Bangladesh is the third most-populated country in South Asia (after India and Pakistan). It shares borders with India to the north, west and east, and overlooks the Bay of Bengal to the south. According to HKTDC research, Bangladesh has maintained macroeconomic stability and rapid GDP growth in recent years despite dysfunctional politics. It has also witnessed a rise in foreign direct investment, particularly in the energy, telecoms and export processing sectors. An abundant supply of labour has made Bangladesh the world’s second largest exporter of ready-made garments (RMG) after China. Garment exports and hefty remittances (mainly from the Middle East) are the key drivers of its economy. Another significant contributor to economic growth is the expanding microfinance sector, which covers millions of borrowers and stimulates its rural economy, supporting entrepreneurship in agriculture, a number of cottage industries and small businesses. Bangladesh joined the WTO in 1995 and is a founding member of the South Asian Free Trade Area (SAFTA) and the Bay of Bengal Initiative for Multi-sectoral Technical and Economic Corporation.

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Bangladesh’s textiles and garments sector is vital to its economy, providing almost four million jobs and accounting for over 80% of its exports. Garment products are shipped mostly to the US and EU. Bangladesh mainly imports machinery and petroleum products from China and India. Bangladesh Investment Development Authority (BIDA), formerly Bangladesh Board of Investment, is the principal investment promotion agency, which aims to accelerate economic development with FDI. The textile and garment sector is a major FDI recipient. The Bangladeshi government is keen to attract more FDI and has set out an ambitious plan to build 100 special economic zones (SEZs) by 2030. The SEZs are areas with more business-friendly laws and aligned infrastructure provision. In January 2017 the Bangladesh Economic Zones Authority had approved construction of four SEZs in the districts of Madaripur, Faridpur, Noakhali and Kishoreganj. Bangladesh’s cumulative FDI was US$13.8 billion as at end-September 2016, with a year-on-year change of 9.4%.