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Special Supplement

Export Develpoment and promotion: Strategy and Trend

Md. Akmal Hossain Director General Export Promotion Bureau
1. INTRODUCTION
1.1 Since the emergence as an independent state in December 1971. Bangladesh has remained as one of the world’s least developed countries, with the present per capita income of USS 265. The inadequacy of domestric savings and scarcity of foreign exchange are the two main constraining factors of the economy. The low per capita income limits the scope for domestic savings. The ability to earn foreign exchange is, on the other hand.. constrained by narrow resource base. Consequently. export earning basically depends on a few products, most of which are subject ot both domestic supply shocks and fluctuation in international demand and prices. At the same time, there is a heavy dependence on a wide range of imports. Including food, manufactures and fuel.
1.2 There has been a shift in the government policy in recent years to overcome this situation,. Narrow and inward-looking import-substituting industrialisation policy has been replaced by a broad and outward-looking exp-ortoriented industrialisation policy, inceraslngly reliant on private enterprises. This has assigned a high priority to export develoment within the broad framework of market economy. It is now overwhelmingly felt that accelerated development of country’s export is an overriding need, not only for easing the growing pres sure on the balance of payments, but also equally and more Importantly for the growth of viable and efficient agricultural and Industrial sectors for balanced economic develo-pment. This is only possible through pursuing Sweater and sustained efforts or Increased export earning.
2. BANGLADESH EXPORT DEVELOPMENT STRATEGY 1992-2000
2.1 With this realisation, the Goverment has adopted an export-led growth policy and decided to follow a long term strategy to implement the same. This long term strategy is embodied in the Export Development Strategy. 1992-2000. The industrial and trade policies of the country are based on the long term Export Development Strategy 1992-2000 and get reflected in the fiscal and monetarypolicies of the government. The Export Devdopment Strategy, thus announces Government s firm commitment to support export. The salient features of the strategy are as follows:
2 11 Remove procedural and regulatory bottlenecks Incompatible with stated objectives of the Export Development Strategy;
2.1.2 Provide progressively updated policy support comparable with those of other countries to enable Bangladeshi exporters to be on a sound footing In International trade;
2.1.3 Strengthen and Improve the Institutional framework for providing better services to the exporters and export-oriented industlres:
2.1.4 Recognise the role that supportive infrastr-uctural services can play to improve the exporters capability to perform efficiently and accordingly attach priority to the development of such Infrastructural facilities;
2.1.5 Take care of the entrepreneurial and managerial inadequacies, in the context of the international competitive environment. through appropriate human resource development programmes;
2.1.6 Formulate and implement an export develop ment programme to broaden and diversify the range of exportable products.
2.2 Expanding country's supply base is central to any export strategy. While removal of constraints and improvement in the incentive structure will enhance export performance of the country in the short to medium term, expansion of produ-ction across industries alongwlth adaptation and development of products to compete In the overseas market constitutes a medium to long term priority. The Strategy, thus, Intends to turn the drive for EXPORT LED GROWTH into an ECONOMIC MOVEMENT.
3. Export policy 1993-95 & 1995-97
3.1 The gradual impl ementation of export strategy backed by export policy support appears to have a direet bearing on the growth of export since 1985-36. Despite adverse world trading conditions, onset of depression and subsequent slow economic recovery. Bangladesh's export
performance over years has been quite impressive.
3.2 Export grew at an annual average rate of 16.91% growth rate had increased to 17.25% with effect from 1990-91. Means that export is getting momentum with the passage of time. This the neighb ouring countries, as may be seen below:
3.3 Noted reveals that although export earning in absolute terms in India. Pakistan is higher that of Bangladesh, her export growth in terms of percentage compares favourably with all these countries. There is no denying the fact that the credit for this achievement goes to the
entrepreneurs in general and the exorting community in particular. But that does not undermine the importance of the enabling role pfayed by the Government in promoting export through strategy and policy support. The cardinal principle of such support centres around two areas, viz; product development and diversification and market promotion and expansion.
4. Product development and diversification :
4.1 An examination of the country's export pattern by products reveals that while 120 Educts were listed as having
n exported, a core group of 7 products accounted for 92%
of the total export earning during 1995-96.
It appears from the above table that the core group of 7 products const-itutes readymade garments (50.2%). knitwear (15.4), Jute goods (8.5%). frozen food (8.1). leather (5.5%), chemical fertilizer (2.4%) and raw jute (2.3%). In this core group again, ready-made garment is the single most important item and alone contributes more that half (50%) to the total export earning. If the earning from knitwear is added to that of RMG. the apparel sector as a whole contributed about two-thirds (66%) to the total earning from export in the year 1995-96. This shows that export from Bangladesh is presently dominated by the apparel sector.
4.2. Besides the core group of 7 products, there is a second group of 8 potential products which seem to be less Erominent at the moment, but old high promise for future development. This group as whole contributed about 5% to
the total export earning of the country in 1995-96.
4.3. From the above analysis, it transpires that the core group of 7 products and the potential * group of 8 products togethere contribute about 97% to the total export earning of the country, while the rest of 105 products contribute only 3%. Some of the products in the third group alongwith a few new products, are also coming up with high promise for export. These products can be termed as tomorrow's products and include, among others, leather goods, stuffed toys, mechanical toys, espadrilla. cut flowers, artificial flowers, data entry, com-puter software. Jewellery, cut and polished diamonds, melamine tablewares and electronic products.
4.4. Product development is a continuous process and depends largely on the market prospect and investment environment. These being favourable, new and new industries are coming up and export base is also getting diversified day by day. In 1985-86. total number of items exported were registered as 95 which had increased to 102 in 1990-91 and 120 in 1995-96. If this trend continues, it can reasona-bly be expected that more and more items will come under the fold of export, as the year will pass by. Prouct diversification is not only taking place horizontally, but also vertically. As lor example, in the' case of readymade garments 66 categories of products were exported in the year 1995-96, as against 35 categories in 1985-86 and 54 categories in 1990-91. This is also an encouraging trend and very much conducive to export development and promotion.
5. Market promotion and expansion :
5.1 In the area of market promotin and expansion, the policy objective is to achieve a greater penetration and consolidation in the existing markets and diversification into new markets having proven potentials. A market analysis indicates that Bnagladeshi products found their way to as many as 124 destinations in 1995-96. as against 89 in 1985-86 and 108 in 1990-91. This shows that like product develo-pement and deiversifi-catlon. there has been considerable achieve ment in market promotion and expansion as well. Market promotion and expansion has also taken place both horizontally and vertically. This means that aiongwitn the Increase in the number of export markets, many markets have been converted from mono or bi-product markets to muiti-product markets.
It appears from table-IV that the USA was the largest export market for Bangladesh in 1995-96 with an intake of 31% of our total export. This was followed by the U. K. (10.8%). Germay (9.5%). France (7.0%). Italy (5.3%). Belgium (4.8%). the Netherlands (4.7%). Japan (3 1%) and Hongkong (2.7%) 5.2. This first group of 9 markets togehter contributed 78 8% to our total export earning in 1995-96.
' Continued