Shift focus to Asia to improve exports

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In addition to the traditional markets like Europe and the united states, Bangladesh should focus more on the Asian markets to revive export earnings before the pandemic, said Mustafizur Rahman, a distinguished fellow of the Centre for Policy 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 markets, especially India and China, are very very important to Bangladesh and China has allowed duty-free facility for 97 % of Bangladeshi products.

"This is a large opportunity for our country. We must utilise this to the full."

Bangladesh's exports to China are rising considerably as the demand for Bangladeshi products, especially garment items, keeps growing among the Chinese middle-income people.

China has a big consumer base but all its consumers can't afford the high-end garment items it creates.

As a result, many Chinese clothing brands are sourcing garment items from Bangladesh at competitive charges for their domestic customers although China may be the major apparel supplier worldwide with a 34 % global market share.

Bangladesh's export to China has risen to nearly $1 billion recently from significantly less than $100 million even seven to eight years back.

Moreover, some work orders for garment products are being diverted to Bangladesh from China as a result of the high cost of production in the manufacturing sector of China.

India too could be another big market for Bangladesh since it enjoys zero duty benefit in the neighbour's market, although there is 12 per cent countervailing duty.

Thanks to the work benefit, shipment to India crossed the $1 billion-mark this past year, with the garment being a major export item.

"We have to further explore the Indian market to reap the utmost benefit of the work privilege," Rahman said.

Japan could possibly be another promising market for Bangladesh as shipment to Japan has been accelerating as a result of high demand for Bangladeshi goods and zero duty benefit. Exports to Japan crossed the $1 billion threshold in fiscal 2018-19.

Bangladesh's overall export earnings fell 16.93 % year-on-year to $33.67 billion in the immediate past fiscal year as the ongoing pandemic affected the global supply chain and dampened demand worldwide.

Against this backdrop, new destinations like China, India and other South Asian nations that comprise one of the biggest consumer markets of the world can provide a breathing space to the exporters of Bangladesh, Rahman said.

Export earnings in fiscal 2019-20 were 25.99 % short of the mark at $45.50 billion.

Which means this fiscal year, Bangladesh should try to reach the amount of fiscal 2018-19's earnings of $40.53 billion.

"And it is possible by penetrating deeper in to the markets of India and China."

Rahman, however, said export revival will be a lttle bit challenging as earnings were in the negative territory even before the onset of coronavirus.

More emphasis should be given to thee sectors that performed strongly previous fiscal year, such as for example jute and jute goods, footwear and pharmaceuticals, to crank up sales.

"Fortunately, the European and US markets happen to be reopening gradually. So exporters should start reengaging with their European and American business partners as soon as possible."

The supply chain and other segments of the business enterprise should be improved drastically to lower the price tag on doing business in a way that local exporters remain competitive if they meet their match in the global marketplace, Rahman said.

"For instance, logistic services ought to be produced more efficient with regard to smooth transportation of goods."

In the recent past fiscal year, Bangladesh's month to month export earnings were upwards of $2 billion until they crashed to only 0.52 billion in April, the cheapest in the annals of Bangladesh, as factories were shut and shipments suspended to support the spread 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.
Source: https://www.thedailystar.net

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