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Bangladesh needs to focus on inclusive growth to achieve export target

"As per a recent survey the RMG sector in Bangladesh is expected to garner $33.5 billion followed by leather and leather goods at $1.13 billion. To achieve this goal, the government plans to set a $40 billion goods export target with a 7.14 per cent growth for fiscal year 2018-19, riding largely on apparel industry’s success. The Export Promotion Bureau (EPB) sent a proposal to the commerce ministry for consideration. If everything goes as planned, then the commerce minister will formally announce the export target in a few days. In July-May of the current fiscal year, Bangladesh earned $33.72 billion against a target of $37.5 billion."

 

Bangladesh needs to focus on inclusive growth to achieve export target 001As per a recent survey the RMG sector in Bangladesh is expected to garner $33.5 billion followed by leather and leather goods at $1.13 billion. To achieve this goal, the government plans to set a $40 billion goods export target with a 7.14 per cent growth for fiscal year 2018-19, riding largely on apparel industry’s success. The Export Promotion Bureau (EPB) sent a proposal to the commerce ministry for consideration. If everything goes as planned, then the commerce minister will formally announce the export target in a few days. In July-May of the current fiscal year, Bangladesh earned $33.72 billion against a target of $37.5 billion.

Abdus Salam Murshedy, President, Exporters Association of Bangladesh (EAB), says over 82 per cent of the country’s export earnings come from the apparel sector. Bangladesh has enough capacity to meet the export target. Manufacturers are losing their competitive edge due to a rise in production costs. Making things worse, in the proposed budget for FY19, beginning July 2018, the government increased corporate tax to 15 per cent, while the tax-at-source returned to 1 per cent from 0.70 per cent. Salam feels, if the government reduces corporate tax and brings down tax-at-source to the previous level to increase competitiveness, Bangladesh will be able to reach the target.

Ahsan H Mansur, Executive Director, Policy Research Institute (PRI) points out this export growth target, isBangladesh needs to focus on inclusive growth to achieve export target 002 unambitious. In attaining development goals as well as GDP target, the export target should be much more ambitious. Present policy towards export-oriented industries, rate of target achievement, and performance is disappointing. This is because of lack of proper policy support to export oriented industries.

Striking the right balance

Industry needs a comprehensive and balanced export policy to achieve export target. Md Jashim Uddin, President of Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA), observes there is a lack of coordination between concerned ministries in setting export target. The government is not taking necessary steps to remove export barriers. The government has offered incentives to promote plastic exports but exporters are yet to enjoy the benefits. Due to lack of proper implementation, incentives and policy support fail to reach the target.

Policy continuity and equal treatment in terms of government incentives are needed to provide space for emerging export industries to grow. Once that’s achieved, it will help diversify the export basket. To achieve the export target, the government should prioritise emerging sector and take measures to expand export basket.

 
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