The government has recently selected 13 engineering firms to carry out a detailed engineering analysis (DEA) of ready-made garment factories, officials concerned said. The selected engineering firms will conduct the DEA of the garment units which have already been assessed or to be assessed under the National Tripartite Plan of Action, they added. Department of Inspection for Factories and Establishments (DIFE) finalised a list of the engineering firms from a good number of applicants last week. “The second meeting of the taskforce held Thursday last selected the 13 engineering firms after scrutiny,” Syed Ahmed, Inspector General of DIFE, told the FE. The names of the selected firms will be available at the DIFE website shortly, he said, adding the taskforce will also share the list with two apparel apex bodies – Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). In February, the government decided to pick some engineering firms having expertise to carry out DEA and invited applications from interested firms, Mr Ahmed added. Earlier, the National Tripartite Committee under the Ministry of Labour on December 23 last formed two taskforces to oversee the post-inspection activities, including hiring of consultancy firms to do DEA, approve corrective action plan (CAP) and monitor its implementation of the ongoing garment factory assessment under the government-ILO joint initiative. All the selected firms have sufficient equipment and knowledge of conducting at least two DEA, said Professor Mehedi Ahmed Ansari of Bangladesh University of Engineering and Technology (BUET). Some 800 garment factories have so far been assessed under the joint initiative and 500 by BUET. BUET recommended DEA for more than 200 out of 500 garment factories after it found structural flaws there, Mr Ansari, also a member of the taskforce, said. The inspection programme under the joint initiative started in November 2013. The teams of BUET engineers gave the factories six-week time for conducting the DEA. On the other hand, an official review panel also asked 45 more factories to do the same. Of them, some 14 units are yet to start the process. The panel headed by the DIFE inspector general was formed in 2013 to decide on closure of any garment factory if found risky or non-compliant during inspection by any of three initiatives – Accord, Alliance and the government-ILO joint programme. Mr Ansari said DEA was recommended for those factory buildings which fail to meet some seven criteria including buildings expanded horizontally or vertically without approval from the authority concerned and when the factory owners or manufacturers of garments in a building failed to provide its drawing, design, soil test, depth of building foundation, scanning or rod and columns and core test and other required documents.

Source: https://www.thefinancialexpress-bd.com/2015/05/31/94777

Bangladesh will post strong economic growth and see a bullish trend in exports up to 2030, according to a forecast by UK-based banking giant HSBC.The HSBC Global Connections Trade Forecast Report said the country’s economy has grown by around 6 percent annually over the past decade, and it will continue to grow at a similar rate over the next ten years.Robust growth is expected over the medium-term, with GDP expanding by 5.5 percent a year in the decade to 2030.”It said the country’s trade prospects are bright, particularly in the textiles sector, and trade liberalisation efforts with its neighbours in Asia should boost prospects further, encouraging more diversification of the export base.The HSBC Trade Forecast examines prospects for exporters in 25 countries and territories. It shows that the short-term outlook for emerging economies is patchy, in part, because of relatively low commodity prices and a moderation in Chinese growth. Over the medium term, however, patterns of global trade will be increasingly influenced by rapidly-growing Asian economies with rising average incomes. Trade between emerging markets will become more significant as their middle classes expand.Among the countries covered in the Trade Forecast, Vietnam, India, China, Turkey and Bangladesh are expected to experience the strongest trade growth.Each is predicted to increase merchandise exports by an average of 8 percent or more per year between 2015 and 2030.Bangladesh has a strong foothold in the global market for garments, and HSBC expects this to continue, with around 80 percent of export growth from 2015-30 coming from clothing and apparel.Although the importance of agriculture will gradually decline as more of the population moves into urban areas, agriculture will continue to be Bangladesh’s second largest export sector out to 2030, contributing around 7 percent of the forecast increase in exports.In recent years, Bangladesh has made good progress towards macroeconomic stability under the guidance of the International Monetary Fund, but major infrastructure investment remains essential, the report said.The report said positive progress towards liberalising trade flows with neighbours in recent years is expected to help maintain competitive advantages in clothing and apparel sector. But rising incomes will encourage a gradual move towards higher value sectors, potentially including the assembly of electronic products, and boosting the sector.Simon Cooper, chief executive of global commercial banking at HSBC, said: “In the short-term an increasingly robust US economy, aided by cyclical upturns in Europe and Japan, is likely to provide the greatest cross-border opportunities for businesses. Further out, demographic trends in emerging markets will undoubtedly fuel greater South-South trade.”The report said the potential for Bangladesh to attract more foreign direct investment inflows is large.

