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https://www.tbsnews.net/economy/import-surge-drives-nine-month-trade-deficit-25b-415766

Sakhawat Prince & Reyad Hossain

08 May, 2022, 10:55 pm

Last modified: 08 May, 2022, 10:59 pm

Import surge drives up nine-month trade deficit to $25b  

Exports clocked the $4 billion mark in April for the eight consecutive month posting 51% year-on-year growth

The country's trade deficit is growing sharply owing to a massive increase in imports compared to exports and the rise in prices of all kinds of products such as food items and fuels in the world market.

In the first nine months of fiscal 2021-2022, the trade deficit was about $25 billion which was 9.25% higher than that of the full period of the previous fiscal year. The deficit is around 64% more than the July-March period.

The trade deficit for the nine months of fiscal 2020-21 was $15.28 billion while it stood at $22.80 billion for the entire fiscal year.

In April, the exports clocked the $4 billion mark with 51% year-on-year growth, raking in $43.34 billion in 10 months of the current fiscal year, according to unofficial data from the Export Promotion Bureau. 

Import figures for April are not available, but the growth trend so far seen in previous months points to further widening of the trade deficit. 

Due to the huge trade deficit in the current financial year, Bangladesh has also plunged into a large deficit in the current account balance of foreign transactions.

During the July-March period, the deficit rose to $14.7 billion. At the same time previous fiscal year, this important indicator of Bangladesh's economy had a deficit of only $555 million.

Economists say a sharp rise in imports has led to a massive increase in the deficits of trade and transactions. However, to keep the country's economy normal, imports have to be restricted. Otherwise, the economy will fall into a crisis.

Imports have been on the rise since the Covid-19 pandemic eased. And the gap between import and export or trade deficit is increasing.

The data released by the Bangladesh Bank on Sunday updated the current account balance of foreign transactions, showing that Bangladesh imported a variety of goods worth $61.52 billion during the July-March period of fiscal 2021-22. This is 43.86% more than the same period of the previous fiscal year. In the first nine months of fiscal 2020-21, goods worth $42.76 billion were imported.

On the other hand, during the July-March period of the current financial year, exporters earned $36.61 billion by shipping various products, which is 32.92% more than the same period of the previous fiscal year.

As a result, the overall trade deficit stood at $24.91 billion in the first nine months of the fiscal year.

Meanwhile, the current account deficit surpassed $14 billion. The financial year 2021-22 started with a deficit in the balance of transactions.

In the first three months through September, the deficit was $2.31 billion. At the end of four months – in the July-October period – it rose to $4.76 billion. The deficit during the July-November period was $6.22 billion.

At the end of December, it rose to more than $8 billion. At the end of January, it reached $10.19 billion.

At the end of February, it rose to $12.83 billion. At the end of last March, it reached a peak of $14.07 billion. Bangladesh has never faced such a large deficit in any previous financial year.

Fiscal 2020-21 ended with a large surplus of $9.27 billion thanks to the reduction in imports amid the pandemic. In the previous fiscal year, the surplus was $3.169 billion.

However, the country's financial account is still in surplus. During the July-March period, the surplus stood at $11.34 billion. At this time in the last fiscal year, there was a surplus of $7.95 billion.

According to economists, the surplus has been driven by financial assistance from the World Bank, International Monetary Fund, Asian Development Bank and other donor countries and agencies to offset the pandemic blues.

According to the data, during the July-March period of the current financial year, Bangladesh received loan assistance of $6.80 billion from various donor countries and organisations, which is $55.16$ more than the same period of the previous fiscal year.

In these nine months of the fiscal 2020-21, Bangladesh received loan assistance of $4.38 billion.

Meanwhile, expatriates sent remittances worth $15.30 billion during the July-March period. This figure is 17.74% less than the same period of the previous financial year. During the same period of FY21, remittances of $18.60 billion arrived in the country.

After Covid, the demand for all kinds of products has increased in the country. Besides, the prices of products in the world market were increasing sharply. Prices are rising further as supplies have been disrupted by the recent Russia-Ukraine war.

In April last year, the price of fuel oil in the international market was $60 per barrel. The same oil sold for more than $112 on Sunday. It rose to $139 at the start of the Russia-Ukraine war.

April exports post 51% growth

Bangladesh's export earnings have almost reached its export target amounting to 43.5 billion set for FY22 in 10 months, thanks to growing global demand for apparels and shifting of a good number of work orders from China.

In April, the exports clocked the $4 billion mark for the eighth consecutive month with a little over 51% year-on-year growth.

In July-April, the country raked in $43.34 billion in exports with the readymade garment sector having been the major contributor as usual –  it alone accounts for more than 81%, according to sources at the Export Promotion Bureau (EPB). 

Dr Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue (CPD), told The Business Standard the trade deficit is not just a Bangladesh-centric phenomenon, it has been in other developing countries as well. Where both current account and trade balance deficit are increasing.

"This is mainly due to higher import costs and lower export growth. The reason for the increase in import costs is that commodities and petroleum have to be imported at higher prices. Although remittances played a good role last year, it is comparatively less this year. That has also affected the overall balance," he added.

The CPD research director further said that the current account and trade balance are being affected by the globalised turmoil in trade.

"However, the amount of reserves we have is still at a tolerable level. But if this rate of imports continues, the reserves will also decrease over time. Now we need to reduce import costs," he added.

In this case, he said, the government should limit the import of non-essential products although the Bangladesh Bank has already asked for keeping a 25% margin for opening letters of credit (LCs).

"Additionally, it is necessary to increase the value of the dollar by further devaluating the taka. At the same time, foreign loans can be received at low-interest rates," he added.

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https://www.tbsnews.net/economy/bangladesh-bhutan-pta-effective-1-july-415750

TBS Report

08 May, 2022, 10:20 pm

Last modified: 08 May, 2022, 10:24 pm

Bangladesh-Bhutan PTA effective from 1 July

Dhaka signed the PTA with Thimphu on 6 December last year

The Preferential Trade Agreement (PTA) signed between Bangladesh and Bhutan will be effective from the next financial year, said officials privy to the matter.

The Bhutanese Ministry of Foreign Affairs has requested Bangladesh to make it effective from 1 July as all the processes including approval have been completed in the Bhutanese Parliament.

Dhaka signed the PTA with Thimphu on 6 December last year, which is Bangladesh's first bilateral trade agreement with any country. 

The Ministry of Foreign Affairs has requested the Ministry of Commerce to take the necessary steps to make the agreement effective from 1 July, as proposed by Bhutan.

Under the PTA, 10 Bangladeshi products, including readymade garments, will get duty free access to the Bhutanese market, while 16 Bhutanese items will get the same preference in the Bangladesh market.

The two neighbouring countries can add more items to the list.

Bangladeshi products that will be covered under the PTA are baby clothes and clothing accessories, men's trousers and shorts, jackets and blazers, plywood, particleboard, mineral and carbonated water, green tea, orange juice, pineapple juice, and guava juice.

Bhutanese products that will get duty free access to the Bangladesh market include milk, natural honey, wheat or meslin flour, homogenised jam preparations, fruit jellies, marmalades, soybean food preparations, mineral water and carbonated water, wheat bran, quartzite, cement clinker, portland cement, soap, wooden particle boards, ferrosilicon, iron bars and rods, and non-alloy steel and wooden furniture.

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https://www.newagebd.net/article/170030/bangladeshs-export-earnings-increase-by-5118pc-in-april

Bangladesh’s export earnings increase by  51.18pc in April

Staff Correspondent | Published: 14:21, May 09,2022

Bangladesh's export earnings in April this year have increased by 51.18 per cent to $4.73billion from $3.13 billion than that in the same month of the past year, riding on the increased shipment of the readymade garment products.

The country’s export earnings in July-April of the current financial year 2021-22 grew by 35.14 per cent to $43.34 billion from $32.07 billion in the same period of FY 21, according to the Export Promotion Bureau data released on Monday.

The earnings from the RMG sector in the first 10 months of the FY 22 has increased by 35.98 per cent to $35.36 billion from $26.00 billion in the same period of FY21, the data showed.

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https://www.tbsnews.net/economy/export-earnings-expected-reach-50b-fiscal-year-416382

Reyad Hossain

09 May, 2022, 08:45 pm

Last modified: 09 May, 2022, 08:48 pm

Export earnings expected to reach $50B this fiscal year 

Bangladesh’s export earnings have almost reached its export target amounting to 43.5 billion set for FY22 in 10 months

ctg_port_4.jpg?itok=x5eMZ6Rb&timestamp=1

File photo of Chattogram Port. Photo: TBS

Exporters and Export Promotion Bureau officials have expressed hope that Bangladesh's goods exports will reach a milestone of $50 billion after the end of the current fiscal year 2021-22, which will be $7 billion more than the target.

AHM Ahsan, vice-chairman of EPB, told TBS, "If we take $8 billion worth of services exports into account, our exports will reach $58 billion after the end of the current fiscal year."

The exports will continue to grow this way until next October, he noted.

Bangladesh's export earnings have almost reached its export target amounting to 43.5 billion set for FY22 in 10 months, thanks to growing global demand for apparels and shifting of a good number of work orders from China.

In April, the exports clocked the $4 billion mark for the eight consecutive month with a little over 51% year-on-year growth.

In July-April, the country raked in $43.34 billion in exports with the readymade garment sector having been the major contributor as usual - it alone accounts for more than 81%, according to sources at the Export Promotion Bureau (EPB). 

Shahidullah Azim, vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told The Business Standard, "The ongoing robust growth of RMG exports will continue in upcoming months too."

The RMG exports will surpass $43 billion while the target was $35 billion for FY22, he noted.

Shahidullah Azim said RMG exports have potential to grow at a higher rate if customs-related complications are eased and business costs are reduced.

The RMG sector apart, frozen and live fish, agricultural goods, leather goods, home textiles, pharmaceuticals and plastics also posted a robust growth.

Three potential sectors, leather and leather goods, agricultural products and home textiles crossed the $1 billion mark, but jute and jute goods registered a negative growth.

Industry leaders say China's gradual pulling out of the apparel business owing to high production costs has come as a blessing for Bangladesh as it is now getting many orders shifting from the world's largest exporter.

Besides, consumers still continue to release their pent-up demand for clothing in particular after the pandemic situation normalised, leading to word order pouring in a big number.

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https://www.tbsnews.net/bangladesh/commerce-minister-urges-canada-produce-canola-oil-bangladesh-417702

TBS Report

11 May, 2022, 05:00 pm

Last modified: 11 May, 2022, 10:44 pm

Commerce minister urges Canada to produce canola oil in Bangladesh

During a meeting with the minister, Canadian HC Lilly Nicholls said her country is interested in increasing trade and investment with Bangladesh

canada-canolla.png?itok=-fLnTP39&timesta

 

Commerce Minister Tipu Munshi has urged Canada to set up canola oil factories in Bangladesh, saying the North American country will benefit from such investment.

He said Canada could then export the product to neighbouring countries after meeting the domestic demand in Bangladesh.

The minister made the call during a meeting with Lilli Nicholls, Canadian high commissioner to Bangladesh, on Tuesday at the Secretariat.

Terming Canada a friend of Bangladesh, Tipu Munshi said Bangladesh wants to take advantage of the huge potential for trade and investment between the two countries. Bangladesh imports a large quantity of edible oil. Canada produces a lot of edible canola oil, which has the potential to be a popular commodity in Bangladesh.

He added that 100 economic zones are being developed across the country, with the construction of some nearing the last stage. The government has announced several facilities for investors in the economic zones. Canada will benefit by investing here.

