Trying to make sense of it all
Sunday, 22 May 2011
Mahmudur Rahman
It is difficult to say the least. On one the venerable donor agencies, particularly the World Bank (WB) and the Asian Development Bank (ADB) are one in opinion that the country is stable and moving to a 6.0% growth. On the other hand, there's some concern about the balance of payment. One thing is clear though: For all the words of wisdom and enthusiasm displayed by one and many there's little doubt that the economy remains fragile. Nature and the vagaries of economics have exposed this fragility too many times. Slowdown in remittances and aid inflows have put pressure when the country least needed it. It leaves open only one major window that of exports and it is now clear that the apparel industry leading a 40% growth can't do the trick. A bumper harvest brings with it the two usual culprits; prices for farmers or for the end-consumer. For years now various bodies from non-government organisations (NGOs) to donors have been harping on the need for small and medium enterprise (SME) products to get better market access. The sorry part of this is that the focus has been too singular: the domestic market. What appears to have been left out is the inflow of money to consumers that will make or break the situation. Sooner rather than later SME product standards have to be lifted to a level whereby they can compete internationally and skills imparted to enable them to tweak the range so as to be of attraction. The basket of demand is large as more and more small products suffering in the west due to expensive labour-intensive processes. Given the relatively lower cost of labour here the bulk of the re-directed trade from China and Vietnam is enough proof of the prospects. There have been ample examples of the kind of products that people need and seek out in the market, all at affordable prices. If these were not being met from the domestic industries and business, Chinese imports and cheap at that were filling the void. The Chinese have for eons been exporting little knick-knacks that have spread around the world save India. The politics and mistrust has succeeded in keeping the juggernaut out and led to the growth of home grown products that have successfully filled the gap. Anyone who has been to the pilgrimage in Saudi Arabia will realise that barring the prayer mats every other item from tasbihs to caps and locks are all made in China. The opportunity for Bangladesh is significant and the trade missions can facilitate a previously untapped source of non traditional export. There is another way that is harder to achieve and may be quite unpopular. That requires the government to really wade in and tackle the unofficial economy. The size is significant, the employment is considerable and the benefits are being enjoyed by all and sundry. (The writer can be reached at mahmudrahman@gmail.com)
It is difficult to say the least. On one the venerable donor agencies, particularly the World Bank (WB) and the Asian Development Bank (ADB) are one in opinion that the country is stable and moving to a 6.0% growth. On the other hand, there's some concern about the balance of payment. One thing is clear though: For all the words of wisdom and enthusiasm displayed by one and many there's little doubt that the economy remains fragile. Nature and the vagaries of economics have exposed this fragility too many times. Slowdown in remittances and aid inflows have put pressure when the country least needed it. It leaves open only one major window that of exports and it is now clear that the apparel industry leading a 40% growth can't do the trick. A bumper harvest brings with it the two usual culprits; prices for farmers or for the end-consumer. For years now various bodies from non-government organisations (NGOs) to donors have been harping on the need for small and medium enterprise (SME) products to get better market access. The sorry part of this is that the focus has been too singular: the domestic market. What appears to have been left out is the inflow of money to consumers that will make or break the situation. Sooner rather than later SME product standards have to be lifted to a level whereby they can compete internationally and skills imparted to enable them to tweak the range so as to be of attraction. The basket of demand is large as more and more small products suffering in the west due to expensive labour-intensive processes. Given the relatively lower cost of labour here the bulk of the re-directed trade from China and Vietnam is enough proof of the prospects. There have been ample examples of the kind of products that people need and seek out in the market, all at affordable prices. If these were not being met from the domestic industries and business, Chinese imports and cheap at that were filling the void. The Chinese have for eons been exporting little knick-knacks that have spread around the world save India. The politics and mistrust has succeeded in keeping the juggernaut out and led to the growth of home grown products that have successfully filled the gap. Anyone who has been to the pilgrimage in Saudi Arabia will realise that barring the prayer mats every other item from tasbihs to caps and locks are all made in China. The opportunity for Bangladesh is significant and the trade missions can facilitate a previously untapped source of non traditional export. There is another way that is harder to achieve and may be quite unpopular. That requires the government to really wade in and tackle the unofficial economy. The size is significant, the employment is considerable and the benefits are being enjoyed by all and sundry. (The writer can be reached at mahmudrahman@gmail.com)