At a time when the country's export basket is confined to a very select few items, apparel topping the list, the task of identifying further value-added products for export could be highly daunting. Happily, this is not the case for Bangladesh. At least two sectors with immense prospects beg for immediate attention from the policy-makers and investors. One is the well-known pharmaceutical industry and the other is the less known light engineering sector. Of these, the pharmaceutical industry relies mostly on highly sophisticated machines and technology. Also, the industry has a long way to go before it can attain the capability for manufacturing new drugs through laboratory experiment and research.
However, the country's light engineering has no such problem. Considered from the point of entrepreneurial initiatives, techno-savvy standard, skill and labour supply, an industry of this order suits Bangladesh quite well. The only concern may be the environmental one but if enough attention is given to clean or green energy and safe disposal of refuse and effluent, the damaging effects can be minimised. Knowledgeable and concerned quarters are unhappy that the sector is not receiving the policy and financial supports from the government it deserves. This claim is substantiated by the fact that exporters of light engineering articles cannot benefit from the existing 10 per cent cash incentives given to them for export of their products. The villain is none other than a complex process which acts as a deterrent to their export rather than facilitating the process.
Against all odds, however, the sector is credited with a turnover of Tk 200 billion. Given the right kind of environment for its flourishing, this amount could be 10 times more, according to Professor Dr M Kamal Uddin, chairman of the Institute of Appropriate Technology under the Bangladesh University of Engineering and Technology (BUET). The sector is capable of earning more foreign exchange than the garments industry does because light engineering is known for far higher value-addition. Moreover, articles produced by this industry enjoy robust demand the world over. The light engineering sector's strength lies there.
Currently, there are 50,000 small and medium light engineering factories and their combined output meets 90 per cent of the local demand for industrial, construction, automobile and other types of spares and equipment. Those are a substitute for such imported products. If the industry grew to its full potential, its contribution to the local manufacturing sector could be raised further alongside export of the spare parts and equipment to more destinations across the globe. Bangladesh is suitably placed to enjoy a competitive edge because of relatively cheap labour and skill. Also, the techno-wizard production line from universities of science and technology is going from strength to strength. Therefore light engineering is an area that can be developed further to strengthen the country's production and economic bases.
Clearly, the sector's contribution to the country's economy is already substantial without enough financial support from the government and financial institutions. If the sub-sectors within light engineering are encouraged to explore areas more diverse than these presently are, one can be sure that the range and capability will expand further. Gone are the days when the smallest of implements had to be imported from abroad. The knowledge, technology and machines are there or can be procured through different means including under deals of transfer of technology. Bangladesh must set its eye beyond. Already it has been manufacturing small machines such as power tillers of very high standard.
Now the main impediment facing the sector's growth is inadequate investment in it. Once again, the loan facility offered proves, like export support, rather useless because of procedural complications. The collateral-free bank loan facilities thus go a-begging. Even foreign investors, interested as they are in investing in the industry, feel discouraged because of scarcity of land and other facilities. Export processing zones have been set up for quite a few productive sectors. The light engineering sector could be a strong candidate for such facilities. With enough potential for fetching a far greater amount of foreign exchange, it surely could get preference over garments. After all, the value-addition is one big factor that should clinch the day for it.
Realising the potential growth of jute industry, India has set up a park near Kolkata in order to kill any competition from Bangladesh. Now this country has to play a second fiddle in terms of marketing jute and jute goods, notwithstanding the fact that the plant's genome sequencing feat goes to its credit. In case of light engineering, Bangladesh should make an all-out effort before the initiative is wrested by another country at comparably similar developmental stage. A technological park, if set up with all the facilities, can be an answer to the problem facing the industry. Technical advice in relation to setting up newer units, financing and facilities for training etc., available within the boundary of such a park can bring about a sea-change in the productive ventures. Although somewhat belated, any initiative for exploiting the full potential of the light engineering still stands a fair chance of success. All concerned should seize the opportunity before it is too late.
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