Retaining overall export growth

Bangladesh registered an overall export earnings growth of over 25 per cent in 11 months of the last year despite many hurdles – decade high inflation, exponential price hike of essentials, dwindling foreign reserve, devaluation of money, declining remittance, energy crisis, liquidity crunch in banks and what not?

The beginning of the last year saw a remarkable growth in export earnings that continued until November when the export market began to turn around. Exporters are still struggling because it is not so easy to leap over so many hurdles and it gets more difficult when the crisis persists worldwide for a long time. Again if there is war not matter wherever it breaks out the end-result is palpable in every aspect of life around the globe.

Of the overall export earnings growth apart from apparel and leather sector almost all other sectors including home textile and jute sector experienced frustrating performances. Even as recent as 2021 the jute sector could survive pretty well in the international market. But high raw jute prices in the domestic market and the sudden global financial crisis compelled international buyers to place few orders as this is not an essential daily item.

The home textile is the second largest export earning sector in the country. The sector’s earning slumped over the last five months. The main export destinations of the sector are the USA, EU and Russia. The USA is facing record high inflation due to its economic crisis while Russia itself is involved in war with Ukraine putting not only its economy in tatter but also the EU economy. Both the EU and Russia are also experiencing high inflation. Because of the war the leather sector lost one of its major markets - Russia. All these factors are together responsible for the slump in export earning of the leather sector.

Of the two sectors – apparel and leather – the leather sector is one of the major sectors that posted the highest export earnings in 11 months except the month of December. The sector posted the highest 33.86 per cent growth. If power and energy crises had not hamper the productions it could have done much better.

The apparel sector too did pretty good in terms of export earnings followed by the leather sector. A report published in The Business Post quoting the data of Export Promotion Bureau (EPB) showed how this sector had retained its growth performance. This sector too had to face the same problems as the leather sector. The main export destinations of this sector are European Union, United Kingdom and the United States. All those three countries are now under the grip of high inflation reducing people’s purchasing power leading to less number of orders.

In this regard, Bangladesh Garment Manufacturers and Exporters Association Vice-President Shahidullah Azim told the Business Post: “Due to the Russia-Ukraine war, we failed to perform as per the expectation. We posted negative growth in September while the December performance, as far as we are concerned, is not better either. It is true that we achieved 29.2 per cent growth in the first 11 months of the year but during this period, we exported many items differed earlier. It will take another two to three months to restore stability in the sector.”

It is now the government that can now help these sectors increase the volume of their exports product baskets. If power and energy cannot be ensured, if inflation cannot be tamed and if liquidity crunch in banks can be solved not only those two sectors all other export-oriented sectors can also contribute during this national crisis. If not, then the two sectors that have played positive role they too might not be able to do the same in future.