Source: https://www.thedailystar.net/business/banking/hsbc-bullish-bangladesh-90043

Thirty-three out of 53 Bangladesh missions abroad have failed to achieve their respective export targets for the July-April period of the current fiscal. The situation is worse for the commercial wings as only 4 out of 17 commercial wings could meet the export target set for the period. Latest data of Export Promotion Bureau (EPB) suggests that the 33 missions altogether fetched $22768.77 million in export earnings against the target of $25241.66 million for the first 10 months of the current fiscal. The shortfall has been estimated at 9.80 percent. These 33 Bangladesh missions are located in Washington, London, Madrid, Paris, Rome, The Hague, Stockholm, Tokyo, Singapore, Geneva, Tripoli, Brussels, Beijing, Muscat, Manama, Moscow, Kuala Lumpur, Berlin, Ottawa, Ankara, Seoul, Hong Kong, Jakarta, Tehran, Bangkok, Kuwait, Colombo, Amman, Doha, Port Luis, Mexico City, Hanoi and Lisbon. On the other hand, 13 out 17 commercial wings also failed to meet export targets. The commercial wings are located in Washington, London, Paris, Tokyo, Madrid, Brussels, Beijing, Moscow, Geneva, Kuala Lumpur, Berlin, Tehran and Ottawa. Data show that the 13 commercial missions bagged $17957.01 million in export income against the target of $19814.41 million for the July-April period of the current fiscal. Though the 13 commercial wings missed the export target for the July-April period of FY 15, their export income in the first 10 months of FY 15 was 2.36 percent higher than the same period last fiscal. Abdus Salam Murshedy, president of Bangladesh Exporters Association, stressed on the need for arranging more trade shows abroad for more effective promotion of Bangladeshi products abroad.

Source: https://www.daily-sun.com/printversion/details/47394/33-Bangladesh-missions-miss-export-target

The Bangladesh Economic Zones Authority (BEZA) has sought to put its name in the new import and export policies along with enough policy bounties to lure in investors from home and abroad. Officials of the new body on economic sector plead for a square deal in this regard on a par with Bangladesh Export Processing Zones Authority (BEPZA), especially for attracting foreign investors. “We all are trying to make an industry-friendly environment for the proposed economic zones (EZs). We have applied to the government for including name of the BEZA in the two new upcoming policies,” said executive chairman of BEZA Paban Chowdhury. He expressed the hope that BEZA would be included in the new Import Policy (2015-18) and Export Policy (2015-18). “We have already consulted all state authorities concerned in this connection,” the chairman said. The proposal has been given due mainly to get more and more responses from domestic and foreign investors to EZ-development plans in future. “Foreign investors analyze the country’s profile, different trade-and investment-related policies when they want to invest in any country. Presently, there is no mention of the name of BEZA in the existing two policies,” said a high official of BEZA to point out the lacking in this respect. As a result, he said, foreign investors do not find the name of the BEZA in the policies and it creates confusion among the investors. “So, it is badly needed to put the name of the authority in the new policies,” said the BEZA official. The BEZA, placed under prime minister’s office (PMO), recently sent a letter to the ministry of commerce (MoC) for including its name and stipulate same rules in the policies. “It is needed to include the name of BEZA in the new policies and also same rules for the BEZA as BEPZA,” the letter reads. Currently, the MoC is working to finalise the Import Policy (2015-18) and the Export Policy (2015-18). The validity of the current Import Policy (2012-15) and the Export Policy (2012-15) expires on June 30. Exporters under the BEPZA presently enjoy different facilities and incentives. They get duty-free facilities in import of all of their raw materials. Besides, they are exempted from paying customs duty on import of capital machinery. Furthermore, they are having rules and regulations support under the existing policies, which, the officials pleaded, should also be applicable for the BEZA entrepreneurs. Earlier, some 22 areas for establishment of economic zones have been approved by the Governing Board (GB) of BEZA. Some sites have been selected for more 8 zones. The Authority gave licences to 4 private economic zones for development and a good number of licences are under processing. The government established the BEZA to regulate and oversee the new zones under the Economic Zones Act 2010. The regulator started work in 2012 on establishing economic zones in different areas of the country having potential to contribute to the national economy.

