Becoming the next Asian export powerhouse

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Bangladesh's export sectors have been witnessing an unprecedented period as a result of Covid-19 pandemic. The novel coronavirus offers swept through the complete landscape of global market including Bangladesh.

Export is a lifeline for the neighborhood overall economy and indispensable to maintaining micro and macro-economic stableness. Hence a significant setback is really alarming.

Regardless of such a predicament, the country's Export Promotion Bureau (EPB) proposed a $37.44 billion export target for fiscal year (FY) 2020-21, in the hope of 13 % growth. The EPB in addition has projected yet another $7.6 billion in earnings from export of companies.

More than 82 % of the proposed export earnings are anticipated to result from the ready-made garments (RMG) sector. According to the EPB, the proposed export aim for is 13 % higher than $33 billion which has been earned previous fiscal. The initial target for the outgoing fiscal was $45.50 billion.

EPB officials said global demand for products during the pandemic features been taken into account during environment out the target. The $33 billion income over the last fiscal have also been the basic of the brand new target.

Merchandise export earnings during the last fiscal witnessed negative development except previous July and December as the problem was getting bad due to the pandemic.

The entire export earnings through the July-Might period fell by 17.99 % to $30.95 billion against $37.75 billion in the corresponding amount of '19 fiscal.

Bangladesh fetched $34.13 billion from RMG export in FY '19 marking 11.49 per cent growth over that in FY '18. The compound twelve-monthly growth price of apparel export during the past five years offers been 6.86 %.

Out of $6.6 billion misplaced export, $1.0 billion was shed in the first fifty percent of 2019 and the remaining $ 5.6 billion was misplaced in the last 50 %. The RMG sector lost 4.8 billion worth of export just in three months from April to June 2020, showing the severe nature of Covid's effect on the industry.

So as to boost export earnings, the central bank allowed banks to export goods under open account credit terms rather than traditional letters of credit or L/Cs with foreign payment guarantees.

Under the new guideline, Bangladesh Bank says, exporters can export without L/Cs.

The authorised dealer banks may allow exporters to ship goods on sales contracts under open account credit conditions within the statutory period, if not extended in any other case, from the date of shipment.

The policy is likely to help ease the export process and reduce the risks of payment realisation. 

It might be mentioned here that the country's export trade is dictated by overseas importers and export is executed under sales contracts without repayment guarantees. Beneath the guideline, payment undertaker/insurer will arrange export payment in the event of default by importers.

The central bank believes that the policy may also help exporters access the correct finances up to the worthiness addition portion. The trunk to back repayment will end up being settled on receipt of final payment on maturity.

The country's business circle welcomed the BB's new technique, saying that it'll facilitate the export activities of Bangladesh. They expect that both exporters and importers will come to be benefited from the new guideline,

Of late, the government is reported to have formulated guidelines to supply 23 types of required services from a central authority for the country's eight export processing zones under (Bangladesh Export Processing Zones Authority) BEPZA.

The companies to be provided are linked to visa, work permit, provider registration, trade licence, tax related registration, certificates linked to environment, explosive, fire fighting and launching of export-import goods, containers and cargo, tax and duty, narcotic licence, utilities including gas and electricity connections, banking and transportation.

The services will be provided within a specific time -one evening to highest thirty days. According to the guidelines, a central one stop service (OSS) authority will be formed that could formulate standard operating procedures. The proposed authority would render needed offerings to regional OSS centres and focal points, define their activities and keep an eye on them, it said.

The move is likely to help provide all the investment-related services under one umbrella not merely linked to BEPZA but also others like customs, National Board of Revenue (NBR) and environment. It could help simplify doing business procedures, reduce expense of doing business and in addition get investments in the country.

Analysts state the commerce ministry should carry out a report to explore product-wise demands that are increasing in the original markets. Entrepreneurs need as well to improve their networking with the clients so that they are able to rise their orders in the united states and with those people who are currently sourcing from various other competitor countries. The government should offer incentives to help boost orders in non-traditional markets.

There are, in fact, better opportunities in the comparatively latest markets. But for insufficient proper knowledge and work - both from the neighborhood businesses and the government - those have up to now remained unexplored. It's been discovered that the importers of African, Russian and some different countries are eager to import items like RMG, leather goods and jute items from Bangladesh.

According to a global Lender (WB) report, Bangladesh should deepen reforms to increase the features of its organizations to participate in global value chains, which will require making it much easier meant for exporters to import what they want, slowly but surely reducing tariff, while bettering trade logistics.

With support from the federal government, local firms can enhance their efficiency and competitiveness by investing more in training their employees and managers, innovating to introduce new products and processes, the article added.

To realise absolute competitiveness probable, the country needs to get started on by focusing on enhancing its trade coverage regime and the business enterprise environment, and address the acute shortage of professional land. With the proper set of guidelines and an allowing environment, there is absolutely no reason to believe why Bangladesh cannot become the next Asian export powerhouse.

Bangladesh desires to continue to grow its exports by improving the mix and top quality of its apparel items, and also diversify into latest labour and skill intensive industries, such as footwear, mild engineering and electronics.
Source: https://www.globaltimes.cn

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