Responding to the minister's call, Lilly Nicholls said Canada is interested in increasing trade and investment with Bangladesh.

"There is a huge demand for Bangladeshi readymade garments in Canada. There is ample opportunity to export Canadian canola oil to Bangladesh. Both countries can import [the commodity] using government to government system through the Trading Corporation of Bangladesh," she said.

The Canadian envoy added that her country will provide all possible assistance in this regard.

At the meeting, Tipu Munshi also asked for Canada's assistance in research to ensure the proper use of agricultural products.

He said Bangladesh produces a huge amount of potatoes, which have the potential to be exported.

During the July-March period of the current financial year, Bangladesh exported goods worth $1,070.58 million to Canada, while Bangladesh imported goods worth $428.86 million from Canada, according to the minister.

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https://www.tbsnews.net/economy/why-duty-free-access-did-not-jack-exports-china-418742

Abul Kashem

12 May, 2022, 11:00 pm

Last modified: 12 May, 2022, 11:13 pm

This is why duty-free access did not jack up exports to China

About 25% of Bangladesh’s total imports come from China, most of which are raw materials for the readymade garments and industrial sectors

bangladeshs-export-to-china_0.png?itok=W

 

When China granted duty-free access to 97% of Bangladeshi products last July, it was a cause for celebration for Bangladeshi exporters. Exports to China, the second-largest economy in the world, were expected to see a huge jump.

The dreams, however, fizzled out soon.

The numbers show that despite granted duty-free access and resumption of exports of crabs and eels after the pandemic, Bangladesh's export to China has made inconsequential rise in the last nine months, and have nearly halved compared to five years ago, when exports hit a high of $949 million.

Exports to China amounted to only $546 million in July-March of the current fiscal year. This is only 9.68% more than the same period of the previous financial year, when exports were $680 million.

At the same time, the trade deficit between the country has grown sharply.

For instance, in FY17, Bangladesh exported goods worth $949 million to China. In the same period, its import bill from China was a staggering $10.7 billion. Fast forward to FY21, Bangladesh's exports fell to $680 million, while imports had shot to $12.93 billion.

About 25% of Bangladesh's total imports come from China, most of which are raw materials for the readymade garments and industrial sectors.

After a meeting with Chinese businessmen, the Bangladesh Embassy in Beijing mentioned that none of Bangladesh's exports made it to the list of top 20 imports.

The embassy also said that Bangladesh's exports to China were not increasing due to a lack of branded and high-end products, something also reflected in the exports of leather goods and footwear which are comparatively cheaper than Chinese manufacturers.

In addition, due to China's Zero-Covid policy, Bangladeshi traders have not been able to travel to the country since the outbreak of the pandemic, while Bangladeshi export-oriented companies lag behind in their online presence. The problems are further compounded by lack of aggressive marketing by Bangladeshi exporters.

Another cause for celebration, which has now turned into concern, has been the generous duty-free access still failing to yield any positive result.

Since 1 July last year, China implemented duty-free access for a total of 6,256 products, including all garment products, under the 97% duty-free facility. This was later changed to 98% and included leather products.

About the negligible increase in exports to China, Commerce Minister Tipu Munshi told The Business Standard that many factories were being relocated from China by different countries to reduce dependence on a single country. This resulted in less exports of various products, including readymade garments, and that has affected the increase in exports.

He said the ministry was taking various initiatives to increase Bangladesh's exports to China.

Speaking to TBS, Faruque Hasan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), highlighted other possible causes: the Zero-Covid policy and the quarantine period for Chinese businessmen after returning from abroad.

He said China was not issuing visas to any foreigners due to its Zero-Covid policy, while any Chinese businessman going abroad had to be quarantined for 21-days after returning home. This has reduced the number of businessmen travelling abroad, including to Bangladesh, and this has reduced China's overall imports as well.

He expressed hope that Bangladesh's exports to China would rise once the situation improved.

But it is not all doom and gloom.

In the current financial year, Bangladesh has seen high growth in all 15 of its major markets, except China. Despite the absence of duty-free access to the United States, export growth is over 50%. Exports to major European markets increased by 20% -30%.
Bangladesh's export growth rate in neighbouring India is about 59%.

Export goods that China doesn't want

Analysing the export picture with China over the last decade using data from the Bangladesh Embassy in Beijing and the Export Promotion Bureau, it can be seen that with the export growth of about 63%, the amount of Bangladesh's export to China stood at $746 million in FY2013-14, which gradually increased to close to $1 billion in FY2016-17. After that, Bangladesh's exports began to experience a steep decline, with one minor high in FY2019-20.

In the last two fiscal years, Bangladesh's exports to China have not touched the $700 million mark.

Against this backdrop, in the first week of April, the Ministry of Commerce sent a letter to the Bangladesh Embassy in China asking for a report on the reasons why Bangladesh's exports to the country did not increase despite the introduction of a duty-free export facility.

In a follow up report, Bangladesh's Commercial Counselor in Beijing, Mohammad Monsor Uddin, said Bangladesh had no export products on the list of major Chinese imports.

It seemed that Bangladesh was attempting to sell products China did not want.

So what is China looking for?

According to the same report, China is current starving for 20 products: electronic circuits, crude oil, motor cars, phone system devices, petroleum gas, soyabean, copper wires, data processing machines, semiconductors, refined copper, solar power diodes, polymers, beauty products, skincare products and low-voltage switches, among others.

The Bangladesh Embassy in Beijing stressed that the lack of any products in those categories had dented Bangladesh's export aspirations.

The RMG and leather conundrum

As much as Bangladesh has been successful in exporting ready-made garments to India after getting duty-free export facilities under the Saarc Preferential Trading Arrangement, it has not made a dent in the losses made in the $300-billion RMG market in China.

During July-March of the current financial year, Bangladesh's exports of woven and knitwear to India amounted to $523 million. At the same time, exports of these two products to China amounted to only $173 million.

Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association, said the global readymade garments market was worth $750 billion, of which China's domestic market alone was worth $300 billion.

"We expected a lot of export orders from China after the duty-free facility came into effect, but we were disappointed," he said.

He cited the decline in Chinese-made garment exports to the United States as the main reason why exports to China did not increase despite the introduction of duty-free facilities. Chinese ready-made garments exporters are now focusing on the domestic market.

Faruque Hasan, president of the BGMEA, told TBS that China was reducing its own garment exports and aiming to meet domestic demand, which is why Bangladesh's exports to the country had not increased.

The same scenario in terms of exports can be seen for leather and footwear.

Despite the demand for Bangladeshi leather and leather products in the Chinese market, exports are not growing due to lack of quality and high prices of Bangladeshi leather products and footwear, the Bangladesh Embassy in Beijing said in a separate report on April 27.

The average export of footwear from Bangladesh to China in the last decade was $16.70 million dollars.

The amount of footwear export from Bangladesh has remained almost the same in the last nine months even after it was declared duty-free with exports reaching $13.19 million, but this is still a high.

In the 2018-19 fiscal year, exports reached a low of $2.24 million.

The poor show continued as last fiscal year, exports reached $1.80 million.

For leather goods, five years ago, exports amounted to more than $76 million. Since then, the amount has been declining. Leather exports stood at $58.29 million, despite a 100 percent growth in the last fiscal year. As of March of the current fiscal year, the amount is $53.68 million.

Bangladesh Tanners Association President Md Shaheen Ahmed told TBS that despite the duty-free facility, after exports, China has to pay 15% VAT, provincial tax and a total tax of 26% -30%.

"This is why we are not able to export more to China. We request the ministry to take necessary steps to remove these obstacles."

According to the report of the Commercial Counsel of Bangladesh in China, the country imports large quantities of hides and skins from the United States, Brazil, Italy, Australia, Thailand and Korea. These skins are separated mechanically from carcasses and are larger in size. Chinese buyers consider importing such leather as more profitable.

False hopes for food

Exports of crabs and eel to China resumed in July after the ban was lifted.

For Bangladeshi exporters, this was an important moment as the country earns around $50 million a year by exporting these two products.

The duty-free access further raised hopes of boosting sales by exporting to the country of 1.5 billion people. Again, this boost has been falsely based.

Furthermore, the export of various agricultural products and frozen food products remains suspended due to failure to ensure standards.

According to the embassy, the export of Bangladesh's edible aquatic animals to the Chinese market was suspended for one year from June 2020 due to non-compliance with Chinese standards and health certificate complications. This hampered Bangladesh's export earnings of more than $50 million.

Since July last year, eight listed companies in Bangladesh have started exporting crabs and eel on a limited basis, while eight more companies are waiting to be listed.

According to the embassy report, China has been cautious in importing food products because of Covid-19. This trend is especially evident in the case of imports of frozen food products.

Since January, online registration of Chinese customs has been made mandatory for 18 types of food exporters. Of these, only two products (Sesame and Sesame Oil) are being exported from Bangladesh so far.

Last July, the embassy sent a letter to the Chinese customs authorities asking for export facilities for six agricultural products from Bangladesh, including mango, jackfruit, and guava and potato paste. The risk analysis has been sent to the Chinese customs authorities and there are hopes the exports will begin once the products are approved.

Al Mamun Mridha, acting general secretary of the Bangladesh-China Chamber of Commerce and Industry, told TBS that Bangladesh needs to undertake a holistic approach to take advantage of the duty-free facility, but so far the government hasn't taken any initiative.

Mridha, also managing director of Mridha Business Limited, an exporter of shrimp to China, said developing countries are taking various initiatives, including organising single country fairs, to increase exports to China.

"I have asked the Ministry of Commerce for assistance in showcasing Bangladeshi products in China throughout the year. The Bangladesh government needs to take various initiatives to increase exports to China," he said.

Recommendations

The Bangladesh Embassy in Beijing has recommended the appointment of dealers or agents in China and aggressive marketing to increase the export of high quality products of Bangladesh, including leather products.

It said local Chinese companies are constantly competing with foreign and multinational companies, but Bangladeshi companies were lagging behind in this regard.

It also said that the well-known brands of Bangladesh were missing in action, as they had no agents or dealers in China. Plus, it was not possible to capture the Chinese market with moderate quality products or those without advanced packaging.

"Bangladesh hasn't generated a brand image among the consumers of China. In order to enhance the brand image, the big brands of Bangladesh need to open their outlets and offices in China and invest in marketing, promotion, advertisement, cultural exchange, both online and onsite," said the embassy report.

It further said that the demand for world class branded products in China is increasing day by day. There are no outlets or sales of Bangladeshi brands in China. Therefore, by setting up outlets of high quality leather goods and footwear brands of Bangladesh in China, the opportunities for export of leather products can be further increased through marketing, promotion and advertisement through agents.

In addition, the embassy has recommended that urgent steps be taken to arrange visas for Bangladeshi businessmen to China.

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https://today.thefinancialexpress.com.bd/first-page/july-april-pharma-export-soars-27pc-1653067794

July-April pharma export soars 27pc

It reaches $163.83m riding on COVID drugs

 Saif Uddin |  May 21, 2022 00:00:00

1653067794.jpg

The country's export earning from pharmaceutical sector has marked a significant rise in the recent years following its growing capacity and access to new destinations.

Local pharmaceutical companies brought in US$163.83 million in July-April period of the current fiscal year (FY), 2021-22, which was nearly 27 per cent higher than the amount in the corresponding period, according to available data of the Export Promotion Bureau (EPB).

Official figures revealed that Bangladesh's pharma companies fetched $169.02 million in the FY 2020-21, and $135.79 million in the FY 2019-20, showing a strong growth trajectory. The sector also earned $129.95 million in the FY 2018-19, and $103.46 million in the FY 2017-18.

