like cooperating with workers, letting them form trade unions or consuming less energy are one thing; while promoting such news to consumers is another fact of the responsibility. He urged Bangladesh to excel in case of both the responsibilities. The first panel was RMG and Fire Safety Panel. Olaf Handloegten, Global Initiative on Disaster Risk Management, Head of Management Unit, Security, Reconstruction and Peace presented his keynote speech of the panel. Rob Wayss, Executive Director, Accord; Mesbah Rabin,
Managing Director and Vice President of Alliance; Abdul Jabbar from, MD of DBL Group; Nazma Akter, Executive Director from Awaj Foundation; A.B.M. Khorshed Alam (CEO (Additional Secretar y), NSDC Secretariat); Tuomo Poutiainen (Programme Manager, Ready-Made Gar ment Sector, ILO Dhaka) participated in the panel. Amy Yee, a journalist for The New York Times moderated the panel. The panel discussed about various problem of the sector regarding building inspection and fire safety and solutions to those problems. The representitives from Accord and Allaince informed the session about their ongoing inspection activities and improvments implemented by factories based on their recommendatrions. Also, the issue of trade unions was discussed. The panel welcomed the trend of rise of trade unions, which would eventually help establish workers’ right in the sector. The Second Panel started with the
{Emerging Bangladesh} bgcci.com
Keynote presentation from Adnan Nafis, Head of Trade Promotion, CSR and Consultancy of BGCCI. The panelists were Md. Saiful Islam, MD Picard Bangladesh Ltd,; Md. Mominul Ahsan , CEO, Centre of Excellence for Leather Skill Bangladesh Ltd.); Sabur Ahmed , Asst. Professor & Chairman,Department of Leather Engineering, Institute of Leather; Engineering & Technology, University of Dhaka; Nabhash Chandra Mandal Executive Member & Additional Secretary), Registration & Incentives, Board of Investment; Tariqul Islam Khan, Chairman, Minikin ltd.; Iftekhar Haider Chowdhury , Industrial Relations Manager, HR Department, Bata Shoe Company Bangladesh Ltd. According to the speakers, Bangladesh will be able to churn $5 billion from exporting leather, leather goods and footwear in four years, riding on the back of product diversification and value addition. The sector will create 200,000 jobs in the period. “Everyone is talking about export diversification.
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Recommendations from the panels RMG & Fire Safety panel •
Mindset has to be changed more quickly and towards positive outcomes of the factory inspections.
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Getting the easy fixes done on time so that those cannot cause any big accidents.
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Factory owners need to gather more information about firedoor and fire extinguishing ingredients.
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Factories must ensure dedicated fire brigade team with proper training, dress and tools.
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Dedicated generator should be installed in factories to power the fire machineries if there is any fire incident.
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Workers entering into the go-down should be checked if they are carrying any sort of ignition material.
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Subcontracting factories should be brought under radar of authoritative bodies immediately to avoid any future accidents. International brands and retailers should come forward to cooperate the factory owners in remediation cases.
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Leather Industry Panel •
More focus on the skill development has to be given. So that more mid and high end products can be produced beside basic products.
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International participation in different exhibitions has to be done to promote Bangladesh with Government support.
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Leather sector should be given priority like the RMG sector.
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Existing Environmental law have to be strictly enforced. New and strict Environment laws have to be passed and strictly enforced.
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Branding of Bangladesh and the leather sector has to be done to promote this sector.
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Revise the Government incentive initiative to encourage more value addition of products.
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Create awareness of Environment protection and international image of Bangladesh.
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Leather goods and shoes are performing well and have no compliance or environment problem so Government should patronize this sub sector more.
Social protection of Workers Panel •
Industrywide workers' trust can be formed to work with issues pertaining to social protection.
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Need to engage society, NGO and the Government if change is desired
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Need to be context specific in protection measures. Urban children often have worse health indicators than their rural counterparts owing to unplanned development, pollution and sub standard living conditions
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Proper zoning laws (dedicated industrial areas) is important to ensure safety and health.
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Proper legal framework should be formed and workers' injury related issues should be included within the framework.
Environment Panel •
We need to bring in more chemical experts from developed countries, shares ideas with them and make the best your of their experiences.
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We need to change the regulatory system to be more fitting with the need of present day industrial activities.
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We need proper application of economic and fiscal tools the protection of environment.
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We need proper allocation of limited resources to ensure further value addition.
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Proper system of penalization has to be there. Government has to take more stringent steps.
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Brands and retailers should provide incentive to the environmentally compliant factories to motivate them and encourage others to follow their footsteps.
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{Emerging Bangladesh} January - March 2015
TVET panel •
To achieve further productivity in the industrial sector, developing a flexible, responsive and market-oriented training system.
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To get rid of the stigma due to cultural bias, proper information about the benefit of TEVT has to be communicated towards the factory owners as well as common mass.
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Mid level managers need to be trained further to brush up their skills in management and work distribution.
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In both RMG and Leather industries, factory owners should take more impetus to develop the skill of their workers.
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Vocational training should be included more prominently in national curriculum.
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Disabled people should be given equal opportunity to receive training.
