The apparel industry, employer of 40 million workers, mostly rural women, contributed 83.49% to Bangladesh’s total exports of $36.66 billion to date
Bangladesh’s export earnings from the apparel sector registered an 8.76% growth reaching $30.61 billion in FY18, thanks to safety improvements.
The apparel industry, employer of 40 million workers, mostly rural women, contributed 83.49% to Bangladesh’s total exports of $36.66 billion to date.
According to Export Promotion Bureau (EPB) data released on Wednesday, Bangladesh’s export earnings from the RMG sector stood at $30.61billion, posting 8.76% growth in the last fiscal year. The figure is 1.51% higher than the target of $30.16 million for FY18.
In FY17, Bangladesh’s export earnings registered a 0.2% growth to $28.15 billion, the lowest in the last one and a half decade.
Of the total amount, Knitwear products earned $15.18 billion, which is 10.40% higher than the $13.76 in the same period a year ago. Woven products earned $15.42 billion, up by 7.18%, compared to $14.39 billion a year ago.
Meanwhile, Bangladesh’s overall export earnings rose about 5.8% to $36.66 billion, which was $34.65 billion in Fy17.
Talking to Dhaka Tribune about export performance, manufacturers gave credit to safety improvements in the apparel industry, restoring buyer confidence to place more orders here. On the other hand, economists say this growth is not up to mark, considering the industry’s potential.
“In the last couple of years, global retailers were slow to place orders due to ongoing safety inspections in the apparel sector. But in the last fiscal, they changed their mind set as the inspection has almost come to an end showing significant progress,” Exporters Association of Bangladesh (EAB) president, Abdus Salam Murshedy, told the Dhaka Tribune. As a result, export earnings have seen a rise, but it could be more, said Salam.
“The present export growth is better compared to the previous year. But there is more space to grow in terms of export earnings,” Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president, Md Siddiqur Rahman, told the Dhaka Tribune.
According to the World Trade Statistical Review 2017, Bangladesh’s global market share in clothing was 6.4% in 2016.
In tapping the opportunity, the government has to reduce the delivery lead time by increasing port capacity to ensure smoother shipment of finished goods. Airfreight capacity should be increased as well to ensure quick delivery of sample goods and accessories from the airport, said Siddiqur.
“Showing a growth over the previous year’s export earnings does not mean a good picture of the export sector. Export contribution to Gross Domestic Product (GDP) is showing a continuous downward trend, which is a big concern for the government,” Policy Research Institute (PRI) executive director Ahsan H Mansur told the Dhaka Tribune.
Bangladesh needs a strong double digit growth in export earnings to meet the expenses of development projects. Slower growth in export performance would widen the balance of payments gap, said the economist.
With the present growth rate, Bangladesh would not be able to reach the target of $60 billion export earnings by 2021, said Ahsan.
In attaining the desired target, the government has to bring reforms to bonded warehouse facilities, export facilities given to entrepreneurs. Infrastructure development is also a must, he added.
In attaining the targeted export growth, Bangladesh has to identify problems hindering the country’s export potential and has to take effective measures to end this, former finance advisor to caretaker government, AB Mirza Azizul Islam, told the Dhaka Tribune.
Azizul also suggested product and market diversification to overcome the challenge. He also stressed the importance of research and development to move towards value added products which would increase export earnings.