Sources said the significant growth in the recent times has been possible due to an increased demand for COVID-related drugs from the country.

Growing demand for anti-viral drugs, like Remdesivir and Favipiravir - used to treat COVID patients, has expanded the export basket of the local pharma sector, sources said.

According to the Directorate General of Drug Administration (DGDA), Bangladesh has been one of the leading exporters of Remdesivir in the world.

Bangladesh is enjoying several trade facilities, like duty-free access to international market for its drugs, and patent waiver on manufacturing generic items, the sources added.

When contacted, Managing Director of One Pharma KSM Mostafizur Rahman said drug making has been a strong aspect for Bangladesh's export basket.

"The world is now well aware of the possibilities of local pharmaceutical companies, as Bangladesh is now exporting drugs to around 160 countries after meeting almost 98 per cent of the local demand."

He also said the time-befitting measures taken by the government have also helped the sector expand its international market amid the pandemic.

"Unlike many other sectors, the pharmaceuticals sector has drawn attention of the international buyers."

In addition to the regular items, export of the drugs related to the treatment of coronavirus soared in the recent times, he added.

According to industry insiders, more than 20 Bangladeshi companies, including Incepta, Beacon, Square, Popular, Eskayef, Beximco, Opsonin, ACI, Renata, and Ziska, exported COVID drugs.

Sources said the local pharmaceutical industry has grown to about $3.0 billion as of June 2020 - from about $25 million in 1982. It is likely to exceed $6.0 billion by 2025 - following rise in purchasing power of the domestic population.

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https://thefinancialexpress.com.bd/economy/bangladesh/outward-fdi-sees-big-jump-in-2021-1653131559

Outward FDI sees big jump in 2021

 FE ONLINE REPORT | Published:  May 21, 2022 17:12:39

1653131559.jpg

The outflow of foreign direct investment (FDI) from Bangladesh recorded a big jump in the last calendar year of 2021.

According to the latest statistics, released by Bangladesh Bank last week, the net amount of outward FDI reached US$91.71 million in 2021, posting some 209 per cent growth over the amount in 2020.

In 2020, the net outflow of FDI from the country was only $11.60 million.

It also showed that the gross amount of outward FDI stood at $94.69 million last year against $31.06 million in 2020.

Outward direct investment (ODI) is defined as a business strategy in which a domestic firm expands its operations to a foreign country. This can take the form of a green field investment, a merger or acquisition, or an expansion of an existing foreign facility.

Statistics compiled by the central bank also showed that the stock of outward FDI stood at $389.80 million in 2021 which was $327.14 million in 2020.

In the last year, 57 per cent of the total outward FDI landed in the United Kingdom, followed by Hong Kong, Nepal, India and United Arab Emirates (UAE) respectively.

These five countries received 94.9 per cent of Bangladesh's annual outward FDI.

The highest amount of annual outward FDI from Bangladesh was recorded at $142 million in 2017. The amount in 2021 is the second highest in terms of net outward FDI.

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https://www.tbsnews.net/economy/finance-projects-export-fall-remittance-rise-428838

Abul Kashem & Reyad Hossain

28 May, 2022, 10:55 pm

Last modified: 28 May, 2022, 11:23 pm

Finance projects export fall, remittance rise

Finance Division officials expect a 16% growth in remittance inflows, which has registered a negative growth throughout the current fiscal year,

lower-external-trade-growth-projections-

 

The finance ministry has projected that export growth will drop to 20% in FY23 because surging inflation in Bangladesh's major trade destinations, such as the United States and European Union, is likely to rein in the hot streak that the country's export sector has been experiencing following the release of the pent-up demand once global economies reopened. 

The falling exports will also cause imports of raw materials to come down to 12% from 30% estimated in the revised budget of the ongoing fiscal year, as predicted by officials at the Finance Division. 

Besides, the government's various measures to discourage imports amid rising commodity prices in the international market and dollar crisis in the country will further dampen import growth.

However, Finance Division officials expect a 16% growth in remittance inflows, which has registered a negative growth throughout the current fiscal year, riding on exports of more than 5.5 lakh workers to different countries in post-Covid times. 

According to finance ministry officials, exports in July-April of the current fiscal year exceeded the $43 billion mark with more than 35% year-on-year growth.

 A dent on buoyant exports? 

In the remaining two months, May-June of FY22, the buoyant exports might face a blow because of a record rise in inflation in the US, the EU and United Kingdom, the main buyers of Bangladeshi products, under knock-on effects arising out of the Russia-Ukraine crisis.

In 25 days of the current month, the major export earner apparel sector raked in around $2.2 billion, which was $800 million lower than in April, according to an updated data from the National Board of Revenue's customs department. 

As the apparel export trend in this current month except the Eid holidays suggest, the receipts might tick up a bit in May as opposed to the amount received in the same month a year ago, but the robust export growth, 36% on average experienced in the last eight months, will no longer be there, Shahidullah Azim, vice-president at Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told The Business Standard. 

In September-April, RMG export earnings stood at $3.5-$4 billion per month. 

Md Fazlul Hoque, managing director at Plummy Fashions Ltd, one of the top listed green certified RMG factories in Bangladesh, told TBS, "I think that the export growth we have witnessed in the last few months will not continue in June as a flow of work orders has already slowed down. Inflation is soaring globally and recession is likely on the way too." 

In such a situation, consumers globally have slightly cut down on expenses on clothing to meet extra costs for food and fuel, he noted.

"If inflation continues to rise across Europe and America, our apparel exports might fall," he said.

In FY21, Bangladesh's exports amounted to $38.75 billion. According to the revised budget target, exports will reach about $50 billion by the end of the current fiscal year. Export earnings in the next fiscal year will stand at $60 billion if it grows at a 20% rate.

The 2018-21 export policy had targeted a $60 billion in exports but fell short of it by 25% owing to the pandemic onslaughts. The then BGMEA leaders said the target was achievable as $50 billion would come from the exports of readymade garments alone.

In the new export policy order, the commerce ministry has set a target to earn $80 billion in exports by 2024.

Economists and exporters say Bangladesh's exports rebounded strongly on the back of a rapid rise in aggregate demand in the western world with the normalisation of Covid-19 and the shifting of some work orders from China and Vietnam to Bangladesh. 

But the global economy started facing serious supply blows since the beginning of the Russia-Ukraine war on 24 February, and there is no sign of overcoming the situation anytime soon, they also say, adding that prices of imported goods continue to soar because of supply chain disruptions, stoking inflation worldwide.

According to a recent BBC report, US inflation hit the highest level not seen in nearly 40 years. Besides, many European countries have been caught in the highest inflation in a decade.

Citing US fashion brand Target Corp, a Bloomberg report said the brand saw a sudden slowdown at the beginning of March as Americans were grappling with rising food and fuel prices.

"While retailers have seen weaker demand for clothing, this has been led by reduced interest in casual apparel," according to the report. 

Some international media are also talking about the fear of global recession.

Dr MA Razzaq, chairman at Research and Policy Integration for Development, told TBS that central banks in Europe and the US raised interest rates to control inflation. As a result, our exports might decrease owing to a fall in consumer spending in those countries.

And, the export growth rate may not be the same as in the previous months, he noted.

But many more apparel orders may shift to Bangladesh from China as the latter cannot ship goods on time for various reasons, including lockdown there, he also said.

"So, we cannot reach any conclusion right now," MA Razzaq said.

Govt hopes big on remittances

In the current fiscal year's budget, the government had expected a bigger growth in remittance inflows as it experienced more than 36% growth amid the pandemic in FY21. 

Remittances had registered a negative growth in nine months of the fiscal year, except for April ahead of Eid-ul-Fitr.

The finance ministry set a 1% growth target in the revised budget of the current fiscal year in the hope of getting additional remittances from expatriates before Eid-ul-Azha next July. The remittance inflows will stand at $25 billion at the end of this fiscal year as per the revised budget's target. The remittance received in the first 10 months of FY22 amounted to $17.3 billion. 

Around $8 billion in remittances will be needed in the remaining two months to meet the target. According to estimates for FY23, remittances will stand at $29 billion. 

In FY21, Bangladesh received remittances amounting to $24.77 billion.

Import payments projected to reach $88 billion in FY23

In July-April of the current fiscal year, Bangladesh's import payment stood at $73.43 billion with a 41% year-on-year increase. In FY21, the country imported goods worth $60.68 billion.

The finance ministry had projected 11% growth in imports in the current fiscal year's budget. At the end of the fiscal year, imports were supposed to reach $67.35 billion. But with two months left of the fiscal year, $6 billion more than the entire year's estimate has already been spent on imports.

The country is having to spend additional money on imports of food items, fuel and fertilisers owing to surging prices in the international market. That is why import expenses surpassed the estimated budget in the 10 months.

The finance ministry estimated a 30% growth in imports in the revised budget of FY22. As per this calculation, imports will amount to nearly $79 billion at the end of the current fiscal year. The imports will reach $88 billion in the next fiscal year if the estimated 12% growth is achieved.

In this way, if export-import growth is achieved as per the budget projections made by the government for the next fiscal year, Bangladesh's trade deficit will stand at $28 billion.

Deficit in balance of payment to hit $11.74 billion

Finance ministry officials think that the deficit in the balance of payment in the next fiscal year will be huge – 1.56% of GDP, despite projections of high remittance inflows and falls in both exports and imports.

In the revised budget for the current fiscal year, the government has set the balance of payments at 2.56% of GDP. In the current fiscal year's budget, the current account deficit was estimated at 0.06% of GDP.

The revised budget for the current fiscal year puts the GDP size at $458.5 billion and the balance of payments deficit at $11.74 billion.

The GDP size for the next fiscal year has been estimated at $512.4 billion, with a $8 billion deficit in the balance of payments that year.

According to the revised budget for the current fiscal year, the foreign exchange reserves will stand at $42 billion in June, which will increase to $43.50 billion in June next year.

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https://www.tbsnews.net/economy/direct-shipping-now-netherlands-428834

Shahadat Hossain Chowdhury

28 May, 2022, 10:40 pm

Last modified: 28 May, 2022, 10:41 pm

Direct shipping now to Netherlands 

Direct container shipping to the Netherlands to begin this week slashing freight time and cost  

 

The container ship Spica J will leave Chattogram for Rotterdam port in the Netherlands this week, introducing a new direct freight route between Bangladesh and the northwestern European country.

This will be the fourth direct shipping service from Chattogram since February this year, with businessmen saying that direct shipments will open up new horizons for external trade amid a global supply chain shock.   

Reliance Shipping and Logistics, the local shipping agent of the latest freight route, said three vessels will be carrying goods. After reaching the Netherlands from Chattogram, the vessels will sail for Barcelona, Spain.            

"Spica J is now at the outer anchorage of Chattogram port. It will leave Bangladesh on 31 May or 1 June with 500 TEUs [twenty-foot equivalent units] of exporting goods," Mohammad Rashed, chairman of the shipping agent, told The Business Standard.   

Currently, container ships from Chattogram go to transshipment ports such as Malaysia's Tanjung Pelepas or Klang, Singapore, Colombo or China before heading towards the European countries.   The export consignments reach the destination via base ports such as Rotterdam, Antwerp and Hamburg in Europe. The entire journey takes around 40 days, while the freight cost for each container hovers around $12,000.

But direct shipping to the Netherlands will slash the time to 20 days, while freight cost will also be reduced by 20%-30%.

Syed Mohammad Arif, chairman of the Bangladesh Shipping Agents' Association, said direct shipping with Europe is very positive for the country's economy. "Increased freight traffic will prompt competition among shipping companies, leading to a reduced freight charge. Businessmen have already started reaping the benefits of direct shipping on three routes."

