Bangladesh has the potential to export footwear, sportswear, denim products, toys, bags and electronic goods along with garment items, a top banker said yesterday.
The government can give go-ahead to foreign direct investments in the sectors, said Abrar A Anwar, CEO of Standard Chartered Bangladesh. The government should also find out the reasons why the foreign funds are not coming to the sectors despite having huge potential, Anwar said.
He spoke at a programme on export diversification, organised by the Policy Research Institute at its office in Dhaka.
As for example, Indonesia and Malaysia have received a lot of FDI in the sectors as many have already relocated their business from China to the two countries because of high cost of production, he said.
The cost of production did not decrease in Bangladesh although the local currency appreciated against the US dollar, said Nihad Kabir, president of the Metropolitan Chamber of Commerce and Industry.
She marked the inefficiency of the Chittagong port as one of the major causes responsible for the high cost of production.
Businessmen have to rely on expensive air shipments due to the poor performance of the country's premier sea port, Nihad said.
She suggested introducing an efficient management for the currency exchange system. Zahid Hussain, lead economist of the World Bank in Dhaka, suggested the local currency should be devalued.
The local industry should be protected through reducing the para-tariff regime, Hussain said.
Such kind of para-tariff regime reflects a negative impact on foreign investment in the country, he said.
The depreciation of the taka against the dollar will create a price pressure on consumer goods, which account for 13 percent of the country's total import value, said Ahmed Jamal, executive director of Bangladesh Bank.
As a result, the inflation on food items will go up, he said. Moreover, the central bank cannot fix the exchange rate anymore as the rate is determined by the market force, he said.
But, sometimes the central bank intervenes by selling and buying dollars from the local market to avoid the market become volatile, he said.
Saiful Islam, president of Leather-goods and Footwear Manufacturers and Exporters Association of Bangladesh, urged the business-people to be innovative in product diversification and market diversification on export.
Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association, said businesses are refraining from making fresh investments due to inadequate supply of gas and power in the sector.
Rahman suggested two or three economic zones should immediately be developed for the garment sector to attract more investment.
Sadiq Ahmed, vice chairman of the PRI, suggested allowing bonded warehouse facility and back-to-back letter of credit for all export sectors like the garment sector.
Commerce Minister Tofail Ahmed urged the businessmen to export products to some new markets like Japan, China, India, New Zealand, Chile and South Africa.
Kazi M Aminul Islam, executive chairman of Bangladesh Investment Development Authority, also spoke.