Creating capacity for enhancing export
Friday, 26 September 2008
Amirul Islam
ALL of these factors point to the need for the country to increasingly encourage enterprises with an essentially export dimension or an export-led economic growth strategy to take care of its needs of resource earnings, employment and income. The successful pursuit of such a strategy also creates the need for more cost-efficient import activities because the capital equipment as well as raw materials for the export-oriented industries have to be imported. Thus, in the spheres of exporting and importing or in the areas of its external trade capacities, Bangladesh needs much improvement to be able to export a great deal more and go on increasing its exports on a sustainable basis.
It was reported earlier that the concerned ministry would launch a new programme, the export promotion and competitiveness project (EPCP). It was to be the successor to a similar project taken earlier, the Bangladesh Export Development Project (BDXDP). Both projects aimed mainly at capacity development and improvement in areas of product and market development, customs administration and profitability analysis and trade cooperation. A major multilateral capital donor, as the report said, would provide $ 25 million for the EPCP and $ 31 million was provisioned for the earlier project.
The BDXDP has been operational since 1999, but one fails to see what benefits have been derived by the export sector from its functioning. Hardly any new product of value has been added to the export list since the time it was launched. Therefore, it should be reasonable to demand better organisation and spending on these projects to get tangible benefits from them.
Meanwhile, there are other sides to improving export competitiveness which must be acted also upon urgently. Indeed, the achieving of greater capacities for exporting more cannot be limited to the areas covered by the two export capacity building projects alone. Augmenting of export activities has vital linkages with many other areas. For example, it has been estimated that exporters of the country's main export item, ready-made garments (RMG), can further increase their export following improvements in infrastructural support facilities. Some improvements, particularly in areas of parts, have been already achieved under the present government.
Non-tariff barriers are no less important and the country needs to improve its capacities to overcome them. One of former ambassadors of one of our major RMG importing countries in had warned here in Dhaka earlier that Bangladesh could lose its all-important market for RMG in the US if it fails to ensure satisfactory working conditions in its RMG industries as demanded by the US buyers. Shrimp is a major item in the country's short list of export products. But shrimp exporters faced threats of a boycott from buyers for not observing hygiene and environmental standards in their production and procurement processes respectively. Therefore, it is important also to pay adequate attention to these areas to hedge export activities from sudden pitfalls.
Some successes of the government have been noted in seeking and getting best terms for the entry of Bangladeshi products into some important consuming countries. But more needs to be done, for instance, the obtaining of the concession of quota- and duty-free access of Bangladeshi RMG products to the US market. Obtaining of similar concessions together with relaxation of rules of origin in relation to some other countries can create opportunities for increased exports.
Higher export activities are dependent considerably on smooth supply of power. Even in the export processing zones (EPZs), power disruptions for a considerable period of time, almost on a daily basis, are noted. Law and order situation ought to improve considerably to inspire greater investment in export-oriented enterprises. Overall improvement of economic governance, including consistent and motivational fiscal and monetary policies, can also be big contributions made by the government to increase exports.
ALL of these factors point to the need for the country to increasingly encourage enterprises with an essentially export dimension or an export-led economic growth strategy to take care of its needs of resource earnings, employment and income. The successful pursuit of such a strategy also creates the need for more cost-efficient import activities because the capital equipment as well as raw materials for the export-oriented industries have to be imported. Thus, in the spheres of exporting and importing or in the areas of its external trade capacities, Bangladesh needs much improvement to be able to export a great deal more and go on increasing its exports on a sustainable basis.
It was reported earlier that the concerned ministry would launch a new programme, the export promotion and competitiveness project (EPCP). It was to be the successor to a similar project taken earlier, the Bangladesh Export Development Project (BDXDP). Both projects aimed mainly at capacity development and improvement in areas of product and market development, customs administration and profitability analysis and trade cooperation. A major multilateral capital donor, as the report said, would provide $ 25 million for the EPCP and $ 31 million was provisioned for the earlier project.
The BDXDP has been operational since 1999, but one fails to see what benefits have been derived by the export sector from its functioning. Hardly any new product of value has been added to the export list since the time it was launched. Therefore, it should be reasonable to demand better organisation and spending on these projects to get tangible benefits from them.
Meanwhile, there are other sides to improving export competitiveness which must be acted also upon urgently. Indeed, the achieving of greater capacities for exporting more cannot be limited to the areas covered by the two export capacity building projects alone. Augmenting of export activities has vital linkages with many other areas. For example, it has been estimated that exporters of the country's main export item, ready-made garments (RMG), can further increase their export following improvements in infrastructural support facilities. Some improvements, particularly in areas of parts, have been already achieved under the present government.
Non-tariff barriers are no less important and the country needs to improve its capacities to overcome them. One of former ambassadors of one of our major RMG importing countries in had warned here in Dhaka earlier that Bangladesh could lose its all-important market for RMG in the US if it fails to ensure satisfactory working conditions in its RMG industries as demanded by the US buyers. Shrimp is a major item in the country's short list of export products. But shrimp exporters faced threats of a boycott from buyers for not observing hygiene and environmental standards in their production and procurement processes respectively. Therefore, it is important also to pay adequate attention to these areas to hedge export activities from sudden pitfalls.
Some successes of the government have been noted in seeking and getting best terms for the entry of Bangladeshi products into some important consuming countries. But more needs to be done, for instance, the obtaining of the concession of quota- and duty-free access of Bangladeshi RMG products to the US market. Obtaining of similar concessions together with relaxation of rules of origin in relation to some other countries can create opportunities for increased exports.
Higher export activities are dependent considerably on smooth supply of power. Even in the export processing zones (EPZs), power disruptions for a considerable period of time, almost on a daily basis, are noted. Law and order situation ought to improve considerably to inspire greater investment in export-oriented enterprises. Overall improvement of economic governance, including consistent and motivational fiscal and monetary policies, can also be big contributions made by the government to increase exports.