Exports from South Asian nations are showing signs of a gradual recovery from the devastating effects of the Covid-19 pandemic, with global retailers beginning to receive canceled or held orders as lockdowns are being eased in the West.
Success in retaining the recovery, however, will depend on how the countries in the region undertake measures to halt the spread of the virus and reset economic policies to revive their struggling economies under a new global perspective, economists have pointed out.
Since the outbreak of Covid-19 in March, exports from such South Asian nations as Bangladesh, India, Sri Lanka and Pakistan have been facing a big jolt with the pandemic badly disrupting the global supply chain.
In June, export earnings recovered from a sharp fall of the previous months, although negative growth trends are still stalking the impoverished region.
Bangladesh, the second largest exporter of apparel goods after China, went through a severe impact of the pandemic in March, with an 18.2% fall which worsened in April by a 82.85% slump to $520 million.
In May, earnings started recovering and improved to $1.46 billion, but still with a 61.57% fall month-over-month.
Exports recovered largely in June, posting a 2.5% decline to $2.71 billion in proceeds, against $2.78 billion bagged in the same month of last year.
Exporters as well as economists have opined that the better performance in June has been due to shipments of canceled or held orders.
“Export earnings increased in June as the global retailers and brands took deliveries of goods that had either been held up or cancelled,” BGMEA senior vice president Faisal Samad told Dhaka Tribune.
Whether or not exports were recovering from the downswing would be visible in September. It was too early to comment on the new orders, added Samad.
Export performance of other countries
According to India’s Ministry of Commerce and Industry, exports in June amounted to $21.91billion, compared to $25.01billion in June last year.
Indian exports in May shrank 36.47% to $19.05 billion. It had contracted by 60.28% to $10.36 billion in April, caused by a cancellation of orders.
On the other hand, according to the Pakistan Bureau of Statistics (PBS), exports in June 2020 witnessed a decline of 6.11% to $1.59 billion, showing signs of recovery after the historic plunge of 54% in April.
However, its exports registered a 14.54% rise in June compared to May, when they raked in $1.39 billion.
After experiencing a sharp decline in March and April, Sri Lanka’s exports rebounded to $950 million in June. The figure had been $250 million in April 2020.
Will the recovery be sustained?
“The sustainability of exports and economic recovery of the region will depend on how these countries control the spread of the virus,” noted Zahid Hussain, the World Bank’s former lead economist in Bangladesh.
China, South Korea and Vietnam have had the maximum possibilities of sustaining the comeback as they were able to address the reasons behind the fall of their exports, added Zahid Hussain.
In June, China’s exports rose by 0.5% to $213.6 billion, thus showing signs of recovery.
On the other hand, imports rose by 2.7% year on year to $167.2 billion, bouncing from a 3% decline in May.
India had a diversified export basket and had the capacity of taking advantage of the global economic turnaround, Hussain said further.
“To sustain the recovery, Bangladesh needs to address issues like product diversification, grabbing new opportunities and ensuring a better environment for buyers,” suggested the economist.
“Since stores as well as economic activities are opening slowly, we are hopeful of sustaining the recovery. But there is still a fear of a second wave of Covid attack ,” said SM Khaled, Managing Director of Snowtex.
Right now, the sector was running with 70% to 80% capacity. If the situation improved by the end of December, the sector would see a turnaround, he hoped.
