& çâÌæÚUæð´ ·¤è ¥ôÚU Îð¹Ùæ ÁæÚUè ÚU¹ð´ ¥ÍæüÌ ¥ÂÙð ÜÿØ ÂÚU ŠØæÙ ÚU¹ð´Ð ãæÚU Ù ×æÙð´, €UØô´ç·¤ ·¤æ× ·¤ÚUÙð âð ¥æÂ·¤ô ©gðàØ ·¤è Âýæç# ãôÌè ãñ ¥õÚU ÁèßÙ ·¤æ ¹æÜèÂÙ ÎêÚU ãôÌæ ãñÐ ÖÜð ãè ÁèßÙ ×ð´ ç·¤ÌÙè Öè ·¤çÆÙæ§ü €UØô´ Ù ¥æ°, çÁ™ææâæ ¥õÚU ©ˆâæã ÕÙæ° ÚU¹ð´Ð ŠØæÙ ÚU¹ð´, ÜÿØ ã×ðàææ ¥æÂ·Ô¤ Âæâ ãôÌð ãñ´ çÁ‹ãð´ ÂæÙð ·Ô¤ çÜ° ÂýØæâ ¥æÂ ·¤Öè Öè àæéM¤ ·¤ÚU â·¤Ìð ãñ´Ð

Can Bangladesh textile exports survive?

Ahsan Mansur
THE ongoing global economic crisis is having a devastating impact on all export dependent economies, whether manufacturing or primary product exporting. The collapse in demand in major industrial countries in North America and the European Union has led to a sharp fall in export demand from the emerging and developing countries and a collapse in primary commodity and manufactured product prices.
Even high performing countries like China and India have recorded sharp slowdowns or decline in export in recent months, following double-digit expansion over a prolonged period. Other high performing economies like those of Malaysia, Thailand,
Philippines, and Indonesia arc also suffering badly because of the ongoing crisis. Along with most exports, textile (including garment) exports from these countries are also declining sharply due to the economic meltdown in North America and Europe.
In contrast, export of textile products from Bangladesh surprisingly remains quite buoyant. Knitwear and woven garments exports have increased by 41.8 percent and 36.2 percent, respectively, during July-December 2008 over the corresponding period last year. Although the high growth rate is partly attributable to the low base of last year during this period, and with the growth rate likely to come down somewhat in the coming months, most garment and knitwear
exporters are bullish about the near-term outlook and are talking about shortage of skilled manpower in the sector.
Naturally, one would like to ask why Bangladesh experience is so different from others. The most common explanation is the "Wal-Mart effect" --named after the world's largest retailer based in the United States, which caters mostly to ordinary Americans. The argument is based on the hypothesis that since Bangladesh primarily exports low-end textile products -- the kind of products marketed by Wal-Mart and whose sales have been least affected by the crisis - and income declining in industrial countries, consumers would be buying more low-end Bangladeshi made textile products.
Prof. Taslim, CEO of Bangladesh Foreign Trade Institute, questions this widely believed hypothesis and rightly points out that: "Our export sector is in deep trouble if it is spewing out mostly inferior goods since the demand for these products will certainly decline when income rises. We do not yet know of any product whose demand increases with both an increase and a decrease in income." I certainly agree with this view since the robust growth of textile exports in recent years (presumably normal times) could not be explained by the hypothesis that Bangladeshi products are inferior.
Another argument put forward by the IMF resident representative in Bangladesh, Mr. Jonathan Dunn, dur-
ing his presentation on the IMF's Asian Economic Outlook, also'throws cold water on the Wal-Mart effect as the basis for explaining the growth in textile exports from Bangladesh. He points to the fact that most households in the US and Europe have closets full of clothes which may last several years even if they do not buy new clothes. The closets I saw at my own and my friends' houses during the last three decades of living in North America certainly testify in favour of Mr. Dunn's argument that households used to a certain quality/brands of clothes would not be shifting to inferior products in the short term, while their overflowing closets could easily meet their needs for several more years.
It is also not conceivable that Bangladeshi manufacturers and workers have suddenly become much more productive than those of China, India, and Indonesia, and will take market share away from these strong competitors. All these countries have larger and better market access, modern production facilities, and better infrastructure than Bangladesh. Why is the Bangladesh textiles sector doing so much better than most others in this difficult time, and will it come out of the global crisis on a positive note?
For the full version of this article please read this month's Forum, available free with The Daily Star on Monday, March 2
Ahsan H Mansur is Executive Director, Policy Research Institute.