Country’s export earnings in the July-May period of the financial year 2014-15 fell 6.01 per cent short of the target of $29.94 billion set for the first 11 months of the fiscal year due to a sluggish growth in the export of readymade garment products in the established markets.
Experts and exporters said political unrest and deprecation of the euro against the US dollar took their toll on the export growth and the export earnings target set for the FY 2014-15 could not be achieved. The export earnings in 11 months of the current financial year grew by 2.80 per cent to $28.14 billion from $27.37 billion in the same period of the FY 2013-14, according to the Export Promotion Bureau data released on Monday. The export earnings in May totalled $2.84 billion which is 4.37 per cent higher compared with $2.72 billion in the same period of the FY 2013-14. The EPB data showed that the single-month earnings fell 8.57 per cent short of the target of $3.10 billion. ‘Reaching $33.20 billion export earnings target in the FY15 would not be possible due to depreciation of the euro against the dollar and appreciation of the taka,’ Policy Research Institute executive director Ahsan H Mansur told New Age. He said that the political turmoil also took its toll on the exports as buyers shifted some orders to other competitive countries. Mansur said that losing space in the US market also a reason for the slow export growth as some of the competitor countries like India and Vietnam gained their capacity in the market due to the deprecation of their currencies against the dollar. ‘I think the export earnings in the FY 2014-15 may stand at 31.30 billion with 3 per cent growth,’ he said. The RMG export in the July-May period grew by 3.37 per cent to $22.92 billion compared with that in the same period of last fiscal year. According to the EPB data, the earnings from woven garments in the 11 months stood at $11.75 billion with a 4.43-per cent growth compared with that in the same period last year. The earnings from knitwear grew by 2.28 per cent to $11.67 billion from $10.91 billion in the same period of the FY 2013-14. The earnings from woven fell 4.72 per cent short of its target while knitwear fell 6.31 per cent short, the EPB data showed. Exporters Association of Bangladesh president Abdus Salam Murshedy said that it was expected that the export earnings would witness a slow growth in the current financial year as exporters faced challenges of political turmoil and safety inspection as per the requirement of brands and buyers groups. At the same time deprecation of the euro and appreciation of the taka put negative impact on competitiveness, he said. ‘As an entrepreneur I am very happy that amid various challenges the export earnings in the current financial year registered a positive growth,’ Salam, also a former president of Bangladesh Garment Manufacturers and Exporters Association, told New Age. ‘Now the key challenge for the RMG sector is our decreasing competitive edge with entrepreneurs investing huge amount of money for factory remediation and buyers putting pressure on them to cut prices of products,’ he said. According to the EPB data, leather and leather products export fell by 0.29 per cent to $ 1.02 billion in 11 months of the FY15 compared with that in the same period of the FY14. Footwear export grew by 26.93 per cent to $429.60 million from $338.45 million in the same period of last fiscal year. Home textiles export grew by 1.80 per cent to $742.06 million in the July-May period of the FY15 from $728.91 million in the same period of the FY14. The export of jute and jute products increased by 5.01 per cent and stood at $794.25 million in the period which was $756.34 million in the same period of the FY14. Frozen food export in 11 months of the FY15 fell by 5.19 per cent to $529.92 million from $ 578.44 million in the same period of the FY14.

State Minister for Labour and Employment Mujibul Haque Chunnu has said that the government is very much concerned to ensure safety for the country’s garment industry, reports BSS. He said this while attending an international seminar on “Transformation Challenges and Opportunities in Bangladesh Garment Industry” on June 6 at the Harvard University at Boston in the USA. The seminar was organised jointly by Harvard University South Asia Institute and Harvard University Centre for the Environment and International Sustainable Development Institute (ISDI), Inc, according to a message received in the city Monday. State Minister for Women and Children Affairs Meher Afroze Chumki also spoke at the function, while Labour and Manpower Secretary Mikail Shipar and Consul General of Bangladesh in New York Md Shameem Ahsan were present. The state minister for labour focussed on the measures already taken for workplace safety and compliance.He especially mentioned the amendment to the Bangladesh Labour Act 2006 to ensure workers’ welfare, rights and safety, promoting trade unionism and collective bargaining and adoption of the National Occupational Health and Safety Policy. The State Minister noted that empowerment of women is a priority issue for the government. “The female workers are the driving force for the vibrant RMG sector, and Bangladesh is not lagging behind the other RMG-exporting countries in terms of improving the living conditions and factory safety,” she said.