The leather sector will help Bangladesh diversify its exports,” said Saiful Islam, also the vice president of Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh. The leather sector has the potential to deliver rapid growth as it has a huge supply of hide, competitive cost base, huge workforce, tariff-free access, business shifting to Bangladesh from China, and a growing middle class, said Adnan Nafis, head of trade promotion at BGCCI. Following the Panel, Farhana von Mitzlaff, Founder, Meena e.V, an NGO for Rana Plaza survivors spoke before the audience. The conference is displaying 20 beautiful paintings done by the orphans of the Rana Plaza victims. In the second session of the Global Social Responsibility Conference 2014, speakers discussed on social protection issue of workers, waste water management due to industrial chemical use and the importance of training up more workers for higher productivity. In panels, namely Social Protection of Workers, Environment and TVET, these discussions took place. The Social Protection panel talked about Rana Plaza victims and their delayed compensation issues. Roy Ramesh Chandra from IndustriAll detailed about the present condition of the compensation process and urged that all European and American brands should come forward to ensure the compensation before the 2nd Anniversary of Rana Plaza disaster. The panelists also discussed about other social benefits workers should enjoy. The issue of child labor was also discussed. The other discussants were
Mohammed Zahidullah (General Manager, Corporate DBL Group); Heng Sophannarith (Deputy Director of Health Insurance Division, National Social Security Fund of Cambodia, NSSF); Johanna Knoess (Head of Sector Project “System of Social Protection” GIZ, Germany); Juergen Kretz (Country Coordinator Bangladesh, German Federal Ministry for Economic Cooperation and Development, BMZ ); Subajini Jayasekaran (Cor porate Social Responsibility Manager, UNICEF). Sarah H. Kraskey, Journalist for The New York Times & Al Jazeera moderated the session. The Environment panel shed lights on profitable management of water in industries. Dr. Shanmuga Sundaram, Managing Director of TUV Rheinland detailed about various hazardous chemical used in the RMG industry and how workers' awareness can be increased regarding the harmful use of them. David Hasanat from Viyellatex shared his success story of saving water by recycling ETP water for toiler flush and rainwater harvesting. Amy Yee moderated the panel. The TVET panel was focused on the current condition of technical vocation educational training. The panelists discussed about what the government is offering right at the moment to the vastly unemployed youth population. They also shed lights on how private sector can come forward to extend help in this regard. Shafquat Haider, (Chairman, Industry Skills Council Information Technology -ICT) ;Paul Weijers (Team Leader, Skills and Employment Program Bangladesh); Bettina Schmidt, GIZ; Md. Mokhlesur {Emerging Bangladesh} bgcci.com
Rahman, PhD (Senior Operations Officer, Education Global Practice, The World Bank); Dr. Abdul Haque Talukder (Chairman, (In Charge) Bangladesh Technical Education Board); Tanzer Siddique, Head of Membership, BGCCI were among the panelists. Zafar Sobhan, Editor, Dhaka Tribune moderated the session. Following the first and second Global Social Responsibility seminars held in 2010 and 2013 successively, BGCCI and its partners decided to put more emphasis on promoting the concept of sustainable growth and sharing practical business examples, which have endorsed environmental friendly innovation as the strategy for raising competitiveness and profits. Moreover, the interactions with other key societal actors, such as the Government, civil society organizations, academia, media and international organizations, bring the benefit of looking and testing proved experiences in building a green economy for all. H.E. Gerben de Jong, Ambassador of the Kingdom of Netherlands extended his felicitations to BGCCI and all its sponsors and participations for organizing such an important event. The conference was organized by BGCCI in cooperation with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, which works on behalf of the Ger man Federal Ministr y for Economic Cooperation and Development (BMZ) with gracious sponsorship of the Embassy of the Kingdom of Netherlands as the Platinum Sponsor, German Embassy as the Partner and TUV Rhineland as the Supporting Sponsor.
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Clockwise from top: BGCCI President Sakhawat Abu Khair with a fraction of BGCCI Executive Committee and distinguished guests; Leather Industry Panel; Presentation from Meena e.V; Environment Panel; Former BGCCI President & Chief Adviser Md. Saiful Islam with Olaf Handloegten
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{Emerging Bangladesh} January - March 2015
Anticlockwise from top: Dr. Binayak Sen presenting his keynote speech in the Social Protection of Workers Panel; H.E. Gerben de Jong, Ambassador of the Kingdom of the Netherlands in Bangladesh delivering his concluding speech; Dr. Mokhlesur Rahman from World Bank as a panelist of the TVET Panel; TVET Panel members at the end of the session; Friendship representatives giving their presentations
{Emerging Bangladesh} bgcci.com
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GSR Media Coverage
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{Emerging Bangladesh} January - March 2015
{Emerging Bangladesh} bgcci.com
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FOREIGN DIRECT INVESTMENT
FDI - What Bangladesh Can Learn from China and India By Sifat Ishtiaque Hossain
Foreign direct investment (FDI) is generally defined as the process that global investors utilize to acquire ownership of capital and controlling interest in an enterprise in a host country. Inward FDI not only serves the long-term financial interests of
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foreign investors, it can also play a significant role in the growth dynamics of host countries. A major change in the regulation of foreign investment in China is underway. On 19 January 2015, the Ministry of Commerce (MOFCOM)
{Emerging Bangladesh} January - March 2015
of the People's Republic of China (China) issued a draft Foreign Investment Law (Draft) for public consultation. The content of the Draft marks a significant move of MOFCOM to relax its regulation on foreign investment and streamline the current
fragmented regulatory framework. If the Draft is passed, it will replace the existing set of laws and regulations that govern the formation and operation of foreign-invested enterprises (which includes foreign-invested equity and cooperative joint ventures as well as wholly foreign-owned enterprises) in China (FIE Laws), some of which have been in place for almost 30 years. In 2014, China attracted $127.6 billion in FDI compared with only $86 billion for the U.S.a sharp decline from the
$230.8 billion recorded in 2013. China's new foreign-investment act is expected to make the country even more attractive to foreign investors. The Draft Rules, a brainchild of the Shanghai Free Trade Zone is used to cut excessive red tape. Under the current regulatory system, all foreign-invested enterprises must obtain pre-approval before making any material changes to its capital structure. This regulatory approach, a necessary instrument for the early years of market reform, is now
{Emerging Bangladesh} bgcci.com
a drag on free competition and the liquidity of capital markets. The Draft Rules will scrap decades old joint venture laws in favor of a modern streamlined system for foreign investment. The rest of the world looked on in disbelief, then awe, as the Chinese economy began to take off in the 1980s at what seemed like lightning speed and the country positioned itself as a global economic power. China used its vast reservoirs of domestic savings to build
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Comparing to India, China's better performance in attracting FDI from OECD countries was mainly due to its larger domestic market and higher international trade ties with OECD countries. India, on the other hand, had advantage in its cheaper labor cost, lower country risk, geographic closeness to OECD countries, and cultural similarity. These advantages helped India decrease the gap in FDI. an impressive infrastructure and sucked in huge amounts of foreign money to build factories and to acquire the expertise it needed. India began its economic transformation almost a decade after China did but has recently grabbed just as much attention, prompted largely by the number of jobs transferred to it from the West. At the same time, the country is rapidly creating world-class businesses in knowledge-based industries such as software, IT services, and pharmaceuticals. These companies, which emerged with little government assistance, have helped propel the Indian economy. Many scholars believed that the huge difference between China and India's FDI has been quite over-estimated. China's potentially huge domestic market is the major determinant of its inward FDI from OECD countries, while for India, both domestic market and cheap labor cost are important determinants of its inward FDI from OECD countries. Comparing to India, China's better performance in attracting FDI from OECD countries was mainly due to its larger domestic market and higher international trade ties with OECD countries. India, on the other hand, had advantage in its cheaper labor cost, lower country risk, geographic closeness to OECD countries, and cultural similarity. These advantages helped India decrease the gap in FDI. There are four countries in South Asia (Bangladesh, India, Pakistan and Sri Lanka) that have benefited from high FDI inflows over the last several decades. However, it appears that Bangladesh faces some significant hurdles to achieving its FDI potential. Given that corruption and bureaucracy are big hurdles to attracting FDI into Bangladesh, 34
policymakers must make it a priority to reduce corruption at all levels of the government and improve the efficiency of the administration. Bureaucratic red tape must be cut down by privatizing and outsourcing many of these processes, if necessary. In a democracy, there are always elements in the political spectrum adamantly opposed to rapid liberalization of the investment climate for foreign investors. An educated and skilled labor force is the key to success for attracting foreign investors. Therefore, adequate investment in education should become high priority. Private universities have done well to create some competition for the public institutions that have been hopelessly mired in politics. These educational institutions must be provided security and to the extent possible, protected from the forces of violence and instability. Bangladesh can learn a valuable lesson from India and China where an important source of FDI has been their expatriate nationals. The numbers for India are also impressive, but not nearly as large as for China given that the Indian policymakers until 2002 were not welcoming of their expatriate citizens. The lesson for Bangladeshi policymakers is to welcome the non-resident Bangladeshi (NRB) citizens, especially those interested in investment and business opportunities. It is clear, therefore, that there are many factors that drive the global flows of FDI. This information is important for policymakers and central banks to devise strategies to promote foreign investment and economic development. Given the intense global competition for these investment funds, there is much at stake not only for Bangladesh and South Asia, but also for developing countries as a whole.
