Kazi Zahidul Hasan :
The latest export data released last week showed that Bangladesh’s outbound shipments shrank by 5.84 per cent in the first half of the current fiscal year (2019-20) amid weak external demands.
Economists voiced alarm over the declining exports saying a prolonged weakness in external demand could darken the country’s export prospect hitting the domestic economy hard.
“Falling exports have appeared to be the biggest discomfort for the national economy,” said Dr Ahsan H Mansur, Executive Director of the Policy Research Institute of Bangladesh.”
He added, “The exports declined mainly because of poor performance of apparel shipments, which accounted for more than 80 per cent of the national exports.”
Garment exports fell by 6.21 per cent to US$16.02 billion in the first half (July-December) of the current fiscal year, according to the Export Promotion Bureau (EPB) data.
Dr. Mansur said, “Garment shipments remained weak due to recession in the Europe, the key market for local products.”
Bangladesh earned $19.30 billion from exports during July-December period of the current fiscal year, while its earning was $20.49 billion during the same period of the last fiscal.
“Exports play an important role in the domestic economy, influencing the level of economic growth, employment and the balance of payments. So, the falling export will obviously affect the economy,” said Dr Mansur.
When asked, he said, “It was earlier predicted that Bangladesh would be a primary beneficiary of the US-China trade war. But the country is yet to get any notable benefits from the trade tension between two of the world’s leading economies because of its own manufacturing weaknesses, supply chain inefficiency and lack of product diversification.”
“If Bangladeshi exporters want to get benefits from the trade war, they would focus more on product diversification,” he added.
“Exports continue to fall in this fiscal on sluggish global demand. Even the import of capital machinery also decreased underlining a darkening outlook for the local economy,” Dr AB Mirza Azizul Islam, a former finance advisor of the caretaker government said.
He said the main cause of the export fall is weak global demands and eroding competitiveness of local exportable, especially apparel items.
“Bangladesh’s apparel export is turning uncompetitive globally because of high cost of credit, longer lead time, lack of innovation and product diversification and rising cost of production,” he added.
Mirza Aziz said that the apparel manufacturers have to concentrate on new markets and product diversification to keep their export afloat in global market. “The government as well as the manufacturers have to invest more in research and development to diversify goods,” he added.
He urged the government to improve efficiency of Chattogram Port and remove infrastructure deficiency to reduce lead time and improve efficiency in the supply chain.
Bangladesh has set $45.50 billion export target in 2019-20 fiscal year, including $38.20 from ready-made garment products, the EPB data showed.
