In reality, our export earnings have decreased facing a challenge of demand and supply
The overall economic condition in Bangladesh is mainly responsible for a slump in exports. The global trade has also been witnessing a slow growth because of a slowdown in recovery which has impacted economies worldwide.
Even then, several countries such as Vietnam, Cambodia and Turkey are performing better than Bangladesh in terms of exports.
When it comes to exporting apparel products, Vietnam is witnessing a good business in the US market while Cambodia and Turkey are doing well in the European market.
It is worth mentioning that the lion's share of our export earnings comes from readymade garments.
Our knitwear, mostly exported to the European market, which was always doing well is now experiencing negative growth as well.
We see, a fall in global prices of our main products is responsible for a fall in export value in dollar terms.
Due to depreciation of dollar against local currency taka, the amount of exports increased but earnings fell – it is true regarding apparel products.
Earnings from other sectors excluding the readymade garments, dropped. Only the situation of jute is good.
In reality, our export earnings have decreased facing a challenge of demand and supply.
I think it will be impossible to reach the export earning target in the current fiscal. Because, the country's export declined 4.7 percent against 12 percent growth set fixed for the year. So, to fulfil the target, the average growth has to be 25-30 percent in the remaining four months which seems almost impossible.
Minimum wage for workers increased and to make adjustment to it we have to enhance competitiveness. We have to increase productivity by developing skills but our entrepreneurs are unable to do that. As a result, we are losing competitiveness and falling behind our competitors.
We are losing in competition in two levels – one is in efficiency at the enterprise level and another in capacity. There are some factors behind it – we remain comparatively behind in terms of doing business, logistics and lead time.
We are also lagging behind our competitor countries with regards to the exchange rate too. They did deeper depreciation of their currencies against dollar. Recently, our currency has depreciated as well. But there is more opportunity to devalue taka for a short term.
We have to increase productivity, diversify products and their markets if we think for mid-term measures. We have to make a strong position in the Chinese and Indian markets.
Every year China imports products amounting to $22,00 billion, India imported products worth $510 billion last year. We exported $1 billion to China and $1.2 billion to India last year, meaning our shares in both the countries' imports are very minimal. So, we have to reap benefit from this Asian century. On the other hand, once we graduate from the least developed country status, many scenes will be changed. We will lose zero tariff facility, then we have to sign bilateral trade deals with different countries.
Not going towards signing Free Trade Agreement only, we have also to sign the comprehensive partnership agreement. If it is possible to do so, we will get many facilities like investment and connectivity apart from enhancing exports. We have to enhance areas of negotiation with various countries.
We are giving many incentives to export sectors. But we have to make a new plan in this regard considering the current market and demand. We have to frame the trade and investment strategy in a combined way.
For instance, the bonded warehouse facility is only given to the readymade garment sector. It is necessary to bring other sectors under the facility as well.
But what worries the government is its misuse. Revenue is evaded through it. Its misuse can be stopped by enhancing the institutional capacity.
Besides, leather is a very potential sector. But we are unable to exploit it as construction of the central effluent treatment plant has not been completed yet.
We might see the export-based investment if we can start the functioning of a few of the special economic zones.
If these can be implemented with a short-, mid- and long-term planning, we will be able to perform well in the global export market.