{Emerging Bangladesh} January - March 2015
Emerging Sector
Leather Industry
The Next Big Thing 36
{Emerging Bangladesh} January - March 2015
Export of leather and leather goods from Bangladesh have seen a recent boon! On the other hand, ‘toxic tanneries’ with serious environmental threats and inhuman working conditions appear as bane for the sector. It’s high time Bangladesh chalks out a roadmap to ensure success in this emerging sector in a sustainable way. Adnan Nafis shares his valuable insights. {Emerging Bangladesh} bgcci.com
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E
Bangladesh’s first tannery was set up at Narayanganj in 1940s and the mass production started from 1970s. but the boom started from the 1990s and maintained an average growth of 15%. Today there are 3,500 Micro, Small and Medium Enterprises & 110 Large firms. More than 8,50,000 workers are directly and indirectly involved in this sector. Finally, in 2014 the export reached 1.29 billion dollars. The moment came when both policy makers and investors realized that this sector could be the next best thing for Bangladesh. The leather sector has the potential to deliver rapid growth as it has a huge supply of hide, competitive cost base, huge workforce, tariff-free access, business shifting to Bangladesh from China, and a growing middle class. Interestingly Bangladesh has the 4th largest goat livestock. The export can easily reach $5 Billion by 2021. Among our nearby competitors,
Vietnam did it. Their leather export increased from $2.7 billion to $7.3 billion between 2009 –2013. They did it without domestic leather supply. The leather sector in Bangladesh is made up of three sectors: hides (finished & semi-finished leather), footwear and leather goods (bags, accessories). Handful of big companies are dominating the export market with excellent compliance and safety reputation Medium and small firms are generally serving the domestic market. Bangladesh exports leather products mainly to Italy, New Zealand, Poland, the UK, Belgium, France, Germany, the US, Canada and Spain. In addition, Japan, India, Nepal, Australia and some other countries are emerging as potential importers of Bangladeshi leather goods. Recently, I conducted a study on leather sector in partnership with Ian Green from BGTIC GmBh where more details are available.
The export can easily reach $5 Billion by 2021. Among our nearby competitors, Vietnam did it. Their leather export increased from $2.7 billion to $7.3 billion between 2009 –2013. They did it without domestic leather supply. 38
{Emerging Bangladesh} January - March 2015
PERSON OF INTEREST
Export Growth (Last 5 years) Year Actual (Mn USD) % growth 2009-10 459.25 20.49 2010-11 651.05 29.46 2011-12 765.03 17.51 2012-13 980.67 28.19 2013-14 1295.74 32.12
Export of leather has been rapidly growing in the last five years and the data proves it. {Emerging Bangladesh} bgcci.com
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The export trend has lucrative growth and has attracted the attention of foreign investors (Picard, Bata and other Chinese investors) and local entrepreneurs (Apex, Bay Shoes, Jenny Shoes etc.) to setup the state of the art facilities in Bangladesh. Before we did not have any ISO certified laboratory for testing and samples had to be sent abroad for testing. Now we have one of the state of the art leather and footwear testing facilities in Bangladesh set up by Intertek, a leading quality solutions provider to industries worldwide,. Interestingly, in the first seven months of FY 2014-15, export grew by 40% but hide export declined a bit. The overall export growth of Leather shoes and goods is increasing rapidly but export of hide is declining (especially in FY 2014-15) due to compliance issue. Hazaribag, the tannery hub of Bangladesh is considered one of the ten most polluted places on Earth by Time Magazine. Most of the tannery dumps the untreated chemicals and residues in the open water source and the river Buriganga. The tannery industry is undermining this promising sector as it has attracted international condemnation for environment pollution and endangering 40
the residents and workers. Extreme social and environmental compliance failures, gender discrimination, child labor, violation of labor safety and lack of waste management are the high light of the tannery industry of Bangladesh. Because of the tannery sector other segments of the leather sector like leather shoe and goods manufacturers are facing image crisis and hurdles to increase export. To avoid compliance issues, Bangladesh also imports significant amount leather: $74m (2013-14) to meet the demand of export need. So improving the capacity of local manufacturers can also bring an importsubstitution benefit for Bangladesh. A handful of large manufacturers dominate the export market with great reputation. Bangladeshi exporters need to attend international exhibitions and fairs to promote them selves and Bangladesh. Lack of interest is harming the rapid expansion of the sector. A mindset of the entrepreneurs is needed, the government can not always assist the private sector, the private sector has to step up and take responsibility. The Government of Bangladesh has taken steps to promote the leather sector and allocated land and compensation fund for the tannery {Emerging Bangladesh} January - March 2015
Because of the tannery sector other segments of the leather sector like leather shoe and goods manufacturers are facing image crisis and hurdles to increase export. For this, a change of mindset is needed for the entrepreneurs.
