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Export diversification efforts require policy-supports, not mere directives |
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News |
March
30, 2000 The government is now showing concern about the country's failure to achieve faster export growth during the current fiscal and Prime Minister Sheikh Hasina has directed the concerned authorities to diversify the export basket.
During most part of 1990s, on an average Bangladesh enjoyed a double-digit export growth. The growth, however, was contributed by the country's burgeoning ready-made garment (RMG) industry that enjoyed special 'quota' facilities meant for the least developed countries (LDCs) in the developed world.
However, somewhat easy access to the advanced countries' market has transformed the RMG sector into the mainstay of the country's exports, accounting for over 70 percent of total export earning. Such overwhelming dependence on one particular item for exports is being considered unhealthy for the country and its economy.
Commerce Minister Abdul Jalil has admitted that the country's export earning during the first eight months (July1999-February 2000) of the current fiscal year has so far missed the target by well over four percent. According to him, total export earning during the eight-month period stood at US$3.695 billion 3.4 percent short of the target. But he hoped that at the end of the current fiscal year, the export target of US$5.738 billion would be achieved.
Jalil has also pointed out that while the actual earning during the first six months of the current fiscal year - between July and December 1999 - was 7.18 percent higher than the earnings during the corresponding period in the year before, it was lower than the target by 4.34 percent. But considering Taka's devaluation that took place during the period, the increase in terms of export value would be of little significance.
Addressing the National Committee on Export (NCE) at the International Conference Center (ICC), Sheikh Hasina said: "We will have to increase the number of export items as well as the volume of exports for giving a boost to the economy." She also laid emphasis on establishing agro-based industries and highlighted the prospects of software industries.
The Prime Minister further stated : " It will be possible to capture the market if we can export vegetables after a little processing. There is a wide rang of market for the vegetable items and we have a lot of products to export."
Sheikh Hasina's speech at the NCE is indeed a positive development. This shows that she is aware of the fact that the country's export base is dangerously narrow and need immediate diversification. She only suggested certain areas where such diversification could take place and obviously is committed to creating an enabling environment for the prospective investors, both local and foreign, to establish such industries. However, if the Prime Minister believes that by speaking out her mind on how to diversify country's exports she has fulfilled her commitment and now it is up to the concerned authorities to implement her directive, she will make a grave mistake. Such exercise would be no more than mere rhetoric.
In fact, analysts suggest that the prime minister's awareness of this fact should be highlighted by the creation of several 'think-talks' to carry out in-depth studies on how to diversify the country's exports and the kind of policy measures that the government has to undertake to make such diversification possible. Without such well thought-out policy measures and mechanism to ensure their implementation, nothing could be achieved. Mere directing the concerned government agencies would not make any difference. Since the prime minister has specifically mentioned promotion of the agro-based industries for the export of processed vegetables and fruits, some problems being faced by the exporters of these items here need to be discussed. Actually quite a few agro-based industrial units had been established in the country In the past several years and exports of raw and processed vegetables are gradually picking up.
According to industry sources, about 50 varieties of green vegetables are being exported from Bangladesh to more than 15 destinations including London, Paris, Frankfurt. Jeddah, Riyadh, Bahrain, Doha, Kuwait, Abu Dhabi, Singapore and Kuala Lumpur. The vegetables and fruits include mango, pineapple, papaya, jackfruit, lemon, betel leaf, beans, long beans, lady's finger, brinjal, bottle gourd, sweet gourd, bitter gourd, cucumber, tamarind and palm. On an average, Bangladesh is currently exporting about 2,500 tones of raw vegetables by air. Of late, the establishment of vegetable and fruit processing industries has also opened up the possibility of exporting the tinned products they are producing.
However, exporters say, adequate air cargo facilities, greater incentives for exports, and availability of better packaging facilities could double such exports almost with immediate effect. They say, demand for these products already exists and is rising, but they not have adequate capacity to meet the demand.
Airlines generally avoid perishable cargo and Bangladesh Biman, the national carrier, apparently hates it. Perishable cargoes, specially taw vegetables, are allowed special discount rates in many parts of the world. If the prime minister is serious to promote exports of these products, she has to direct the concerned authorities to talk to the leaders of Bangladesh Fruits, Vegetables and Allied Products Exporters Association (BFVAPEA) and work out how their problems could be solved.
Source : The Financial Express
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