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Actionable Proposal & Its Impacts: Lower Wages

The document proposes actions to develop Bangladesh as a manufacturing hub, including developing a strong business ecosystem, flexible regulatory compliance, low taxes and duties, and a competitive currency. These proposals aim to leverage Bangladesh's large, low-cost labor pool and could establish the country as an efficient, cost-effective manufacturing base like China, with impacts such as attracting investors and companies seeking low-cost production.

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Arman Rahman
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31 views2 pages

Actionable Proposal & Its Impacts: Lower Wages

The document proposes actions to develop Bangladesh as a manufacturing hub, including developing a strong business ecosystem, flexible regulatory compliance, low taxes and duties, and a competitive currency. These proposals aim to leverage Bangladesh's large, low-cost labor pool and could establish the country as an efficient, cost-effective manufacturing base like China, with impacts such as attracting investors and companies seeking low-cost production.

Uploaded by

Arman Rahman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Actionable proposal & Its Impacts

 Developing strong business eco-system


 Flexibility in regulatory compliance
 Imposing low taxes and duties
 Practicing competitive currency

Lower Wages

Bangladesh is one of the most populous country (8 th) in the world. The law of supply and demand
tells that since the supply of workers is greater than the demand for low-wage
workers, wages stay low. Bangladesh seems reluctant to follow (not strictly at
least) laws related to child labor or minimum wages, which are more widely
observed in the West.
The huge labor pool in Bangladesh might help to produce in bulk, accommodate
any seasonal industry requirement, and even cater to sudden rises in the demand
schedule.

Business Ecosystem

Industrial production does not take place in isolation, but rather relies on
networks of suppliers, component manufacturers, distributors, government
agencies, and customers who are all involved in the process of production
through competition and cooperation. The business ecosystem in Bangladesh has
evolved quite a lot in the last 10-15 years.

Flexible Compliance

Manufacturers in the West are expected to comply with certain basic guidelines
with regards to child labor, involuntary labor, health and safety norms, wage
laws, and protection of the environment. Bangladeshi factories are known for not
following most of these laws and guidelines.
Taxes and Duties

The export tax rebate policy is a way to boost the competitiveness of its exports
by abolishing double taxation on exported goods. If VAT exemption or rebate
policy and consumer products from Bangladesh can be exempted from any
import taxes, these lower tax rates might help to keep the cost of production low,
enabling the country to attract investors and companies looking to produce low-
cost goods.

Currency

The currency of bdt is weak and weaker currency makes exports more attractive.

Impacts

Bangladesh can be "a home to supply chain network” with its low production
costs, huge labor pool, vast talent base, and business ecosystem.

Bangladesh’s business ecosystem of networked suppliers, component


manufacturers, and distributors can be evolved to make it a more efficient and
cost-effective place to manufacture products like China if the stated proposals
are taken in action.

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