Source: https://www.thefinancialexpress-bd.com/2015/05/30/94661

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has set the target of raising its apparel export earnings to US$ 50 billion by 2021. It will be the year when the nation celebrates its 50 years of independence. The rapidly growing garment exports have been pushing the country’s economy forward for long. It now enjoys a major place among the economic indicators of the country like gross domestic product (GDP).

The RMG sector constituted only 32 per cent of our total exports in 1989, which has reached 80 per cent in 2014. With a 15 per cent growth in the RMG sector, the Bangladesh economy has progressed impressively in the last few decades.

Moreover, backward and forward integration of RMG-related industries is also providing boost to the economy. Despite many challenges including political turmoil in the country and legal bindings, the sector has been making its dominant presence felt in the country’s economy. The number of apparel factories is also witnessing an increase, which is lowering unemployment. A number of factors have lately emerged to hold prospects for the RMG sector to boost its output faster and take its earnings to US$ 50 billion by the year 2021. The Bangladesh government and the private sector are expected to put in their all-out efforts to this end. Let us have a look at the factors that will be conducive to the RMG sector’s rapid growth. Firstly, cost of production in China is rising due to higher labour cost and upward prices of raw materials, socio-economic and livelihood standard uplift and shift to high-tech industries. This has caused concern among international buyers of late. As a result, a large section of the buyers is shifting their orders to other apparel producing countries. And Bangladesh is fast becoming a beneficiary. As per World Trade Organisation (WTO) statistics, China occupied a 37.35 per cent share in global clothing exports in 2011, whereas Bangladesh had a share of about 4.83 per cent (which increased slightly later). This huge gap points to an enormous opportunity for Bangladesh as it keeps strengthening its position as the second largest apparel exporter. Secondly, for achieving the dream goal for 2021, enhancing the market is fundamental. The existing market will provide only a small digit growth, but in order to strike a revolution in RMG export, Bangladesh needs to explore newer opportunities and grab other destinations of the global apparel export market. Now is the time to expand the sector horizontally to shape the country’s market. It is interesting to note that Bangladesh is also exploring newer markets and diversifying its exports and going beyond the traditional exports to the European Union and the US. The share of apparel exports to markets other than the EU and North America was 6.88 per cent in 2008-09. It increased to 14.71 per cent in 2013-14. The new markets include Japan, China, India, South Korea, South Africa, Russia, Brazil, Mexico and Chile. The duty-free access and preferential market access offered by countries like India, China, Korea and Malaysia have helped in the process. North America can be an important and potential market for Bangladesh. Thirdly, only exploring markets will not be enough, as steady growth is required to achieve the dream within the shortest possible time. Manufacturing new apparel products is also a big factor. New products should be manufactured to attract more foreign buyers. The product-wise RMG exports from Bangladesh indicate that the highest share is occupied by trousers, followed by T-shirts and jackets; sweaters and shirts follow. Over the last 5 years, however, the highest growth has been seen in export of shirts and jackets. In a period of about four years from 2009-10 to 2013-14, jacket exports increased by over 120 per cent, whereas export of shirts increased by about 118 per cent. Trouser exports increased by about 87 per cent.

A few challenges must be faced to realise the goal, the major challenges being a well-structured infrastructure as well as international relations. In achieving the RMG export target of US$ 50 billion, a lot of other challenges might emerge. Bangladesh will have to deal with them. However, the main challenge will be posed by the sector’s infrastructure. Let us see how we stand among other Asian countries in the Global Competitiveness. The Global Competitiveness Report 2014-15 (World Economic Forum) evaluates important apparel exporting countries on their infrastructure quality.

