Businesses see no risks from Japan crisis as yet

Local businesses having trade links with Japan see no immediate risk from Japan crisis, but are concerned about the potential negative impact on the country's economy.
"We do not see any chance of immediate risk, but are concerned about the potential consequences of the worst-ever crisis in the Asia's major economy," said Abdul Haque, former president of the Japan-Bangladesh Chamber of Commerce and Industry (JBCCI), to the agency yesterday.
Haque, a current JBCCI director, said the JBCCI held a meeting immediately after the March 11 catastrophe followed by the nuclear disaster in the northeastern part of Japan to discuss the impact of the disaster on their trade and businesses and listed some areas those are exposed to potential risks.
Haque said the areas including flow of ODA (Official Development Assistance) and investment from Japan need to be monitored closely.
"The Japanese government will be spending billions of dollars to face the crisis, which will create a huge pressure on its fiscal management, prompting cut in ODA allocation."
A number of Japanese companies were planning relocation of their units from China to Bangladesh to reduce production cost, he said.
The relocation might be delayed as some of the companies were also affected in the earthquake and tsunami, added Haque.
He said import from Japan will have a mixed effect, as vehicle import is expected to remain unhindered while shipments of steel and capital machineries will be delayed and costly as many major shipping lines already decided to skip some Japanese ports to avoid radiation.
"Bangladesh does not import motor vehicles from the areas devastated by the earthquake and tsunami because vehicles in these winter dominant areas often do not have good air conditioning," Haque, also a former president of Bangladesh Reconditioned Vehicles Importers and Dealers Association, pointed out.
He said export to Japan will not be harmed as well because Bangladesh mainly export garments and textiles there.
He said Bangladesh's annual import from Japan is still around US $1 billion as the country buys high valued steel, capital machineries, and motor vehicles from there.
Haque also ruled out risk of radiation from Japanese imports against the backdrop of the nuclear disaster saying that the crisis-hit areas of Japan produce manly agriculture products, but Bangladesh does not import food, agriculture and consumer products from Japan.
He admitted that some motor parts' producers are situated in the crisis areas, but said import from those areas remained stalled after the disaster.