Global competitors are not the threat for Bangladesh’s garment sector, but the country’s persistent political unrest appears as a real hurdle to having expected growth, said speakers at a seminar yesterday.
“India and Vietnam are not a challenge for Bangladesh. Violence, throwing petrol bombs in the name of politics is the hurdle,” Commerce Minister Tofail Ahmed told the seminar held at the BGMEA office in Dhaka.
He said the government would try to sign Free Trade Agreement (FTA) with the countries like Malaysia, Brazil, Chile, Argentina and some other Latin American countries not offering Bangladesh duty-free market access.
Tofail said Vietnam is politically stable country and has adequate lands for setting up industries, but Bangladesh lacks land and other utility services including power, gas and electricity.
“If India and Vietnam sign FTA with the EU countries, Bangladesh’s RMG will not face problem,” he said.
But Ahsan H Mansur, Executive Director of the Policy Research Institute, thinks FTA is not necessary right now for Bangladesh and what is necessary is investment.
The seminar’s title was “Possible Implication of EU-India FTA and EU-Vietnam FTA on Bangladesh’s Exports,” jointly orgainsed by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Foreign Trade Institute (BFTI).
Vietnam enjoys duty-free access into all countries across the world for it political relationship. Besides, the Vietnamese living in the US has an important role in creating market there.
“As the competition is rising, Bangladesh has to be competitive. For this problems like political unrest, lack of power, electricity and infrastructures need to be resolved,” said Nazneen Ahmed, senior research fellow at Bangladesh’s Institute of Development Studies (BIDS).
FTA is expected to open more avenues for exports to the EU countries by Bangladesh, but focus should be given to finding solutions to unrest and infrastructural problems, she said.
“Trade agreements will not bring benefits to the country’s RMG and will remain meaningless if we do not have enough capacity for production,” Nazneen said.
Zillul Hye Razi, trade adviser of the EU delegation to Bangladesh, also thinks India and Vietnam are not a threat for Bangladesh’s RMG at the moment as the countries have given focus on other sectors.
“Domestic problems like lack of workplace safety and political unrest should be resolved,” he emphasised.
In Vietnam, the rules and regulations have been relaxed to do business and any one can do business there, he noted.
BGMEA president Atiqul Islam said if the problems are resolved, the country’s economy will become vibrant again.
“In 2014, Bangladesh’s RMG sector turned around, but the political unrest has taken a heavy toll on the sector once again,” he said.
Daniel Seidl, executive director of Bangladesh German Charmer of Commerce and Industry, laid emphasis on the productivity of workers and ensuring transparency in factories.
“Bangladesh is doing a good job and needs to change the factory structure in terms of safety and compliance,” he added.
Mujibur Rashman, former CEO of BFTI, said the Trans Pacific Partnership would be under threat by the Asian Free Trade Agreement.
But the market access is very important for Bangladesh, he added.
Nazma Akter, president of Sommilito Garments Sramik Federation put stress on more efficient price negotiation.
She said the RMG people would have to concentrate more on the betterment of workers ensuring workplace safety and providing dormitory facility.