The table [Comparison of Infrastructure Quality: 2014-15] shows the areas where Bangladesh still needs to work in relation to infrastructure improvements, especially roads and electricity. Besides, the availability of skilled workforce would be another important aspect which would be very important for the desired growth. Investment in education and training would be highly important in raising a large and skilled workforce. In terms of challenges, the infrastructural development is a prime concern for the major export business owners. It involves massive projects that include deep-sea port, metro rail in Dhaka, the eight-lane Dhaka-Chittagong Highway etc. These projects need to be completed within specific timeline. All this is part of the prerequisite that ought to be met for Bangladesh to materialise its RMG exports vision by 2021. Another basic need for the apparel industry is sufficient power and energy. Electricity supply has increased lately, but gas supply hasn’t, and its supply pattern is almost unchanged. Besides, costly power and energy add to the expenditure of the RMG factory owners. Less costly power as well as its uninterrupted supply is vital for achieving the RMG sector’s vision. All-round stability is imperative for development and growth. Volatile politics and government mean volatility in policy. Violence and unrest affect production even more. They erode confidence of businesses and hamper reputation. Following bouts of political turbulence in the recent past, Bangladesh is now badly in need of a peaceful political atmosphere. The last two spells of political violence have taken their toll on the country’s export activities, especially those involving the RMG sector. Think-tanks observe that ‘the cost of capital’ is the main challenge to achieving growth target. In line with this, sufficient loans to the RMG sector, export financing and congenial banking services must be ensured to increase productivity and meet market demand. The government should also ensure safety and compliance measures at the factories. The country had to face image crisis due to major incidents like the Rana Plaza collapse and the Tazreen fire. All these measures must guarantee that such incidents will not recur. Digital Bangladesh doesn’t only mean increase in internet use, electronic money transfer and use of video conferences; the real benefits of digitisation should find expression in good governance. Every sector is more or less graft-ridden in Bangladesh. From getting necessary approval for setting up new factories to having gas and electricity connections, every step requires extra money or influence of powerful quarters, or both. Setting up of factories by new entrepreneurs has thus become almost impossible. In this reality, overseas entrepreneurs as well as foreign direct investment should be encouraged to bring in new financing to the RMG industry. The target of $50 billion exports by 2021 is highly ambitious, but not entirely unachievable. Here we should see the growth achieved in the last 5 years as exports doubled from $12 billion to $24 billion. However, Bangladesh’s apparel sector needs to work hard for improving its infrastructure and ensuring a larger supply of skilled workforce to make the grand RMG export dream for 2021 come true.