Leather Industry in Bangladesh: Meaningful Metrics Foreign investment: USD 210 million
Value addition in this exports averages 85%
About 95% of leather and leather products are marketed abroad
Local employment due to foreign investment: 30,342
Produces 2% 3% of world’s leather market
Total foreign companies in Bangladesh footwear and leather goods: 50
Leather and leather related products constitutes: 4.29% of total Bangladesh export and 0.56% of global leather and related products market of USD 230 billion
relocation to Savar but now the Government has to be strict and enforce existing laws to punish the violators. It is unfortunate that the private sector is demanding more compensation for relocating where as they are violating existing environmental laws by endangering the people and the environment. The government has provided the land and the initial compensation now if factory owners do not avail that benefit, they should be prosecuted as per the law of the land. Investing and implementing environmental safeguards now will save Bangladesh from a greater future expense. We have to learn from China. In 2010, the environmental damage in china was worth $230 billion and 3.5% of GDP was spent to clean up environment. China is implementing strict enforcement of environment laws; like in 2014, six Chinese companies have been fined $26 million for discharging tens of thousands of tonnes of waste chemicals into rivers. Time has come to be strict because we cannot just accept environmental damage for the sake of short-term growth. The author is the Head of Trade Promotion, CSR and Consultation Services, BGCCI and can be reached at adnan.nafis@bgcci.com {Emerging Bangladesh} bgcci.com
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EXPORT DIVERSIFICATION
Diversify or Perish? The way forward to export diversification. By Sabrina Afroz Erina
Export earnings of Bangladesh have grown about 85 times in the past 30 years. The once $0.3 billion segment, over the years, has steadily grown to a strong $27 billion segment, which represents roughly 16% of our GDP. But once looked into the constituents of our export earnings, Bangladesh is guilty of having a very narrow export base. And the alarming fact is that our dependence on a single segment has grown even more in recent years. 30 years back, the biggest share of the export pie belonged to Jute and Jute goods that contributed 54% of the total earnings.
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Now, in 2015, almost the whole export pie is occupied by RMG while other sectors represent a meager 16% of total earnings. The risk associated with such overdependence on a single category was proven in black and white when export took a hit this year owing to the flat growth in RMG exports. That is when the concept of ‘Export Diversification’ received fresh attention from all relevant stakeholders. While the impor tance of expor t diversification can be seen in plain sight, how we can actually diversify our exports remain the bigger question.
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Reaching the goal- Tools needed to diversify export base
Broadening the export base- Sectors that are poised to grow If we look into the cases of our Asian peer economies that have been successful in terms of product diversification, few trends can be found common. At the initial stage, primary products (mostly ag ricultural) accounted for a major share of export earnings. As the economies evolved, exports diversified into labor-intensive manufactured products. Later, with greater policy support and technological advancement, composition of manufactured items gradually shifted toward technologyintensive higher value added products. Bangladesh is still in the middle stage, where our cheap, low-skilled labor puts us in an advantageous position over our competitors. There are a lot of industries we can diversify into leveraging this existing comparative advantage. Agriculture still accounts for significant portion of overall employment and this labor force can be utilized to spur the growth of laborintensive agro-processing industries such as: production of frozen fish and processed foods. Pharmaceuticals sector has posted commendable growth in recent years that can be accelerated further until the expiry of TRIPS. Bangladeshi footwear has already found its place in many globally renowned retail chains. With sound policy support and a stable macroeconomic environment, these industries have the potential to be the next RMG of Bangladesh. Reaching the goal- Tools needed to diversify export base Export Incentive Package: To increase the effectiveness of export incentive packages, Government needs
to develop industry-based export incentives and tariff structure that will facilitate budding industries. Apart from developing packages, awareness needs to be raised among entrepreneurs about the existence of such funds. The government should also take steps to provide incentives comparable to our neighboring countries. A major policy focus should be laid on ensuring that our entrepreneurs can avail raw material at internationally competitive rate which we often fail to materialize. Low Cost capital: Despite the increasing pressure from the Government and the Central Bank to provide low-cost financing to SME owners, the actual small entrepreneurs are deprived of such funds due to Financial Institutions’ preference towards medium sized businesses. Supplying low cost capital to small entrepreneurs should be made a priority for the banking institutions. As credibility issue is one of the major underlying reasons behind nonavailability of fund for small entrepreneurs, enhancing the post loan-disbursement monitoring system at banks can ensure small entrepreneurs’ access to capital. Foreign Cooperation: Increased cooperation and technology transfers from our regional partners will be essential to ensure sustainable growth of emerging industries. In the early 80s, technology transfer from Korean firms initiated the high growth momentum of RMG industries. In recent years, increasing foreign investment has facilitated the export sectors of many Asian countries {Emerging Bangladesh} bgcci.com
including our neighboring India. The bottlenecks that repel foreign investors from Bangladesh such as: political instability and infrastr uctural deficiency need to be addressed immediately. By developing diplomatic relationship with our regional counterparts, we can achieve dual benefit in terms of export market and export basket diversification. Skill Development Poor quality of our labor is gradually receiving attention in the international arena. While we still hold edge in terms of labor cost, how long we can leverage that advantage remains uncertain. High-skilled human resource will be a deciding factor of our transition into a middle income country. On top of that, we cannot sustain foreign investment if our labor force is not competitive enough. Quality education and training remain crucial to brush up the skill set of our labor base. Broadening our export base is crucial to lay the future path of our economic d e ve l o p m e n t . W i t h i n c r e a s e d patronization from government, policymakers and relevant stakeholders, our emerging sectors too can show impressive growth trend. Since export growth has a very high correlation to overall economic growth, failure to broaden our export base will be very detrimental to our economy. It is the coherent effort of all the stakeholders that helped us conquer the nontraditional export arena 30 years back. We strongly believe such united effort can enable us to diversify our export basket successfully this time. 43
HEALTH INSURANCE
A Stitch in Time 44
Non-Profit Health Insurance for RMG Sector Wo r k e r s : C o n c u r r e n t l y A d va n c i n g Productivity, Social Responsibility and Health The ready-made garment (RMG) sector is the backbone of economic development in Bangladesh. With exports worth $24.5 billion in FY 2013-2014, the sector contributed more than 81% of all exports from Bangladesh and currently employs around 4.2 million workers (around two thirds of all formal sector employees). All in all, it can be assumed that more than 16 million or 10% of the total population directly depend on the RMG sector, with many more indirectly dependent. In the current state, productivity in the garment sector is not yet maximized due to the extremely high worker turnover in the industry and absence due to illness. Different factory managers mentioned that as many as 5% of workers leave their factories each month for different reasons. While the majority of workers on the factory floor are skilled in the RMG sector already, this turnover results in a tremendous waste of resources if one calculates investments needed for factory {Emerging Bangladesh} January - March 2015
specific trainings and in-factory culture adaptation. Some of those leaving the factories do so involuntarily: because they fall ill. In Bangladesh getting sick is very unpleasant even for higherincome earners because the health care system needs improvement in regards to provision of quality healthcare to the sick without them enduring financial hardship. Much of the necessary improvements are rooted in the way the health system is financed. Workers falling ill frequently will result in a loss of income for the factory, due to forgone production output. In order to improve the situation, BRAC with support from the German Government through GIZ - is currently developing a 'proof of concept' for a health insurance scheme for formal sector workers. This support
falls under the bilateral development cooperation initiative with the Ministry of Health and Family Welfare and is in line with the endorsed Healthcare Financing Strategy 2012-2032. It is envisioned that this scheme will be launched into the market by mid-2015 and would be self-sustained when the German Government support to the Bangladesh health sector ends in 2016. By pooling a small amount of contributions monthly, employees along with up to 3 family members participating in the scheme will be able to avail quality healthcare from accredited health facilities without enduring financial hardship at the time when healthcare is needed. The cashless system allows for those protected under the insurance scheme to enjoy healthcare services at the
empaneled health facility of their choice, with coverage including diagnostic services and medication. The insurance premium payable is envisioned to be a proportion of salary with a 50-50 split between the employee and employer. By enrolment into this scheme, it is intended that the workers and their family members would no longer be hindered by the barriers of finance and quality when trying to seek healthcare. Such a strong incentive would almost ensure employee loyalty thereby reducing the turnover rates. All these would contribute towards productivity of the business and also has a high chance of increasing business profitability in the long run.
