http://www.thedailystar.net/business/60b-export-target-achievable-1280173
12:00 AM, September 04, 2016 / LAST MODIFIED: 12:00 AM, September 04, 2016
$60b export target achievable
Exporters say they need policy support
Star Business Report
Exporters are positive they would be able to achieve the goal to export goods worth $60 billion by 2021, if the government gives them proper policy and financial support.
Of Bangladesh's $60 billion export target for its 50th independence anniversary, $50 billion will be from apparel items.
However, exporters said they have to face several challenges every day. They urged the government to facilitate non-traditional export goods to widen the export basket and help explore new destinations.
They spoke at a roundtable on 'hindrances to export and ways of overcoming the challenges' jointly organised by Prothom Alo and Crown Cement at the newspaper's office in Dhaka. Prothom Alo Associate Editor Abdul Kaium moderated the discussion.
Export Promotion Bureau has been conducting a study on products and market diversification to increase the country's overall shipments, said Mafruha Sultana, vice-chairman of EPB.
“We have the potential and we can achieve the export target.”
The EPB will formally launch the findings of the study soon, she added.
The EPB is also conducting a study on how to increase the export of pharmaceuticals, jute and jute goods and leather and leather goods as these are promising sectors after garments.
The bicycle industry also has potential; Chinese bicycle exports to the EU face more than 60 percent duty whereas Bangladesh enjoys zero-duty benefit, said Shubhashish Bose, director general of the WTO Cell under the commerce ministry.
Another important sector is shipbuilding. Bangladesh began exporting ships to many countries and 30 ships are ready to go to India soon, Bose added.
The amount for the Export Development Fund should be increased because many entrepreneurs have been receiving loans from foreign funds at lower interest rates, as the local banks charge a higher rate.
“We also need to improve the skills of the workers for higher productivity. We need to brand our goods for the international markets,” he said. For example, Bangladesh has clothing brands like Yellow and Cats Eye, he added.
Bangladesh lacks a skilled workforce in fashion and design, although Bangladesh Garment Manufacturers and Exporters Association has been running a university on this subject.
The leather industry in West Bengal, India has grown because it hired a good number of fashion designers from Italy, said Bose.
Product diversification is necessary as Bangladesh's export base is largely concentrated on only six, out of 721 exported items. The contribution of garments is more than 82 percent to national export earnings in a year, he said. Moreover, markets should also be diversified as 54.6 percent of Bangladesh's products are shipped to only the EU countries.
Bangladesh exported 6.9 billion units of goods last fiscal year, up from 6.6 billion units in the previous year, he said.
The export price increased only 9.77 percent last fiscal year compared to the previous year, he added.
“As a measure of market diversification, we can send goods to the South African nations and Latin America,” he said.
Siddiqur Rahman, president of BGMEA, said new entrepreneurs are discouraged from setting up industrial units for higher bank interest rates.
The miserable condition of the Dhaka-Chittagong highway that is used to transport export goods is also another hindrance, he added.
It should usually take four hours to go from Dhaka to Chittagong Port, but it is takes more than 16 hours, he said. “As a result, many exporters have to send goods via expensive air shipments.”
Another major challenge is a scarcity of energy in the industrial units. “Although, the supply of electricity improved a bit recently, the gas pressure in the units did not improve at all.”
The cost of doing business is increasing for several reasons, but at the same time, the source tax went up to 0.60 percent and corporate tax to 20 percent. “Corporate tax should be reduced to the previous level of 10 percent for the garments sector.”
“It is true that we have very good prospects, but we need to improve the capacity of our units and skills of the workers,” he said.
Currently, Bangladesh has 35 green garment factories and 150 are about to obtain green certifications.
Bangladesh has five platinum rated world class garment factories, he said.
Rahman expects remediation work on all 2,200 garment factories, inspected by the Accord and Alliance, two foreign factory inspecting agencies, will be completed by June next year.
The Indian government recently announced some financial packages for the garment makers so that they can grab a bigger market share of the global apparel market. India targets to export goods worth an additional $30 billion by the end of 2018, he said.
Mir Nasir Hossain, a former president of the Federation of Bangladesh Chambers of Commerce and Industry, said jute, shipbuilding and services sector should be given cash incentives to boost their export performance.
“We need uninterrupted, quality electricity at affordable prices for higher growth of exports,” Hossain said. “The curricula of the universities should also be need based.”
For a lack of expertise in the apparel sector, foreigners are taking away $5 billion a year in salaries and allowances, which is nearly 12 percent of the national export, he added.
Only local company Pran is known internationally, especially in India, for its branding efforts, he said.
The negotiation skills of Bangladeshi bureaucrats are low because the trained officials are not posted in one ministry for long, he added.
For example, 28 officials of the commerce ministry received training for 10 months at the WTO headquarters in Geneva; but after one year, only two officials were seen in the commerce ministry, as the rest were posted in the jute and fisheries ministries, he said.
Habibur Rahman Molla, executive director of Crown Cement, said his company exported cement worth $50 million to India, Myanmar and Nepal in the last few years.
Crown Cement that began its operations in 1996 produces 6,000 tonnes of cement a day; an additional 4,000 tonnes would be produced from next July, he said.
Fazlul Hoque, a former president of Bangladesh Knitwear Manufacturers and Exporters Association, said the export of goods worth an additional $22 billion is possible in the next five years if the government gives policy support.
Abdul Barik Khan, secretary of Bangladesh Jute Mills Association, demanded increasing financial support for the jute and jute goods sector, as this sector has higher export potential.
“This sector needs new machinery and trained manpower.”
Abdus Salam Murshedy, president of Exporters Association of Bangladesh, suggested the government develop at least 10 special economic zones in the next two years, so that entrepreneurs can set up factories there.
The government should encourage the small and medium garment factories, as those play a vital role in supplying raw materials and accessories to the bigger factories, he said.
Mohammad Hatem, a former vice-president of BKMEA, said the Accord and Alliance are not following the common building inspection standards in some cases; they are following their own standards.
Zakir Hossain, business editor of Bangla daily Samakal, also spoke.
