Home ›› 15 Nov 2021 ›› Opinion
Bangladesh exports around 35 billion worth of handicraft goods annually. The volume of exports in this particular industry has increased over the years. However, these number is small compared to what other countries like Vietnam, China, India and some other countries are earning. One of the major problems that the sector faces is that we have not been able to diversify our products.
According to expertmarketresearch, the world handicrafts marketplace stood at a value of USD 647.57 billion in 2020. The handicrafts market is projected to witness a Compound Annual Growth Rate (CAGR) of 10.9 per cent over the forecast period of 2021-2026. It is expected to reach USD 1,204.7 billion by 2026.
On the other hand, there are few industry experts who are optimistic about the present situation as they believe the situation is heading towards a positive direction. Nonetheless, there are a lot of challenges that lay on the path. Starting from lack of finance to policy implementation there are several problems that needs to be addressed immediately.
According to industry insiders, more young people are showing interest in this particular industry. Also, there has been some diversification of handicraft products. For example, we are making rags from wasted cotton now. Basket is one of the top listed products that experts think are getting more market attention. There has been an increase in the export of tableware. One of the main reasons behind the rise of export is that China has almost stopped their handicraft industry and moved on to advanced high-tech. Again the demand for environmentally friendly products has significantly increased among the exporters and that has led to a surge in the demand for handicraft goods.
Every year different handicraft fairs are being organised in various important trading centres including in Frankfurt, the central German city and in Hong Kong. In these fairs both buyers and sellers of handicraft industries get an exclusive access to new innovating handicraft products.
Among the many handicrafts products of Bangladesh the prominent ones are pottery , woodwork, cotton, silk, gold, silver, jute, reed, brass ware, traditional dolls, pink pearls and copperware trays, well decorative bamboo made items, vases, etc,. The role of Banglacraft or previously known as Bangladesh Handicrafts Manufacturers and Exporters Association is to promote this industry among the local masses and familiarize our products to the world. They started their journey in 1979. They help to organise training programmes and even help people with product development. World Bank has different projects which provide monetary assistance to handicraft manufactures. They also organise training programmes for them and others who are interested to learn and want to develop their handicraft products. Banglacraft makes sure that news gets spread around so people can use such opportunities to learn and expand their businesses.
In the opinion of Gloam Ahsan, President, Banglacraft Challenges, at the moment the Bangladesh Handicraft industry is facing a number of challenges. For example, there used to be an export incentive of 20 per cent from the part of the government. That has been reduced to 10 per cent. The Ministry of Finance has taken this decision although the Ministry of Commerce was more willing to let the incentive be as it was, which was 20 per cent, according to credible sources. Vietnam already exports more than USD 2.4 billion and has set a target to export handicraft products worth five billion dollars by the year 2025. Their handicraft businesses receive interest free loans. We need to follow them and identify what we are missing and take concrete actions accordingly. Those who become members of Banglacraft enjoys some benefits like they easily get an export license. To become a member, one has to pay an enlistment fee and an annual membership renewal fee. Bangla craft helps offer help with the big shipments, let it be FCL or LCL. However, the small exporters use GPO, DHL and different courier services.
It’s hard to comprehend why the export incentive has been reduced. When we are trying to grow and develop this particular industry, it’s only natural that we provide them with all the support they need. Of course, a different story might be coming from the other side of the aisle. For example, there can be cases where loans or incentives have not been disbursed properly. There are also classic bureaucratic bottleneck problems.
Today we are having a very hard time in keeping up with the world market. The freight cost has increased significantly. That is why the buyers are requesting to reduce the price. The RM, (raw material) cost of making handicraft products has increased from 20 to 30 per cent in the last 3 to 4 years. The labour cost has increased. Only a few years back we could see workers getting wages of 200 to 300 taka per day. Today that situation has changed. Now it’s very hard to find workers and one has to pay at least 500 taka as wage. One of the crucial raw materials Typha or cattail is used to make the handicraft products used to cost and 0.15 paisa per 1.5 feet now that cost around 0.25 to 0.30 paisa.
We have to find new ways to develop our products and bring further diversification. At the moment Bangladesh is exporting handicraft goods to all corners of the globe, but the quantity of the export is not enough in our opinion. Our main market is in Europe, the US and now we are even exporting to Brazil, Cambodia and Argentina as well.
The government has a stimulant loan scheme, where the borrower has to give 4 per cent interest. However, the sad part is small business owners who are looking for say a loan ranging somewhere from 5 lakh to 10 lakh are been constantly denied by the banks. The banks ask for documents and guarantee that most of the small businesses are not able to produce. In this particular case the policies regarding the stimulant loan scheme needs to be made clear among the banks and the potential borrowers. There should be initiatives to resolve this problem by making both the bank and small handicraft business seat together and find better solutions.
Bangladesh started exporting handicraft products in 1978. From various sources we learn that during that time people from all walks of life participated to help out. Now we cannot see that same level of participation, as it has become more business-oriented.
This industry clearly lacks financial support, and the proper guideline or policy support is absent according to industry insiders. The authorities concerned and stakeholders associated with this industry must come forward with better solutions. We need to make sure that bank loans are available for the small traders. Since the Government has a stimulus package for people working in this industry, the small businesses must have that freedom to use those resources in order to grow and develop. Otherwise, there will be only media reports and the main aspects or a problem that needs solving will be left unheard off.
The writer is Editorial Assistant of The Business Post
