Despite huge opportunity to boost export, Bangladesh failed to retain service export growth in the last fiscal year while India, our neighboring country, reaping billions annually from this sector.
As per data from the Export Promotion Bureau (EPB), the country's service exports experienced a decline of 15.65 per cent, amounting to $7.49 billion during the FY 2022-23. This figure fell short by 16.69 per cent compared to the commerce ministry's export target of $9 billion for FY23.
In FY22, the country earned $8.89 billion from the service sector.
As a result, Bangladesh’s overall export earnings rose by 3.42 per cent to $63.05 billion in FY23, while earnings from the goods sector rose by 6.67 per cent to $55.56 billion year-on-year.
Besides, during July of the FY 2023-24, service exports witnessed a substantial decline of 52.6 per cent, reaching $556 million in a year-on-year comparison. In contrast, In July of FY 2022-23, earnings stood at $1.17 billion, according to Export Promotion Bureau.
Experts say owing to the absence of effective policies, adequate planning, quality education, and a limited inclination to invest in the sector, Bangladesh failed to boost service sector, despite possessing a large number of population and numerous appealing tourist destinations.
Although the country earned some billions of USD through service export, Bangladesh is still importing service multi folds than export, they said.
Speaking to The Business Post, Policy Research Institute (PRI) Executive Director Ahsan H Mansur said, “Bangladesh is importing billions of USD medical and education service every year though the country could earn from the sectors.”
He added, “Regrettably, we find ourselves in a situation where we are importing services, despite the significant potential for exporting them due to our vast population. The aviation sector, for instance, presents a lucrative opportunity for earning billions of USD through air services, yet our domestic airlines operate at a mere 15 per cent capacity.
Furthermore, even with numerous universities, a significant number of students seek quality education abroad. This underscores the irony that we are also importing services like education when we possess the capability to export them.”
Except readymade garment sector, all export sectors failed to meet expectations. This happened because our policies are not export friendly. That is why local and foreign investors are not showing interest to invest export sector, the prominent economist said.
He further said, “We have to promote export sector, improve education and hospitality quality. If we can ensure these, export sector will be boosted.”
Major contributors
The EPB data shows that in FY23, earnings from transportation down to $1.05 billion from $1.75 billion year-on-year. During this period, $683 million earned from sea transportations and $357 million from the air transportation. The figure was $827 million and $917 million in FY22 respectively.
Manufacturing service on physical inputs owned by others earned $550 million from manufacturing sector in the last fiscal year, which was $619 million in FY22.
In the last fiscal year, earnings from the travel service rose by 26.41 per cent to $447 million. The figure was $353 million in FY22. Among the last fiscal year figure, $57 million came through tourist, which was $65 million in FY22.
Besides, education-related travel earnings slipped by 0.98 per cent to $56 million in the last fiscal year.
In the last fiscal year, construction service earnings dropped by 28.13 per cent to $777 million, which was $1.08 billion in FY22. The commerce ministry set $1.16 billion earnings target from the sector in FY23.
Telecommunication and information sector, another potential service export earnings basket, failed to retain export growth in the last fiscal year. In FY23, the sector earned $664 million through the sector, which was $739 million in FY22.
Among the values, Computer Services (software, data processing, and consultancy) earned $548 million in FY23, which was $592 million in the previous fiscal year. The commerce ministry set $597 million earnings target from the sector for FY23.
In the last fiscal year, business service earnings rose by 5.66 per cent to $1.2 billion year-on-year. In the FY22, the earning was $1.14 billion, according to the EPB.
From the sector, technical, trade-related and other business services earned $898 million in the last fiscal year, which was 5.15 per cent higher than FY22.
The government’s earnings by goods and service sector dropped by 20.11 per cent to $2.18 billion year-on-year despite the commerce ministry’s $2.74 billion export target for FY23. In FY22, the sector earned $2.73 billion from the government goods and service export.
