Bangladesh’s economic growth for the last two decades and more has been quite notable. The average annual real increase in GDP of about 5-percent in 1990s and drop of almost 10 percent in the poverty rate are both very significant achievements. The boom in exports, over the past decades, with earnings in 2004-05 (of $ 8.65 billion) about four times the level of 1991-92 and the success in halving the 1980’s average rate of population increase have helped raise the country’s per capita growth.

This record of progress is one guide to Bangladesh’s potential to grow and to score well in the world markets. Now, Bangladesh has attained a level of macroeconomic stability with a GDP growth of 5.5 percent, a satisfactory export growth, stable exchange rate and a low rate of inflation. In 1972-73 an amount of $348.00 million was earned by exporting only 29 items to 67 countries. But now in 2004-2005 our export earning amounted to $8.65 billion and numbers of exportable items are about 160, which were exported to 186 countries of the world. It is now increasingly recognized that our economic development mainly depends on the accelerated development of country’s export base and foreign investment. The government decision to adopt a “look East” market policy is being followed by EPB and as such we are trying to find new markets in Asia, Africa and CIS countries.

The export development strategy largely depends on our ability of developing and diversifying export products and markets. However our main weakness in export sector is narrow export base and limited number of markets abroad. In view of such a situation, the government has emphasized a policy of export development rather than export promotion. The government has also 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.

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. In the export policy 2003-2006 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 products, High priced readymade garments. In addition, 10 items such as pharmaceutical products, cosmetics and toiletries, luggage and fashion goods, electronic products, C.R. coil, cards and calendars, stationery products, silk cloths, handicrafts and herbal medicines and medicinal plants identified as potential products have also been incorporated in the Special Development Sector in the present export policy.

Incentives and facilities are provided for the development of those products:

Project loan with lower interest rate on priority basis; income tax exemption; financial incentives including cash assistance; export loan on easy term and lower interest rate; air transport facility with reduced transport fare; tax return/bond facility and duty-draw back system; assistance for setting up infrastructures and related units to reduce production cost; expansion of institutional and technical facilities for developing product quality and quality control; assistance in marketing products; assistance in exploring markets abroad; and assistance in foreign investment.

In order to strengthen the product base, three product promotion councils namely (a) ICT Business Promotion Council (b) Leather Sector Business Promotion Council and (c) Light Engineering Product Business Promotion Council have been formed. The representatives from both government and private sectors are in these councils. The formation of Pharmaceutical Product Business Promotion Council and Medicinal Plants and Herbal Product Business Promotion Council are also in the offing.

With a view to encourage the exporters to export more and to make the prices of the products competitive internationally, a package of cash incentives have been accorded which includes frozen shrimps and other fishes (10 percent), bicycle (15 percent), agro-products and agro- processed products (30 percent), RMG made of local fabrics (5 percent), jute goods (7.5 percent), leather products (15 percent), potatoes (20 percent), handicrafts (15-20 percent), bone crushed (15 percent), tobacco (10 percent) and hatching eggs and day-old chicks (25 percent).

The Ministry of Commerce has also taken initiatives to seek duty free/quota free market access of Bangladeshi products in the markets of developed and developing countries. As a result Bangladesh has already received duty free/quota free market access from a number of countries which includes Australia, New Zealand, Norway, Canada, and EU, besides getting some tariff concessions for exports to India, Pakistan, China, Thailand, Russia and Turkey.

Realizing the need for market development activities, the government continues to provide support and assistance in widening the marketing network, the objective of which is to achieve greater penetration and consolidation in the existing markets and diversification into new markets. Besides, to encourage the exporters to establish market contacts in potential and unexploited markets, participations in different international trade fairs have been organized which have resulted in familiarization of our products. Marketing missions comprising the delegation both from private and public sectors have been sent in order to explore the potential of our products in the globe.

