With a slump in demand for commodities among the Western consumers, Bangladesh needs to remodel its business plans to revive exports in the time of Covid-19, which has severely affected the global economy, economists said.
Maybe the traditional fast fashion garment items or basic apparel products are not adequate for Bangladesh to remain competitive in the global markets, they said.
Bangladesh needs to grab new markets for supplying products like personal protective equipment (PPE), masks and healthcare-related items such as bed sheets and isolation sheets for hospitals.
As the pandemic has created a market of billions of dollars for these products worldwide, the local exporters need to utilise this opportunity for the revival of export earnings, the experts said.
Earnings from merchandise exports in the immediate past fiscal year fell 16.93 per cent year-on-year to $33.67 billion because of Covid-19, which has affected production and dampened demand.
The receipts from exports in fiscal 2019-20 is 25.99 per cent below the annual target at $45.50 billion, according to data from the Export Promotion Bureau (EPB).
The export earnings in fiscal 2018-19 were recorded at $40.53 billion.
In June, the last month of the fiscal year, earnings were $2.71 billion, which is 31.15 per cent below the monthly export target of $3.94 billion.
The fall in export earnings was mainly because of a decline in garment shipment that contributes 84 per cent to the total national exports a year.
In fiscal 2019-20, garment exports fell 18.12 per cent year-on-year to $27.94 billion. Of the earnings from garment, $13.90 billion came from knitwear shipment and $14.04 billion from woven.
However, knitwear export dropped 17.65 per cent and woven 18.58 per cent last fiscal year, according to the EPB data.
The global economy is stumbling at best with reopening even in countries that have brought the spread of the virus somewhat under control, said Zahid Hussain, former lead economist of the World Bank's Dhaka office.
However, the virus keeps striking back even in those countries and it is quite clear now that the global economic recovery will be slow and protracted until efficacious vaccines and therapeutics are available, he said.
"This is true generally and particularly for the US and Europe, Bangladesh's largest markets for exports."
Under such circumstances, the best Bangladesh can do is damage control, that is, contain the loss of existing exports and take advantage of demand created by the virus for products like masks, PPEs, ventilators, various pharmaceutical products and digital services, Hussain added.
"Containing the loss of existing exports requires building confidence in our ability to deliver on time in these difficult times."
This in turn requires easing regulatory hassles that cause inordinate delays in time to import and export. The efficiency of the trade logistics system needs considerable enhancement.
"The existing production system in garments and pharmaceuticals may need to be reconfigured to take advantage of the opportunities created by the need to combat the virus," Hussain told The Daily Star.
There is growing demand for masks, sanitisers, PPEs and so on, while demand for digital services is also rising. It is not easy to start a new product line or a new business in Bangladesh because of regulatory complexities and bureaucratic red tape. These need urgent attention, he said.
The government should do everything it can to make sure that the duty-free and quota-free access of 97 per cent of Bangladeshi products to the Chinese market crosses the finish line.
"Not just that. We should expedite the building of the special economic zone dedicated for Chinese investors in Chattogram."
Joint ventures with the Chinese will be critical for exploiting the opportunities opened by the duty- and quota-free access, Hussain said.
"Most important of all, we have to deploy everything needed to control the spread of the virus. Without success on this front, it will be hard to restart the engine of the economy in both the domestic and external markets."
The conduct of business will continue to be disrupted as long as the spread of the virus is out of control, as is the situation currently in Bangladesh, Hussain said.
Ahsan H Mansur, executive director of the Policy Research Institute (PRI), echoed the views of Hussain.
Mansur also said the devaluation of local currency against the greenback can be an important factor for a quick rebound of export as peer countries like Vietnam are taking this advantage.
He also called for producing garment items with manmade fibre and reducing lead time.
"We need to redesign and remodel our business plans as everything is depending on demand from customers," he said.
The country manager of a renowned European buyer of apparel items said he has been placing increased volume of work orders in Bangladesh now as almost all of his company's outlets in Europe and the US have already reopened.
"I have placed more than $400 million worth of new work orders after the lockdown in Bangladesh. I have placed work orders in our every supplying factories," said the European buyer asking not to be named.
Arshad Jamal Dipu, chairman of Tusuka Fashions Ltd, a leading garment exporter, said he saw a silver lining in work orders from October onwards as buyers are coming back.
Moreover, Bangladesh can receive a good quantity of work orders being shifted from China, he said.
But the government needs to ease the conditions in receiving loans from bailout packages and offer incentives so that small and medium enterprises can cope up with the fallouts of the Covid-19, Dipu said.
Commerce Minister Tipu Munshi said the government has set a target to grab new markets for PPEs and masks.
"We are trying to import PPE fabrics from India quickly as the demand for this item soared worldwide and Bangladesh is turning into a major manufacturer and supplier globally," Munshi told The Daily Star over the phone.
"We are closely observing the market demand so that we can take quick decisions," he said.
Rubana Huq, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said the decline in garment export during last fiscal year in actual amount is $6.18 billion, which is around one-fifth of the total export.
"A closer look reveals that out of the $6.18 billion lost exports, $1.06 billion was lost in the first half of the year and the remaining $5.12 billion in the latter half. We lost $4.33 billion just in three months. This shows the severity of the pandemic's impact on the industry," Huq said.