In this episode, I look at what Bangladesh’s economy is like, the main exports of the country, and the price difference between goods in America and in Bangladesh.
Some things in Bangladesh are super cheap but others are really expensive, why?
In this episode, I look at the different cost of goods in Bangladesh, the state of the Bangladeshi economy, and what their main exports are…
“Bangladesh fits inside of Illinois and has more than half of the US population which is 332 million people.” – Ben Jones
01:20 – The role Gandhi played in India’s independence.
01:40 – How being independent affects Bangladesh’s economy.
03:06 – The most densely populated city in the world.
04:14 – How much land there is per person in America and Bangladesh.
04:40 – The GDP of Bangladesh.
05:15 – How much clothing gets produced in Bangladesh.
06:28 – How much the average Bangladeshi gets paid.
07:18 – Why imported goods are so expensive in Bangladesh.
08:00 – The difference in cost between Bangladesh and America.
10:30 – How to get plane tickets for cheap.
Connect with Ben Jones:
Thanks for coming back for the second half of my discussion on my upcoming trip to Bangladesh and Nepal. I took some notes before my trip and I wanted to write them down, as I visit the developing countries of Bangladesh and Nepal. In the last episode, I discussed a couple of items, which included:
- The Various Shots I had to take
- And the potential for some tourist diarrhea
- The Cost of a Visa
We ended with interesting facts about the country, that I wanted to understand, including
- It was once called East Pakistan
- It has the longest female-led Government
- The capital, Dhaka is the most densely populated city on Earth
- Traffic is Insane
- It’s the world’s least livable city
- There are a lot of Bangladeshis who live OUTSIDE of the country
Ok, I’m not really going to test you on your geography, but I found it fascinating, that Bangladesh was previously East Pakistan. I’m not a historian, so I’m going to make oversimplify things. If you remember Gandhi, he wanted to peacefully obtain Indian Independence from the British crown. There are some insane stories about how Britain messed with the financial aspects of India, but that’s for another time.
Anyway, Gandhi succeeded, but it led to separating India into India and Pakistan due to religious beliefs. Well, there used to be a West Pakistan and an East Pakistan, which is now Bangladesh. It’s hard for me to believe because “West Pakistan”, now known simply as Pakistan, is 1,000 miles away from Bangladesh on the other side of India. Isn’t that a bit crazy? Aren’t east and western parts of a country supposed to be closer together? Then in 1971 Bangladesh fought for its own independence, and it won. But, from a monetary view, India still looks at Bangladesh as having a big economy that it’d like to control. They remember it as part of India. Britain wants to control India, and India wants to control Bangladesh. Wow, it also kind of sounds a bit like Russia and Ukraine, huh? But, being independent and creating their own currency used only in their country doesn’t make for a strong financial situation.
Ok, here’s something interesting, and I hope I’m saying it correctly. Sheikh Hasina is the longest-serving Prime Minister in the history of Bangladesh with 18 years, and she is the world’s longest-serving female elected official. Cool. If Mak was here, she’d be saying “GIRL POWER!”.
Ok, Dhaka is the capital of Bangladesh, and depending on how you calculate density and how the area of each city is calculated, by comparison, Dhaka is definitely in the most populous and most densely populated category with around 16 million in a very small area. For reference, New York is less than 9 million.
Bangladesh has a total of 168.4 million people and is located in an area of 57,321 square miles. In comparison, Illinois has 12.7 million people in a slightly BIGGER area which is 57,915 square miles. Illinois is about 600 square miles BIGGER. That means Bangladesh fits inside Illinois and has more than ½ of the US population which is 332 Million people. If you look at the US, it has 3.8 million square miles and not 57,000 like Bangladesh. That means on a per-person basis we have over 130 times more space than they do.
So, what does all this mean when talking about money? First, there are 195 countries in the world. Bangladesh is ranked 35th in total Gross Domestic Product or GDP. That’s how much the entire COUNTRY produces in the terms of services and products. But since it has a lot of people and ranked #9 most populous above Russia each person doesn’t produce much. On a per-person GDP basis, it ranks near the 150th position out of 195 countries. It’s a big economy, but each individual is not producing a lot on average. When we talk about wealth, how much each person produces in a country, on average helps to determine how wealthy its people are.
