Remodel business plans to regenerate exports: experts
With a slump popular for commodities among the Western consumers, Bangladesh needs to remodel its business strategies to regenerate exports in enough time of Covid-19, which includes severely damaged the global economy, economists said.
Maybe the traditional quickly fashion garment items or basic apparel goods aren't adequate for Bangladesh to remain competitive in the global market segments, they said.
Bangladesh must grab new market segments for supplying products just like personal protective equipment (PPE), masks and healthcare-related products such as bed linens and isolation bed linens for hospitals.
As the pandemic has created a market of vast amounts of dollars for the products worldwide, the neighborhood exporters have to utilise this chance of the revival of export earnings, the experts said.
Earnings from products exports in the immediate past fiscal season fell 16.93 % year-on-year to $33.67 billion as a result of Covid-19, which has affected creation and dampened demand.
The receipts from exports in fiscal 2019-20 is 25.99 % below the total annual target at $45.50 billion, according to info from the Export Advertising Bureau (EPB).
The export earnings in fiscal 2018-19 were documented at $40.53 billion.
In June, the last month of the fiscal year, earnings were $2.71 billion, which is 31.15 per cent below the monthly export target of $3.94 billion.
The fall in export earnings was mainly because of a decline in garment shipment that contributes 84 per cent to the total countrywide exports a year.
In fiscal 2019-20, garment exports fell 18.12 % year-on-year to $27.94 billion. Of the wages from garment, $13.90 billion came from knitwear shipment and $14.04 billion from woven.
Nevertheless, knitwear export dropped 17.65 % and woven 18.58 per cent last fiscal year, based on the EPB data.
The global economy is stumbling at best with reopening even in countries that contain brought the propagate of the virus somewhat under control, said Zahid Hussain, former lead economist of the World Bank's Dhaka office.
Nevertheless, the virus keeps striking back possibly in those countries and it is very clear now that the global monetary recovery will be slower and protracted until efficacious vaccines and therapeutics are available, he said.
"That is true generally and particularly for the united states and Europe, Bangladesh's major markets for exports."
Under such circumstances, the very best Bangladesh can do is damage control, that is, contain the loss of existing exports and take advantage of demand created by the virus for goods like masks, PPEs, ventilators, various pharmaceutical items and digital providers, Hussain added.
"Containing the increased loss of existing exports requires construction confidence in our capability to deliver on time in these difficult circumstances."
This in turn necessitates easing regulatory hassles that cause inordinate delays in time to import and export. The proficiency of the trade logistics system needs considerable enhancement.
"The existing production program in garments and pharmaceuticals might need to be reconfigured to take advantage of the chances created by the need to fight the virus," Hussain told The Daily Star.
There is growing demand for masks, sanitisers, PPEs and so on, while demand for digital offerings is also rising. It is not easy to start a new product line or a new business in Bangladesh as a result of regulatory complexities and bureaucratic red tape. These want urgent focus, he said.
The government should do everything it can to make certain that the duty-no cost and quota-no cost access of 97 % of Bangladeshi products to the Chinese marketplace crosses the final line.
"Not just that. We have to expedite the setting up of the special monetary zone dedicated for Chinese investors in Chattogram."
Joint ventures with the Chinese will come to be critical for exploiting the opportunities opened by the duty- and quota-free access, Hussain said.
"Most important of most, we need to deploy everything needed to control the pass on of the virus. Without victory on this front, it'll be hard to restart the engine of the economy in both domestic and external marketplaces."
The conduct of business will continue to be disrupted given that the spread of the virus is out of control, as is the situation currently in Bangladesh, Hussain said.
Ahsan H Mansur, executive director of the Insurance plan Exploration Institute (PRI), echoed the views of Hussain.
Mansur also said the devaluation of hometown currency against the greenback could be an essential factor for a quick rebound of export seeing as peer countries want Vietnam are acquiring this advantage.
He also known as for generating garment items with manmade fibre and lessening lead time.
"We need to redesign and remodel our organization ideas as everything is based on demand from buyers," he said.
The country supervisor of a renowned European buyer of apparel items said he has been putting increased volume of work orders in Bangladesh now as almost all of his company's outlets in Europe and the united states have already reopened.
"I have placed more than $400 million value of new do the job orders following the lockdown in Bangladesh. I've placed work orders inside our every providing factories," said the European client asking never to be named.
Arshad Jamal Dipu, chairman of Tusuka Fashions Ltd, a respected garment exporter, explained he found a silver lining found in job orders from October onwards as being buyers are returning.
Moreover, Bangladesh can get a good level of work orders being shifted from China, he said.
But the government must ease the types of conditions in receiving loans from bailout offers and offer incentives so that small and channel enterprises can cope up with the fallouts of the Covid-19, Dipu said.
Commerce Minister Tipu Munshi said the federal government has set a good target to seize new market segments for PPEs and masks.
"We want to import PPE fabric from India quickly as the demand for this item soared world-wide and Bangladesh is turning into a major manufacturer and dealer globally," Munshi told The Daily Celebrity over the phone.
"We will be closely observing the market demand so that we can take swift decisions," he said.
Rubana Huq, president of Bangladesh Garment Suppliers and Exporters Association (BGMEA), said the decline found in garment export during previous fiscal year in actual sum is $6.18 billion, which is just about one-fifth of the full total export.
"A closer glance reveals that out of your $6.18 billion lost exports, $1.06 billion was misplaced in the first one half of the entire year and the rest of the $5.12 billion in the latter 1 / 2. We shed $4.33 billion just in 90 days. This shows the severe nature of the pandemic's effect on the sector," Huq said.
