importing essentials: Kasem
Abul Kasem Khan, Chairperson of the Trustee Board of Business Initiative Leading Development (BUILD) and former president of Dhaka Chamber of Commerce and Industry (DCCI), talks to The New Nation about the impact of coronavirus on Bangladesh Economy. The New Nation’s Senior Reporter Al Amin took the interview.
Abul Kasem Khan said COVID-19 outbreak has already created havoc in global economy. Moreover, it is also assumed that this virus might trigger a global recession. The world economy is more dependent on China than ever.
In 2003, China constituted only 4 percent of global GDP; today, that figure stands at 17 percent. As China is the hub of global supply chain, any disruption would negatively affect other economies and all the trading partners of China are now going through a vulnerable situation, he said.
Kasem, also Director of AK Khan & Co Ltd and Managing Director of AK Khan Telecom Ltd, said it is literally impossible to find any country, which is not associated with China in terms of business involvement and the shutdown of Chinese manufacturing industries is likely to have an adverse consequence on global economy.
This slowdown would surely impact Bangladesh’s economy as Bangladesh widely depends on Chinese supply and Chinese goods account for more than 26 percent of Bangladesh’s total imports which includes wide range of products worth around $14 billion per annum, he said.
He said Readymade Garments (RMG) is one of the most important manufacturing industries of Bangladesh for its vital contribution in export and more than 50 percent raw materials, which are used in these sectors, are imported from China.
It causes the increase of lead-time as well as cost of doing business and if disruption in the supply chain continues for several months, garments accessories sector would face financial damage worth Tk 14-15 billion, he said.
He further said RMG exporters of Bangladesh might not be able to export their products in deadline to overseas buyers, as Chinese suppliers fail to make delivery in due time.
On the other hand, Wuhan province, which is the most affected region of the coronavirus is renowned for manufacturing motorcycle parts and the importers of Bangladesh have to seek for alternative sources for importing motorcycle part and accessories, he added.
A good number of Chinese citizens are involved in several mega projects in Bangladesh including Padma Bridge and Payra Power Plant. If this situation does not improve in short time, it might disrupt the progress of these mega projects, Kasem said.
Besides China, coronavirus has already spread to a limited extent to a few other countries as well, with infected individuals identified in Afghanistan, Pakistan, and so on. If the virus spreads in neighboring countries, it will amplify the threat for Bangladesh as well, he suggested.
Bangladesh should import essential commodities from India, Turkey and Egypt to ensure sufficient supply and it needs to ensure that the virus doesn’t get spread within its territory which would hamper the export-oriented and remittance-based economy of the country.
Abul Kasem Khan, Chairperson of the Trustee Board of Business Initiative Leading Development (BUILD) and former president of Dhaka Chamber of Commerce and Industry (DCCI), talks to The New Nation about the impact of coronavirus on Bangladesh Economy. The New Nation’s Senior Reporter Al Amin took the interview.
Abul Kasem Khan said COVID-19 outbreak has already created havoc in global economy. Moreover, it is also assumed that this virus might trigger a global recession. The world economy is more dependent on China than ever.
In 2003, China constituted only 4 percent of global GDP; today, that figure stands at 17 percent. As China is the hub of global supply chain, any disruption would negatively affect other economies and all the trading partners of China are now going through a vulnerable situation, he said.
Kasem, also Director of AK Khan & Co Ltd and Managing Director of AK Khan Telecom Ltd, said it is literally impossible to find any country, which is not associated with China in terms of business involvement and the shutdown of Chinese manufacturing industries is likely to have an adverse consequence on global economy.
This slowdown would surely impact Bangladesh’s economy as Bangladesh widely depends on Chinese supply and Chinese goods account for more than 26 percent of Bangladesh’s total imports which includes wide range of products worth around $14 billion per annum, he said.
He said Readymade Garments (RMG) is one of the most important manufacturing industries of Bangladesh for its vital contribution in export and more than 50 percent raw materials, which are used in these sectors, are imported from China.
It causes the increase of lead-time as well as cost of doing business and if disruption in the supply chain continues for several months, garments accessories sector would face financial damage worth Tk 14-15 billion, he said.
He further said RMG exporters of Bangladesh might not be able to export their products in deadline to overseas buyers, as Chinese suppliers fail to make delivery in due time.
On the other hand, Wuhan province, which is the most affected region of the coronavirus is renowned for manufacturing motorcycle parts and the importers of Bangladesh have to seek for alternative sources for importing motorcycle part and accessories, he added.
A good number of Chinese citizens are involved in several mega projects in Bangladesh including Padma Bridge and Payra Power Plant. If this situation does not improve in short time, it might disrupt the progress of these mega projects, Kasem said.
Besides China, coronavirus has already spread to a limited extent to a few other countries as well, with infected individuals identified in Afghanistan, Pakistan, and so on. If the virus spreads in neighboring countries, it will amplify the threat for Bangladesh as well, he suggested.
Bangladesh should import essential commodities from India, Turkey and Egypt to ensure sufficient supply and it needs to ensure that the virus doesn’t get spread within its territory which would hamper the export-oriented and remittance-based economy of the country.
