The Revival of Bangladesh’s Export Sector

The global recession will severely disrupt world trade due to the corona pandemic. To cope with the recession, we must think out of the box & act according to that to boost our economy. It’s late than never to think about the revival of the export sector. As it will help our economy to grow even in this global recession. The Export sector plays an important role in our economy, influencing the level of economic growth, employment, and the balance of payments.

Before talking about the revival of the export sector, it’s necessary to know the significance of the export sector in our economy & as an example, the garments sector will be taken to understand the whole scenario well & good.

1. The Revival of the export sector can create employment. The growth in clothing exports has created many jobs in garment industries, such as the Garments factory in Gazipur, Savar & Narayanganj. Traditionally export jobs are an important source of full-time employment, especially in industrial regions.
2. As we all know, exports are a component of aggregate demand. Rising exports will help increase aggregate demand & it will help economic growth. Growth in exports can also have a significant effect on the local economy. For example, the success of clothing exports in Narayanganj will help the local economy, with local shops benefiting from increased spending. Similarly, a fall in exports during a global economic recession can negatively impact Bangladesh’s economy.

There are some particular factors which determines the level of exports in a country. These factors are

•  Competitiveness;
• Quality and value-added of exports;
• Exchange rate;
• Economic growth in other countries.

Competitiveness itself depends on many other factors: Tax rates, Cost of doing business, Infrastructure, Tariffs & Non-tariffs barriers. Besides that, if  Bangladesh prices are relatively higher to other countries, Bangladesh will lose out (Pettinger, 2017). 

In some industries like pharmaceuticals products, demand in price is inelastic. Therefore, a change in price has less effect on demand for that particular sectors. The main & essential issue is the product's importance, quality, and value-added (Pettinger, 2017).

A depreciation in the exchange rate may make Bangladesh exports more competitive, but it may contribute to cost-push inflation & will cause more expensive imports. In that case, it’s wise not to make any decision like that (Pettinger, 2017).

If the world enters a recession, this will adversely affect Bangladesh’s exports. With a worldwide recession, even depreciation in the currency may be insufficient (Pettinger, 2017).

It’s necessary to increase the level of exports for the revival of our export sectors. In my view, there is some work to do to achieve the level of exports.

Supply-side policies to improve competitiveness. Supply-side policies include both interventionist supply-side policies & market-oriented supply-side policies. This can help to increase production. Beside Supply-side policies, devaluation of the currency is an option (Pettinger, 2017).

Competitiveness depends on new management techniques & technology, so it’s essential to innovate the Private sector completely. And the government can become a promoter pf their private sector’s productivity (Pettinger, 2017).

Lower tariff barriers can be the reason for increasing trade. However, reducing general tariff barriers may be the reason for some domestic industries to lose out because they can no longer compete. Though the theory of comparative advantage states, overall economic welfare will increase there will be a shift within the economy (Pettinger, 2017).

According to Modern trade theories, non-tariff barriers and obstacles to trade are important. Removing non-tariff barriers can make trade more friction-less and improve exports. 

Now it’s time to discuss to know about which countries Bangladesh exports the most & as well as the significance of exports in our GDP. We will understand this by Graphical Representation.

 

The “Exports in Billion Dollars vs Countries Name” histogram shows the countries where Bangladesh exports most. We have to analyze the remaining countries & their needs. And try to find new trade partners.

From this “% Contribution in GDP vs Year” histogram, we can understand how much influence exports have on Bangladesh’s economy. We also can see a downfall in the scheme, which I think is a matter of concern.

Bangladesh usually exports ready-made clothing, footwear, shrimp, other seafood items, leather, jute, etc. Bangladesh is the second-largest exporter of textiles in the world after China. But there are more other sectors with higher opportunities. And for a rising country like Bangladesh, it’s essential to grab the opportunity before it’s too late. Besides, it’s good to have alternatives rather than depend on one particular sector.

Exports have to become more diversified with a greater reliance on service-based sectors. Several fields can be mentioned under the master plan as “master-stroke” to revive the export sector.

• Software services;
• Electrical transformers;
• Integrated circuits;
• Semiconductor devices;
•  Ship Building;
• Beef;
• Pharmaceuticals products;
• Agricultural Products;
• Industrial machines;
• Plastic & rubber products;
•  Glasses & ceramics.

Proper planning & diplomatic approach is a must for any success. It’s essential to combine long term & short term strategy for the revival of exports. Perhaps there should be a clear vision & mission for both the govt & private sectors. Entrepreneurs who want to manufacture & exports item included in “master-stroke”  should be encouraged & can be offered with low-interest long term loans scheme for the betterment of the exports. New economical zones can be created & the main aim should be to enhance export items & acquire new trade partners along with the globe. Employees in export sectors should be provided proper training to amplify their skills. Seminar & workshops can be arranged all along the country to enlighten the youth about the master-plan & it’s significance in their life. Moreover, the revival of  Bangladesh’s exports depends on the government, the private sectors & young entrepreneurs. Finally, it can be said that if Bangladesh enhances it’s export items along with the traditional ones the revival of the export sector is certain.

References

Pettinger, T. (2017, July 15). economicshelp.org. Retrieved from economicshelp.org: https://www.economicshelp.org/blog/7164/trade/importance-of-exports-to-the-economy/?fbclid=IwAR3hYTADGSUs9OoBHuEgbDvsA0DBMUWa7qQUpDT2TLtKH68UvdXkz2XRmfg