Bangladesh’s share of participation in the Global Value Chains (GVCs) is singly much higher than the Asia-Pacific regional total for imports, basically for a growing demand for textiles from the apparel industry. While the total share of the Asia-Pacific region in the participation in the GVCs is 22 per cent, it is more than double at around 46 per cent in the case of Bangladesh. ESCAP sees fall in bothexport, import in 2015 The calculations came in the Asia-Pacific Trade Briefs, prepared by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
The briefs were released Monday in Bangkok as part of ESCAP’s flagship publication Asia-Pacific Trade and Investment Report 2015. In the report, the UN agency projected a decline in both import and export from Bangladesh in the current calendar year. Import in terms of volume is projected to drop by 8.3 per cent while export by 3.5 per cent. “Across the region, the volume of merchandise exports in 2015 is projected to grow by 2.3 per cent while imports will contract by 2.4 per cent,” said the report. ESCAP linked the contraction of imports to the substantial drop in import by the Russian Federation (-30.4%) and other large declines in import by the Republic of Korea, Bangladesh, Indonesia and China. “This is likely evidence of the so-called ‘bullwhip effect’ where the demand for intermediate goods is much more sensitive to changes in income than in the demand for final goods,” it said. ESCAP used the ‘share of intermediate goods in trade’ as a proxy for participation in GVCs. It also showed that Bangladesh’s participation in GVCs for exports was only 3 per cent which was significantly lower compared to regional share of 18 per cent “Bangladesh is involved in textile global value chains at the processing stage, which is reflected by the top import products prominently featuring fabrics and cotton,” said the report. To put it simply, GVCs are the different processes in different parts of the world that each adds value to the goods or services being produced. The ESCAP report also said while GVCs could open up opportunities for nearly all countries, at present GVC-related trade in the Asia-Pacific region was highly concentrated, around 90 per cent, in only 10 economies. These countries are: Australia, China, Japan, India, Indonesia, Malaysia, South Korea, Singapore, Thailand and Turkey. “Low-income countries are thus at present not fully participating in the spread of GVCs across the region,” said ESCAP. “In most sectors, low-income countries represent a negligible share of final exports with the exception of apparel and footwear, mainly from Bangladesh and Cambodia,” it added. Meanwhile, International Trade Statistics 2015, released by the World Trade Organisation (WTO) last week, revealed that Bangladesh was the seventh-largest importer of textiles in 2014, accounting for 2 per cent of total global textile imports. Last year, the country’s imports of textiles stood at $6.77 billion, which was $6.21 billion in 2013, registering around 14 per cent growth. Due to requirements of huge investment for setting up, the number of textile mills in the country is still limited. On the other hand, there is a growing demand for textiles in the local woven factories. This gap in demand and supply within the country pushes up the import of textiles. WTO statistics also revealed that the European Union (EU) is the largest importer of textiles across the world followed by the United States and China. Vietnam, Japan and Turkey are placed fourth, fifth and sixth on the list. Interestingly, China is the top largest exporter of textiles followed by the EU and India.
