The Financial Express has recently published a brief but important news saying: Bangladesh has plans to explore export markets for its products to three countries of North Africa: Morocco, Tunisia and Algeria and is likely to send a high power delegation to these countries some time by June 2015. The report did not give details on the homework for the trip but since the country is fairly rich with the experience of export trade in its 41 years' history and showed impressive performance in overall growth and development, it is natural to expect that the country has developed the capacity to explore with relevant experience and expertise.
Common man's understanding of the export market of a country says that it comprises the set of foreign countries to which the country sells its goods and services. But exploring overseas market is not just getting to know where the country can sell its goods and services, rather it involves the painstaking task of adapting products to suit the needs and preferences of that market, and therefore, the task is much more complex and difficult and while the opportunities and rewards are big, so are the risks. Efforts in expanding export markets and searching for global clients require careful planning, research and patience.
Available information suggests that Algeria, Tunisia and Morocco look good as potential destinations for exports from Bangladesh. The per capita income in these three countries in US dollar is 13788, 9795 and 7350 and their GDP growth rate is 3.3 per cent, 2.8 per cent and 5.1 per cent respectively. These countries are 'generous' in imports too. The list of products they import includes capital goods, foodstuffs, and consumer goods such as, knit and non-knit suits for men and women, raw hide and skin, leather products, plastic products, packaged medicaments etc. However, not all these countries are equally dependent on import of all these products.
For example, Algeria itself exports textiles, leather goods and agricultural products. But at the same time, Tunisia and Morocco imports insulated wires, electrical power accessories and passenger and cargo vessels. The information suggests that there are options for Bangladesh to look into the prospects of exporting products to these countries, where, according to some preliminary ideas, Bangladesh intends to explore the market for its pharmaceuticals, garments, jute and jute goods and food items like jam, jelly juices etc.
As of now, Algeria, Morocco and Tunisia do not seem to be prospective destinations of exports from Bangladesh. Statistics is scarce, and the FE report saying that data are not available on the issue is largely true. The Bangladesh Bank records of export receipts show that the total amount of country-wise export to Algeria, Morocco and Tunisia in the periods July-September 2013 was only about 1 million dollar each, while the total export of Bangladesh in the same period was about US $6800 million. In April-September 2014 Bangladesh had a total export of US $14612 million and in the same period, exports to these three countries taken together were US $2 million, US $3 million and US $3 million respectively.
Expansion of export market in North Africa seems to be difficult because of a number of reasons:
l Bangladesh may count on exporting consumer goods in these countries but the consumption habits, especially choices of items, their design, tastes etc., may not be easy to match;
l The major sources of import of Algeria, Morocco and Tunisia at present are France, Italy, China, Spain, and Germany. Tunisia, however, has substantial imports from Netherlands, Russia, Singapore and India and even though the sources mix is diverse and Bangladesh has improved a lot in producing quality goods, it may still be difficult for Bangladesh to win a market share for both low and high-end products in the three target African destinations;
l There are issues relating to banking services, insurance, currency and customs regime to fit into the system. Besides, there are other factors, especially the cost and frequency of available transportation services, which may cause rise in export prices and the cultural barriers that may make many products of Bangladesh difficult to get entry into the North African markets.
Exploring these markets should also take into account activities like identification of companies/firms the products of which may be exported to the intended countries. This will call for a methodical assessment process, development of a fair understanding of the demand for the products in these markets. In addition, getting a sense for the current industry trends in the export location, potential customers' response in the export market to products intended to be exported are also of critical importance. Strategic issues such as whether to go for direct or indirect exporting should also be resolved.
Mentioning the above is not meant to discourage initiatives of exploring new export markets. It is expected that the commercial sections in Embassies and High Commissions in the target markets would do the needful for making updates. In addition to market exploration, Bangladesh probably needs to emphasise on building export capabilities at the level of enterprises/companies for developing their international selling skills. Some countries have designed programmes, such as Graduates for International Growth (G4IG), or The International Selling Programme. The G4IG brings together a graduate and a company that are both focused on making a lasting impact in overseas markets. Graduates, with their potential to be next generation business executives, are matched with an ambitious international trading company and provided with a structured means of acquiring new skills in international business. The International Selling Programme is designed to equip domestic companies with the necessary tools to reach their export potential in global mark.
Dr S M Mahfuzur Rahman is Professor, Department of International Business,University of Dhaka.
ibmahfuz@gmail.com