Managing Director of Apex Footwear Syed Nasim Manzur has urged stakeholders to brand Bangladesh in the international market as a lucrative sourcing destination for leather products. He made the call at the 11th annual general meeting of Leathergoods & Footwear Manufacturers & Exporters Association of Bangladesh (LFMEAB), held Saturday in the city. In his speech, Mr Manzur, also outgoing president of the trade group, spoke on the challenges that member factories had to face in the previous year such as tannery relocation and making industry more green, drastic fall in EURO value, supply chain disruption owing to domestic political conflict for long time. He also expressed concern over erosion of advantages for Bangladesh due to extension of similar facilities for other countries too such as Pakistan getting the GSP facility. The government needs to work to avail new offers for Bangladesh in order to retain competitiveness, he said. Meanwhile, the association held its biennial election to its executive committee, where Md. Saiful Islam was elected president, the trade group said in a statement. Other members of the new executive committee for 2015-17 include senior vice president Abdul Momen Bhuiyan, vice president, (Finance) Nasir Khan, vice-president (HR & Admin) Mohammed Nazmul Hassan, director M. Anisur Razzaque, director, Ziaur Rahman, and director Hedayetullah Ron. Mr Manzur presided over the AGM and also delivered the inaugural speech of the AGM and presented the Annual Report 2014 and highlighted challenges and prospects of leather and footwear sector. The AGM discussed on how to implement the Gender Policy in the member factories, aiming to strengthen the social compliance initiatives and mapped out the future focus on targeted marketing, product diversification to boost export in international market, social compliance, green initiatives and skills training to sustain the growth of this value-added and job-rich sector. Later on, the annual audit report of the year 2014 was approved unanimously at the AGM, and elected executive committee for 2015-17 of the Association announced.

Rana Plaza Donors Trust Fund has finally met its target of $30 million, required to compensate all the victims and their families of the industrial tragedy, said a statement of International Labour Organisation (ILO). Rana Plaza Coordination Committee, representing all industry stakeholders, announced on Monday that it has raised the fund, required for ensuring full, fair and equitable payment to all victims in the coming weeks. According to the statement, over $27 million had been raised by April 2015, and the committee had paid out 70 per cent of the awards promised to over 2,800 claimants. Further donations, including one significant sum pledged late last week, mean that the target of $30m has been reached, and all final payments can be made now. “This is a milestone, but we still have important business to deal with. We must now work together to ensure that accidents can be prevented in the future, and that a robust national employment injury insurance scheme is established, so that victims of any future accidents will be swiftly and justly compensated and cared for,” said ILO Director-General Guy Ryder. ILO has acted as the chair of Rana Plaza Coordination Committee since its establishment in October 2013. It has supported the committee to design one coordinated arrangement for all victims of the accident, based on ILO Conventions. In January 2014, ILO also established Rana Plaza Donor Trust Fund to support the committee’s effort to finance the scheme, it added. The statement, however, said Bangladesh does not yet have a national employment injury insurance scheme to protect victims of accidents at work, although ILO is now working with the government, employers’ and workers’ organisations, donors and industry partners to establish one. Meanwhile, in a separate statement, Ineke Zeldenrust of Clean Clothes Campaign (CCC) said, “This day has been long in coming. Now that all the families impacted by this disaster will finally receive all the money they are owed, they can finally focus on rebuilding their lives. This is a remarkable moment for justice.” CCC has been campaigning since the disaster in April 2013, and demanding the brands and retailers provide compensation to the victims. Since then over one million consumers from across Europe and around the world have joined actions against many of the major high-street companies, whose products were being made in one of the five factories housed in the structurally-compromised building.

