Kamruzzaman Bablu :
The gloomy outlook of the world economy and the internal challenges have eaten into the export earnings this fiscal year- a development that has prompted the exporters and economists to call for policy supports to fashion a recovery.
In the first ten months of fiscal 2016-17, export earnings stood at $28.72 billion, missing the ten-month target of $30 billion, sources said.
According to the Export Promotion Bureau (EPB) data, during the July-April period, all major sectors recorded a decline in shipments including apparel, which accounts for 82 percent of the export receipts.
‘Export earnings from garment shipments grew only 2.21 percent in the first ten months of fiscal 2016-17 way below the sector’s average of 13 percent in the past ten years’, said Siddiqur Rahman, president of the Bangladesh Garment Manufacturers and Exporters Association. He said, the upcoming budget, to be announced on June 1, should address the problems the exporters are facing.
The export receipts during the period were 6.06 percent lower than the ten-month target of $24.62 billion.
Apparel exporters said a silent recession is going on in their main export destinations in Europe, brought about by the general elections in four major economies in 2017. France and the Netherlands have already had their elections, while the UK is due to go to the polls on June 8 and Germany on September 24.
Besides, a subdued demand for clothing items can be seen among consumers in the Western world in recent times, apparel exporters said. For instance, in 2015, consumption of apparel items declined 7.9 percent worldwide as consumers shifted their focus to electronic gadgets.
During the July-April period, garment shipments to Bangladesh’s single largest export destination, the US, declined 6.80 percent and the third largest export destination, the UK, 5.91 percent. Regarding new destinations like Japan, Australia and New Zealand, Rahman said exports grew only 1.21 percent to those countries in the last ten months, which is way lower than the 20 percent growth recorded a year earlier.
Shafiul Islam Mohiuddin, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), echoed the same as Rahman.
Instability in global politics reduced both the demand and prices of consumable goods worldwide. Besides, the Bangladeshi taka appreciated against the US dollar and there is a perennial problem of gas and power crisis in industrial units, he said.
Moreover, many garment factories have to stop production either for remediation or for relocation of units as per the recommendations of the Accord and Alliance engineers.
“The export sectors should be given policy supports in the interim period,” Mohiuddin said, while urging the government not to impose any new tax on them.
Ahsan H Mansur, Executive Director of private think-tank Policy Research Institute of Bangladesh said, encouraging foreign direct investment in the garment sector can be an option to offset the shocks at least for a while as such initiatives will also bring diversified products and markets.
The contribution of export towards the country’s gross domestic product has been on the descent for the past four years.
In fiscal 2015-16, the contribution of export to GDP was 15.50 percent, down from 16.04 percent in 2014-15, 17.46 percent in fiscal 2013-14 and 18.02 percent in fiscal 2012-13, according to data from the Bangladesh Bureau of Statistics.
Mansur, however, said the sectors that are already enjoying financial benefits from the government should not be given any further support.
Bangladeshi frozen foods, especially shrimp, are losing market share in Europe to products from India, Indonesia, Vietnam and Thailand, said Kazi Belayet Hossain, senior vice-president of the Bangladesh Frozen Foods Exporters Association. He also blamed the weak demand in Europe for lower receipts from shipment of frozen foods and fishes.
In the July-April period, Bangladesh exported frozen and live fish worth $425.09 million, down 3.10 percent year-on-year. Fruit and vegetable exporters are not faring any better due to weak demand in Europe and regulatory problems in direct shipment of cargo from Bangladesh to the EU.
Earlier, Bangladesh used to export 60 percent of its vegetables to the EU, but the share came down to 40 percent due to the ban imposed last year on direct shipments from Bangladesh, said Mohammed Mansur, general secretary of Bangladesh Fruits, Vegetables and Allied Products Exporters’ Association. He said, from May 9 the government has put a bar on export of vegetables to Europe for different regulatory problems.