Source: https://www.thefinancialexpress-bd.com/2015/05/30/94638

European Union ambassador Pierre Mayaudon said Bangladesh would have to meet four conditions to get GSP+ trade facilities after graduation to the middle income country status. The conditions include ensuring human and labour rights and maintaining environmental and good governance principles. Pierre Mayaudon was speaking at a seminar styled as “Bangladesh-EU Trade Ties: Prospects and Challenges” in Dhaka yesterday. The Economic Reporters Forum (ERF) organised the event at the National Press Club. The per capita income of Bangladesh is now $1,314, according the latest official data. To achieve middle-income country status as defined by the United Nations, Bangladesh must continue a per capita income above $1,398 for four consecutive years. Replying to a question the envoy said the EU will provide support including research and development, technology and academic assistance to explore the country’s emerging blue economy. He said the vision of Digital Bangladesh and proper exploration of blue economy will help Bangladesh achieve middle-income status. The GSP+ scheme provides a strong incentive to respect core human and labour rights, the environment and good governance principles. The scheme is part of the revised GSP scheme that entered into force on 1 January 2014. ERF president Sultan Mahmud moderated the programme, where secretary Sajjadur Rahman, among others was also present. “EU ambition in economic relation is to establish broader economic partnership between Bangladesh and the European countries,” Pierre Mayaudon said. The envoy added the EU had identified three main objectives including implementation of the sustainability compact, improving business climate and accompanying Bangladesh in climbing value chain. He urged the government to implement the labour rules not only in the RMG sector but also in other 42 sectors. As per the Vision 2021, Bangladesh will reach status of the middle income status. After reaching that status, the country will no longer benefit from the GSP facility, which is only for the least developed countries (LDCs). To prepare for the candidacy of GSP+ facility, Bangladesh will have to implement 27 international conventions on the subjects like human rights, labour rights, environment and good governance, Mayaudon said. As a LDC, Bangladesh is now enjoying duty-free and quota-free market access to the EU market under the GSP regime. The ambassador suggested reforms to the Companies Act integrating the service sector. He stressed the need to have transparent and credible regulatory framework to secure investment. Mayaudon said they would meet Commerce Minister Tofail Ahmed to tell him about what they can do for the reforms of the Companies Act. The envoy laid emphasis on peaceful environment to attract investment. “Some disturbing news make investors worried, which is keeping potential investments away from Bangladesh.” Mayaudon added: “70% of the court cases in Bangladesh are related to land disputes, which sends discouraging signal to foreign investors.” In a globalised economy, Bangladesh has to compete with many attractive destinations for foreign direct investments, he said. “Designing and conducting economic reforms is an absolute necessity, but it is vary difficult for the country to reform an economy.” Bangladesh has many assets to bravely carry out the process, the ambassador said.

Source: https://www.dhakatribune.com/business/2015/may/28/eu-envoy-urges-bangladesh-prepare-gsp#sthash.qbnrGDev.dpuf

The country’s trade gap with India in the first nine months of the current financial year continued to hover at $4.06 billion despite a slight increase in exports to the neighbouring country. The trade gap was still high as different non-tariff barriers continued to limit Bangladesh’s exports to the neighbouring country, said economists and experts. Bangladesh’s imports from India stood at $4.45 billion in July-March of the FY 2014-2015 whereas exports stood at $396.43 million during the period. The trade gap in July-March in the FY14 was $4.17 billion with an export figure of $284.49 million and import of $4.45 billion. A BB official told New Age on Sunday that the trade gap with India decreased in the first nine months of the FY15 as the country’s export earnings from the neighbouring country slightly increased while import remained static. ‘The businesspeople has recently adopted a “wait and see” approach to their business expansion by opening letters of credit for import due to political unrest. For this reason, the imports from India remained static in the first three quarters of the FY15,’ he said. He said that the increased export to India in the first nine months of the FY15 was not satisfactory as Bangladesh posted a paltry export figure of $396.43 million in July-March period of the FY15. The export figure was $284.49 million during the same period of the FY14. Policy Research Institute of Bangladesh executive director Ahsan H Mansur told New Age on Sunday that the country had been facing a large trade gap with China and India for a long time due to lower export earnings against higher import payments. The government should give pressure to India on political ground so that the country’s businesspeople would be able to increase their export items, he said. Mansur said the commerce ministry should take initiative to avoid non-tariff barriers with India that would help the exporters to increase their items to the neighbouring country. The government also should take initiative to strengthen Bangladesh Standards and Testing Institution so that the organisation will be able to conduct proper testing of the export products, he said. The foreign countries will get more confidence to import products from Bangladesh if the products will be tested accurately, Mansur said. Former finance adviser to interim government AB Mirza Azizul Islam told New Age earlier that the trade deficit of Bangladesh against India was still high as different non-tariff barriers continued to limit Bangladesh’s exports to the neighbouring country. The businesspeople have long been raising their concern in this connection but the India’s government is yet to mitigate the problem, he said. Mirza Aziz said the Bangladesh government should take step to continue discussion with New Delhi with a view to removing the non-tariff barrier. Besides, the country’s industrial sector has also facing a production crisis due to the recent political unrest and that might have played a role in the large trade deficit between the two countries, he said. ‘It is a natural phenomenon that Bangladesh usually faces a deficit with the neighbouring country considering the volume of India’s economy. But, the size of the deficit it has been maintaining for years is not acceptable,’ Aziz said.