The country’s overall export earnings recorded a marginal growth during the July-May period of current fiscal year 2014-15. The export receipts stood at $28.14 billion showing a 2.83 per cent growth during the period though it fell short of target by 6.01 per cent, according to Export Promotion Bureau (EPB) data released Monday. However, the single month earnings bounced back in May 2015 with earnings worth $2.84 billion marking a 4.37 per cent growth. The merchandise shipments last month failed to achieve the target set for the month by 8.57 per cent. In April 2015, the export earnings witnessed a negative growth of 0.55 per cent, the data showed. Apparel exports, both knit and woven products, however, witnessed a 6.84 per cent growth last month compared to that of May 2014. Export of apparel products in July and August 2014 witnessed a 0.07 and 4.23 per cent growth respectively compared to that of same period in 2013. But export earnings fell by 2.06 per cent and 9.69 per cent in the next two months-September and October-while it bounced back in November with 9.71 per cent growth in the same year. In December, the growth slowed down to 2.38 per cent while it maintained a moderate growth of over 7.0 per cent from January to March in 2015. The growth again slowed down to 1.16 per cent in April of this year. The country fetched $1.19 billion from export of woven items marking a 9.80 per cent growth while earnings from knit products stood at $1.15 billion with a 3.94 per cent growth in May 2015. Knitwear earnings stood at $11.16 billion during the July-May period of current fiscal showing 2.28 per cent growth compared to that of last fiscal. Woven products fetched $11.75 billion registering a 4.43 per cent growth during the same period. But both the sectors failed to achieve the targets by 6.31 per cent and 4.72 per cent respectively set for the period. When asked, Abdus Salam Murshedy, former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said the sector failed to achieve the targeted growth of 10 per cent during the current fiscal year due to various reasons including recent political turmoil, devaluation of currencies in major importing countries and ongoing safety initiatives. Moreover, the competitiveness of the sector is also declining due to rising cost of production. On the other hand, buyers are not increasing prices of the products, he added. Earnings from frozen food sector grew negatively by 8.39 per cent and stood at 529.92 million during the July-May period. Golam Mostafa, vice president of the Bangladesh Frozen Food Exporters Association (BFFEA), attributed this to falling prices of frozen fish in the global market. Export of leather and leather goods witnessed a negative growth of 0.29 per cent during the period.

The Rana Plaza Coordination Committee yesterday said it has raised the entire amount of $30 million needed to compensate all the victims of the building collapse. The payments will be cleared in the next few weeks, the panel, which was formed to raise and disburse the compensation, said in a statement yesterday. The committee that represents all industry stakeholders had estimated that at least $30 million was required to ensure fair and equitable compensations for all victims. By April 24, 2015, the second anniversary of the Rana Plaza accident, more than $27 million had been raised and the committee had paid out 70 percent of the awards promised to more than 2,800 claimants, according to the statement. Further donations, including one significant sum pledged late last week, mean that $30 million has now been reached and all final payments can be made. The International Labour Organisation has acted as the chair of the committee since its establishment in October 2013. “This is a milestone but we still have important business to deal with. We must now work together to ensure that accidents can be prevented in the future, and that a robust national employment injury insurance scheme is established,” Guy Ryder, ILO’s director-general, said in the statement. The ILO supported the committee to design a coordinated arrangement for all victims of the accident based on ILO Conventions. In January 2014, the ILO also established the Rana Plaza Donor Trust Fund to support the committee’s efforts to finance the compensation scheme. Bangladesh does not yet have a national employment injury insurance scheme to protect victims of accidents at work although the ILO is now working with the government, employers’ and workers’ organisations, donors and industry partners to establish one. In this context, the full implementation of the Rana Plaza arrangement within a two-year period represents a very significant step forward, Ryder said.

Imposing higher duties on apparel exports from Bangladesh to the US is not only inhuman, but also an injustice, as the US government receives lower tariff from other developing and developed countries, a UN official said.

Not only is the US imposing higher duties on Bangladesh at 16.72 percent, it also did not stand beside the nation after the Rana Plaza building collapse, the deadliest industrial accident that took the lives of more than 1,130 workers in 2013.

“Rather, as a punishment, the US suspended the GSP (generalised system of preferences) status for Bangladesh after the industrial accident,” said AK Abdul Momen, ambassador and permanent representative of Bangladesh to the United Nations, in an interview with The Daily Star last month.

The suspension of the trade privilege for Bangladesh just after the accident does not put the US in good light; it is also not expected from them as they showed their generosity towards Bangladesh in many instances earlier, he said.

Momen, who is also the president of the High-Level Committee of the United Nations Office for South-South Cooperation, was in Dhaka to attend the ‘High-Level Meeting on South-South Asia and Triangular Cooperation in the Post-2015 Development Agenda’.

