Bangladesh posted a 7.91 year-on-year export earnings growth to the non-traditional market in the immediate past fiscal year despite the ongoing global economic crisis.
According to the Export Promotion Bureau (EPB) data, the country earned $11.89 billion from the market in the 2022-23 fiscal year (FY), which was $11.02 billion in FY22.
In the last fiscal year, contribution of non-traditional markets to total export also increases to 21.39 per cent, which was 21.15 per cent in FY22.
To achieve the goal, the readymade garment (RMG) sector contributed 75.95 per cent to the total earnings. Other major sector, however, failed to perform well during the last fiscal year, even most of the sector posted negative.
Industry insiders said they are highly focusing on the market to earn more, and expecting retain growth, while they are receiving sloth order from the western market due to the ongoing global economic crisis and high inflation.
Meanwhile, economists said that the ongoing growth is not sustainable for the long term as three of fourth earnings came from a single sector, RMG. They also recommend to focusing on non-RMG items to build sustainable economy after the LDC graduation in 2026.
Speaking to The Business Post, former lead economist of the World Bank's Dhaka office Zahid Hussain said, “Earnings from the non-traditional market are increasing, which is good news for the country. But most of the earnings came from a single sector, RMG, and its dominating is increasing day by day. Our goal are export market and product diversification. But due to the proper initiatives, we failed to diversify our export basket. If this trend will continue, export earnings will stop at the certain point.”
He added, “Our trade and tariff policy is not favour to export sector as this is protecting domestic sector. Besides, due to the compliance and standard issues, non-RMG sector failed to create market in traditional and non-tradition markets, despite the huge opportunities.”
The prominent economist suggested that the government must have to take initiatives to increase BSTI capability to provide international standard certificate and also have to ensure proper compliance to all sector as RMG already done.
“We have to understand that our labour cost is increasing day by day. So, there are no any alternatives except product diversify to create sustainable export sector,” he added.
The EPB data showed that in the last fiscal year, highest 2.13 billion earnings came from India, which was $1.99 billion in FY22. The country earned $1.9 billion from Japan, which was $1.35 billion in FY22. In the last fiscal year, the country has another billion USD export market club, Australia, and earned $1.23 billion. It was $916 million in FY22.
In FY23, Bangladesh earned $623 million from South Korea, which was $530 million in FY22, $460 million from Russia, which was $638 million in FY22, $677 million from China, which was $683 million in FY22, $543 million from UAE, which was 864 million in FY22.
RMG sector witnessed 31.38 per cent growth
While most of the major sector failed to perform well, RMG sector witnessed a tremendous export growth in the non-traditional markets in FY23. During the period, RMG sector earnings rose by 31.38 per cent to $8.37 billion to the market, which was $6.37 billion in FY22.
Industry insiders said that they have a huge potentiality to the market, and already set a short and long term plan to boost export. Basically, they are focusing on India, Australia, Japan, South Korea, Brazil, Russia and Middle East market, especially UAE and Saudi Arabia market.
Although, they failed to perform well in the Russian market due to the ongoing Russia-Ukraine war despite the potentiality, the sector is performing well in other countries.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan said, “Our main target is non-traditional markets. Their buyers and brands are also interested to increase business with Bangladesh.”
To boost exports, we are planning to organise multiple roadshows in the market, he added.