On 7 February this year, the first direct shipping from Chattogram port commenced, introducing the Chattogram-Italy route. The service was launched by the Italian freight forwarder RifLine. The company has so far imported and exported goods six times by four ships, with each trip taking 18-20 days.       

Abul Kalam Azad, director of RifLine, said the container ship Cape Flores will reach Chattogram port on 8 June. On its next voyage, the vessel will carry goods to Turkey as well as Italy.  

On 20 May, the London-based freight forwarder Allseas Global Logistics launched the Chattogram-Rotterdam-Liverpool route. Through the service, ships carrying export goods from Chattogram will first go to Rotterdam port in the Netherlands via the Suez Canal. After the unloading, the ships will go to the port of Liverpool in the United Kingdom. Vessels on the route will also carry imported goods to Chattogram.

Captain Syed Sohel Hasnat, chief executive officer of Phoenix Shipping Limited, a local representative of Allseas Global Logistics, said the direct freight service can deliver goods to the UK within 23 days. It takes about 35-40 days to reach the UK via transshipment ports in Singapore or Colombo.

On 24 May, the Chattogram-China-Hong Kong direct container cargo route was introduced by the Switzerland-based Mediterranean Shipping Company. Four vessels are operating on the route as two more ships are to join the fleet soon.   

Rear Admiral M Shahjahan, chairman of the Chattogram Port Authority, said several other countries have also expressed interest in signing direct shipping contracts. These include Portugal, Slovenia and some Middle Eastern nations. Direct container shipping in the three routes will begin soon.

Rakibul Alam Chowdhury, vice-president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said direct freights with European countries have created huge potential for external trade. "This is a great achievement for Bangladesh, and the authorities must ensure that this service is not disrupted."

Chattogram port accounts for 92% of Bangladesh's external trade. It also handles 98% of the country's container shipments. 

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https://www.tbsnews.net/bangladesh/bangladesh-sign-mou-portugal-direct-shipping-links-429826

TBS Report

30 May, 2022, 07:00 pm

Last modified: 30 May, 2022, 07:08 pm

Bangladesh to sign MoU with Portugal on direct shipping links

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Bangladesh and Portugal are working to establish direct shipping links between the two countries to create new prospects for fast, cost-effective and reliable shipping for the Bangladeshi exporters while sending regular consignments to Europe by sea.

State Minister for Foreign Affairs Shahriar Alam appreciated the progress towards signing a Memorandum of Understanding (MoU) in this regard during his current visit to the European country.

Assuring Bangladesh's full support, he also expressed satisfaction over the progress towards formation of a working group for the timely implementation of the MoU.

Shahriar Alam discussed the development after receiving the Leixoes Port Authority delegation, led by the President of its Board of Directors Eng Nuno Araújo at the Bangladesh Embassy in Portugal.

He apprised the delegation of Bangladesh's existing port infrastructure and its further development opportunities to meet the regional and international requirements.

The representatives of the Leixoes Port Authority explored technical issues related to establishing direct links between the ports and discussed the feasibility of the said freight route.

Later that day, the State Minister met a business delegation from the "Business Association of the Lisbon Region" led by its Executive President Rui Jorge Rego.

He underscored the need for enhanced interaction between both business communities to tap the full potential of future trade and investment.

He suggested establishing a Joint Business Council to further the cooperation. Highlighting the investment friendly policies and incentives of the government, the State Minister invited the Portuguese Investors to make full use of the offered opportunity and invest in Bangladesh.

The business delegation commended the steady and continuing economic growth of Bangladesh and anticipated full support from the government for enhancing economic relations between the countries.

A video featuring Bangladesh's economic progress and potential was screened for the delegation also.

The State Minister also interacted with the members of the expatriate community in Portugal the day before.

 Bangladesh Ambassador to Lisbon and other officials were present at both meetings.

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https://www.tbsnews.net/economy/rmg/mexicos-coppel-keen-increase-rmg-imports-bangladesh-429994

Abul Kashem

30 May, 2022, 10:40 pm

Last modified: 30 May, 2022, 10:49 pm

Mexico’s Coppel keen to increase RMG imports from Bangladesh

Mexico's retail giant Coppel aims to import more RMG and other products from Bangladesh

mexico_coppel_logo.png?itok=07-NvYdZ&tim

 

Mexican retail giant Coppel is keen to import more readymade garments from Bangladesh as well as bicycles, home textiles, undergarments, home appliances, jute products, and ceramics.

To this end, a 10-member delegation led by the retailer's sourcing manager Jorge Gomez Garcia will visit Bangladesh in July, said Abida Islam, Bangladesh ambassador to Mexico, to the commerce ministry in Dhaka.

In a 27 May letter to the ministry's Senior Secretary Tapan Kanti Ghosh, the ambassador said Coppel had been conducting successful and satisfactory business with Bangladesh for several years – its imports from Bangladesh having increased from $5 million to $20 million in a few years.

"During a recent discussion with me, Coppel expressed interest in purchasing readymade garments as well as bicycles, home textiles, undergarments, home appliances, jute products, and ceramic products from Bangladesh. They are interested in meeting with manufacturers and suppliers of these products," Abida said in the letter.

Founded in 1941, Coppel has about 1,600 department stores in 700 cities across Mexico and has about 3 crore customers. In 2021, the company's total sales exceeded $12 billion.

Coppel purchases various products such as cell phones and accessories, computers and accessories, bicycles, motorcycles, tyres, luggage, linen, furniture and home decor, jewellery, home appliances and electronics, from suppliers of nearly 2,700 national and international brands, to sell in its department stores.

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https://www.dhakatribune.com/business/2022/05/29/square-pharma-to-manufacture-drugs-in-kenya-this-july

Square pharma to manufacture drugs in Kenya this July

Square looks to get hold of the $30 million drug market in Kenya and five other East African countries — Tanzania, Rwanda, Burundi, Uganda and South Sudan — and fulfill the unmet demands of medicines in those countries

 

Zisan Bin Liaquat

May 29, 2022 5:51 PM

Square Pharmaceuticals has constructed a state of the art pharmaceutical plant at EPZ Athi River in Machakos County of Kenya. It is expected to be commissioned in July this year.

“Square Pharmaceuticals’ first overseas manufacturing unit in Kenya has received the good manufacturing practices (GMP) approval today (Friday). This is also the first investment of Bangladesh in the pharmaceutical sector outside the country,” General Manager at Square Pharmaceuticals Prosenjit Chakraborty wrote in a LinkedIn post on Friday.

The offshore plant is set to help the company diversify its supply chain and mitigate any impact of Bangladesh's LDC graduation a decade later.

Square looks to get hold of the $30 million drug market in Kenya and five other East African countries — Tanzania, Rwanda, Burundi, Uganda and South Sudan — and fulfill the unmet demands of medicines in those countries.

“This is a milestone for not just Square, but the country itself, as it not only diversifies the export basket but also speaks volumes about our expertise in the pharmaceutical and medicine sector and the quality product we can produce,” Jahangir Alam, the executive director of Square pharma, told Dhaka Tribune.

The company had extended its range of services towards the highway of the global market, pioneering exports of medicines from Bangladesh in 1987 and has been exporting antibiotics and other pharmaceutical products. 

It currently has an export market that covers 42 countries manifesting the credibility of Square Pharmaceuticals Limited, as per the company.

The top brass also thanked the initiative of the government that helped the local pharma giant to step foot abroad and tap into the foreign market.

The central bank earlier gave permission to four private business entities to invest $10 million in foreign countries in a major leap forward for reining in capital flight alongside easing global marketing of local products. 

As one of the permitted companies, Square Pharmaceuticals will also invest $1 million in the Philippines, opening up an opportunity for the company to gain a foothold in the import-dependent $6 billion pharmaceutical market — the third-largest in the Asean region.

Square had been waiting to begin manufacturing in its newly built Kenyan plant much earlier. However, the pandemic delayed the commencement of operation abroad, according to the official of the company.

The plant, which is the largest in East and Central Africa, is in its final stages of getting operational licenses from the Pharmacy and Poisons Board, according to Kenya’s Cabinet Secretary (CS) for Industrialization, Trade and Enterprise Development Betty Maina.

“The plant is expected to get the licences this week to enable it to start full commercial operations for the production of malaria and diabetes drugs, and other essential medicines,” Maina told reporters on Friday. 

She said when the plant commences full operations, Kenya would benefit from additional 500 direct jobs from the plant, lower costs of essential medicine and increased foreign exchange earnings from exports of drugs.

The CS was speaking during a meeting with visiting senior officials from Bangladesh at her office at the NSSF building to discuss the commissioning of the Square Pharmaceuticals plant.

Maina, who lauded the company for investing over $75 million in the country, encouraged the firm to inform other potential investors from Bangladesh to take advantage of Kenya’s conducive business environment and set up manufacturing facilities in Kenya.

During the meeting, it was agreed that Bangladesh would share with Kenya its extensive knowledge in pharmaceutical production, as well as set the required requisite skills.

“We agreed that Bangladesh will also enter into collaboration with Kenyan Universities on the training of industrial pharmacists in addition to the clinical pharmacists that Kenya is currently training to assist in the management of modern pharmaceutical plants like the one set up by Square Pharmaceuticals in Kenya,” said the CS.

The meeting was attended by the Principal Secretary for Industrialization Amb Kirimi Kaberia, Director of Industries in charge of Private Sector Development Stephen Odua, and the visiting officials from Square Pharmaceuticals who included the Executive Director (Finance and Strategy) Muhammad Zahangir Alam, General Manager (International Marketing) Prosenjit Chakroborty and General Manager (Human Resources) Fakhrul Hasan.

Square Pharmaceuticals posted Tk1,594 crore in annual profit for the 2020-21 fiscal year, which is 19.38% higher compared to the previous year, boosting the top pharmaceutical company's earnings per share to Tk17.99 for the year, up from Tk15.07.

The profit figures include that of its subsidiary companies. But the individual companies also posted growth in profits on a standalone basis.

The pharma market of the country is growing by 15% every year, according to the Bangladesh Association of Pharmaceutical Industries. The market is expected to grow four times to Tk1 lakh crore by 2030.

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https://www.dhakatribune.com/editorial/2022/05/31/towards-greater-trade-with-italy

Towards greater trade with Italy

The authorities would do well to assess current trade conditions and make necessary arrangements

268301384-1633721936973861-4796605168278

 

Tribune Editorial

May 30, 2022 10:34 PM

Despite the many challenges elicited by the Covid-19 pandemic, Bangladesh has been making strides in establishing and strengthening its ties with various developed countries, paving the way forward for our economy. This has been editorialized by this newspaper, and the government, relevant authorities, and all stakeholders deserve to be applauded for recognizing the importance of diplomacy.

A case in point is the improved trade between Bangladesh and Italy, garnering a two-way trade volume of over $2.2 billion. While a major reason can be attributed to the direct container ship route from Chittagong port to the port of Ravenna, which became operational in February this year, no doubt the ongoing discussions between the two nations have only gone from strength to strength and have also been a major reason for this uptick.

The direct container ship route has not only cut down the cost and duration of transportation significantly, but also encourages both countries to explore more efficient and frequent trade options for added mutual benefits.

This is an extremely favourable development for our country. 

Italy is currently our sixth largest export destination, with RMG products making up the majority of the exports. Yet, as Bangladesh Ambassador to Italy Md Shameem Ahsan rightfully identified, given that other items such as leather, jute, and ceramics can also be exported to Italy, and with faster and cheaper trade being facilitated, it is a golden opportunity for our export industry to not only grow more, but also be diversified.