Much of the necessary improvements are rooted in the way the health system is financed. Workers falling ill frequently will result in a loss of income for the factory, due to forgone production output. {Emerging Bangladesh} bgcci.com
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FEATURE The German version of this article first appeared in the Newsletter of PricewaterhouseCoopers, a renowned international professional service network.
The Fantastic Seven G-7 and E-7 are the past and present – the future belongs to the F-7-countries, the Future Seven. The long-term growth predictions look dreamlike for those states. It’s high time for entrepreneurs to take a closer look at those markets. It can go so quickly: yesterday the world’s poorhouse and today a giant of growth and tomorrow probably one of the world leading economic nations. Bangladesh is the example to comprehend, in which rapid speed a countr y can develop from an agricultural based economy to a gigantic future market. 30 years ago mass starvation made Bangladesh the symbol for food shortage in developing countries around the globe. „Today the country is importing tea and exporting rice itself“, states Daniel Seidl, Executive director of the BangladeshGerman Chamber of Commerce and Industry, who is active since 20 years in the country. „5 years ago there was not a single Coffee-Shop here, but nowadays you can get a latte macchiato in all possible variations on every corner.“ The eight biggest population on earth stands on an area twice as big as Bavaria - with a density of 85 millions of mobile phones, which is like mutated and that as well in the last five years. Every month two million new mobile phones are joining. Not only has the example of Bangladesh demonstrated: The world economy is on the threshold of a shift of power. Europe is showing signs of weakness, Asia is catching up and Africa is on the hop. According to the latest actual economic projections, the purchasing power of the E-7-countries Brazil, Russia, India, China, Indonesia, Turkey und Mexico will out-compete 46
the purchasing power of the G-7countries USA, Germany, England, France, Italy, Canada and Japan by the year 2030. Already this year China will supersede USA as the world’s leading economic nation. Also in 2015 the Asia-pacificarea will have a numerically larger middle class than Europe and the USA together. The growing middle class of the emerging markets will represent an annual market of six trillion US-Dollars in the year 2021, as PwC-analysis estimate. Landmarks and trends of this kind are stating clearly: The traditional ways of evaluation of national economies are becoming more and more extraneous. The world comprising change of the guard is accompanied by growing imbalances within those groupings. So within the G7 group, the economy of Italy is not growing anymore since the year 2000 and in the Europe area in the same time a number of 7 million jobs have been lost. In the same time in the group of the E-7-countries, the economic power of China has tripled, whereas Mexico has only grown by 1/3 and the growth rates of emerging markets like Vietnam and Indonesia will reach soon those of India. The extreme economic shifts between countries and regions will lead to momentous changes of consumption patterns. Additionally the challenges for successful business are globally aggravating. „Enterprises are hunting {Emerging Bangladesh} January - March 2015
for moving targets by now“, states Norbert Winkeljohann, spokesman from PwC Deutschland. „New consumers and markets are developing in a very different way – and quicker than ever before. It is becoming harder for companies to shot into the varied markets and numerous emerging competitors.“ More than half of the surveyed CEOs expressed concern about the changes in the behaviour and expenditures of consumers. And also more than half are getting cold feet from the competitors of the futureeconomies. The ongoing realignment of the global economic powers has also consequences for the strategic planning of future infrastructure investments. T h e a n nu a l e x p e n d i t u r e s f o r infrastructure will double form four trillion US-Dollars in 2012 to more than nine trillion USD in the year 2025 says a PwC report. Aggregated the world expenditures will be 78 trillion Dollar between 2014 and 2025 – an enormous potential for growth willing companies. Solely the Asia-pacific region – driven by China’s growth – will combine almost 60 percent on itself. In contrast the amount of western Europe will halven itself to less than ten percent. „These global distortions are not just unique because of their sheer scale, but also because of the extreme high speed, with which they take place“ emphasizes Norbert Winkeljohann. „It is beyond all question, that within one decade the
economical world map will look essentially different than nowadays.“ To understand, how this new map could look like, it needs a completely new viewpoint on the development of the world economy. T hese developments are also confirmed by the Organization for Economic Cooperation and Development (OECD). „If the latest trends like demographical evolution, knowlegde based technological change, globalization and growing pressure on the environment will pursue, then it will have tremendous effect on the world economy“, states the economical department of OECD in their latest re por t „Shifting Gear : Policy Challenges for the next 50 years“. Within the next 50 years, as the authors note, the world economic growth will decrease from 3.6 percent until 2020 towards 2.4 percent until 2050/2060. „However the salary structure in the emerging markets with low salaries will grow more dynamically – with a more than sevenfold growing GDP per capita. Therefore masses of people will 48
migrate from poverty into the middle class.“ Companies should especially keep a close eye on a group of future growing markets: the so called future-7countries (F7): Bangladesh, Columbia, Morocco, Nigeria, Peru, the Philippines and Vietnam. The fantastic Seven as well as other emerging market countries will constantly challenge the developed G-7-national economies, especially in terms of production of durable production g oods. Long-ter m prognoses for those countries sound dreamlike: Additionally, an almost exploding pool of well-educated and motivated talents wings the growth of those countries. And not only this: Many of them will lead new multinational companies into the future. The countries themselves will develop themselves to huge sales markets as well. According to a HSBC-Bank report, countries like the Philippines and Peru will climb noticeably in the ranking of the biggest national economies. The Philippines should locate on position {Emerging Bangladesh} January - March 2015
16 in the ranking and by that climb up 27 positions. Peru will probably climb up from position 46 to 26. According to prognoses the Philippines will have an annual growth rate of 7 percent on average in the years until 2050 and Peru’s growth rate will be 5.5 percent. Possibly as much people as in the USA could populate Nigeria by the year 2050. Columbia is developing with annual growth rates around 4.5 percent to the gateway of the Caribbean, Morocco is the new springboard for European companies to the fast growing markets of Western Africa. And Vietnam is just taking over China as location for inexpensive, personnel intense manufacturing. Norbert Winkeljohann: „It’s high time for CEOs und proprietors to see the world with different eyes than five years ago. Growth potential is emerging in markets, which were not targeted before in the plans of the strategic department.“ So it is high time, to canvas those countries thoroughly.
