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Alarming fall in garments export

Star Report
' The country's ready-made garments sector is reeling under serious problems as a declining trend in export earnings has set in since last year.
According to Export Promotion Bureau (EPB) figures. earnings from the readymade garments (RMG) exports dropped by 24.11 per cent during July and August of the current fiscal year compared to the corresponding period of 1993-94.
Export earnings from the sector stood at only 192.52 million US dollars, against a target of 341.67 million, during the period. It was 253.69 million dollars in July-August of the last fiscal year.
The rapid decline in export earnings from the RMG sector will continue unless the
government initiates immediate steps to solve the problems plaguing the sector," cautioned Redwan Ahmed. MP. President of the Bangladesh Garments Manufacturers and Exporters' Association (BGMEA).
He pointed out that nearly 40 per cent of the 1.&30 -member factories of BGMEA have been turned into sick units because of faulty government policies.
The EPB noted that the average export uplt price and the export volume declined by 9.05 per cent and 16.58 per cent respectively during the first two months of 1994-95.
In 1993-94 export earnings from the sector, which accounts for some 60 per cent of
the total export earnlnp of the country, were 21.72 per cent lower than the target of 1.650 mflliqn dollars ;
Although export earnings during the period were 4.13 per cent higher at 1.111.65 million dollars compared to that of 1992-93. the tot»l volume of exports in the Sector declined by 4.72 per cet^
What Is more alarmirig. the EPB pointed out. is thalTearn-ings from RMG exports to the United. States, the single-largest market, during tie last fiscal year declined bj 109 million dollars to 545.42 million dollars Instead of a projected growth of 25 per cent.
Industry circles attributed the decline to increased competition from other countries like Vietnam. Kenya. Cobmbia and Honduras, and to some domestic problems facing the garments sector.
The BGMEA. meanwhile, has identified 12 problems plaguing the sector and has called for immediate #veminent intervention in delving those.
The association seeks the withdrawal of the 0.5 p«r cent tax at source imposed on the FOB value of exportable,readymade garments: strearllining of complex customs procedures: allowing duty-fife import of all types of fabc. including grey-fabric. an} other chemicals used in the sector under bonded warehouse facil-
hies: providing the export oriented garments industries the same facilities given in the export p.ocessing zones: and reinstating the facility allowing import, which have been shipped before opening of a back-to-back letter of credit.
Tlie main problems of the sector relate to fiscal disincentives and administrative bottlenecks, said Red wan Ahmed, adding. "If these problems ai e solved we won't have any problem In enhancing our position in the international market "
The BGMEA had earlier set October 24 as the deadline for the government to solve the problems of the garments sector. But last week the association deferred the action programme by another two weeks following assurances from Finance Minister M Saifur Rahman to look into the problems af a meeting with the BGMEA leaders on November 3.
"We are hopeful of a positive outcome from the meeting with the finance minister as it is not very difficult to implement our demands." observed Ahmed.
In addition to the domestic impediments, the non-signing of the Bangladesh-US textiles agreement as well as the implications of the GATT accord and the proposed Harkins Bill in the US Senate have ali cast long shadows over the future of the country's most successful industrial sector.