An economic condition marked by the fact that individuals actively seeking jobs remain unhired. Unemployment is expressed as a percentage of the total available work force. The level of unemployment varies with economic conditions and other circumstances.
Unemployment is defined as by the Bureau of Labor statistics (BLS) as people who do not have a job, have actively looked for work in the past four weeks, and are currently available for work. Also, people who were temporarily laid off and are waiting to be called back to that job are counted as unemployed. People who are jobless and have not looked for work within the past four weeks are removed from the labor force by the BLS and are no longer counted as unemployed. Most people leave the labor force when they retire, go to school, have a disability that keeps them from working, or have family responsibilities. Others may feel they can't get work, and so stop looking. The BLS calls them discouraged workers. The BLS removes them from both the unemployment statistics and the labor force. However, they are separately reported in the Employment Report. Unemployment is an important statistic used by the government to gauge the health of the economy. If unemployment gets too high, the government will try to stimulate the economy and create jobs with expansionary monetary or fiscal policy. It will also create additional benefits to aid the unemployed until they can find jobs. The BLS measures unemployment through monthly household surveys, called the Current Population Survey (CPS). It has been conducted every month since 1940, as part of the government's response to the Great Depression. It has been modified several times since then, and experienced a major redesign in 1994. This included a revamping of the questionnaire, the use of computer-assisted interviewing, and revisions to some of the labor force concepts. Nationally, unemployment is caused when the economy slows down, and businesses are forced to cut costs by reducing payroll expenses. Unemployment can also be caused by competition in specific industries or companies. Advanced technology, such as computers or robots, cause unemployment by replacing worker tasks with machines. The consequences of unemployment for the economy are less consumer spending, as workers have less money to spend until they find another job. If high national unemployment continues, it can deepen a recession or even cause a depression. That's because less consumer spending from unemployed workers reduces business revenue, which forces them to cut more payroll to reduce their costs.
b) Two sectors of the economy growing faster then other sectors
Agriculture is the single most important sector in Bangladesh's economy. Over 80% of the population (or 70% of the workforce) of Bangladesh is engaged in agriculture. The share of agriculture in GDP has fallen from around 57% in the 1970s to 19% in recent years. Nonetheless, agriculture is still one of the largest economic sectors in Bangladesh. The agriculture sector is also the source of many of the small industrial sector's raw materials, such as jute, and accounts for 10% of Bangladesh's exports. In short, agriculture is the driving force behind economic growth in Bangladesh and, as a result, increasing food and agriculture production have always been major concerns of Bangladeshi policy-makers.
Bangladesh's major crops include: rice, jute, tea, wheat, cane, oilseeds, potatoes, pulses, and spices. Rice is by far the largest, with an average 71% share of the gross output value of all crops. As a result, growth in the agricultural sector essentially mirrors the performance of rice production, although the share of livestock and fisheries has increased steadily in recent years to 22% of the value added in agriculture. Bangladesh’s dependence on food imports and, in particular, food aid throughout the years has been a cause for concern. In 2006-07, agri-food imports in Bangladesh represented approximately $1.9 billion (8% of total imports) and were worth about 9% of total export earnings. Natural disasters (floods in particular) may cause abnormal increases in imports to the agribusiness sector. Government legislation for agricultural products changes with the country's production and import requirements. For example, the government recently allowed the food import with no tariff at all since there is a significant shortage between demand and the level of local production.
The Bangladesh Agricultural Research Council (BARC) estimates the future requirement for food grains to be about 45 million tones in 2030 (compared to 25 million tones in 2000).Total Bangladesh/Canada agricultural trade was valued at over $265 million in 2007 (January - November), and represented over 32% of total trade between the two countries. Top Canadian agricultural exports to Bangladesh were wheat, valued at $164 million and accounting for over 50% of all agri-food exports, and peas (dried), valued at $70 million or 22% of total agri-food exports. Bangladesh imports large quantities of wheat, as it is a staple of the Bangladeshi diet. Consistent demand in this commodity represents an excellent opportunity for Canadian wheat exporters to increase sales. India is Bangladesh's largest supplier of agri-food, supplying over 18% of Bangladesh's agri-food imports in 2003. Bangladesh's other large agri-food suppliers include Australia and Singapore. Natural disasters pose a constant threat for Bangladesh. The country is particularly vulnerable to sudden floods, cyclones and even droughts. Agriculture growth in 2008 is likely to moderate because of the serious flooding and devastating cyclone that occurred in 2007. The floods and cyclone caused extensive damages to the agriculture sector by affecting crops, livestock, poultry and aquaculture. Production losses due to flooding are estimated at 1.3 million tons, while the November cyclone was also severely damaging. The effect of this year's flooding and cyclone on agriculture sector could be substantial unless the losses are offset by a bumper boro crop.
Vulnerability to natural disasters and a heavy reliance on annual rains for the main crop performance are the causes of severe fluctuations in food grain production and prices, as well as erratic GDP growth. Losses of both food and cash crops are common occurrences which seriously disrupt the entire economy by precipitating unanticipated food import requirements. Bangladesh has an agriculture-dependent economy with a growing population and one of the world's lowest land areas per capita. Not surprisingly, the most important issue in Bangladesh agriculture is to enhance and sustain growth in crop production. The most pressing problem is therefore the current state of stagnating yields and declining productivity in a range of food and non-food crops. Projections of food grain supply and demand are consistent in their conclusions that there is a widening food grain supply gap. With negligible scope for area expansion (as most of the arable lands of Bangladesh are already under cultivation) future growth will have to continue to rely on raising productivity per unit of land. For this reason, continuous efforts are being made towards developing new improved seed varieties. It is also felt that the agricultural sector has by no means exploited its full potential for crop production and that there are various opportunities for substantially increasing cropping intensities. Currently only 40 percent of the potential irrigated area is covered by modern varieties and, most importantly, there are wide gaps between the potential and the realized yields for all crops in the country.