With more negotiations in the cards, the authorities would do well to assess current trade conditions and make necessary arrangements to enable further avenues to be explored effectively.

The trade target with Italy accounts for $1.4bn of the total target of $4.35bn for the current fiscal year. Needless to say, it is an extremely promising relationship that can, if cultivated with care, advance us on our path to building stronger and more long-term bilateral ties.

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https://www.tbsnews.net/economy/economic-partnership-major-deal-boost-dhaka-delhi-trade-430706

Abul Kashem

31 May, 2022, 11:00 pm

Last modified: 31 May, 2022, 11:16 pm

Economic partnership a major deal to boost Dhaka-Delhi trade

dhaka-delhi_trade_tbs.jpg?itok=PWdSAPli&

The proposed Comprehensive Economic Partnership Agreement (CEPA) with India is going to be a real shot in the arm for Bangladesh that is set to lose duty preferences after its graduation to a developing nation.

Once the trade deal is signed, Bangladesh's export earnings will go up by $3-5 billion and India's by $4-10 billion in next 7-10 years, according to a final draft report of the joint feasibility study by Dhaka and Delhi.

New investment windows will also open up for both the countries thanks to the proposed CEPA, which is a little different from FTA as it covers many issues, including trade in goods and services, investment, intellectual property rights and e-commerce, according to the draft report submitted to the commerce ministry on Monday.

Md Jafor Uddin, chief executive officer at Bangladesh Foreign Trade Institute, told The Business Standard, "We have submitted [the draft report] to the ministry, which will be finalised at a meeting of the advisory committee chaired by the commerce secretary following a discussion with stakeholders."

Commerce ministry officials say Bangladesh has no experience in making such agreements. So, they will cautiously complete bilateral negotiations with India over CEPA. Right now, it is not possible to say how many days it will take to sign the deal.

Agreement to benefit both countries

The report, prepared by Bangladesh Foreign Trade Institute and India's Centre for Regional Trade, says, "It may be concluded that the estimates and analysis of this study indicate that the proposed CEPA between India and Bangladesh is not only feasible but also mutually beneficial in terms of possible gains in the realms of trade in goods and services, and investment."

In FY21, Bangladesh imported nearly $8.6 billion worth of goods from India, while its exports amounted to only $1.3 billion.

Under CEPA, the country will have opportunities to enhance its share in exports to the neighbouring country. Marine goods, textiles and apparels, pharmaceuticals, animal and vegetable fats or waxes, inorganic chemicals and flour-based products are among potential export items, according to the draft report.

Bangladesh gets duty-free access to India for all products except 25 products, including arms and drugs under the South Asian Free Trade Area, but exports to the country are still not going up owing to non-tariff barriers.

Bangladesh exports to India crossed $1b last FY

For the first time in the last fiscal year, Bangladesh's exports to India crossed the $1 billion mark. In the first 10 months of the current fiscal year, exports amounted to $1.7 billion, up by more than 58% over the same period of the last fiscal year.

On the other hand, the neighbouring country will get a scope to export food and food items, earth materials, mineral fuels, chemicals, pharmaceuticals, plastic and plastic goods, wood products, cotton, woven fabrics, iron and steel, railway trams and locomotives and other vehicles to Bangladesh.

"Bilateral service trade is likely to benefit from the trade in goods, which is expected to grow as a result of CEPA, due to the necessity of supporting trade in services, such as transport services, insurance and banking services, telecommunication and distribution services," according to the report.

Under CEPA, Bangladesh will be able to export to India professional services, IT/ITes services, construction and related services, financial services, and communication services, while India's export services include other business services, tourism, personal travel and freight services, telecommunications, computer and information services, education and health services, it added.

The draft study report said any efforts to augment trade in goods and services between the two countries would require cross-country and cross-sectoral investment.

Besides, the feasibility study report reveals the potential sectors for investment from India into Bangladesh are food, pharmaceuticals, leather and leather products, textile and apparel sector, agro-based Industries and farm machinery plant, automobiles, light engineering and electronics, ceramics, ICT sector, banking and financial services, telecommunications and mega construction project.

Similarly, Bangladesh will have potential to invest in food and beverages, agro processing, pharmaceuticals, plastics and rubber products, leather and leather products, textile and apparel, jute and jute products, cement, spinning mills, electronics and batteries, travel and tourism and ICT sectors of the neighbouring India.

As per existing policy, Indian citizens are allowed to invest in Bangladesh but Bangladeshis need to take prior permission from the Indian government to do so.

Recommending that businesses from both the countries get equal opportunities in terms of investments, the draft report said both sides would strive for a legally binding investment regime under CEPA so that investment flows between the two countries are not only through automatic route but also through fast-track mode and single window system.

Scope to build regional value chain

The study suggests that there exists scope for building regional value chains (RVCs) between Bangladesh and India.

"The proposed CEPA between Bangladesh and India can help build RVCs through trade in goods and services and investment. Bangladesh and India could explore new RVCs or strengthen the existing ones in sectors, such as agro processing, chemicals, pharmaceuticals, textiles, leathers and electric machinery, because of the potential existing under trade in goods, services and investment and by addressing the challenges related to these, RVCs can play an important role for which CEPA could be the best enabler."

Abdul Matlub Ahmad, president at Bangladesh-India Chamber of Commerce and Industries and former president at Federation of Bangladesh Chambers of Commerce and Industries, told TBS that the value chain is now the most important issue in the world.

"India has cotton. We can make yarns and garments. So, if CEPA is signed, joint investment as well as bilateral trade in both the countries will increase," he said.

Skills and resources of the two countries can be utilised for each other's development through the signing of CEPA. This will benefit both countries. There will also be opportunities to create many jobs in Bangladesh, he noted.

"I agree with the fact that the final draft report of the joint survey has raised the possibility of increasing bilateral imports and exports," Abdul Matlub, also said, hoping that the trade volume will further increase if the existing barriers to bilateral trade under CEPA are resolved.

The study report said despite existing institutional mechanisms, trade and economic relations between India and Bangladesh have not reached full potential. Thus, there was a need to integrate both the economies and enhance trade linkages, by way of creating a new institutional mechanism in the form of a CEPA that could include trade and investment between the countries, to enable creation of RVCs.

Integrating both the economies through these dimensions would not only enhance trade but also lead to improve backward and forward linkages which in turn will result in overall economic growth and development on both the sides, it added.

Challenges and possible policy responses through CEPA

Although the possible CEPA would bring significant benefits for both Bangladesh and India, there are a number of possible challenges, including inter alia the need to balance the benefits for both the countries, seamless connectivity between two countries to be ensured through hard and soft infrastructure, securing proportionate protection to sensitive industries, which should be addressed.

The study report said a lack of understanding of the trade policy between the countries can have uncertain and unfavourable implications for importers and exporters and general consumers, especially at the border check-points.

Thus, there is a need for customs cooperation and trade facilitation through the mechanism of CEPA in a holistic manner.

For any success of CEPA, it would be essential to address non-tariff barriers, which CEPA could give due consideration to.

A lack of testing facilities has been a major problem to align food safety standards requirements in Bangladesh with India. Provisions for investment facilitation keeping such endeavours in mind would be useful while negotiating the investment chapter under CEPA.

"The CAROTAR (Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020) of India needs to be studied in connection with SAFTA rules to prevent any hindrances to trade flows. This could be adequately focused upon in CEPA negotiations."

May crowd out domestic employment

The study report said there are concerns relating to crowding out of domestic employment on both sides if trade in services is included in CEPA. So while giving special emphasis on the potential sectors of trade in services of both the sides, CEPA negotiations could focus on provisions that allay the fear without sacrificing on the potential for enormous growth in temporary movement of natural persons.

One of the most important constraints in the realm of trade in services was identified as the unduly restrictive Visa regimes. This prevented business-to-business contacts and ventures pertaining to trade as well as FDI.

The study report suggests that an adequate policy mechanism is required to mitigate any effects of sudden volatility of currencies so that trade and investment flows remain stable on a bilateral basis.       

As a neighbouring country both India and Bangladesh have continued to consolidate their political, economic, trade and cultural relations and have built a comprehensive institutional framework to promote bilateral cooperation.  

The two countries have several bilateral agreements and MOUs, including for trade and connectivity, economic and development cooperation, cooperation on water resource and power, investment promotion and protection, double taxation avoidance, opening of border haats, security and border management etc.

Bangladesh India's largest development partner

India's development cooperation with Bangladesh has grown in size and coverage. With $8 billion in three Lines of Credit under implementation, Bangladesh has become India's largest development partner.    

During the bilateral commerce secretary level meeting between Bangladesh and India, held in February, 2018, the Indian side raised the issue to sign CEPA under enhancement of bilateral trade.

During the bilateral meeting of commerce ministers, held on September the same year in Dhaka, both the ministers agreed that a CEPA, covering goods, services and investment, would provide a sound basis for substantial enhancement of trade and commercial partnership and directed their officials to undertake a joint study on the prospects of entering into a bilateral CEPA.

During the bilateral meeting of commerce secretary level in January 2020, both the parties decided to undertake a joint feasibility study to find out whether a CEPA will be mutually beneficial for both the countries.

 

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জুন ০১, ২০২২

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বাংলাদেশের বিভিন্ন বিষয়ে যুক্তরাষ্ট্রের কঠোর সুর সত্ত্বেও দুই দেশের অর্থনৈতিক সম্পর্ক এখন নতুন এক উচ্চতায় পৌঁছেছে। দুই দেশের প্রত্যক্ষ অর্থনৈতিক-বাণিজ্যিক সংযোগ এখন ১২ বিলিয়ন (১ হাজার ২০০ কোটি) ডলার ছাড়িয়েছে, যা অতীতের যেকোনো সময়ের তুলনায় বেশি। এ মুহূর্তে একক গন্তব্য হিসেবে বাংলাদেশের শীর্ষ রফতানি বাজার যুক্তরাষ্ট্র। দেশে প্রত্যক্ষ বিদেশী বিনিয়োগের (এফডিআই) উৎস হিসেবেও যুক্তরাষ্ট্রের অবস্থান শীর্ষে। রেমিট্যান্সের উৎস হিসেবেও দেশটির অবস্থান দ্বিতীয়। গত পাঁচ বছরে দুই দেশের অর্থনৈতিক অংশীদারত্ব বেড়ে দাঁড়িয়েছে প্রায় দ্বিগুণে।

রফতানি, এফডিআই ও রেমিট্যান্স বিবেচনায় দেশের অর্থনীতিতে সফটপাওয়ার (বাণিজ্যিক, বুদ্ধিবৃত্তিক বা সাংস্কৃতিকভাবে প্রভাব বিস্তারের ক্ষমতা) সবচেয়ে বেশি এখন যুক্তরাষ্ট্রেরই। ২০১৬ সালেও বাংলাদেশ থেকে ৫৯১ কোটি ১ লাখ ডলারের পণ্য আমদানি করেছিল যুক্তরাষ্ট্র। ইউএস সেনসাস ব্যুরোর তথ্য অনুযায়ী, গত বছর তা দাঁড়িয়েছে প্রায় ৮৩০ কোটি ৩৬ লাখ ডলারে। এ হিসেবে পাঁচ বছরে দেশটির বাংলাদেশ থেকে পণ্য আমদানি বেড়েছে ৪০ শতাংশেরও বেশি। চলতি বছরের প্রথম তিন মাসেই (জানুয়ারি-মার্চ) দেশটির বাংলাদেশ থেকে পণ্য আমদানি বাবদ ব্যয়ের পরিমাণ ৩ বিলিয়ন (৩০০ কোটি) ডলারের কাছাকাছি পৌঁছে গিয়েছে।