STUDY IN EUROPE
Pave Your Way to Success BGCCI Highlights the Latest Trends in Global Higher Education. By Rafael Stemplewski
“To be or not to be, that is the question,” Shakespeare's Hamlet asks himself. The world renowned question is asked in a slightly modified version at some stage of life by almost every human being: “To be, and what to be?” In the modern society, where options are limitless, offers are vast and rankings are must! Nevertheless, what bothers people is to define the set of factors while choosing an education suited for them? Confusion and a lack of orientation among young people is a commonly
is often the first impact, which influences young adolescents in choosing their future profession. Therefore, thorough and profound knowledge about educational and professional options by parents would be most required to guide their offspring on the suitable professional path among all the available tracks. What's Happening at the Domestic Front? To cut it to the chase, let's have a closer look at the issue of business schools in
Since naturally every graduate wants to enter a job or start his/her business, how do they correlate what is actually taught at business schools to what they want? Are they in line with the ever-changing demands of the corporate industry? Does the hard work at institutions and investment by guardians in business graduates pay off? occurring scenario, when it comes to choosing the right profession and education. Facing one of life's big challenging decisions, many young people become puzzled and seek advice to pick the right option! Parental advice 50
Bangladesh. What can the adolescent Bangladeshi expect from their domestic business education? This topic was explored in detail in the February edition of the Business Times in the article “Profiting from basics How far {Emerging Bangladesh} January - March 2015
business schools meet market requirements”. With thousands of students taking admission for tertiary level education at both public and private universities, the majority of them are taking up graduation and post-graduation courses in business administration. It is the most preferred subject of this generation and their immediate seniors. However on the other hand, we have the information that despite high graduation rates there is no translation in the job market, and the disappointingly low employment rates are disturbing. Since naturally every graduate wants to enter a job or start his/her business, how do they correlate what is actually taught at business schools to what they want? Are they in line with the ever-changing demands of the corporate industry? Does the hard work at institutions and investment by guardians in business graduates pay off ? A British Council-sponsored report on graduate unemployment in South Asia published last year and prepared by the Economist Intelligence Unit (EIU), shows that 5 out of every 10 graduates in Bangladesh are unemployed (against 3 out of 10 in India and Pakistan). The report partly attributes the graduate unemployment problem to the region's fast expanding but poor quality private education sector and use of outdated curriculum in public universities. Prof. Imran Rahman, Vice Chancellor
at University of Liberal Ar ts Bangladesh says, “Half of the courses are ideally skill-based training, but then again it can only be attained if there is a love for learning the trade, not merely for getting a job. In Bangladesh, this is a big problem. Classroom lectures are not everything, and that is where we are lagging behind. The severe shortage of skills in business graduates is one of the major reasons why there is a high unemployment rate among business majors.” Furthermore, Prof. Rahman states: “The cut-paste curriculum that most universities have adopted need to be phased out and the respective management needs to find out what actually should be taught. Sadly, this is also why there is no actual integration between the business curriculum and employers.” That rather non-optimistic picture of the domestic business schools and course degree scenario can cause interested students to hesitate to study in their own country. What is the a l t e r n a t i ve f o r t h e e m e r g i n g undergraduate? The alternative could be studying abroad. In today's globalized world, it is deemed more preferable to position yourself in the world market, where education actually translates to job opportunities, rather than staying fixed on the domestic perspective. What is interesting in this year's Forbes international MBA ranking is how schools in the established economies of the developed world continue to dominate the market. Despite the ongoing problems of its economy, Spain, for example, still manages to field three schools in the top twenty, while Europe as a whole contributes no less than nine to the top ten. The next generation of professionals and managers from developing
economies is embracing the business school experience enthusiastically, but is still boarding planes to do it. However, in many instances their mid to long term agenda has changed. Rather than look for a job in their alma mater's home country, as used to be the case, they are heading home again with their brand new qualification. Why? Simply because they perceive that this is where the real action, the real opportunity lies, not in the sluggish or ailing economies of the developed
came under fire to be producers of long time debtors. An article from Bloomberg states: “Two years at a top business school costs around $100,000 in tuition, and students at these programs have even more debt than their peers, who are also heavily indebted. At Dartmouth University's Tuck School of Business, the median debt load for students was $90,000, including student loans, credit card debt, and personal debt, twice as high as the median of $40,000 at all U.S.
What is interesting in this year's Forbes international MBA ranking is how schools in the established economies of the developed world continue to dominate the market. Despite the ongoing problems of its economy, Spain, for example, still manages to field three schools in the top twenty, while Europe as a whole contributes no less than nine to the top ten. world. Studying Business: A Global Scenario When speaking of studies abroad, the first country which comes to mind in Bangladesh regarding quality education is often still the United States, especially when focusing on a MBA degree. Let's consider if this opinion is still up to date. United States elite universities are regarded to be in the midst of a crisis. In particular, US top business schools {Emerging Bangladesh} bgcci.com
schools. Wharton students said their median debt was $66,000.” The pitfall of studying in the United States lies in overpriced degree programs that subsequently condemn the graduates to a long journey of breaking even their educational investments. America's elite university system has even succumbed to critique from within. As a professor at Yale, Bill Deresiewicz, saw something that troubled him deeply: his students, some of the nation's brightest minds, were adrift when it came to the big questions: 51
how to think critically and creatively, and how to find a sense of purpose. His book “Excellent Sheep: The Miseducation of the American Elite and the Way to a Meaningful Life” is climbing up the bestseller list. Excellent Sheep takes a sharp look at the high-pressure conveyor belt that begins with parents and counselors who demand perfect grades and culminates in the skewed applications Deresiewicz saw firsthand as a member of Yale's admissions committee. Not deepening in the criticism of the American elite university system, another factor against studying business in the U.S. is that U.S. business education is designed for the American market, so if you plan to spent your professional career outside the U.S., it is not so practical to conduct and finish your education over there. Moreover, “one of the most important reasons to make an MBA is the alumni network. And, you have to face the reality: “Of course the networks of European schools are bigger than the U.S. ones. If I see my careers future in Europe, then the European MBA-programs can be very interesting,” says Gerhard Grueter, investment banker of Merrill Lynch from London, emphasizing the advantages of good European business schools in the German Handelsblatt article “Is the US MBA still worth the effort?”. Furthermore, it has to be stated that many American business schools recruit their most valuable academic staff from the Europe. Therefore, let us explore the European business schools environment, and the potentials that lie there. Europe's business schools had some problems in recent years as well, albeit slowly they are being overcome. Recession on the continent made them less attractive to foreigners. So did Britain's tough new visa requirements for students, which include restrictions on those who can stay and work in the country after graduation - an essential consideration for those taking an MBA. As a result, many European programs - even quite prestigious ones - found it harder to fill their courses. Nevertheless, European business schools continue to be at the forefront of innovation in business education, ensuring they attract top international talent, which in turn attracts global MBA employers. Despite the economic woes of the region, recent years have seen record employment statistics among European business schools graduates, which are supplying MBA talent not just to local employers in the region, but also to employers across Asia, the Americas and the Middle East. Around the globe, students appear confident enough in the value of formal business education that they are willing to invest, not just in the conventional MBA, but also in other forms of the b-school experience. Saïd's Business Schools 1+1 program is a prominent example of the joint approach which allows students to combine an MBA with a masters in a wide range of complimentary areas, from criminology to computer science to biodiversity. Additionally, Europe is also seeing a boom in pre-experience master's programs, which bring candidates onto school campuses more or less straight from 52
Another important factor, which can be a pitfall for cost explosion of the overall cost of a MBA-program, is the living cost expenses. By way of example and to allow you to become familiar with the average living cost components of a European city (Madrid), we provide an overview from the website of IE Madrid: Food and accommodation expenses Housing + expenses Shared room - 400€ Studio - 700€ 1 BR apartment - 850€ Utilities - 80€ Food + leisure Groceries - 150€ Eating out - 10€/lunch Public transportation Monthly pass (metro + bus) - 50€ 10 trip ticket - 12,5€ 1 trip - 1,5€ Mobile phone + internet Mobile phone - 50€ Internet - 30€ Medical insurance For those students who need private medical insurance 40€ (Please note that the costs outlined above are “estimations” and “basic costs”, it does not include personal expenses such as those related to leisure (social life, trips, movies, etc.) or those related to culture (books, shows, museums, etc.). It does not take educational costs (course books) that may be required or recommended by professors into account. You will also need to take into consideration costs related to your visa process (if any) and flight expenses depending on the location and the frequency of your trips back home throughout the year.)