During 2003-2,004 and 2004-2005 Special Marketing Missions were sent to a number of African countries namely Kenya, Uganda, Tanzania, Malawi, Egypt, Algeria, Morocco, Tunisia, Libya and Sudan in order to explore the potential of Bangladesh pharmaceuticals products and hold business negotiations with the importers as well as the Drug Registration Authorities to facilitate export activities from Bangladesh. Due to these activities export orders of pharmaceuticals from these countries have been received and about 5/6 pharmaceuticals Bangladesh firms have taken initiatives to engage agents in those countries to work on behalf of Bangladesh.

Due to various support and activities undertaken by the government, export of some non-traditional items like pharmaceuticals, light engineering products, cut flower & foliage have been possible.

Pharmaceutical Product:

Bangladeshi pharmaceuticals industries today not only meet 95 percent of local demand but are also exporting medicine to about 62 countries. In the year 2003-2004 Bangladesh exported medicine worth $12.69 million. As against this, an amount $21.26 million was earned during 2004-2005. The percentage of increase is therefore, 67.53. Bangladesh as an LOC, will be able to manufacture patent medicine under TRIPs till 2016.

Light Engineering Products:

The export earning from light engineering products like iron-chain, coil assembly, machinery parts, motor/vehicle parts, diesel engine & generator in 2004-2005 amounted to $ 85.00 million while Bangladesh earned $ 41.87 million during 2003-2004, thereby registering an increase of 103.06 percent.

Cut Flower and Foliage:

The most non-traditional item has now become a promising one, the export of which registered a phenomenal growth of 865.79 percent over the period of one year. In the year 2004-2005 the performance of this sector was $7.34 million while in 2003-2004 the figure was just $0.76 million.

Agro Processed Products:

An amount of $ 8.88 million was earned from this sector, which includes spices, mustard oil, jam/jellies, fruit juice, biscuits & dry food during 2004-2005 while the performance was $6.31 million during 2003-2004 thereby registering an increase of 40. 73 percent.

Bicycle:

Bicycle is a new entrant in our export basket. In 2004-2005 our export was $40.98 million while we exported $39.67 million in 2003-2004 thereby registering an increase of 03.30 percent.

Leather Footwear:

During 2004-2005 an amount $87.55 million worth of footwear was exported while the figure was $68.30 million during 2003-2004. The percentage increase is 28.18 percent. As part of development activities Bangladesh missions abroad have been activated and made more dynamic and target oriented in order that all stakeholders in Bangladesh may benefit by using the missions’ services and information with regard to market intelligence of those countries.

Export Promotion Bureau has been conducting National Export Training Program in order to make the stakeholders aware of the recent changes taking place in the field of export business due to the present liberalization and globalization policy under WTO.

Capacity building of Export Promotion Bureau as an institution has also been initiated by the government in order to make it more efficient and market oriented and to cater the demand of the exporters. EPB is now working more closely with private sector organizations. The private sector plays a pivotal role in the economic development of the country. Keeping this in view, the Private Sector Development Support Project (PSDSP) has been designed in the context of the Poverty Reduction Strategy Program (PRSP). The objective of the proposed project is to help the private sector enhance its competitive strength and successfully meet the challenges of a post MFA world. Under the auspices of the design phase, three groups have been formed from among the key stakeholders of PSD in Bangladesh. The GOB PSD Task Force, the PSD Core Groups and the Private Sector Consultative Group focusing on each of the key components of the proposed PSDSP Regulatory Reform, Capacity Building and Special Economic Zones. Export Promotion Bureau is playing vital role in designing the PSD program where Vice Chairman, EPB is a member of the Task Force and other four officials are in the Core Group. Besides, EPB has been maintaining close liaison with different international agencies like World Bank, ITC, UNDP, European Union, USAID, Trade Facilitation Office of Canada (TFOC), SIPPO Switzerland, GTZ of Germany, etc. for technical and marketing collaboration. Recently EPB has jointly organized a seminar in collaboration with TFOC regarding marketing prospect in Canada. All these policy supports have contributed toward export development of the country.

(Mir Shahabuddin Mohammad is vice-chairman of Export Promotion Bureau)