বাংলাদেশে এফডিআইয়ের সবচেয়ে বড় উৎস এখন যুক্তরাষ্ট্র। ২০২১ সাল শেষে দেশের মোট এফডিআইয়ে মার্কিন প্রতিষ্ঠানগুলোর অবদান ছিল ২০ শতাংশ। ডিসেম্বর শেষে যুক্তরাষ্ট্র থেকে আসা এফডিআইয়ের স্টকের স্থিতি দাঁড়িয়েছে ৪৩২ কোটি ৮৯ লাখ ৯০ হাজার ডলারে। বাংলাদেশ ব্যাংকের হিসাব বলছে, এর মধ্যে সবচেয়ে বড় বিনিয়োগগুলো এসেছে জ্বালানি তেল ও গ্যাস, ব্যাংক ও বীমা এবং বিদ্যুৎ উৎপাদন খাতে। দেশের মোট গ্যাস চাহিদার অর্ধেকেরও বেশি পূরণ করছে মার্কিন জায়ান্ট শেভরন। নিজেকে বাংলাদেশের সবচেয়ে বড় বিদেশী বিনিয়োগকারী হিসেবে দাবি করছে প্রতিষ্ঠানটি।

রেমিট্যান্সের উৎস হিসেবে সৌদি আরবের পরই এখন যুক্তরাষ্ট্রের স্থান। কেন্দ্রীয় ব্যাংকের তথ্য অনুযায়ী, গত অর্থবছরে (২০২০-২১) বাংলাদেশে যুক্তরাষ্ট্র থেকে প্রায় সাড়ে ৩ বিলিয়ন (প্রায় ৩৫০ কোটি) ডলার রেমিট্যান্স এসেছে। চলতি বছরের প্রথম প্রান্তিকেও (জানুয়ারি-মার্চ) দেশে মোট রেমিট্যান্সের ১৬ দশমিক ২৮ শতাংশ এসেছে যুক্তরাষ্ট্র থেকে। অর্থবছর বিবেচনায় গত পাঁচ বছরে যুক্তরাষ্ট্র থেকে আসা রেমিট্যান্সের প্রবাহ বেড়েছে ১০০ শতাংশের বেশি।

ইপিবির পরিসংখ্যান অনুযায়ী, চলতি অর্থবছরের প্রথম ১০ মাসে (জুলাই-এপ্রিল) বাংলাদেশ থেকে যুক্তরাষ্ট্রে পণ্য রফতানি বেড়েছে ৫২ শতাংশের বেশি। দেশটিতে মূলত তৈরি পোশাকই রফতানি হয় সবচেয়ে বেশি। দেশটির সঙ্গে বাণিজ্যিক সম্পর্ক জোরালো হয়ে ওঠার কারণ হিসেবে চীনকেন্দ্রিক ভূরাজনীতির কথা বলছেন পোশাক খাতের উদ্যোক্তারা।

তাদের ভাষ্য অনুযায়ী, যুক্তরাষ্ট্র আমদানি বাণিজ্যে চীননির্ভরতা কমাতে চায়। এজন্য পণ্য আমদানির উৎস হিসেবে অন্যতম সম্ভাবনাময় বিকল্প হিসেবে বাংলাদেশকেই বিবেচনা করছে দেশটি। অতীতে আফ্রিকার দেশগুলো বা ভিয়েতনামে এ ধরনের বিকল্প তৈরির চেষ্টা করেছিল যুক্তরাষ্ট্র। তবে চীন ইস্যুতে ওইসব দেশ থেকে মুখ ঘুরিয়ে নিয়েছে ওয়াশিংটন। বাকি দেশগুলোর মধ্যে বাংলাদেশেই এখন তুলনামূলক বেশি সম্ভাবনা দেখতে পাচ্ছেন দেশটির বাণিজ্য খাতসংশ্লিষ্টরা।

যুক্তরাষ্ট্রে দীর্ঘদিন ধরে পোশাক রফতানি করছে রাইজিং গ্রুপ। নিজ উৎপাদিত পণ্যের প্রায় ৪০ শতাংশ মার্কিন বাজারে রফতানি করছে প্রতিষ্ঠানটি। কোম্পানির ব্যবস্থাপনা পরিচালক ও পোশাকপণ্য প্রস্তুত ও রফতানিকারকদের সংগঠন বিজিএমইএর সাবেক সহসভাপতি মাহমুদ হাসান খান বাবু বণিক বার্তাকে বলেন, গত পাঁচ বছরে দুই দেশের সম্পর্কোন্নয়নের বড় দিক ছিল সংলাপ। সম্পর্কোন্নয়নের জন্য যে সংলাপ হওয়া প্রয়োজন তা এখন হচ্ছে। যেমন দেশটি বাংলাদেশে তুলা রফতানির ক্ষেত্রে যেসব বাধার সম্মুখীন হয়, সেসব বাধা তুলে নিতে বলছে। এর বিপরীতে আমরা বলছি, যুক্তরাষ্ট্রের তুলা থেকে তৈরি সুতা-কাপড়ের পোশাক যুক্তরাষ্ট্রে রফতানি হলে শুল্ক সুবিধা নিশ্চিত হতে হবে। সামগ্রিকভাবে দুই দেশের অর্থনৈতিক কূটনীতির ক্ষেত্রটি অনেক শক্তিশালী হয়েছে।

কূটনৈতিক পর্যবেক্ষকরা বলছেন, দুই দেশের অর্থনৈতিক সম্পর্কের গভীরতা বাড়লেও এখনো এ-সংক্রান্ত সম্ভাবনাগুলোকে যথাযথভাবে কাজে লাগানো যায়নি। যুক্তরাষ্ট্র বিশ্বের সবচেয়ে বড় একক বাজার। দেশটিতে জিএসপির আওতায় যে বাণিজ্য সুবিধা পাওয়া যেত, সেটি স্থগিত রয়েছে। প্রতিযোগী দেশগুলো জিএসপির আওতায় মার্কিন বাজারে বিভিন্ন পণ্য রফতানি বাড়াচ্ছে। পোশাকপণ্যের সবচেয়ে বড় বাজার হিসেবে যুক্তরাষ্ট্রে প্রবৃদ্ধি ভালো হলেও এখানে কাঙ্ক্ষিত প্রবৃদ্ধি অর্জন করতে পারেনি বাংলাদেশ। এদিক থেকে প্রতিযোগী দেশ ভিয়েতনাম ও ভারতও এগিয়ে যাচ্ছে। যুক্তরাষ্ট্রের মোট বার্ষিক আমদানি ২ ট্রিলিয়ন (২ লাখ কোটি) ডলারেরও বেশি। এতে বাংলাদেশের অংশগ্রহণ খুবই সামান্য। বর্তমানে যেসব মার্কিন কোম্পানি বাংলাদেশে ব্যবসা করছে, সেগুলোও খুব একটা শান্তিতে ব্যবসা করতে পারছে না। দেশের আইনকানুন অনেক অস্বচ্ছ। মার্কিন বিনিয়োগকারীদের জন্য সবচেয়ে গুরুত্বপূর্ণ বিষয় হলো মুনাফা। সারা এশিয়ায় মার্কিন কোম্পানিগুলো বিপুল পরিমাণে ব্যবসা করে। সে তুলনায় বাংলাদেশে দেশটির ব্যবসা খুবই অপ্রতুল।

সাবেক রাষ্ট্রদূত হুমায়ুন কবির বণিক বার্তাকে বলেন, বড় মার্কিন কোম্পানিগুলোকে ধরে রাখার পাশাপাশি নতুনগুলোকে আকৃষ্ট করতে যে পরিমাণ পদ্ধতিগত উন্নয়ন দরকার, এ বিষয়ে আমাদের আরো মনোযোগ দিতে হবে। কর জটিলতার মতো বিষয়গুলো দূর করা নিয়ে ভাবতে হবে। আর ভাবনার ক্ষেত্রগুলো আরো আগ্রাসী হতে হবে। ব্যবসা-বাণিজ্যের পদ্ধতিগুলো আরো সহজ করা দরকার। বাণিজ্য বিরোধ নিষ্পত্তির ক্ষেত্রগুলো আরো স্বচ্ছ হতে হবে। সব মিলিয়ে দেশটির সঙ্গে সম্পর্কোন্নয়নে দেশটিকে আরো বুঝতে পারার প্রয়োজন। তাদের কৌশলগত অগ্রাধিকারগুলোকে আরো ভালোভাবে অনুধাবন করতে হবে। দুই দেশের অর্থনৈতিক সম্পর্ক বা যোগাযোগের একটা বহুমাত্রিকতা আছে। এ বিষয়গুলো আমাদের অনুধাবন করতে হবে। সব মিলিয়ে আমরা সমন্বিত ব্যবস্থা তৈরি করতে পারি। তাহলে বিদ্যমান সম্পর্কের চেয়েও বহুগুণ বড় অর্থনৈতিক সম্পর্ক সম্ভব।

যুক্তরাষ্ট্র ও বাংলাদেশের দ্বিপক্ষীয় বাণিজ্যসংশ্লিষ্ট উদ্যোক্তারা বলছেন, পরোক্ষ অনেক ক্ষেত্রেও দুই দেশের সম্পর্কের উন্নয়ন হয়েছে। দ্বিপক্ষীয় সম্পর্কের ভিত্তিও এখন অনেক শক্ত। মার্কিন কোম্পানিগুলো এখন বাংলাদেশে বিনিয়োগ বাড়ানোয় মনোযোগ দিয়েছে, যা সামনের দিনগুলোয় আরো বাড়ার আভাস রয়েছে।

আমেরিকান চেম্বার অব কমার্স ইন বাংলাদেশের (অ্যামচেম) সভাপতি সৈয়দ এরশাদ আহমেদ বণিক বার্তাকে বলেন, রফতানি, এফডিআই এগুলো হয়তো চোখে দেখা যাচ্ছে। কিন্তু দৃশ্যমান নয় এমন ক্ষেত্রগুলোয়ও যুক্তরাষ্ট্রের সঙ্গে বাংলাদেশের সম্পর্ক উন্নত হয়েছে, যেমন নলেজ শেয়ারিং। সম্প্রতি প্রাণের সঙ্গে প্রডাকশন শেয়ারিং শুরু করেছে প্রোক্টর অ্যান্ড গ্যাম্বল। এটি মূলত নলেজ ও টেকনোলজি শেয়ারিং। বাংলাদেশের বাণিজ্যসংশ্লিষ্টরা গত পাঁচ বছরে যুক্তরাষ্ট্রের সঙ্গে সম্পর্ক নিয়ে অনেক সতর্কতা বজায় রেখেছেন। ইউএসএআইডিও বাংলাদেশকে অনেক সহায়তা দেয় টেকনোলজি ট্রান্সফারের ক্ষেত্রে। যুক্তরাষ্ট্র থেকে ফাইজারের টিকা ভারত না পেলেও বাংলাদেশ পেয়েছে। সামগ্রিকভাবে বাণিজ্যিক সম্পর্ক ইতিবাচক অনেক বিষয়ের ওপর প্রভাব পড়েছে। অর্থনৈতিক কূটনীতিতেও মার্কিনদের সঙ্গে অনেক ভালো অবস্থানে আছে বাংলাদেশ। ভূরাজনৈতিক একটি প্রেক্ষাপটও আছে। ইন্দো-প্যাসিফিক স্ট্র্যাটেজিতে দেখা যাচ্ছে বাংলাদেশ গুরুত্ব পাচ্ছে। পাঁচ বছর আগে অর্থনৈতিক কূটনীতির গতি অনেক শ্লথ ছিল, যেটা এখন নেই বললেই চলে।