The US is the biggest trade partner with Bangladesh and 85% of total exports from Bangladesh are for clothing. It’s not technology or services that they specialize in, but the production of clothes. This puts the country a bit behind others. But, if you check the tag on your clothing, it’s likely that you have SOMETHING in your closet made in the country. The great part is that they are growing faster than other countries and trying to change their economy to focus more on technology which can really help move them up in the ranking but it takes time, especially when their education is ranked the lowest in the area.
The local currency is called the Taka, which is funny because it means “currency” in Bangla. Right now, you can get about 100 Taka for each US dollar. So, that’s a pretty easy conversion for anything I’d buy. The average salary for 75% of the population in Dhaka is about $850 per month or $10,000 a year. However, those in the capital Dhaka earn the most. Over 80% of people in the country earn less than $5.50 per day. So, that’s around $110 dollars for a 20-day work month, which can be a bit shocking to an American.
In the US, for the period ending June of 2022, the Bureau of Labor and statistics showed a median income of over $54k which is 5 times the US. This is where the biggest portion of earners are. But, the prices of many items in Bangladesh are significantly different than in the US. Items that can be produced in the country are MUCH less expensive than those imported because imported items require payment in foreign money, like the US dollar which is a stronger currency. Items such as computers, cell phones, cars, and other items that aren’t built in the country, but brought in, have to be purchased from another currency, transported in, and then they are generally taxed a lot, say 40, 50, or even 100% or more. Let’s look at a couple of different items bought in the US and those bought in Bangladesh.
If you go to get a meal with a drink at an inexpensive restaurant in Bangladesh, it would cost you less than $2 and it’s estimated at over $15 in the US. That’s over 7 times more expensive here.
A loaf of bread in the US is around $1.75, while it’s around 50 cents in Bangladesh which is over 3 times more expensive. Jeans are averaging $50 now in the US, but can easily cost less than $12 in Dhaka, that’s over 4 times more expensive.
The country actually gets very little tourism revenue. If we think of New York City, I’ve seen that around 70 million people visit the city with about 15 million visitors coming from other countries. But, Bangladesh isn’t as lucky. In 2021, it ranked 100th out of 117 countries being reviewed in the world for tourism. And that was better than the year before, as it moved UP 3 places. It’s been rated as a top 10 Best Value country in the world by the Lonely Planets travel guide, which is one of the largest travel guidebooks out there.
So, gasoline is imported. Any guesses what it costs? Well, its about $5 in Dhakka as of about a week ago, compared to my neighborhood which is around $4, so that’s about 25% more expensive.
A brand new Volkswagen Golf 1.4L is about $24,000 in the US, and it’s about $40,500 in Bangladesh. That’s a 40% difference.
Ok, but what about the day-to-day living arrangements? Well, I saw some research that a one-bedroom apartment in Bangladesh is about $78 but is closer to $1,200 in the US. That’s about 14 times more expensive. I actually just went online and found several one-bedroom apartments in Dhaka, which were pretty nice having around 600 square feet from $100 to $150, and that’s in the capital which is more expensive. Wouldn’t that be nice?
Ok, if you haven’t traveled in a while, I was surprised by the tools that were available to find the best prices for your tickets. Sure there’s Expedia, Booking.com, CheapTickets and more. But, I’ve come to really like Google Flights, for plane tickets. I could see how pricing moved up and down, put on trackers with email alerts to my inbox, and loved the price grid which would show departure dates and return dates and you could see the best pricing out there. NUTS. It was nuts. I actually was looking at the pricing chart and it knew my dates, and it literally told me to wait a little longer for better pricing. I waited and the pricing dropped from $1,250 down to $999. I couldn’t believe it.
I took a flight from Chicago to Instanbul which was about 10 hours with a 2-hour layover. That’s perfect for me. Off the plane, walk around, stretch, toilets, maybe food, and back on. Then another 8 hours or so to Bangladesh. It’s been a long time since I spent 18+ hours on a plane. Chicago to London is less than 8 hours and 4,000 miles. This trip is over 9,000 miles. If you go around the earth at the equator, it’s 25,000 miles. So, I was going to be a long way from home. On second thought, maybe I should just pay to upgrade my seats. I’m over 6’ 1” and the average Bangladeshi is about 5’ 2”. The seats can’t be that big, right? Bad rational, but still a good idea for 18 hours. DONE.
This is going to be an adventure and I can’t wait to see my business partners and friends. Thanks for being here. There’s more to come, so we’ll see you next time on Money with Mak & G. Bye!!!