Political unrest forcing apparel exporters to open offices abroad

Badrul Ahsan With a view to avoiding the impact of the ongoing political turmoil, the country's apparel (RMG) exporters started opening their liaison offices in Hong Kong and Singapore for negotiating with foreign buyers, industry insiders say. According to them, more than thirty apparel makers have opened their offices abroad in last one year, and some others are in line for doing the same as most of the buyers, those who do not have their offices or agents in Bangladesh, prefer to sit with exporters abroad for business negotiations. "Due to the massive political unrest, most of the foreign buyers now prefer to sit with the producers in the nearest Asian cities to execute business deals, rather than flying down to Dhaka," an exporter who has opened liaison office in Singapore told the FE requesting anonymity. "The present volatility in the garment sector and political violence in the country has seriously tarnished the country's image abroad, for which neither the buyers nor the fabric and accessories suppliers prefer to come to Dhaka for business negotiations," he added. Harun-ur-Rashid, Managing Director of Rupsha Fashions Ltd, said that his buyer used to come to Dhaka five to six times a year, but due to the current political trouble in the country, he came only once in the last one year. The situation has forced him to open an office in Hong Kong. Mr Rashid, however, said that his company was running other business activities also like fabric and accessories sourcing from the Hong Kong office rather than only doing business deals with the buyers. By opening offices in Hong Kong and Singapore big players have long been running business, but the present political situation has forced even the comparatively small exporters to open offices at the same places, he informed. Former president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Abdus Salam Murshidi said that his company had not opened office abroad but took help from one of his fellow exporter, who has office in Hong Kong. Political situation and business facilities are better in Hong Kong than Dhaka. As a result, many Bangladeshi entrepreneurs now like to open liaison offices there, he added. "Besides the political turmoil, the RMG sector entrepreneurs are also getting interested to open new offices in Hong Kong for geographical proximity with China, the largest apparel and fabric supplier worldwide," Mr Murshidi added. Bangladeshi apparel makers are largely dependent on Chinese fabrics for manufacturing exportable garment items. However, according to the exporters, the Hong Kong and Singapore offices are mainly operated by either Bangladesh-born citizens living there or by Chinese people as they know the local languages and have experience of business deals. Mr Rashid, expressing his dismay at transferring complicacies involving US dollars abroad, said, "The central bank dose not allow expatriation of foreign currency beyond a certain amount, for which it is really tough to run an office abroad." The central bank allows transfer of only $10,000 abroad. Upon getting permission from the central bank, it is possible to transfer more dollars.