The Ministry of Commerce has become quite realistic in setting targets for the current fiscal year’s export earnings. Recently, the ministry declared this target, which relies on shipments of primary commodities and manufactured goods, will grow by 11.36 percent to $58 billion for the ongoing fiscal year 2022-23.
In the just-ended FY22, we saw growth at more than 34 percent to $52 billion. That high growth had not taken place in real value but rather forced by the increased price of raw materials like cotton, fabrics, and all accessories of apparel. Volume rise or value addition factors might have achieved 10 to 12 percent growth even in the last fiscal. So, with the price of garments declining and some buyers cutting the volume of orders also, this is very unlikely that the Bangladeshi garment industry will reach $50 billion mark by the end of this fiscal. Reaching the $50 billion mark will be possible only by the endeavors of all textile industries including home textiles, especially if we can raise exports of fabrics and yarns also. Let us hope the best for our RMG sector, the export champion.
Considering changing circumstances in the global market, this will be a very good performance if Bangladeshi RMG exporters can achieve double-digit growth by the end of the current fiscal year. Prices of garments, which consist nearly 85 percent of the country’s entire export earnings, are set to decline or according to some experts have already started declining. Buyers are cutting prices since mid-May with prices of raw materials declining after increasing sharply in the previous year or so.
We should rather hope for more and look at other billion-dollar export sub-sectors and those set to touch billion benchmarks soon.
Agro and processed food subsector, has become the billion-dollar sector already where dry foods and snacks are contributing significantly. It can grow more and more.
This sector has enormous potentials which remain unexploited. Just think of the fish subsector. Seafoods has lot of potentials and more potentials are there in sweet water fishes also and this is exploited by our Asian competitor Vietnam. The country proved that Ready to Cook and Ready to Eat fishes can be several billion dollars earning export sub sector. We can follow them and become a significant market player in Ready to Cook and Ready to Eat fishes within years and we need to set our target there and work accordingly.
The commerce minister said that the Light Engineering sector will be billion-dollar sector this year. This writer is hopeful also. I cannot understand why not light metals, engineering and household items should be several billion-dollar earning export subsector in the next few years. China alone shares more than half of more than thousand billion dollars global market of these products.
Local entrepreneurs are struggling here as they are almost deluged by floods of Chinese products. Potential is huge here, dream is great but not easy to achieve. Not only tariffs, many barriers also need to be removed here by policies, technical, financial and marketing supports.
People in the government and seminars have talked much on the Light Engineering sector for the last three decades or more but effective policies and supports remain unseen. This is the most promising SME subsector for employment, skills and value addition to the economy.
Officials from the Swiss, German and Japanese governments also met our ministries several times offering technical supports but follow-ups have not been made. I recall interviewing the Swiss Machinery Manufacturing Association Secretary General in 2007 in Dhaka. He told me “This is your choice, either you will continue producing only steel bars to sell a tonne at less than a thousand dollar, or produce tools by steel to sell a tonne at 10 to 100 thousand dollars.”
Due to geopolitical changes, the European and American markets will welcome Made in Bangladesh tools and households. Definitely, we have to fight and establish a Bangladeshi brand image here. So Bangladeshi electronics and home appliance industries can exploit such new opportunities. Of course, some of them have already expanded their networks across the world. Now Made in Bangladesh ACs, refrigerators and Smart TV sets should take off in the global market to earn several billion dollars annually within the next few years.
Quite naturally, that segment will not be fulfilled without smartphones. Samsung of Korea is now working with a Bangladeshi partner to assemble their latest models of smartphones here and feed the local market. This is the government’s job now to enter into the game. It should formulate alluring policies and cater globally competitive facilities to Koreans, Chinese, and Japanese as they assemble smartphones and smart devices in Bangladesh ship those to the global market. $50 billion worth, if not more, of shipments annually of smartphones and smart devices, is no way a daydream for Bangladesh as this has been achieved by our competitor Vietnam.
Several Bangladeshi companies are also working for developing apps and software used in smartphones. It shows that a local backward linkage industry is also here that can facilitate the global smartphone manufacturers. So, this is high time for Bangladesh to look at engineering and electronics products for raising her export earnings.
As a global smartphone leader like Samsung is now putting trust in assembling in Bangladesh now the government, taking private entrepreneurs should start negotiating with Samsung and other Korean and Japanese electronics giants as they plan bigger scale assembling plants in Bangladesh for electronics, smartphones and smart devices. Such initiative will be smartest endeavor to boost Bangladesh’s export earnings and cross thee 100-billion-dollar benchmark in the next few years.