“The magnitude of duty discrimination can be seen if we compare it to another country.” For example, France pays 0.5 percent duty on exports to the US, but Bangladesh pays 16.72 percent, despite being a least developed country, he said.

After the Rana Plaza building collapse, members of the US Congress Grace Meng, Peter King and Joseph Crowley visited Bangladesh, but they did nothing positive for the country, he said. “I had hoped that the US would consider duty removal on garment exports from Bangladesh, in the interest of the poor workers.”

Bangladesh paid $860 million as duty to the US government upon exporting apparel worth $5.59 billion last fiscal year.

Of the total annual exports to the US from Bangladesh, apparel items make up for 95 percent. Bangladesh paid $4.1 billion as duty to US customs over the last five years.

The US has allowed duty benefits to the African LDCs under the African Growth and Opportunity Act, but they left Bangladesh out from such a benefit, Momen said.

Moreover, many countries will enjoy duty benefits once the proposed Trans-Pacific Partnership, a trade agreement between Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and the US, comes into effect soon, he added.

He praised the government’s achievements in workplace safety after the Rana Plaza building collapse. A free trade advocate, Momen said the US was a stalwart for free trade, but in case of Bangladesh, they did not show their real spirit.

He also talked about the contemporary global issues and development initiatives taken by the governments and the UN bodies.

On the illegal migration issue, he said the way some governments had reacted was appalling.

Illegal migration is not a new phenomenon; people will migrate from one country to another for better opportunities, which had also taken place in the US, he said. “People from many countries in the world migrated to the US, either legally or illegally.”

“If a small country like Bangladesh can offer shelter to more than 29,000 Rohingyas for years now, why can countries like Thailand, Malaysia and Indonesia not offer shelter to a few thousand people for a brief period, as the international communities are trying to resolve the crisis?” he asked.

The citizenship issue of the Rohingya people should be resolved as soon as possible, as people cannot remain stateless for long, he said.

On the issues of development and setting up the $100 billion worth BRICS Bank and $40 billion worth Asian Infrastructure Investment Bank, he said the Asian nations will grow further for these moves, as they will have more funds for the improvement of basic infrastructure.

The Southern Asian countries like China and India have the capital, while the Northern countries should come forward to participate in the global development agenda, which will be a win-win situation for the people of the world, he said.

He said $5 trillion to $11 trillion will be required a year to attain the Sustainable Development Goals, which identified 169 problems under 17 areas that need to be solved in the next 15 years, he said.

Bangladesh should also diversify its exports, and reduce dependence on only one product — garment — for exports, as the country aims to come out of the LDC status by 2021, he added.

“I believe if the political leadership is sincere and committed for a better world for all, human ingenuity will surely come up with solutions that we all can be proud of,” Momen said.

The third Financing for Development Conference will begin in Addis Ababa, the Ethiopian capital, on July 13-16, and global leadership will hopefully determine the ways of mobilising resources, he said.

Exports bounced back in May after a dip in April, raking in $2.84 billion, up 4.44 percent from a year earlier. “Our exports could have been more,” said Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association, the apex body of the garment sector that typically accounts for 80 percent of the export earnings. Garment products fetched $2.35 billion in May, up 6.33 percent year-on-year. Going forward, the steep decline of major currencies like the US dollar, euro, Canadian dollar and Russian ruble is a cause of concern for the sector, Islam said. “Our earnings are eroding as a result.” Meanwhile, May’s earnings missed the monthly target by $270 million, according to data from the Export Promotion Bureau. The latest data takes export receipts between July and May to $28.14 billion, which, although an increase of 2.79 percent year-on-year, misses the target by $1.8 billion. The political turmoil from January through to April hampered business prospects this year, exporters said. Some $5.05 billion has to be earned this month to meet fiscal 2014-15’s export target, highly improbable seeing that monthly takings always hover around the $2 billion-mark.

