Export potential of SMEs

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Continued from page 23 education have expanded and have been providing manufacturing, construction, trade, transports, real estate, health, and personal services. But their operational role is believed to have narrowed during this period. The SMEs are undoubtedly quite predominant in the industrial structure of Bangladesh, comprising over 90% of all industrial units. The total number of SMEs is estimated at 79754 establishments, of which 93.6% are small and 6.4% are medium. The 2003 Private Sector Survey estimated about 6.0 million micro, small, and medium enterprises defined as enterprises, with fewer than 100 employees and contributing to around 20-25% to GDP. In Bangladesh, the SMEs account for about 45% of manufacturing value addition. They account for about 80%of industrial employment, about 90% of total industrial units and about 25% of total labour force. Their total contribution to export earnings varied between 75% and 80%, based on the Economic Census 2001-2003. The following are the few areas of activitis by the SMEs that have otherwise been dominant in creating jobs and earning of foreign exchange: Ready-made garments sub-sector: The ready-made garments sub-sector is the largest foreign exchange earner for Bangladesh, accounting for about 79 per cent of total export earnings and 12 per cent of GDP in 2009. There are more than 4,000 ready-made garment businesses, which generate 3.5 million jobs. The garment sector is, thus, the largest employer for the country's women workforce. The sector can be divided into two broad categories - woven and knitwear products. Knitwear garment exports have been increasing since the early 1990s and now surpass those of woven exports. The United States and the European Union (EU) are the largest importers of Bangladeshi ready-made garment products, accounting for more than 90 per cent of total ready-made garment exports. Besides, fashion design and fashion wears are booming nowadays. Jute sub-sector: Jute and jute-related industries constitute an important part of Bangladesh's heritage. The sector has contributed significantly to the country's economic development. About 20 per cent of the country's total population is directly or indirectly involved in the sector and jute production accounts for 4.0 per cent of total GDP. It was once the highest foreign currency earner, contributing to over 80 per cent of Bangladesh's foreign exchange reserves. From the 1980s, its share began to decline as synthetic substitutes and artificial fibers emerged. The jute and jute goods sector has experienced the beginning of a new era during the fiscal year (FY) 2010-2011 as there has been a continuous decline in the demand for synthetic products. The jute and jute goods sector posted an unprecedented level of export earnings which crossed the one-billion dollar mark for the first time in the history of Bangladesh. Leather goods sub-sector: The leather goods sub-sector is another key economic sector in Bangladesh. It is smaller in size, employment and business investment than the textile sector, contributing to 0.50 per cent of GDP in FY2003. All leather goods businesses are privately owned and a few belong to multinational corporations. Leather goods, sector comprises three sub-sectors -- finished leather, leather goods and the leather footwear. The leather goods and footwear sector has been growing enormously during last few years owing to a growing demand in the world market. This opportunity has already attracted a large volume of investment both from home and abroad. The sector now stands 5th, in terms of the country's export earnings. Agribusiness sub-sector: Bangladesh is predominantly an agricultural country. Agriculture is the engine of growth of its economy. The overall contribution of the broad agriculture sector is estimated at 20.60 per cent of GDP in fiscal year (FY) 2008-2009. In FY 2008-09, Bangladesh earned US $870.11 million by exporting agricultural products. The amount was about 5.59 per cent of the country's aggregate export earnings. Agribusiness is related to the commercial production of agricultural commodities (including crops, livestock, fisheries, and forestry). Continued to page 14