The Japanese companies operating in Bangladesh have said the changes in the global trading environment, particularly due to the souring US-China trade relations, had a positive impact on their business.
A survey conducted by the Japan External Trade Organisation (JETRO) between August and September in 2020 measured the increase in the impact at 2.9 per cent to 13.8 per cent year-on- year. Vietnam and India did better than Bangladesh due to the changes in trading environment.
The companies that responded to the survey said their business confidence fell in all the countries, including Bangladesh, of Asia and Oceania in 2020 due to the Covid-19 pandemic.
The business confidence fell to its 'lowest level' worldwide, said the survey report obtained by the FE.
The survey was conducted based on responses received through email from 14,399 Japanese companies globally. In Bangladesh, 35 large and 34 SME Japanese firms responded to the survey questionnaires.
In the last two surveys carried out in 2019 and 2018, Bangladesh remained at the top as far as the business confidence is concerned. More than 70 per cent Japanese companies operating in the country had expressed their willingness to expand business in next two years.
According to the latest survey, 54 per cent Japanese companies operating in Bangladesh, however, are hopeful of making operating profit in 2021. They expect the business confidence to improve to 46 point in 2021 from 31.4 points in 2020.
Some 41.8 per cent companies still wanted to expand business in next two years and 49.3 per cent others responded to maintain the status quo.
The survey also found that the business confidence of Japanese companies and their intention to expand the existing businesses in next two years fell to its lowest level all over the world in 2020 due to the changes in the trading environment amid US-China relations followed by Covid-19.
China was at the top among all countries in terms of erosion in business confidence in 2020. The intensity was milder with regard to other countries of the region.
Commenting on the findings, JETRO country representative Yuji Ando said that this year's survey findings did go neither in favour of Bangladesh nor other parts of the world as most of the Japanese nationals, who were working in the firms including the ones in Bangladesh, went to their home country amid the pandemic. However, he said the situation has already started improving and 72 per cent of the Japanese nationals have returned to Bangladesh to restart their businesses.
"We are expecting big changes in the survey findings this year (2021). But the government needs to address the challenges of trading environment as Japanese companies spoke about the barriers in customs clearance and some other issues," the JETRO chief in Bangladesh told the FE over phone.
Bangladesh remained at the top of the list for business expansion by the Japanese companies in 2019 like that of 2018 due to profitability amid highest gap between the wages and production cost among the 20 countries.
The JETRO has been conducting the survey since 1987 and the one conducted in 2020 was the 34th version.
The survey 2020 was conducted on the Japanese-affiliated companies operating in 20 countries/regions of northeast Asia, ASEAN countries, Southwest Asia and Oceania.
smunima@yahoo.com