Stimulus drives RMG exports to new destinations
Garment exports to non-traditional markets advanced more than four times over the last six years following the government's incentive package in 2008 to offset the impact of the global financial crisis on the sector.
The financial crisis started off in the US and then spread to the European Union—both of which happen to be the chief destinations of the country's garment exports.
In a bid to offset any significant drop in garment export figures, the government in 2009 introduced a financial package to encourage garment manufacturers to explore new destinations.
Under the scheme, the government gave 5 percent cash incentive to garment exporters in fiscal 2009-10, 4 percent in fiscal 2010-11 and 2 percent in fiscal 2011-12. The exporters are still receiving 2 percent cash incentive for exporting to the new destinations.
Subsequently, exports to India, China, Russia, Japan, South Africa, Turkey, Brazil, Chile, Mexico, South Korea, Malaysia, Australia and New Zealand, took off.
In 2008, garment exports to destinations other than the US, EU and Canada stood at $800 million; in 2013 the figure crossed $3.5 billion.
“We are trying to concentrate on new destinations along with our traditional export destinations,” Reaz-Bin-Mahmood, vice-president of the Bangladesh Garment Manufacturers and Exporters Association, said at a workshop at the office of Economic Relations Division.
The South-South Cooperation, a broad framework for collaboration among countries of the south, will bring a new dimension in garment exports from Bangladesh, he added.
Monowara Hakim Ali, vice-president of the Federation of Bangladesh Chambers of Commerce and Industry, moderated the session, while Mozibur Rahman, chief executive officer of Bangladesh Foreign Trade Institute, presented the keynote paper.
Khondaker Golam Moazzem, additional research director of the Centre for Policy Dialogue, said: “Sometimes, the trading cost itself forms a barrier to trade to some markets.”
The country can export a lot of products to Nigeria, Saudi Arabia and Chile by strengthening the South-South Cooperation, he added.
In another session titled “Upscaling skills and overseas employment”, Muhammad Alkama Siddiqui, joint secretary of Economic Relations Division, said the government is working on enhancing skills to boost export of skilled manpower.
He also called for institutionalisation of migration and overseas employment as well as skills development and professional training for manpower.
A separate overseas employment ministry with the prime responsibility of creating and developing skilled manpower to meet developed countries' growing demand for skilled manpower should also be established, said Farooq Ahmed, secretary general of Bangladesh Employers' Association. The government should delegate skill development process to the private sector to ensure transparency, he added.
Loree Semeluk, second secretary of Canadian High Commission, said skills development can promote overseas employment of Bangladeshi workers as well as strengthen the national economy.