সার্বিক বিষয়ে জানতে চাইলে পররাষ্ট্রমন্ত্রী ড. এ কে আব্দুল মোমেন বণিক বার্তাকে বলেন, গত পাঁচ বছর নয়, তার চেয়েও বেশি সময় ধরে সব ক্ষেত্রে অভাবনীয় সাফল্য দেখিয়েছে বাংলাদেশ। এজন্য অনেকের চক্ষুশূলও হতে হয়েছে। বাংলাদেশের নির্বাচন সামনেই, যা মাথায় রেখে কেউ কেউ এরই মধ্যে চাপ সৃষ্টি করতে শুরু করেছে, যেন নিজের দেশের জন্য কিছু সুবিধা নিশ্চিত করা যায়। কিন্তু সব মিলিয়ে প্রায় সব বন্ধুরাষ্ট্রের সঙ্গে অর্থনৈতিক সম্পর্ক অনেক বেড়েছে। তবে গত পাঁচ বছরে যুক্তরাষ্ট্রের সঙ্গে অর্থনৈতিক কূটনীতির জায়গাটি অনেক শক্তিশালী হয়েছে। অর্থনৈতিক সম্পর্কটা শক্তিশালী হয়েছে মূলত অ্যাফর্ডেবল প্রাইসে পণ্য বিক্রি করতে পারি, তাই। আমাদের পণ্য সরবরাহ সঠিক সময়ে হয়। এসব কারণেই বাংলাদেশের দিকে ঝুঁকেছে যুক্তরাষ্ট্র। মৌলিক বিষয় হলো যুক্তরাষ্ট্রের চাহিদা আছে, যা মেটাতে পারছে বাংলাদেশ। আগে দেশটি ওষুধ ও মেডিকেল ইকুইপমেন্ট কিনত না। কভিডের সময় বাধ্য হয়ে পিপিই ও ওষুধ নিয়েছে। প্রয়োজনের তাগিদেই তারা বাংলাদেশের দিকে ঝুঁকছে। এটা একটা উইন উইন সিচুয়েশন। যুক্তরাষ্ট্রেরও লাভ হচ্ছে। বাংলাদেশেরও লাভ হচ্ছে। আমরা উদার, তাই যুক্তরাষ্ট্রের সঙ্গে অর্থনৈতিক সম্পর্ক আরো বাড়বে। দেশে গড়ে উঠতে থাকা ১০০টি অর্থনৈতিক অঞ্চলেও যুক্তরাষ্ট্র বিনিয়োগ করতে পারে। দেশটির উদ্যোক্তারা কারখানা স্থানান্তর করতে চাইলে আমরা তাদের স্বাগত জানাই।

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https://www.tbsnews.net/economy/exports-sees-23-growth-may-431706

TBS Report

02 June, 2022, 01:55 pm

Last modified: 02 June, 2022, 02:30 pm

Exports sees 23% growth in May

Bangladesh has recorded export earnings amounting to $3.83 billion in May this year, according to data released by the Export Promotion Bureau (EPB) on Thursday (02 June).

The export receipts couldn't surpass the $3.894 billion target set for the month; however, it was 23.24% high than the $3.10 billion of May last year.

Earnings in May fell compared to April when the country's export earnings crossed $4.73 billion.

The country's exporters posted 34.09% year-on-year growth in export earnings to $47.17 billion in the July-May period of the current fiscal year of 2021-22.

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https://www.tbsnews.net/economy/trade-deficit-hits-historic-high-despite-rising-exports-foreign-aid-432050

Jebun Nesa Alo, Saifuddin Saif, Reyad Hossain & Jasim Uddin

02 June, 2022, 11:00 pm

Last modified: 02 June, 2022, 11:38 pm

Trade deficit hits historic high despite rising exports, foreign aid

Volatility in the dollar market and a prolonged Russia-Ukraine conflict has stoked worries that any growth in export earnings would be temporary, with cancellations and deferrals of shipments having already begun. Against this backdrop, the Bangladesh Bank on Thursday made a U-turn on their earlier decision of having a prescribed dollar rate, instead allowing banks to quote the rate based on market demand

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An increase in foreign aid and growth in export earnings, a boon under any other circumstance, has done little to allay fears over the growing trade deficit, which reached the historic high of $27.56 billion in the first 10 months of the current fiscal year.

At the same time, volatility in the dollar market and a prolonged Russia-Ukraine conflict has stoked worries that any growth in export earnings would be temporary, with cancellations and deferrals of shipments having already begun.

Against this backdrop, the Bangladesh Bank on Thursday made a U-turn on their earlier decision of having a prescribed dollar rate, instead allowing banks to quote the rate based on market demand.

A floating exchange rate is expected to encourage the inward flow of remittance through formal banking channels and help exporters.

Exports posted 23% growth in May, bringing home $47 billion so far in the current fiscal year. Inflow of foreign assistance also increased 59% year-on-year to $7.7 billion until April.

These positive trends appeared at a time when the country's trade deficit widened the most as export growth is far exceeded by runaway import bills due to global price hikes.

Remittance inflow dropped 13% in May, adding to the concern about the safe level of the foreign exchange reserve standing at $42.11 billion as of 1 June.

The trade deficit, the gap between the country's export incomes and import expenditures, widened by 53% higher from July-April of last fiscal year, according to the Bangladesh Bank data released on Thursday.

Current account deficit ballooned to $15.31 billion in July-April of the current fiscal year, more than 9 times the level seen a year ago.
However, net foreign direct investment and capital transfers posted impressive growth during the period, according to the latest data of the central bank.

Now, the growth figures in export and external finance are seen as a relief for the country's overall balance of payment (BoP) situation.

Growing foreign aid comes as a relief

The amount of foreign aid, including budget support, increased by 59% during July-April of the current financial year, spelling relief for strained foreign reserves.

According to the Economic Relations Department (ERD), development partners disbursed  $7.7 billion during the period.

In the current financial year, $1.85 billion has been allocated for budget support and purchase of vaccines, with the money coming from the World Bank, Asian Development Bank (ADB), AIIB, JICA, Korea and OPEC funds.

Of this, $956 million is the discount for buying vaccines, while $895 million is for budget support.

In addition, $250 million in budget support from the World Bank will be released this month based on an agreement the government signed on April 18.

Dr Zahid Hussain, former lead economist, the World Bank, Dhaka office said, the budget support will come as a relief given the current global situation as it will be deposited directly into the reserve. On the other hand, the fund for buying vaccines would ease pressure off the reserve as otherwise it would have to be used to procure the inoculations.

In the last fiscal year, the budget support was $1.09 billion. Earlier, Bangladesh received $1 billion in budget assistance in the 2019-20 fiscal year to address the Covid-19 situation. Until then, annual budget support was below $300 million.   

ERD officials said the government expects to receive budget support from a number of development partners in the next financial year as well.

The World Bank, ADB and AIIB are expected to give $500 million each in assistance. Besides, the government is expecting huge budget support from JICA as well.

ERD officials, meanwhile, said the foreign aid had been $4.85 billion in July-April, although it rose to $8.95 billion at the end of the year.

On the other hand, with two months left in the current fiscal year, the ERD expects foreign funding to exceed $8 billion by the end of the current fiscal year, the highest since independence.

In the first 10 months of the current financial year, ADB released the most money - $1.98 billion - followed by JICA's $1.7 billion.

Meanwhile, according to the Department of Implementation Monitoring and Evaluation (IMED), the allocation of foreign aid to the Annual Development Program (ADP) towards the end of the current fiscal year has led to a slight increase in spending.

As of April, various ministries and departments had spent 32.35% of their foreign aid on ADP. At the same time last year, the rate was 30%.

Some projects, however, are slowing down due to the global crisis.

In terms of debt servicing, the government has already paid $1.75 billion for interest and the principal amount by April. Last year during the same period, the government had paid $1.6 billion.

Exports earnings grow by 23%

Despite factory closures for more than a week due to Eid holidays, Bangladesh's export earnings grew by more than 23% in May in the current 2021-22 fiscal year, inching closer to the coveted $50 billion target set by the government.

Bangladesh has already posted export earnings of $47 billion in the first 11 months of the current fiscal year.

AHM Ahsan, vice chairman of the Export Promotion Bureau (EPB), told The Business Standard that Bangladesh's export earnings could easily cross the $50 billion milestone if the pace of exports is maintained.

The situation in Russia and Ukraine, however, has added some doubt about the pace of exports in the coming months as the turbulence has led to a decrease in the purchasing power of buyers due to inflation in Bangladesh's major export markets.

Meanwhile, the central banks of Europe and the United States have raised interest rates to control inflation, which has dampened purchasing power in those markets as well. 

Apparel export might fall

Engineer Kutubuddin Ahmed, chairman of Envoy Textile Ltd, the world's first LEED-platinum certified denim textiles, said apparel exports might face some cancellations and deferred shipments in the coming days as stores are facing falling sales.

"We had a pressure of orders after the Covid-19 recovery period in our export markets, as almost every store was empty. But the Russia- Ukraine war changed everything."

He said high inflation in the EU and the USA would lead to people cutting expenses which may hurt apparel demand.

Ahmed also said on top of deferred shipment, one buyer had already asked for a 2.5% discount, with the situation expected to worsen if the war didn't stop immediately.

EPB analysis shows lowest export earnings in May

According to data released by the Export Promotion Bureau (EPB) on Thursday, Bangladesh recorded exports amounting to $3.83 billion in May this year.

The EPB's statistical analysis, however, shows that last month was also a period of the second lowest export earnings in the last 11 months.

Earlier in August, exports were slightly lower than in May. And since last September, export revenue had crossed $4 billion for eight consecutive months.

This was not the case in May, although it is higher than the $3.10 billion last May.

Although export receipts couldn't surpass the $3.89 billion target set for the month, it reached $3.83 billion.

Talking with The Business Standard, Fazlul Hoque, managing director of Plummy Fashions Ltd, one of the greenest knitwear manufacturers in the world, said, "Due to Eid vacation, apparel shipments were a little bit lower in May, as it was a shorter month to do business".

He also mentioned that the export volume still remains good compared to last year, although it might fall in the coming months as the order placement has slowed.

The EPB data shows that the country's exporters posted 34.09% year-on-year growth in export earnings in the July-May period of the current fiscal year.

In April, exports clocked at $4 billion with 51% year-on-year growth, raking in $43.34 billion in 10 months of the current fiscal year.

4 sectors crossed $1 billion in exports

According to EPB figures, the garment sector accounted for about 82% of total exports in the 11 months under review. Out of this, four sectors crossed the $1 billion mark during the period under review. These are home textiles, leather and leather products, agricultural products, jute and jute goods.

Despite the growth in exports of three of the four sectors, exports of jute and jute products declined compared to the same period of the previous financial year.

Meanwhile, the EPB expects to have lower growth next year.

"It seems to us that next fiscal year, there will be not more than 15% to 20% growth in exports compared to the current year," said AHM Ahsan, vice chairman of EPB.

Earlier, the finance ministry had also reduced its export projections for next year.

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https://thefinancialexpress.com.bd/economy/bangladesh/merchandise-export-fetches-4717b-in-11-months-of-fy-22-1654162891

Merchandise export fetches $47.17b in 11 months of FY '22

 FE ONLINE REPORT | Published:  June 02, 2022 15:41:32 | Updated:  June 03, 2022 08:24:56

The country's merchandise export earnings maintained hefty growth during the first eleven months of the current fiscal year recording over 34 per cent rise year on year following the good performance of apparel shipments.