Source: https://newagebd.net/123755/trade-gap-with-india-hovers-at-4b-in-july-march/#sthash.OAFE49gR.dpuf

Employers have teamed up with the International Labour Organization (ILO) to enhance occupational health and safety in the country’s largest foreign currency-earning garment sector. The Bangladesh Employers’ Federation (BEF) and ILO Wednesday signed an agreement marking the beginning of the second phase of a two-year plan supported by ILO’s Improving Working Conditions in the RMG sector project funded by Canada, the Netherlands and the UK. Under the project, some 750,000 to 800,000 workers would gain practical skills on how to reduce workplace accidents. Speaking at the signing ceremony, ILO Bangladesh Country Director Srinivas Reddy said, “It is vital that a culture of occupational health and safety (OHS) is developed throughout the Bangladesh RMG sector. By working closely with the Bangladesh Employers Federation, we will be able to build capacity at all levels that will benefit workers and employers alike.” “As employers, we are working closely with our partners to make workplace safety the number one priority,” Tapan Chowdhury, president of BEF said. OSH is everyone’s responsibility and through the joint efforts, a large number of managers, supervisors and workers will gain a good understanding about safety issues, which affect them and what they can do to keep both themselves and their workmates safe, he added. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Md Atiqul Islam and its vice president Reaz-Bin Mahmood and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) vice president Monsoor Ahmed were, among others, present. The first phase of the ILO-BEF collaboration saw the formation of a team of 114 master OHS trainers. During the second phase, the master trainers will head to 400 RMG factories and train 7,500 to 8,000 mid-level and line supervisors, who in turn will pass on OHS knowledge to 750,000 to 800,000 workers. By doing so, they will help create a culture of workplace safety and implement practical measures to reduce the risk of accidents. Master trainers have been selected by the BEF, BGMEA and BKMEA and include their own staff as well as officers from private sector companies in the RMG sector. The initiative is also backed by the International Training Centre (ITC) of the ILO, which has helped build the capacity of master trainers to deliver the courses which use the ITC-ILO Essentials of Occupational Safety and Health (EOSH) package. The complete EOSH course in which the master trainers have been trained comprises 25 subject areas. As training is cascaded down to the factory floor, emphasis is placed on a smaller number of areas best reflecting local needs. These include fire and electrical safety, dangerous substances, personal protective equipment, good housekeeping and primary health.

Source: https://www.thefinancialexpress-bd.com/2015/05/28/94399

In the face of rising demand from exporters, the central bank yesterday increased the size of its export development fund by 33 percent to $2 billion.The size of the fund was last raised in June last year — to $1.5 billion. Exporters get foreign currency loans from the fund at almost one-third the rates commercial banks charge.Kazi Sayedur Rahman, general manager of Bangladesh Bank’s foreign exchange reserve and treasury management department, said a hike in demand and adequate reserves of foreign currency have prompted them to increase the size of the fund.The revolving fund was introduced at just $100 million in 2006. Its size rose to the present level from only $200 million five years ago, riding on demand and swelling foreign exchange reserves, now nearly $24 billion.The interest rate for loans from the fund is 2.5 percent plus LIBOR (London Interbank Offered Rate). Businesses from various sectors, including garments, can take loans worth $1 million to $15 million for a maximum of 180 days.lso, by a notice yesterday, the BB raised exporter’s retention quota (ERQ). The central bank allowed exporters to retain specified parts of their export earnings in foreign exchange, for utilisation without prior approval from the BB for bonafide business expenses abroad, including maintenance of offices abroad, import of raw materials, machineries and spares.The ERQ for exports of high domestic value-added merchandise was raised to 60 percent from 50 percent now.The quota for merchandise exports of high import contents (like apparels using woven fabric) rose to 15 percent from existing 10 percent, according to the notice.The ERQ for export of services increased to 60 percent from existing 50 percent of repatriated export receipts.

Source: https://www.thedailystar.net/business/export/export-fund-raised-2b-88372