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their first degrees. The CEMS Masters in International Management program, for example, originally founded by three schools in the Forbes ranking SDA Bocconi, HEC Paris and ESADE (plus the University of Cologne) now embraces nearly 30 schools around the globe and over 1000 students every year. Another interesting opportunity for business-interested undergraduates is the Aalto University's School of Business (formerly known as the Helsinki School of Economics) one-year postgraduate CEMS Master's in International Management (MIM) pre-experience program. The program is open to a select group of students enrolled in Master's studies in one of the 29 member schools - leading academic institution offering postgraduate studies worldwide. Consistently ranked among the top in the world by the Financial Times, the CEMS MIM unites multinational companies and international-caliber professors from leading universities and business schools, jointly designing and delivering theoretical knowledge and practical know-how.
Almost 250,000 foreign students are currently registered at German universities nearly 100,000 students more than 10 years ago. Even reaching as far as Bangladesh, there has been a record growth in the number of Bangladeshi students studying in Germany. A total of 730 Bangladesh nationals enrolled in different Germany universities in the winter semester of 2014 2015, and these numbers are projected to grow even further.
Studying in Germany: The Land of Ideas In the recently published World's Leading Higher Education Ranking, Germany has emerged as the world's third best provider of higher education. Germany, appropriately marketed as the “Land of Ideas” is becoming more appealing than ever before for prospective international students. Higher education in the Land of Ideas means major emphasis on education, science, research, and development; which are contributing factors to making it one of the most popular countries to study. It is also recognized as being a site for state of the art research and patent development, processes enormously applicable in today's world economy. With its high quality of life, good infrastructure, and attractive central location in Europe, Germany is the top business destination in Europe. Making it more appealing for prospective international students is that over the past few years higher education in Germany has transitioned many degree programs to internationally recognized bachelor's and master's as part of the Bologna Process, and the trend is continuing, making studying in Germany more accessible than ever before. Germany now counts more than 1,000 programs offered in English that take an international approach, and are particularly aimed at the international student demographic. The British magazine Times Higher Education ranks eleven German universities among the world's 200 best. International students also rate German universities highly: in a 2012 survey, a good 85% of the international students surveyed stated that they were satisfied with the quality of the
teaching. And more than 90% praised the high standard of equipment of German university laboratories. The internationalization trend in Germany has not gone unnoticed; it has convinced more and more “high potentials” from all over the world to choose it as their next study destination. Almost 250,000 foreign students are currently registered at German universities nearly 100,000 students more than 10 years ago. Even reaching as far as Bangladesh, there has been a record growth in the number of Bangladeshi students studying in Germany. A total of 730 Bangladesh nationals enrolled in different Germany universities in the winter semester of 2014 2015, and these numbers are projected to grow even further. University of applied sciences, college of technology, university, and university of cooperative education the German higher education system has many facets. This diversity enables students to select the best course for their needs. Around 72% of Bangladeshi students go to Germany for programs in STEM (Science, Technology, Engineering and Mathematics).