Bangladesh fetched $47.17 billion during the July-May period of FY’22 over that of $35.18 billion in the corresponding period of last fiscal, according to provisional data of the Export Promotion Bureau (EPB).

The overall export earnings also surpassed the set target by 18.34 per cent, according to the EPB data released on Thursday.

Besides, the single-month export earnings growth in May last slowed down to 23.24 per cent and earned $3.83 billion.

Since September last to April this year, the country's single-month export earnings had been surpassing the four-billion mark.

The May 2022 earnings, however, missed the target set for the month slightly by 1.64 per cent, disclosed the data.

Of the total $47.17 billion export income during the July-May period, RMG sector fetched $38.52 billion, posting 34.87 per cent growth than last fiscal's rate.

A breakdown of the clothing-sector performance shows that knitwear subsector of RMG earned $20.98 billion from exports, registering 36.61 per cent growth.

Earnings from the export of woven garments have amounted to $17.35 billion in the past eight months, up by 32.85 per cent.

Home-textile exports also recorded over 41 per cent growth to $1.46 billion in the first eleven months of this fiscal.

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https://thefinancialexpress.com.bd/trade/walton-sets-up-research-centre-in-south-korea-1654411499

Walton sets up research centre in South Korea

An initiative of groundbreaking changes in product quality and design

 FE ONLINE DESK | Published:  June 05, 2022 12:43:54

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Bangladeshi electronics and technology giant Walton has set up a Research and Innovation Center in South Korea.

In this context, Walton signed an agreement with a reputed South Korean design house to jointly work on bringing groundbreaking changes in the quality and design of electronics and technology products. By setting up the research centre in South Korea, Walton moved another step ahead in winning the global market with Bangladesh made world-class products, said a media release. 

According to the authorities concerned, this initiative of Walton will bring a radical change in product quality and design. Though it will raise the cost of production, the Bangladeshi buyers will get the experience of using international standard, quality and designed products. Walton products will also gain more popularity in the global market.

As part of his global market expansion activities, Walton Hi-Tech Industries PLC's Managing Director and CEO Golam Murshed visited South Korea recently. In his presence, the agreement was signed in South Korea's capital Seoul on June 2, 2022). Following the agreement's terms and conditions, neither side has disclosed the name of the Korean design house.

The agreement signing ceremony was conducted under the supervision of Walton Global Business Division's Vice-president of Korea Operations Azmal Ferdous Bappi and attended by, among others, Walton's Head of Supply Chain Mohasin Sarder, Head of Sourcing (Refrigerator) Aminul Islam, Head of Walton Refrigerator's R&I Tofail Ahmed and Head of Electronics R&I Abdul Malek Sikder.

Conforming to the changing global situation, Walton has been taking lots of bold and big initiatives aimed at delivering world-class products with the latest designs to Bangladeshi buyers and also grabbing the global market.

The Bangladeshi electronics giant recently acquired the rights of more than 50-years old reputed three European electronics brands and its production plant, a trademark, patent, design and software license in 57 countries. Now, Walton set up a research and innovation centre in South Korea and also joined hands with a reputed South Korean design house. These initiatives of Walton will play an important role in the economic development of Bangladesh towards securing the status of a developed country by 2041.

Moreover, these initiatives will also pave the way for achieving Walton's goal of becoming one of the top global brands by 2030, the release said.  

Walton's Managing Director and CEO Golam Murshed said, South Korea is undoubtedly a leading global hub of electronics and technology products. Setting up a research centre in that country and also working jointly with a reputed South Korean design house is a giant step for the electronics sector in Bangladesh. By combining Walton's capabilities with South Korean expertise, consumers will get international standard products with innovative designs.

He added technology-dependent world is changing rapidly. At the same time, people's needs and tastes are also changing. That's why we took this initiative to deliver innovative design products considering the new generation's needs in the modern world. And customers will get a new experience of using modern and innovative design electronics and technology products, which will make their daily life easier and more comfortable.

According to the industry concerned, the world in the post-COVID-19 period is on the way to economic recovery amid the geopolitical crisis.

In this situation, the Bangladeshi electronics giant is doing very well in the global market. Walton's successes are opening new eras in the electronics and technology industry of Bangladesh, along with making a significant contribution to the nation's economic development, the release added. 

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https://www.newagebd.net/article/172487/85pc-japanese-cos-want-fta-with-bangladesh-survey

85pc Japanese cos want FTA with Bangladesh: survey

Staff Correspondent | Published: 22:28, Jun 05,2022

Eighty-five per cent of the Japanese companies operating in Bangladesh wants signing of a free trade agreement between Japan and Bangladesh to continue duty-market access even after the graduation of Bangladesh from the least developed country to a developing one in 2026, according to a survey.

A survey on FTA or economic partnership agreement between Japan and Bangladesh, jointly conducted by the Japan External Trade Organisation and the Japan Bangladesh Chamber of Commerce and Industry also found that 87 per cent of Bangladeshi companies wanted an FTA between the two countries.

JETRO and the JBCCI on Sunday revealed the outcome of the survey through an event held at the Lakeshore Hotel in Dhaka.

The survey was conducted among 300 companies in August 5-October 14 in 2021.

Out of 300 companies, 142 are Japanese companies operating in Bangladesh and 155 are local firms.

Of the surveyed, 111 Japanese companies hope for the bilateral FTA and only one company in the readymade garment sector denied for the agreement because of incentives for garment factories housed in export processing zones, the survey report said.

The Japanese companies said that bilateral FTA was mandatory as once the GSP was abolished after graduation, it would be difficult for Bangladesh to differentiate competitiveness with the neighbouring country India.

If the preferential treatment is continued by the bilateral agreement, relocation from Bangladesh to other countries could be avoided, the report said.

The survey found that if the FTA was not signed to retain the duty benefit after Bangladesh’s graduation, 20 per cent companies wanted to relocate from the country to other competitive countries like in countries in the Association of Southeast Asian Nations, China and India.

Japan is one of the billion-dollar export markets in Asian for Bangladesh.

Naoki ITO, ambassador of Japan in Bangladesh, said that both the countries were interested to conduct a joint study on feasibility of signing of the FTA between the two countries.

He said that Japanese intra agencies, including foreign, commerce, finance and agricultural ministries, had started consultancy on signing of the FTA between Bangladesh and Japan.

Bangladesh commerce minister Tipu Munshi said that Bangladesh was trying to sign FTAs, preferential trade agreements with some major trading partners, but so far only a PTA was signed with Bhutan in December in 2021.

He said that the government was working for signing trade agreements with seven important trading partners like China, India, Japan and Russia.

Senior secretary to the commerce ministry Tapan Kanti Ghosh, Bangladesh Trade and Tariff Commission chairman Mahfuza Akhter and  Policy Exchange Bangladesh chairman Masrur Reaz, among others, spoke at the event.

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https://thefinancialexpress.com.bd/economy/bangladesh/bgmea-urges-eu-to-continue-duty-free-facilities-after-ldc-graduation-1654432627

BGMEA urges EU to continue duty-free facilities after LDC graduation

Published:  June 05, 2022 18:37:07 | Updated:  June 06, 2022 17:48:49

BGMEA.jpg

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has urged the European Union (EU) to continue GSP facilities for 10 to 12 years more after the country's graduation to a developing nation in 2026.

A delegation of the BGMEA made the call while meeting with Parliamentary State Secretary (Deputy Minister) to the Federal Minister for Economic Cooperation and Development in Berlin Dr B"rbel Kofler on Thursday, reports BSS citing a press release.

Ambassador of Bangladesh to Germany Md Mosharraf Hossain Bhuiyan was also present at the meeting held on Sunday.

BGMEA President Faruque Hassan led the team while the other members were Vice President Miran Ali, Directors Barrister Vidiya Amrit Khan, Md Imranur Rahman, Neela Hosna Ara and Chair of BGMEA Standing Committee on Foreign Mission Cell Shams Mahmud.

At the meeting, Commercial Counsellor of Bangladesh Embassy in Berlin Md Saiful Islam was present.

They discussed possible ways of expanding Bangladesh's trade with Germany and further deepening the relationship between the two countries.

They underscored the need for more cooperation and collaboration between Germany and Bangladesh to unlock trade and investment potentials.

In his speech, BGMEA President Faruque Hassan informed that Bangladesh will graduate from LDC to a developing nation in 2026 and after that, the country will get Generalized System of Preference (GSP) facilities for three years.

He requested EU to continue the facilities for more 10-12 years.

The BGMEA president gave an overview of Bangladesh's RMG industry including the current situation, opportunities, challenges and future priorities.

The RMG industry of Bangladesh is increasingly focusing on enhancing its capabilities particularly through technology upgradation, innovation and skills development, he said.

He said the industry is also laying more emphasis on apparel made from synthetic fibers to meet the rising demand in the global market.

The BGMEA President said Bangladesh aims to increase the share of its apparel export to Germany and accordingly seeks Dr B"rbel Kofler's cooperation in this connection.

Terming Germany as an invaluable development partner, he said there is potential of more cooperation to expand further in the coming years.

During the visit, the BGMEA team also met Director General of the German Federal Ministry of Economy Affairs and Climate Action (BMWK) Dominik Zusammenarbeit (GIZ).

They also took part in a roundtable of Asia Pacific Business Association of the Hamburg, Germany.

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https://www.tbsnews.net/economy/bangladesh-will-allow-bhutan-use-six-more-ports-435074

TBS Report

07 June, 2022, 07:50 pm

Last modified: 07 June, 2022, 07:59 pm

Bangladesh will allow Bhutan to use six more ports

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Bangladesh has agreed to allow Bhutan to use six more ports including Aricha, Chilmari, Sirajganj, Mongla, Chattogram and Payra Port under the port of call arrangement. 

The development came at a meeting between the Bangladeshi and Bhutanese delegation in Dhaka earlier last week, reports Bhutanese daily Kuensel on 1 June.

A port of call is a place to stop for a while to load and unload consignments.

These ports of call will be formalised upon the signing of the revised standard operating procedure (SOP) between the two countries, according to a press release from the Department of Trade (DoT) of Bhutan.

The new provisions were agreed upon when the Bhutanese delegation met with the Ministry of Shipping and related stakeholders in continuation to the second Joint Technical Committee (JTC) meeting to amend the SOP for the memorandum of understanding (MoU) on the Use of Inland Waterways between Bangladesh and Bhutan.

The Bangladesh delegation was led by the joint secretary of the Ministry of Shipping,  ATM Monemul Haque and the Bhutanese delegation was led by the director general of the DoT, Sonam Tenzin.

Bhutan has only one port of call as of today, which is Narayanganji in Dhaka.

The Bangladesh government also agreed to consider Bahadurabad as an extended port of call for Chilmari, the DoT release stated. 

The press statement added that currently extended port of call at Bahaduradad has no custom services but the exporters can still facilitate loading and unloading after completing customs formalities at Chilmari.

The agreement and the amendment of the SOP with the new ports of call are expected to provide alternative export and import transit routes and modes of transportation for the private sector, it added.

It would also help to promote, facilitate, expand and deepen trade relations between Bhutan and Bangladesh and complement the Preferential Trade Agreement that will come into effect from July 1.

The press release stated that the meeting finalised the text of the agreement and its protocol. "The agreement and protocol will be tabled at the Commerce Secretary Level Meeting of the two governments for endorsement and subsequently to the Parliament (Bhutanese) for ratification."

Once ratified by the two respective countries, Bhutan can facilitate the movement of goods in transit (both imports and exports) through Bangladesh including the exit through the seaports of Mongla, Payra and Chattogram.

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