Home ›› 31 Mar 2023 ›› Editorial
Higher inflation in the Western countries continues to ravage our economy. It has cast a negative impact mainly on our garment industry. As Bangladesh largely has to depend on its export earnings from this sector, drop in work order incredibly weakens our economy. Time and again we, in our editorials, urged the government to try to diversify our export products to avert any kind of disasters in our economy.
International clothing retailers and brands have reduced their work orders as their apparel stocks are yet to be sold out. Their sales have dropped significantly because people are reluctant to buy clothes as they can’t cope up with the growing inflation giving a big blow to our apparel sector, the biggest export earning sector in the country.
The downward trend in the garment shipment began in the month of last November and it has continued to fall till date. The orders for the April-June season have declined by 40 per cent because of the Ukraine-Russia war. This slowdown has been going on for the last one year. Bangladesh exports its 80 per cent of garment products to the EU and US. If the increasing inflation continues there naturally it will put pressure on the consumers forcing them to cut down on their clothing budget.
As people have started to buy less apparel products importers of those countries are issuing less orders to Bangladeshi exporters. However, Bangladesh has reasons to be a bit upbeat with the new markets in Asia. They are called emerging markets and to these markets Bangladesh shipped garment products worth $849 b=million in 2008-2009 while in 2021-2022 the country shipped apparel products to the same markets worth $6.37 billion.
According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the Asian market rose to $1.08 billion in the July-February season. But still the share in terms of its total apparel exports is only 6.87 per cent. Presumably it will take a long time to grab a big share of the Asian market. Till then the country’s export earning apparel sector has to wait and it needs a vigorous drive and campaign. We have to depend largely on the existing markets in the EU and US.
Another reason for the decline in the work order may be the high production cost of apparel items. Recently the hikes in prices of power and fuel have pushed up the prices of raw materials and freight charges. If the production costs continue to rise, the apparel industry might stumble in near future. Due to high buying prices foreign importer of our garment products might lose interest in our export market.
Our economy is already in crisis for a number of both domestic and international factors. Of them, the war in Ukraine is the major cause as this war has brought the European nations to their knees because of shortage of power and fuel as Russia stopped exporting its gas and fuel to those countries. As our export is mainly dependent on garment items and the major buyers are the European nations and America naturally it has wrecked havoc on our economy.
If the war between Ukraine and Russia doesn’t come to an end the crisis will deepen like any other countries in the world. And it will continue to deepen our foreign currency crisis. For the time being we have no hope in sight but we must take our precautionary measures to keep our economy afloat. And the only way to do this is to diversify Bangladesh’s products.