Market and Sector Challenges (Strengths and Weaknesses)
The overriding objective of all agricultural policy and development since independence in Bangladesh has been to achieve self-sufficiency in food grains and, in particular, rice production. In reality, what has actually been sought is a substantial acceleration in the growth rate of domestic food production and a decreased dependence on, or elimination of, food aid in the long term. The emphasis on accelerating food production in Bangladesh stems from the country's excessive dependence on food imports, its precarious external account situation and its perceived comparative advantage in food production.
Although Bangladesh continues to be a net importer of food, importing on average 1.5 million tones of rice annually, it has achieved substantial gains in food grain production during the last two decades. Demand for some agro-based products depends on various climatic factors. Bumper crops may see food imports drop; however, the import of cotton, pulse crops and oilseeds are showing ongoing upward trends. Until the early 1990s, the Trading Corporation of Bangladesh (a government-owned trading house) and the Ministry of Food were the main importers of agro-based commodities. Now, the private sector in Bangladesh has become the largest agro-food importer in Bangladesh. Since 2004-05, the country has achieved an average annual growth rate of around six per cent. Bangladeshi buyers are price-sensitive but are also quality-conscious buyers. Canadian products are well accepted in Bangladesh for their quality. Bangladesh agribusiness opportunities include exporting wheat, oilseeds and pulses. Yearly consumption of wheat in Bangladesh is about 4 million tones. Canadian Wheat.
Canada Western Red Spring is already established in the market due to its price and quality. Major competitors for wheat are from India, Australia, the US and the EC.Local production of most of the oilseeds has either stagnated or declined in recent years due to climatic constraints and increased cultivation of alternative crops such as wheat and rice. The total yearly oilseed crush is approximately 650,000 tones including 250,000 tones of imported rapeseed/canola. Canadian oil seed exports to Bangladesh have significantly increased in recent years. Australia and France are Canada's main competitors.Consumption of pulses has been growing faster than local production and has resulted in an increasing amount of pulse crops imported into the country. Canada is the leading supplier of chickpeas to Bangladesh. Canadian yellow peas are gaining popularity in Bangladesh, competing with its nearest rival, the Australian dun peas. Due to the shortage in local production of agricultural commodities, there are no barriers or quotas affecting the import procedure for agro-commodity items in Bangladesh.
The importation of any food item to Bangladesh requires a phytosanitary certificate from the Canadian Food Inspection Agency (CFIA) that includes a fumigation certificate. Under current Canadian law fumigation of commodities can't be carried out in Canada. CFIA has already launched a bilateral negotiation with the Bangladesh authorities to solve this issue. In the meantime, authorities in Bangladesh have taken a special measure to physically inspect Canadian exported commodities in port and decide their entry after their examination based on the fact that it is free from pests, insects, larva and others. This is an interim measure which was taken until bilateral negotiation leads to a solution.
A radiation certificate is also required with all imports from the Canadian Grain Commission. Pre-shipment inspection through Interdev Testing is mandatory for any export to Bangladesh to certify all Clean Reporting Findings (CRF), except agri-commodities. Local agents/indenters play an important role in the import of agro-commodity products. Both traders and industrial concerns import product through agents. Canadian companies are urged to have local agents handle import facilitation and customer liaison. There are few reputable trading companies in Bangladesh for agro-commodities. In many cases, an agent's value relates to their operating in specific areas of the country or their dealings with specific customers. Wheat and pulses are imported in bulk containers which are bagged and sold in 40-50 kilogram bags. There are strong government regulations in terms of international trade. Importing is permitted only through irrevocable letter of credit and certain documentations are needed for doing business under this regulated environment. Large suppliers dominate the import of wheat and pulses as they import in bulk, in vessel. However, import in containers has been increasing in recent years, and consequently small and medium importers have flourished. Bangladesh is a founding member of the World Trade Organization (WTO) in which it actively represents the interests of the least developed countries. Bangladesh is also a member of good standing in the South Asia Preferential Trade agreement (SAPTA).
In addition, Bangladesh is a member of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), an organization that seeks to promote economic cooperation between Bangladesh, India, Burma (Myanmar), Sri Lanka, and Thailand. Such agreements tend to facilitate and ease trade amongst these countries and represent connections with all of Bangladesh's largest trading partners.
Agribusiness has achieved limited success in a few areas including poultry, shrimp, fruits, dairy products, vegetables, wheat and bakery products, medicinal plants, animal feed, flowers and orchids. Other commodities and products including rice, tea, sugar, jute and tobacco have been part of the commercial system of production, but have not shown yet the required dynamism for agribusiness. The largest agricultural sub-sector, rice, is still dominated by a large number of farmers producing for household food security or producing for a small marketable surplus. Scope remains, however, to improve milling, packaging and distribution capacity. Potential for interventions can be at the following levels: Commercialization of production through new products and commodities, such as high value crops, livestock, poultry and fisheries;
Development of forward linkages through improved services, packaging, processing, storage, transport, removal of marketing constraints and opening up of new markets; and Backward linkages through the provision of inputs (seeds, fertilizers, animal feed and agriculture machinery)
Potential Areas for Exploring Business Opportunity:
Processing of Potato flakes, pulses and spices;
Post harvest storage, processing and packaging of fruits and vegetables; and
Production of organic fertilizer and mixed fertilizer.