Leather sector needs govt support to reach potential

Bangladesh ranks among the top 10 rawhide producing countries in the world but the leather sector has been lagging behind other sectors in terms of export earnings since our independence. Targets have always been set high by successive governments but the sector is yet to see any remarkable progress.

Even way back in the colonial period the sector had its bright prospect but it is still stuck in the quagmire of not making any time-befitting prudent policy. The readymade garment (RMG) industry began to grow in 1980s in Bangladesh but it is advancing steadily. Almost all leading newspaper including The Business Post reported on its tremendous progress.

In the immediate past month of November the RMG sector exported $4.38 billion worth of apparels out of the total record high export of $5.09 billion. The apparel sector accounted for staggering 86.05 per cent export earnings while the rest went to other sectors amid country’s foreign reserve crisis, record high inflation and dwindling export earnings.

According to industry insider analysts, without analyzing the facts as to why every time successive governments have failed to meet the target set by them this time our commerce ministry has once again set another unrealistic target for the leather and leather goods industry. The target is $10-12 billion by 2030 after it failed to meet the target of $5 billion mark by 2021. When this target was set Prime Minister Sheikh Hasina herself announced leather as the ‘Product of the year’. Even after that the goal could never be achieved.

Economists and people involved in the sector think that it is impossible for the government to reach the target of $10-12 billion by 2030 without sorting out the reasons behind the failure of the target set every time by the government despite the sector having immense potential. There are a number of reasons for the failure of the sector to achieve its targeted goals.

The reasons include lack of safety measures, pollution and the environmental compliance issue. Of them, the third factor i.e. the environmental compliance issue is a major obstacle in the way of earning from exports. The other issues are not less important but this is the issue that is a stumbling block to its foreign export earnings as it directly affects the sector de-motivating the importers to buy our products.

Tanners have times and again promised and announced that they would ensure the issue of environmental compliance as they have had to face harsh criticism from every quarter for polluting environment and especially the Buriganga River. But every time they have reneged on their promise. This non-compliance issue prompts the authorities of the Leather Working Group (LWG) not to issue the coveted certificate much needed to ensure higher price for its leather products in the international market.

“The leather industry’s main problem is lack of compliance. This is holding back the industry from reaching its full potential. Bangladeshi products are getting lower prices in the international market,” Dr M Abu Eusuf, the Executive Director of Research and Policy Integration for Development, told The Business Post. He also said: “It is impossible to earn $10 billion annually by exporting leather and leather products by 2030.”

We believe that if the government can ensure all those factors and obstacle that are preventing the leather and leather industrial sector from reaching its targets this sector can undoubtedly contribute to the foreign export earnings no less than our garment industry is doing. In the near future it will be very much possible to grab at least three per cent of the total global leather market of $419.5 billion helping the government to achieve its annual target of $12 dollar.