Export diversification bid faces hurdles

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Jasim Khan Efforts for diversification of exports have suffered setback as 25 export items faced negative growth between July-May period of the fiscal year (FY) 2012-13. Of the 25 items, 10 witnessed continuous negative growth for the last few years and the process is on to de-list the same from the export basket if the trend continues. The Export Promotion Bureau (EPB) sources said products like rubber, plastic goods, wool and woolen products, tobacco, cut flower and foliage, cement, printed materials, stainless steel ware, glass and glass ware were earlier considered most potential items for diversification but those experienced negative growth in the current fiscal. Traditional items for which the country already gained a stronghold in overseas markets -- chemical fertiliser, frozen fish, tea, ocean-going ship and raw jute -- witnessed significant negative growth during 11 months of the fiscal 2012-13, the EPB statistics shows. Chemical fertiliser, ships and floating structures, cement and stainless steel ware faced major negative growth to the extent of 100.0 per cent, 87.63 per cent, 56.97 per cent and 53.82 per cent respectively. In the perspective of export performance of Bangladesh, the country is still dependent on ready-made garment (RMG) sector contributing over 80 per cent to the national export earnings. The country earned US$24.3 billion during the 11 months of the current fiscal of which over 19.0 billion dollars came from the readymade garments (RMG) (knitwear $9486.39 million and woven $9603.34 million). Dr. Zaidi Sattar, Chairman, Policy Research Institute (PRI) said concentration on a few items has kept the country's exports at a vulnerable state. He said prior to the emergence of RMG exports, jute and jute goods dominated the export sector making up 70 per cent of exports in 1981. In the post-1990 period, however, RMG exports had overtaken Bangladesh's traditional exports and, by the close of the 1990s, export concentration emerged afresh, he added. Shubhashish Bose, vice chairman of the Export Promotion Bureau, said Bangladesh exported 724 types of items in 60 categories to 188 countries in fiscal 2012-13 of which some products witnessed negative growth. "A heavy concentration on a very few markets and products limits the country's export diversification drive," he said. But, overdependence on a few products or on a single product is not a wise decision the country should stick to. For sustenance of business, it needs diversification of both export products and destinations, he further said. Rokia Afzal Rahman, former adviser to the caretaker government, said the success of garment exports proved that Bangladesh could utilise the opportunities if there is a scope for diversification. She said many women have come out of their houses and joined the workforce for development of the readymade garment sector. "We have the opportunity for more diversification," she said. Shamim Ahmed, president of the Bangladesh Plastic Goods Manufacturers and Exporters Association, said the country has capacity to produce diverse plastic goods and find new markets abroad. But lack of necessary policy guidelines and patronisation has slowed the pace of product search in the overseas markets, he added. Ahmed said a total of 5,200 plastic industries are in operation across the country.