Bangladesh Garment Manufacturers and Exporters Association has sought a 50-acre land in India to build a warehouse and distribution centre. The call came as the visiting India’s Prime Minister Narendra Modi met a business delegation at Sonargaon Hotel in Dhaka yesterday. The delegation was led by Abdul Matlub Ahmed, president of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI). “If India allocates 50 acres (of land), we will form a company in India with a fund of $25m to establish India’s largest warehouse and distribution centre,” BGMEA president Atiqul Islam told Narendra Modi. He also told PM Modi that they want to open 1,000 retail shops in India. Atiqul Islam said if all the steps were implemented, it would help Bangladesh reduce trade gap between the two countries. He also urged the Indian premier to withdraw countervailing duty and to import more clothing products from Bangladesh. Narendra Modi patiently listened to the business leaders and assured of consideration, according to a press release issued by the BGMEA. “We hope that Narendra Modi’s visit will open a new horizon in the Bangladesh-India relations, especially in the areas of trade, business and investment,” said apex trade body president Matlub Ahmad. “Now Bangladesh business people can travel to Nepal through Indian territory,” he added referring to bilateral agreements signed between India and Bangladesh recently. He also proposed establishing a “Joint Working Group” involving private sectors of the two countries to help implement the agreements signed to narrow the trade gap between Delhi and Dhaka. Chittagong Chamber of Commerce and Industry president Mahbubul Alam urged the Indian PM to take an initiative to build a deep sea port in Bangladesh coastal areas near the port city of Chittagong. FBCCI senior vice president Shafiul Islam, Metropolitan Chamber of Commerce and Industry president Syed Nasim Manzur and Dhaka Chamber of Commerce and Industry president Hossain Khaled, among others, were present during the visit.

Source: https://www.dhakatribune.com/business/2015/jun/08/bgmea-seeks-land-india-build-warehouse#sthash.rLgFt17H.dpuf

Bangladesh has made gradual progress in reducing some investment-related constraints and offered opportunities for investment, especially in energy and power, pharmaceutical, information technology, telecommunications, and infrastructure sectors. The US Department of State made the observation in its “Investment Climate Statements 2015,” which provide country-specific information and assessments on investment-related laws and other important factors for doing business abroad. Investment Climate Statements include examples of countries’ expanding openness to foreign investment and investor protections, as well as relevant market barriers that may deter investment. Topics include host countries’ legal and regulatory systems, dispute resolution, transparency, intellectual property rights, state-owned enterprises, and labor-related issues. “With over 6% annual growth sustained over the past two and a half decades, a large, young and hard-working workforce, and vibrant private sector, Bangladesh offers opportunities for investment, especially in the energy, power, pharmaceutical, information technology, telecommunications, and infrastructure sectors as well as in labor- intensive industries such as readymade garments, household textiles, and leather processing,” said the investment climate statement dated on May 29. The statement, which was made available online yesterday, said: “Sustained economic growth, a demographic dividend, and increased reforms of the RMG sector are resulting in substantial interest in investing in Bangladesh.” There was significant political violence and uncertainty during the first quarter of 2015 following the one-year anniversary of controversial national elections held in January 2014. While this raised concerns of a short-term, adverse impact on business and investment, growth forecasts for 2015 remain above 6%, it added. Government policies are generally in favor of increased economic growth, but are hampered by slow and incomplete implementation issues involving the regulatory and rule of law environment, said the statement. Besides, commenting on the a 16-point action plan outlining next steps as part of a longstanding effort to address in a meaningful way worker rights and safety problems in Bangladesh, the statement said: “If implemented, the plan would provide a basis for the President to consider reinstating Generalized System of Preferences (GSP) trade benefits”. On June 27, 2013, US President Barak Obama suspended trade facilities for Bangladesh under the GSP scheme over workers rights issue. At the time of the announcement, the US government outlined a 16-point action plan for Bangladesh for the restoration of GSP trade facilities. Bangladesh actively seeks foreign investment offering a range of investment incentives under its industrial policy and export-oriented growth strategy, with few formal distinctions between foreign and domestic private investors, the investment statement said. According to Bangladesh Bank, the country received $1.5bn as foreign direct investment (FDI) in the FY 2013-14, up from $990m in the previous year. Commenting on Bangladesh climate, the US state department said it has made gradual progress in reducing some constraints on investment, but inadequate infrastructure, financial constraints, bureaucratic delays, and corruption continue to hinder foreign investment. The lack of effective alternative dispute resolution mechanisms and slow judicial processes impede the enforcement of contracts and the resolution of business disputes, it added.

Source: https://www.dhakatribune.com/business/2015/jun/08/investment-climate-improves-bangladesh