Promising Asian marketplaces could revive export income, say analysts
The promising growth in export earnings seen at three Asian marketplaces through the previous fiscal year has come to a halt following coronavirus outbreak.
Exports to China, India and Japan, three economical giants, were developing steadily over the last five years.
During fiscal 2019-20 aswell, exports from Bangladesh were likely to increase significantly. However, the unprecedented pandemic slowed the shipments to those three locations.
The consumer industry size of the three Asian economic giants is worth trillions of dollars because of their strong consumer base and monetary foothold.
In the immediate past fiscal year, shipments to China declined by 27.79 per cent year-on-year to $600 million also to India by 12.09 % to $1.09 billion while exports to Japan fell by 11.76 per cent to $1.20 billion, relating to info from the Export Advertising Bureau (EPB).
As a least developed region (LDC), Bangladesh enjoys duty-free advantages to all three markets.
For instance, Bangladesh enjoys zero-duty advantages to India beneath the SAARC Free Trade Agreement (SAFTA), zero-duty benefit to Japan beneath the LDC category and the same for 97 per cent of Bangladesh-origin items shipped to China beneath the same conditions and Asia Pacific Trade Agreement (APTA).
Exports from Bangladesh to India crossed the $1 billion mark found in fiscal to 2018-19. Within the last fiscal time also, exports to India valued at more than $1 billion.
Exports to India possess increased mainly for 3 reasons, including duty-free industry access, functions of multinational clothing corporations in India and a good rising number of middle-income consumers found in India.
For example, the multinational attire retailer H&M and Walmart have already been operating shops in the country.
Due to this fact, garment exports to India have risen every year even though local exporters have to face a 12 % countervailing duty in Indian markets.
Japan has been turning into a significant market for Bangladesh aswell.
Garment exports from Bangladesh to Japan have become at an easy pace because of the duty-free center and for the reliance of a good few Japanese makes on Bangladeshi apparel things.
"Now we are not planning about the expansion seeing that coronavirus impacted our organization. There can be uncertainty for at least the next twelve months. So, we are simply serving our existing buyers and job orders," stated Anwar Ul Alam Chowdhury Parvez, former president of the Bangladesh Garment Companies and Exporters Association (BGMEA).
However, he is very hopeful about the potentials of the Asian markets simply because exports to all three places have increased gradually. However, Bangladesh shouldn't depend only on attire shipments.
Bangladesh should change its industrial base to the production of heavy apparatus like construction and medical center gear and light engineering to grab the opportunities in Japanese, Chinese and Indian market segments, Parvez told The Daily Star over the phone.
Tareque Rafi Bhuiyan Jun, basic secretary to the Japan-Bangladesh Chamber of Commerce and Sector, said he believes the following is required and really should be looked at seriously: the signing of free of charge trade agreements (FTA) between Japan and Bangladesh.
"Signing a great FTA between Bangladesh and Japan will definitely enhance exports from Bangladesh to Japan and also increase Japanese investments found in Bangladesh," Jun told The Daily Star found in response to a good WhatsApp message yesterday.
"The Araihazar monetary zone advancement should happen promptly so that it could attract Japanese companies quickly," Jun added.
The federal government allocated special economic zones to all or any three of the Asian economical tigers -- Japan, India and China -- as investment proposals are coming from those countries.
Mustafizur Rahman, a distinguished fellow of the Center for Policy Dialogue, in an interview with The Daily Superstar previous this week, also known as for seizing the possibilities the Asian giants provide amid this pandemic.
In addition to the EU and US markets, Bangladesh should focus even more on the Asian market segments to regenerate the country's revenue from export amid the Covid-19 outbreak, said Rahman.
Some 80 % of the country's exports are destined for European and American market segments and little focus is directed at the Asian markets despite the fact that those destinations have a whole lot of assurance for Bangladesh.
Asian marketplaces, especially the Indian and Chinese kinds, are extremely important for the united states. For instance, China provides allowed duty-free facility for 97 % of products.
"This is a huge chance for our country. We need to grab this option in Chinese markets," Rahman said.
Bangladeshi exports to Chinese market segments are developing as the demand for Bangladeshi items, especially garment items, is growing among the middle-profits people in China.
Although China has a major consumer base, not absolutely all Chinese consumers can afford the high-end garment items manufactured in their country.
As a result, many Chinese clothing makes origin garment items from Bangladesh at competitive prices for their domestic customers even though China may be the world's largest apparel provider with a 34 per cent global market share.
