BD fails to tap vast trade potentials in Malaysia

Bangladesh has so far failed to tap the opportunity to increase its exports to Malaysia to minimise the existing massive trade gap for various reasons.
The reasons include poor diplomatic efforts, absence of promotion of Bangladeshi products in Malaysia through various trade shows and follow-up of various agreements between the two countries by the Bangladesh authority.
Other reasons identified are poor negotiation skills and inefficiency of officials of the commerce wing of the Bangladesh High Commission in Kuala Lumpur (KL), absence of incentives and encouragement to the private entrepreneurs and lack of support to Bangladeshi expatriates with regard to official procedure.
Many Bangladeshi entrepreneurs, businesses and expatriates, during a trade show in Kuala Lumpur, told the FE that there is a huge market potential of Bangladeshi products in the Malaysian market.
India and China have been enjoying less duty on their products as they have free trade agreements (FTA) with Malaysia. But Bangladeshi products are losing competitiveness and markets due to higher prices after paying 29 per cent duty.
In 2013, total trade with Bangladesh was valued at US$ 1.67 billion, an increase of 5.7 per cent from 2012.
From January to September 2014, Malaysia's trade with Bangladesh was US$ 1.06 billion. Malaysia's exports to Bangladesh stood at US$ 978.8 million while imports from Bangladesh were US$ 87.7 million.
Officials of both the countries think, trade and investment remain relatively modest and have tremendous potential for growth.
Shohel H Choudhury, head of marketing and sales of RahimAfrooz Globatt Ltd told the FE recently that the Bangladeshi battery brand is going out of market in Malaysia due to its high price after payment of 29 per cent duty.
On the other hand, India and China pay only 3.0 per cent duty on battery and ASEAN countries zero duty.
 "The market is ready and quality of our battery is also accepted there. But we are becoming uncompetitive due to the duty structure," said Mr Shohel, who participated in Showcase Bangladesh 2014 organised at Kuala Lumpur Convention Centre (KLCC) in Malaysia from November 14 to November 16.
The Bangladesh-Malaysia Chamber of Commerce and Industry (BMCCI) organised the event for the third time in collaboration with the Bangladesh High Commission in Malaysia, the Malaysia South-South Association (MASSA), the Malaysia External Trade Development Cooperation (MATRADE) and the Malaysian Industrial Development Authority (MIDA).
On the other hand, chairman of the organising committee of Showcase Bangladesh 2014 Syed Nurul Islam attributed the sluggish export promotion to lack of capacity of the Bangladeshi companies to produce adequate quantity of products required in the Malaysian market.
 "I think, the government has taken a 'go- slow' strategy in signing FTA with Malaysia. If the FTA is signed, both the markets will be opened for duty-free entry while Bangladeshi companies cannot produce enough products like their counterparts in Malaysia," he added.   
Eng Badalur Rahman Khan, an expatriate living in KL for over 25 years, said there are at least 40 shops in the heart of KL city where Bangladeshi traders sell Bangladeshi garment items and other commodities. There is a demand of Bangladeshi manpower, fabrics, jute products, pharmaceuticals and food products in Malaysia but lack of government initiative to increase export volume to Malaysia has kept the situation at this poor level.
 "The officials of the commerce wing of Bangladesh mission in KL are inefficient and non-cooperative for the entrepreneurs. Besides, there is no follow-up of any trade dealings or effective negotiation by the Bangladeshi authority," said Mr Badal, director of the UAE Exchange in Malaysia.
Regarding the difficulty in getting trade licence in Malaysia which many Bangladeshis reported, Mr Badal said company formation and getting a trade licence are simple in Malaysia provided proper procedure is followed and compliance ensured.
Zaeem Tashfin Bari, managing director of Greenfield Jutex and Composite Ltd, who also participated in the showcase said they got quite a good response to their diversified jute products during the three-day exhibition.
Especially, the Malaysian businesses are showing interest for fashion and promotion jute bags and jute wine bags, he said.
 "They really like our quality and say our products are better than those of India and China. But the main drawback is our price," he said.
Ali Ahmed, chief executive officer of Ultrapack said the exhibition was quite helpful for his company as he got many inquiries from the Malaysian businesses.
 "Malaysia does not have big cosmetic companies as the population is less there. They used to import container, tube and label for packaging from India, China and Thailand," said Mr Ali, adding that now they want to import those from Bangladesh as Chinese products have become costly.
Expatriates say officials of the Bangladesh mission in KL are not friendly with them and their service delivery is in a poor state, combined with harassment of the service- seekers.
Aggressive promotion of Bangladeshi products in KL, appointment of skilled officials in the commerce wing, support to the private sector for promotion of trade and commerce, incentives for exporters and traders and strengthening of the capacity of Bangladeshi companies with diversified products can help reduce the existing trade gap, experts said.

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