The government will have to add more products to Bangladesh’s export basket to ensure the growth in the sector sustainable for the country, experts said.
Although the government has been providing cash incentive for different products to encourage traders to boost the export earnings of the country, this is not enough to protect local businesses to fight global competitors, they opined.
It is high time to focus on new and potential export items, like jute and jute goods, leather, agricultural products and pharmaceuticals, in order to come out of overdependence on readymade garments. To compete with other Asian countries, notably China, India, Indonesia, Malaysia, Sri Lanka, Thailand and Vietnam, it is necessary to come up with more diversified products, they said.
Existing policies to boost export earnings, undertaken by the government, appear to be very fruitful for several items. But more governmental support for other potential products can help export earnings rise to a great extent, they added. BGMEA president Rubana Huq said RMG is leading the export sector as it covers almost 90 per cent of total export earnings of the country.
Hence, the government will have to give more emphasis on this sector, she added. The BGMEA head said they are now working to create new markets by promoting their products in order to raise export earnings. Abdus Salam Murshedy, president of Exporters Association of Bangladesh (EAB), told Bangladesh Post that the country’s 84 percent export earnings are dependent on readymade garments.
Therefore, it is very much necessary to expand the export market with more diversified products, in a bid to minimise the risk of overdependence on RMG, he added. He noted that the country now is capable of making the best quality products at low prices, which will help enhance export earnings even more from developed countries, thus contributing to the country’s economic uplift.
Eminent economist and former governor of Bangladesh Bank Saleh Uddin Ahmed said for export diversification, the government needs to encourage entrepreneurs by giving several fiscal and technical support. He stressed an exemption of taxes on raw materials and backward linkage industries to survive competition with others, which will help to expand the country’s export earnings.
Md Shakawat Ullah, general secretary of Bangladesh Tanners Association (BTA), told Bangladesh Post that as a very potential item the leather goods need a special care. Providing land at affordable prices for infrastructural development coupled with easy-term loan can help the leather sector bounce back, he added.
Commerce Minister Tipu Munshi said the export earnings have seen a positive growth due to various initiatives—like diversification of products and markets, signing of bilateral agreements, FTAs—undertaken by the government in recent years. In this effort to push up export earnings, the government has been giving highest priorities to 12 sectors in the export policy of the three fiscals between 2015 and 2018, he said.
Ninety percent of total export earnings of the country came from only four products including ready-made garments, jute and jute goods, frozen foods and leather and leather products. The contribution of exports of readymade garments was almost 84 percent of total exports whereas the remaining six percent has come from frozen foods, jute and jute goods and leather and leather products.
The overall export earnings stood at $36.67 billion in the last fiscal year 2017-18, according to Export Promotion Bureau (EPB) data. During current fiscal, the country’s total export earnings stood at $33.93 billion, up by 11.61 percent over the corresponding period of the previous fiscal. Official data show export earnings from readymade garments went up by 12.59 percent during the July-April period of the current fiscal from $25.30 billion in the corresponding period of the previous fiscal.
On the other hand, the non-apparel goods accounted for only $5.44 billion that is almost 16 percent of the total exports. Although the RMG attained 12.59 percent export growth in the time the other sectors could not maintain the momentum. Even some products such as leather and leather products witnessed a negative export growth with 8.69 percent fall during the time in comparison with the preceding fiscal while export of jute and j ute goods went down to 21.83 percent.
Rubber, wood and wood products, paper and paper products and home textile also witnessed a negative growth during the period. On the other hand, some products witnessed a higher growth but it was not up to the expectation. Among them, the plastic sector witnessed a positive growth to $100.35 million during the time, which was 23.6 percent higher from $81.19 million in the same period of previous fiscal. Export earnings from frozen and live fish, chemical, cotton and cotton products, ceramic products and handicrafts also saw a positive growth.