‘Export or Perish’

Bangladesh is now recognised as an important player in the global apparel trade. The value of its annual apparel export is around $25 billion. The industry people are hopeful about fetching twice that amount in just six more years.
Though the prospect of reaching the target of $50 billion remains still clouded, one cannot dismiss such a possibility outright, given the achievements of the country's apparel sector over the past four decades.
In fact two factors -- readymade garments and manpower export -- have been top contributors to what is Bangladesh today. Of the two, RMG remains at the top just not for fetching a revenue twice the volume remitted by the expatriate workers but for the fact that it has transformed the country's economy and brought millions of poor and uneducated women out of their homes and empowered them, socially and economically.
Besides, the RMG has many other spillover positive effects on the economy the value of which is very difficult to determine in monetary terms.
Unfortunately, as far as its export basket is concerned, the country has become very much dependent on the apparel sector. Everybody has been putting emphasis on diversification of exports. There has been rise in the volume of export revenue in the case of a few items, namely, leather and leather goods and frozen foods. But the increase is no match with that of RMG.
Undeniably, Bangladesh has been successful in making big strides in the apparel export primarily because it is neither a capital-intensive nor a high-technology-based industry. The availability of cheap labour has been a great advantage. The government too extended all support to the sector.
But a few developments that have taken place lately can be viewed as ominous signs for the Bangladesh RMG. The FTA (free trade agreement) between the European Union (EU) and the Trans Pacific Partnership (TPP) agreement are notable among them. Any imminent impact is unlikely. But in the longer terms, there could be a few. So, it is necessary to promote a few more export items that can help fetch a large volume of revenue for the country.
Such a need was also voiced by none other than the chief economist of the World Bank (WB), Mr. Kaushik Basu, while talking to this paper Monday last in Dhaka.
Basu, a Padma Bhushan award recipient, said the government of Bangladesh should initiate appropriate measures to help development of three to four more sectors, including pharmaceuticals, in 'replication of RMG model of success.'   
The WB chief economist, who has taught at Delhi School of Economics, Harvard, Princeton and MIT and currently on leave from Cornell University, USA, where he is professor of Economics, however, advised the government to ease the procedural hurdles and reduce the cost of doing business.
In fact, bringing the sectors such as leather and leather goods, frozen food and pharmaceuticals on a par with those of competing countries in the global market would necessitate efforts and resources far greater than employed in the case of RMG.
Leather and pharmaceutical sectors are very much capital-intensive and skill-based ones. The entrepreneurs engaged in the leather sector have been trying hard to expand their market internationally. Despite competition coming from old and new players in the relevant markets, Bangladesh has been making inroads. With proper support, it has all the potential to do even better.
The performance of the pharmaceutical sector as far as export is concerned has been well below the potential. Though export of drugs and medicines increased to Tk. 5.53 billion in 2013-14 from Tk. 3.27 billion in 2009-10 in  more than 100 countries, the prospect is far greater, given the opportunities being made available through the TRIPS (trade related intellectual property rights) waiver extended to the country as a least developed one. The exemption was due to expire on January 01 next. But the facility, some weeks back, was extended for another five years.
Neither the government nor the pharmaceutical industry was found serious enough to exploit the opportunities offered under the TRIPS waiver. The government has been dragging its feet on the matters of building an active pharmaceutical ingredient (API) park. On the other hand, the domestic pharmaceutical industry could not make much headway in developing its research base and producing basic ingredients during the first waiver period.
In fact, the second TRIPS waiver has come unexpectedly. It would be yet another opportunity lost if the domestic pharmaceutical industry failed to make best use of the latest waiver for furthering its own as well as country's interests.
The food and allied goods export has more or less stagnated, particularly to the EU, the major destination. An unscrupulous section of exporters has caused enough of damage to the sector's prospects through their acts of forgery and adulteration. The EU has been rather lenient towards Bangladesh exporters.
A strong and efficient export base in the frozen foods sector carries great potential. The government does need to extend support where it is necessary and justified and mete out punishment to the dishonest section of exporters without fail.
There is no room for complacency as far as the country's export is concerned as multilateralism, as preached by the World Trade Organisation (WTO), has been losing ground, of late, against bilateralism and regionalism based on parochial  trade interests. 'Export or perish', coined by Late J. Nehru in the early 1960s, remains true for every nation, including Bangladesh. So, no stone should be left unturned as far as promotion of the country's export is concerned.
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