An equally supportive export policy

NEWS reports said that despite government’s claim of having a robust export policy; there is a huge discrimination in it that favours readymade garments (RMG) by all means as against other export sectors of the economy. It is not helping the economy to grow in all fronts. The Asian Development Bank has highlighted the issue in a handout circulated recently and shared with the media through a press briefing in the city. It said government’s concentration to promote RMG export has left non-RMG sectors in the sideline. It is noticeable that such discriminatory policy is causing setback in developing competition and product diversification in the non-RMG sectors especially in leather and pharmaceutical sectors.

The garment sector is enjoying tax rebates and cash incentives for exports and powerful lobby is using pressure on the government to give it such privileges. But looking at 81 percent of export earnings now coming from RMG export, it also shows how the economy has become heavily dependent on a single sector. Its consequences may not be good in any crisis that may plug the industry at home or its export market. The growth potential of other sectors is also remaining under-utilized because of the limited concentration of government attention to the non-RMG sector.

Report said the government provides zero-tariff to garment industry in importing fire safety equipment but realizes upto 65 per cent duty on similar items for the non-RMG sectors, which is highly damaging for their growth. For even-handed growth of all export sectors such discriminatory policy is not sustainable. In 2014, the government took a set of measures to diversify export basket with special focus on 11 manufactured products, which are ship-building, pharmaceuticals, furniture, Poppadom (a snack item), rubber, ICT, frozen food, electric home appliance, home textile, jute and jute goods, printed and packaging materials. But it failed because of negligence of concerned agencies of the government to promote them with timely initiative and follow up support.

The country is now totally depended only on single product (RMG) while the share of other products in export basket is very limited. The second biggest export earner is home textiles that accounts for 2.7 percent. followed by Jute and Jute goods 2.7 percent, frozen food 2.2 percent, shrimp 1.9 percent, jute yarn 1.8 percent, footwear 1.8 percent, leather 1.7 percent , engineering 1.32 percent and other rest, EPB latest data shows. As a result, it creates a huge gap between the first 81 percent and second 2.7 percent, which is not good news for the economy.

We say we can’t confine our attention to limited products; which may limit our export capacity in the long run. Only the more we can export products, the more we can develop the economy and keep it free from risk. We have no way except developing all export sectors for the greater interest of the nation.