December export bodes well for future

FE Team | Published: January 04, 2025 20:00:33

Despite socio-political instability centring the July-August mass upsurge, the country's export earnings during the July-December period of the current fiscal year surpassed that of the corresponding period of the previous fiscal. This is seen as a silver lining in the horizon given the current pressure on the country's forex reserves. Quoting Export Promotion Bureau's data released on Thursday last, this paper reported that based on a steady 17.72 per cent growth in December, Bangladesh's export earnings during the first half of the current fiscal reached $24.53 billion compared to $21.74b earned during the same period of the last fiscal year. As usual, apparels fetched the largest part of the export proceeds. Naturally, given the trend in export proceeds in the first half of the current fiscal year, it can be assumed that the total export earnings could have been even more had there been no hindrances created by the volatile political situation.
The export performance in December this fiscal year deserves special mention for certain reasons. The December export earnings exceeded those of all other months under discussion both in FY 2023-24 and FY2024-25. This indicates that the extent of uncertainties emerged following the political changeover in July-August has been decreasing since the assumption of power by the Interim Government. This underscores the need for maintaining stability in an economy to perform better. All stakeholders should therefore make utmost efforts to restore stability in the country.
Despite the success achieved in export earnings, the problem as usual lies with absolute dependence on a single sector --- export of readymade garments. According to the FE report, out of the total earnings in last December, some 81 per cent came from RMG export while the rest 19 per cent was fetched by non-RMG goods. Needless to say, this overwhelming dependence on a single sector due to lack of export diversification and market expansion is by no means a healthy sign for the country's export business. Though some other exportable items posted increased earnings during the period under review, their contribution in the overall export is quite insignificant. This once again underscores the dire necessity of export diversification.
A handful of internal and external factors have played an important role in putting the country's export earnings onto a positive trajectory during the first half of the current fiscal year. Bangladesh is already a familiar name in the global market of readymade garments. Branding of the products has further strengthened its image as a producer of quality apparels. This and such other measures like product diversification, value addition and improvement in workplace safety have contributed to increasing earnings. These factors are also indicative of a better future for Bangladesh's RMG products as demonstrated by sustained buyer confidence and diversion of orders to Bangladesh as a result of the Sino-US trade war. Compliant factories are also enjoying better flow of work orders. What is needed is to sustain this positive trend and strengthen it further. However, efforts must be made to overcome the overwhelming dependence on a single sector. Bangladesh should make the best possible use of duty-free facilities offered by different countries for its products through diversification of the export basket and horizontal and vertical expansion of the markets.