Home ›› 30 Jun 2022 ›› Editorial
Medical and Personal Protective Equipment (MPPE) production has shown a remarkable increase during the C-19 pandemic. Some RMG, Plastic and Pharmaceutical industries have started manufacturing these products as per the guidance of the Ministry of Health, Directorate of Drug Administration(DGDA), Ministry of Commerce and National Board of Revenue etc. The government has also considered the MPPE as an export diversification sector because the parent sectors that can instantly commence production of these products have got a strong footing in the country.
In addition to that Bangladesh has managed the pandemic situation quite efficiently. The Budget 2022-23 titled” Return to the Path of Development Leaving the Covid Behind” has included a chapter about the successful management of Covid-19 and the economic recovery of Bangladesh. It also mentioned that 28 incentive packages by the government have been implemented benefiting about 73 million people through about 1,72,000 organizations. There is a detailed description of these organization in appendix A, Table1 of the Budget speech. Bangladesh ranked 5th out of 121 countries in the May 2022 edition of Nikkei Covid Recovery Index, published by the Nikkei Media group of Japan and Financial Times. These are all good testimonies that Bangladesh can handle a severe crisis without upsetting growth.
The budget speech demonstrated that Bangladesh has been triumphant in handling the pandemic situation. As per the World Bank statement, Bangladesh has shown resilience amid uncertainty. However, during the pandemic situation, we have been able to observe the lack of capacity of the health sector, hospitals and medical institutions and a number of casualties. Consequences of the pandemic in respect of unemployment and rise in poverty level have also been recorded. The budget endorsed that the bigger the challenges the greater the opportunity for growth.
There is no denying the fact that intelligent countries have been able to use the pandemic for business development and MPPE production is one them. Some countries have been successful to gain through exporting vaccines through extensive research and development. During the pandemic there was a surge in export and import of MPPE products, Bangladesh government has also considered the sector as an opportunity for export diversification. MPPE products such as medical masks, medical gloves, gowns, shoe covers, aprons, coveralls, and goggles increased tremendously from 25 per cent to 1200 per cent. The global demand increased. The demand for a single product i.e. medical masks increased by 500-1200 per cent. Global MPPE demand in 2021 increased from USD 510 billion to USD 595 billion
Bangladesh was not behind. The government initiated a number of policies, in the export policy 2021-24 it has been included as a special development sector by the Ministry of Commerce. NBR has issued some SROs for exemption of Custom Duty, Regulatory Duty, Supplementary Duty, VAT and AT under different HS codes for industrial IRC holders of Pharmaceutical and Medical instrument manufacturers, while Industrial RMG and Textile IRC holders can also be allowed to receive tax exemption provided they have NOC from BGMEA and BTMA. Under a different SRO exemptions were given to producers at the production and trading stages. Exemption was extended up to June 2022.
Export of MPPE products of Bangladesh such as protective spectacles, facemasks, gloves, hand sanitizers, shoe cover and head cover, mask surgical KN 95 and N95 , coverall suit, isolation gown( as per WHO/WCO list ) increased to USD 1.40 billion in 2021 which was USD 837 million in 2019. There are a number of hospitals where the doctors, nurses and other health workers use these products on a regular basis and there is demand abroad. It was expected that with the increase of health awareness among the public, sustained demand for specific health and safety goods will also increase. However, with the withdrawal of policy support for the sector, the spree of the export potential sector may face a reversal. Budget 2022-23 has withdrawn the VAT exemption for the manufacturing and trading sector by announcing some SROs, the HS codes are 9018.9090, 9004.9090, 6211.3300, 6210.10.00, 3926.2090, 3926.20.90, 3822.00.00, 3002.15.00. The products are test kits, plastic face shields, spectacles, goggles, medical protective gears, protective garments(PPE) etc. Besides supplementary duties have also been imposed on some of the MPPE products. On the other hand, as per the budget speech (para 341) tax holiday has been extended for the import of raw materials needed for the production of medical kits. It seems that government is willing to encourage domestic manufacturers to invest in this sector. However, tax holiday benefits announced in the speech have not yet been supported by relevant SRO and related policies. Considering the importance of the export potentials of the sector and existence of established associated industries in the country such as; RMG and Textile Industry, Plastic Industries, pharmaceuticals, and light engineering who are capable of producing a number of medical goods, such as aprons, gowns, goggles, medical waste box, shoecover, oxygen masks nasal catheter, surgical masks, saline hanger, SDP Bottles, measuring cups, spoon, bottle caps, ventilators, pulse oximeters, infrared thermometers, support products in the ICU, hand sanitizers, hand rub solution, medical equipment, etc. the extended support could be continued for some time. In the meantime, more than one hundred PPE manufacturers and surgical mask manufacturers have taken their approval from the Directorate General of Drug Administration and some are preparing for an export license. Some large RMG industries had a plan for sector diversification. BEXIMCO established labs and a separate park and already exported a significant amount. Bangladesh is strongly in need of export diversification. MPPE has the impending possibility to progress further. The policies would need to be supportive at least for some more time to give a good signal to the sector to survive and flourish.
The writer is CEO, BUILD-a Public Private Dialogue Platform which works for private sector development. She can be contacted at ceo@buildbd.org
