RIYADH, 26 March 2005 — Bangladesh has adopted an export-led growth policy attaching export development as one of its priorities in its progressive economic policies.

During the recent times, it has emerged as a potential economic force. It has attained a level of macro-economic stability with a GDP growth of 5.5 percent, a satisfactory export growth, stable exchange rate and low rate of inflation. It is now increasingly recognized that economic development on a fast track will largely depend on the accelerated development of country’s export base. This is an overriding need not only for easing the growing pressure on the balance of payment but also for the growth of a viable and efficient industrial, agricultural and tertiary sectors for balanced economic development.

The government has liberalized its trade regime in phases by reducing tariff restrictions on trade, rationalizing tariff rates and improving export incentives measures. The policy of trade liberalization pursued by Bangladesh over the recent past has passed three distinct phases. The first phase constitutes widening of a number of steps toward liberalization of the import regime for facilitating export production by changing the base of the import from the positive to a shorter negative list. To provide package of incentives to the export sector, duty-draw-back schemes on imported input were instituted. In the second phase, important steps like reduction in the number of items under quantitative restriction (QR), rationalization and simplification of tariff structure were undertaken. Major thrust of the trade policy in the third phase had been to carry forward the reforms initiated earlier in a more productive way.

The basic strategies of the country’s export development initiatives include implementation of the export-led-growth strategy through implementation of the measures provided in the export policy; removal of the anti-export bias in the economy by harmonizing the tariff structure; further rationalization of tariff structure; and promotion of export-oriented investment.

Although during 2003-2004 about 138 products were listed as having been exported and the export earning amounted to $7602.99 million, a core group of eight products like ready-made garments, knitwear, raw jute, jute goods, frozen food, leather, chemical products and tea constitute about 89 percent of the export earning of which ready-made garments and knitwear contribute about 75 percent. This shows that export from Bangladesh is presently dominated by these two products. The export target for 2004-2005 has been set at $8565.78 million. During July-December (2004-2005) export earning has stood at $4146.53 million.

Considering the situation government initiatives on export development were focused on expansion of non-traditional export and policy support was given accordingly.

As a measure to broaden the export base, the government has identified a number of non-traditional items having high export potentials for its further development. These are grouped under highest priority sector consisting of software and ICT products, agro products and agro processing products, light engineering products (including auto parts and bicycles), leather goods, high priced ready-made garments and special development sector.

To overcome this situation and strengthen the product base three product councils (a) ICT Business Promotion Council (b) Leather Sector Business Promotion Council and (c) Light Engineering Product Business Promotion Council have already been formed.

These councils are being conducted by representatives of both government and Private sectors. In this connection it may be mentioned that some new non traditional items like potatoes, C.R. coil, cement, pharmaceuticals, computer software, flower and foliages, leather goods, footwear, bicycle and agro-processed products have been exported to the overseas market.

A Few Export Potential Items:

a) Software and ICT Product: Of the product diversified sectors, ICT is very important in the field of export business. Considering the significance of it Export Promotion Bureau initiated various development activities in 1991 and has been taking care of this sector. During 2003-2004 an amount of $7.01 billion was earned through this sector (July-November) 2004-2005 $4.5 million.

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b) Agro-Products: Of this sector vegetables and fruits have been playing a significant role in earning foreign exchange every year. During 2003-2004 export earning of this sector stood at $24.84 million and July-December (2004-2005) $36.59 million.

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c) Agro-Processed Products: Jam, jelly, pickles, “chanachur”, dry foods, juice belong to the agro-processed products. During 2003-2004 an amount of $4.90 million was earned by exporting these products. It is observed that 12,000 restaurants of the United Kingdom import these items from different countries of the world. There are some problems in this sector which include lack of improved packaging and technology, want of adequate space of cargo and cool chain. To overcome these, initiatives like providing 30 percent cash incentives, export credit at seven percent, participation in International Trade Fair and arrangement of Dhaka International Food Fair have been undertaken.

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d) Cut Flower and Foliage: In Bangladesh trading of flowers and foliage is a new concept. Local business of flower started just in early nineties, Bangladesh being gifted with favorable climatic condition and fertile land is capable of producing a large variety of flowers, foliages, orchids and ornamental plants of international standard. Envisaging its potentiality, the government has put this sector under thrust sector and provided necessary incentives in this regard. The cut flower industry in Bangladesh is small when compared to global market. Bangladesh is a new entrant in the cut flower business. Out export earning in this sector was $0.77 million during 2003-2004. The major destinations of our export of cut flowers are India, Pakistan, Saudi Arabia, UAE, USA, UK, Italy, Portugal etc.

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e) Bicycle: Bicycle has been treated as the most potential item in the field of Bangladesh export and $39.67 million was earned through export of bicycle during 2003-2004 and in July-December (2004-2005) $21.19 million despite acute competition with China. We have been capable of exporting this items to countries Malaysia, Saudi Arabia and the united States. Considering the importance and potential of this sector 15 percent cash incentive has been given to the exporters.

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f) Leather Goods: Leather goods also play a vital role in augmenting the export earning of the country. Leather goods such as leather bags, purse, hand gloves and footwear were exported during 2003-2004 and the export earning amounted to $54.50 million and in July-December (2004-2005) $36.36 million.

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g) Halal Meat: About 1.43 billion people consume halal meat in the world. The extent of world trade of halal meat is $500 billion. An enterprise called Premium Abattoir has established the infrastructure with a view to exporting this item. Malaysia will issue import licenses in favor of the importers for importing halal meat from Bangladesh after visiting the aforesaid enterprise in Bangladesh by Malaysian delegation.

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h) Diamond Cutting and Polishing: It is a new inclusion in our exportable products but the export of this item has not still been effected. EPB has taken all sorts of possible initiative as to export it and a policy regarding diamond cutting and polishing has already been sent to the government for finalizing it. In the world there is a great demand of it worth about $42 billion. We hope to export it very shortly.

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i) Luggage and Fashionable Goods: It is one of the most important non-traditional items. During the year 2003-2004 an amount of $0.24 million was earned through export of this item. Considering its importance it has been included in the Special Development Sector of the present Export Policy 2003-2006.