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Top Ten Reasons for Studying in Germany 1. You have a top-class degree recognized around the world! German higher education is one of the best in the world! Whether it is cars or education, people everywhere recognize “Made in Germany” as a seal of quality. You can benefit from Germany's long and famous university tradition especially in the fields of engineering and science. A German university degree is highly respected by employers around the world. 2. You have a diverse range of study opportunities! Germany's higher education system has something for everyone! There are almost 450 state-accredited universities with some 17,500 degree programs in Germany. German universities offer degree programs in every possible subject and academic level be it bachelors, masters, state examinations or doctoral degrees. General universities focus strongly on scientifically oriented study in a wide range of disciplines. Universities of applied science, on the other hand, are very practice-oriented. If you are more interested in artistic subjects, you can enroll at a college of art, film or music. 3. You can study in English! More and more courses and degree programs are being offered in English, especially at the master's degree level. This is good news if you do not know any German or if your German is not good enough yet. You will find an overview of international degree programs in Germany in the large DAAD database. 4. You are not alone! Around twelve percent of students at German universities come from foreign countries, just like you. 5. You pay very low tuition fees and sometimes none at all! Students normally do not have to pay tuition fees at German universities, and if so, the fees are very low. Most German universities receive considerable financing from the government. Bachelor's degree programs are usually tuitionfree at public universities. Some master's degree programs, however, come with tuition fees, but they're not as high as in other countries. 6. You have very affordable living expenses! Compared with other European countries, the cost of living in Germany is reasonable. The cost of food, rent, clothing and 54
cultural activities are equivalent to the EU average. There are also a number of concessions available to students. You can receive reduced prices at theatres, museums, opera houses, cinemas, swimming pools and other institutions. All you have to do is present your student ID. 7. You can benefit from many scholarship programs! As an international student with outstanding academic achievement, you have good chances of receiving a scholarship to finance your studies in Germany. The German Academic Exchange Service (DAAD) is one of the largest scholarship organizations in the world and offers countless scholarship programs. No matter what your country, subject or status, you will find a scholarship that matches your profile and needs in the DAAD scholarship database! And not only does the database contain programs offered by the DAAD, but also many other organizations in Germany. 8. You live in a safe country! Germany is a safe country also on an international scale. The police are reliable and help you in every situation. Whether you live in a big city or in the country, you can move freely day or night without having to take any special precautions. 9. You live in a diverse country in the heart of Europe! Beaches and mountains, medieval city centers and pulsating metropolises, and above all, lots of nature. Germany is a diverse country with many facets! Living in Germany means living in the middle of Europe surrounded by many other countries. Whether you would like to visit Paris, Prague, Rome or Copenhagen, you have a wide range of destinations at your doorstep. Within a couple of hours by train or plane, you can experience an entirely different culture and language. Weekend trips are no problem and affordable. 10. You learn a language, which can open many doors! German is one of the ten most spoken languages in the world. Some 185 million people worldwide can speak German. You can still study in Germany even if you don't know German, but having some knowledge of the language can make everyday life easier and help you make friends faster. Knowing a foreign language also looks great on a résumé! Nobody says that German is an easy language, but there are many ways to learn German in a course, with a tandem partner or with German flat mates
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World University Rankings 2014 2015 top rated Germany Universities
About Visa & Language Proficiency Requirement Christian Z端rpel, Third Secretary at the German Embassy in Dhaka shares with us a few vital information about studying in Germany and obtaining Visa. These are as follows: The German Embassy in Dhaka recommends for applicants to avoid agencies in the student visa application process. Z端rpel points out, that agencies charge high fees for their services, though the visa application process is transparent and all necessary information can be obtained online. Please be informed that B1 Level proficiency in German language is required for student visa application and the B1-Course preparing for the language exam at the Goethe Institute takes one full year. Due to high numbers of interested individuals in the courses at the Goethe Institute, you can undergo long waiting time for subscribing to the courses.
About finding Right Information for potential Bangladeshi students looking to study in Germany First of all you will have to identify the study course you wish to pursue. For finding such a course and for further general information concerning studies in Germany, please visit: http://www.daad.de/deutschland/studienangebote/studiengang/en/ Please note that the requirements for every individual study course may differ, hence, read the course outline thoroughly. In case you need to be proficient in German, please contact a language school of your choice, they will be glad to assist you in organizing a language course. Secondly, your study stay in Germany has to be financed. For more detailed information on scholarships and other financial support for your studies, please refer to: http://www.daad.de/deutschland/stipendium/en/ The last step is the application for a visa. Concerning visa issues, please refer to: Http://www.dhaka.diplo.de/visa
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Are You Ready for the Long Journey? When the decision has been made to study internationally, it is very important to orientate yourself on what you want to study, and where. Familiarize yourself with courses, programs, and application procedures. There is a lot of graft work that goes into a study abroad, but with the right measures, attitude, and perseverance, it will open the door to a life changing, mind altering, rewarding, opportunity that will pay of the rest of your life, if not only in the experiences gained. To showcase the journey towards German higher education for a Bangladeshi student we interviewed, Johnny Islam, currently pursuing his Master's degree in Frankfurt. How was the University application procedure? Do you have any tips for prospective students in Bangladesh wishing to study in Germany? I experienced a very smooth application 56
procedure as I have done it by myself. It took one year of preparation to shape my plans of studying in Germany. I took the IELTS (English language test) and collected all the necessary papers and certificates from my educational institutions. In addition, I requested recommendation letters from my university professors. Students also have to send documents to Uni-assist for verifying certificates to check if they are eligible or not. I got this information from the DAAD as well as German embassy in Dhaka websites. I applied to different universities on their web portals and later on, I sent my online application via postal service. My suggestion to all Bangladeshi students who aspire to study in Europe is that, they should do all preparation work by themselves including selecting the university as well as preparing all the necessary documents. This is the most {Emerging Bangladesh} January - March 2015
important stage for the student to prepare themselves for studying abroad. As I know, a majority of students in Bangladesh rely on the agencies for finding a course and university which eventually does not allow the student to gain the full experience. How was the transition from Bangladesh to Germany for you? To answer this question in one sentence, I would say, it gives me a bridge for the future to make myself as a better-educated person with academic and social knowledge. Life abroad is not easy, as I have to maintain everything from house, food, study and social life. Germany is a very different country than Bangladesh. I am experiencing different culture, educational system as well as university life with international students.
What are some differences between the education system in Germany and Bangladesh? The education system in Germany is totally different than in Bangladesh. For example from the lectures to the examination system, everything is different. I have experienced power point lectures by the professors, group study, seminar, presentation for the courses, oral exam, short written assignment (1500 to 4500 words) as well as practical study project that might not be the trend in many universities of Bangladesh. Most importantly in Germany, there is no chance to memorize lessons for passing exams while in Bangladesh cramming is encouraged in schools, colleges and universities. Education system in Germany is more practical, follows the international charter, and gives more practical knowledge about the study program. Before going to study in Germany, m a ke s u r e yo u h ave a g o o d understanding and proficiency in English language as it allows you to have an easier transition into the English taught Ger man higher education. Another piece of advice is to learn German language beforehand from the Goethe-Institut in Dhaka if
they want to study in German. What are the differences between life in Germany and Bangladesh? Anything future Bangladeshi's students should know? Every country has a different culture and a unique way of life. In Germany, people are very friendly, helpful and straightforward. People here are very concerned with managing their time efficiently. I recommend Bangladeshi students to acknowledge the fact that the traffic in Germany is very different than back home in Bangladesh. Germany is a country with strict rules and regulations and contracts; here people favor planning. To help your finances during your studies, you are allowed to work 120 days in a year and 20 hours in a week, tax free, if you are not earning more than 450 Euro per month. Finally the visa procedure, can you tell us a little about that? Every student have to follow the visa application procedure which includes an interview, accompanied by the submission of all required documents i.e. admission letter of university, bank statements, as well all the educational certificates. According to European {Emerging Bangladesh} bgcci.com
It has been four and half months I am here in Germany. I have gathered so many good experiences. law, any foreign student outside the EU has the right to study in Europe after meeting the requirements of the visa procedure. Although my personal experience was a bad one as I initially got a visa denial. After receiving the visa denial, I appealed against the decision with the help of a German lawyer, and appeal was eventually honored by the German Embassy. My suggestion to Bangladeshi students regarding the visa interview is to be confident and feel relaxed during the interview. All students have to be informed about their study course including the duration as well as the course details and how it will help them for future life. Geographical knowledge of Germany and their last study program in Bangladesh is also advisable. Speak clearly and clarify why you wish to pursue a study in Germany.
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