More perks to lift export to record level
The government is set to extend more policy and fiscal support, rationalise corporate tax, offer bonded warehouse facility and explore new markets and products as it looks to give a much-needed boost to export earnings.
Currently, the government is framing a new export policy for 2021-2024, targeting to offset the challenges brought on by the severe fallout of Covid-19 and the potential impacts of Bangladesh's graduation to a developing nation from the grouping of the least-developed countries.
Despite failing to hit the $60-billion export target in the outgoing policy, the government has again set an ambitious goal of shipping $80 billion worth of products by 2024.
Usually, the export policy is formulated every three years. But, the government has extended the tenure of the export policy of 2018-21, which expired in June last year, by a year because of the pandemic.
The government could not pull off the export target as the pandemic jolted the global economy and the global supply chain, sending Bangladesh's exports to a record low during the peak of the pandemic in the country in 2020.
Foreign sales have, however, rebounded strongly since then, making the government bullish about attaining the target at the end of 2024.
"We are hopeful that we can achieve the $80-billion export target by 2024 as recent export earnings are impressive," said Tapan Kanti Ghosh, senior secretary of the commerce ministry.
The export target, which covers both goods and services, has been fixed at $51 billion for the current fiscal year. Receipts stood at $30 billion between July and December, the first six months of the fiscal year.
Of the sum, $27.90 billion came from goods export and $2.6 billion from services export.
"We can earn at least $55 billion by the end of the current fiscal year if the ongoing momentum continues," Ghosh said.
In the last fiscal year that ended in June, Bangladesh exported goods worth $38.75 billion, up 15.10 per cent, year-on-year, according to data from the Export Promotion Bureau, against the target of $41 billion.
Goods export surged 48.27 per cent year-on-year to $4.90 billion in December, the highest takings in a single month, thanks to a strong recovery of apparel shipment, which accounts for about 85 per cent of the national export.
The shipment was up 28.41 per cent to $24.69 billion between July and December.
Ghosh said the Omicron variant of Covid-19 might not have serious effects on the exports as the global supply chain was functioning well.
The government also plans to give more policy and fiscal support for the production of man-made fibre, personal protective equipment (PPE), medical clothing, ICT, freelancing, and light engineering products to give a boost to exports.
It will also rationalise the corporate tax for some sectors, extend the bonded warehouse facility to various sectors, and offer incentives to emerging sectors, said the senior secretary. In the draft export policy for 2021-2024, the government has also focused on new and potential export markets and products.
"The government has put emphasis on the Fourth Industrial Revolution to increase exports," Finance Minister AHM Mustafa Kamal told reporters after the meeting of the cabinet committee on economic affairs in Dhaka yesterday.
The proposed policy will provide export facilities to all export-oriented sectors and involve more women and small entrepreneurs.
"It will simplify trade rules and policies to achieve the export target," said the minister.
The draft policy recommended maintaining compliance and standards for grabbing more export markets, and the government has emphasised production of intermediary and recycled goods.
The government is working to encourage halal food export, promote 'Made-in-Bangladesh' concept and attach importance to research and development.
Kamal also ruled out the possibility of Bangladesh falling into a middle-income trap after it becomes a developing nation in 2026, since the government has devised year-wise plan up to 2041.
For instance, Vietnam's investment mainly comes from external sources, but in case of Bangladesh, it is different, he said.
"If foreign markets face ups and downs, investment dwindles. In case of Bangladesh, it will not happen because of the strong domestic investment in the economy."
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