Declining export earnings passes wrong signals

THIS newspaper reported yesterday that the overall export growth of the country has fallen considerably in the outgoing fiscal which only belies the tall claims of making big achievements in most areas, particularly in the economy. In effect, the situation seems to be alarming. Export earnings’ growth of the country in 2016-17 fiscal hit a 15-year low at 1.69 percent as the earnings from readymade garment products witnessed a sluggish growth in the major destinations including the European Union and the United States. Available data showed that export earnings in FY17 stood at $34.83 billion with a shortfall of more than $2 billion from the government-set target of $37 billion. Despite the prevailing comparatively stable political environment and infrastructural development, the failure to meet the export targets exposes the fact that a dark cloud is gathering over the economy while the government is untiringly propagating its economic success. Almost all the macro-economic variables of the economy are shrinking when the government claims its success to ensure re-election.

Available data showed that the earnings’ growth was the lowest since the FY 2001-02 when it was negative 7.43 percent. The export earnings from goods in FY17 fell short of target by 5.85 percent. Officials said that export earnings from goods in FY17 stood at nearly $35 billion with about 2 per cent growth. Export earnings in June 2017 stood at $3.04 billion with a 15.27-percent negative growth against $3.59 billion in the same month of FY16. There were both external and internal factors, including, shrinking global demand for apparel products and devaluation of currencies, behind the undesirable export earnings growth. Worried exporters said that the negative growth has sent a signal to Bangladesh that the country is losing its competitive edge while other competitors are doing well. Experts suggested that the nation should go for productivity-driven growth, diversification of markets and products and cut the cost of doing business.

According to the provisional data, export earnings from RMG products in FY17 stood at $28.15 billion with a minimal growth of 0.20 percent, which fell short by 7.34 percent the government-set target of $30.38 billion. Export earnings from knitwear stood at $13.75 billion with 3.01 percent growth while earnings from woven fell by 2.35 percent to $14.39 billion in FY17. In last 15 years, the export earnings registered a poor growth of 3.35 per cent in FY 2014-15 while the earnings registered highest 41.47 percent growth in FY 2010-11.

If the government provides policy support, ensures gas and electricity on a priority basis, the export earnings growth would rebound in the new fiscal. Bangladesh would have to focus on ensuring the quality of products as well as on diversifying markets and products. The government should work to increase the export earning as it is the life-line of economy and the largest sphere which can generate employments.