Shift emphasis to Asia to improve exports
In addition to the traditional markets like Europe and the united states, Bangladesh should focus even more on the Asian marketplaces to revive export earnings during the time of the pandemic, said Mustafizur Rahman, a distinguished fellow of the Center for Plan Dialogue (CPD).
About 80 % of the country's exports are destined for the European and American markets, while Asian nations do not get due importance though they hold huge potential, he told The Daily Star within an interview recently.
The Asian market segments, especially India and China, are very important for Bangladesh and China has recently allowed duty-free facility for 97 % of Bangladeshi products.
"This is a major opportunity for our country. We must utilise this to the full."
Bangladesh's exports to China happen to be rising considerably seeing that the demand for Bangladeshi items, especially garment items, is growing among the Chinese middle-income people.
China has a huge consumer base but all its customers can't spend the money for high-end garment items it makes.
As a result, many Chinese clothing brands are sourcing garment items from Bangladesh at competitive charges for their domestic clients although China is the largest apparel distributor worldwide with a 34 per cent global market share.
Bangladesh's export to China has got risen to nearly $1 billion recently from significantly less than $100 million even seven to eight years ago.
Moreover, some function orders for garment items are getting diverted to Bangladesh from China as a result of the high cost of production in the developing sector of China.
India too could be another big marketplace for Bangladesh since it enjoys zero duty advantage in the neighbour's market, although there is 12 % countervailing duty.
Thanks to the work advantage, shipment to India crossed the $1 billion-mark this past year, with the garment being a major export item.
"We need to further explore the Indian market to reap the maximum benefit of the work privilege," Rahman said.
Japan could possibly be another promising industry for Bangladesh due to shipment to Japan has been accelerating because of high demand for Bangladeshi things and zero duty gain. Exports to Japan crossed the $1 billion threshold in fiscal 2018-19.
Bangladesh's overall export revenue fell 16.93 % year-on-year to $33.67 billion in the immediate past fiscal year as the ongoing pandemic afflicted the global supply chain and dampened demand worldwide.
From this backdrop, new destinations like China, India and other South Asian nations that comprise one of the biggest consumer markets of the universe can provide a breathing space to the exporters of Bangladesh, Rahman said.
Export earnings found in fiscal 2019-20 were 25.99 % short of the target at $45.50 billion.
So this fiscal season, Bangladesh should make an effort to reach the amount of fiscal 2018-19's earnings of $40.53 billion.
"And it is practical by penetrating deeper into the marketplaces of India and China."
Rahman, however, said export revival will be a lttle bit challenging as revenue were in the undesirable territory even prior to the onset of coronavirus.
More emphasis ought to be given to thee sectors that performed strongly last fiscal year, such as for example jute and jute goods, footwear and pharmaceuticals, to crank up sales.
"Fortunately, the European and US marketplaces are reopening gradually. Hence exporters should begin reengaging with their European and American business partners immediately."
The supply chain and additional segments of the business should be improved significantly to lower the cost of doing business in a way that native exporters remain competitive if they meet their meet in the global marketplace, Rahman said.
"For instance, logistic services should be made more efficient with regard to smooth transportation of things."
In the recent past fiscal year, Bangladesh's month-to-month export earnings were up to $2 billion until they crashed to only 0.52 billion in April, the lowest in the annals of Bangladesh, as factories were shut and shipments suspended to support the pass on of the novel coronavirus.
However, since Might exports started to research and reached $1.46 billion before hitting $2.71 billion in June, the previous month of the fiscal year.
