Bangladesh economy shows early signs of pandemic recovery

A garment factory in Dhamrai, near Dhaka, Bangladesh. After months of decline in garment exports, Bangladesh’s economy appears to be in recovery. (AP)
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Updated 19 September 2020

Bangladesh economy shows early signs of pandemic recovery

  • In August, exports rose 4.3 percent from a year earlier, to $2.96 billion, mostly driven by apparel shipments, according to the government’s Export Promotion Bureau

DHAKA: A rebound in garment orders after demand crashed during spring shutdowns is helping to revive the Bangladesh economy.
Apparel makers, the country’s main export industry, say they are looking ahead to Christmas orders from the US and other major markets.
Remittances from Bangladeshi workers employed overseas have also recovered, helping to relieve pressures from a pandemic quasi-shutdown during the spring.
The Asian Development Bank reported this week that the economic comeback was encouraging. It is forecasting the economy will grow at a robust 6.8 percent annual pace in the fiscal year that ends in June if current conditions persist.
That’s a much brighter outlook than in April-May, when global clothing brands suspended or canceled orders worth more than $3 billion, affecting about 4 million workers and thousands of factories.
“At the moment we can say that the ready-made garment industry has been able to regain its growth trajectory upward compared to March-May,” said Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association, or BGMEA.
“As economies in the West were turning around we were successfully able to get the buyers back to the negotiating table, which is why 80 percent to 90 percent of the $3.18 billion in canceled orders have been reinstated,” she said.
Bangladesh earns about $35 billion annually from garment exports, mainly to the US and Europe. The industry is the world’s second largest after China’s. Bangladesh’s exports rose 0.6 percent to $3.9 billion in July,

FASTFACT

Bangladesh’s exports rose 0.6 percent to $3.9 billion in July, after plummeting 83 percent to $520 million in April.

after plummeting 83 percent to $520 million in April. Imports, which are reported on a quarterly basis, began recovering earlier, rising 36 percent in May-June.
In August, exports rose 4.3 percent from a year earlier, to $2.96 billion, mostly driven by apparel shipments, according to the government’s Export Promotion Bureau. Garment shipments totaled $5.7 billion in July and August.
“The garment sector is making a good comeback. Our agriculture is doing well. Remittances are coming. These all are good signs for the economy,” said Ahsan H. Mansur, executive director of the Policy Research Institute, a think tank in Dhaka.
“The pace of the recovery is clearly visible. But challenges have been there too. The pace of the recovery will depend on how the pandemic behaves in the West over the next few months,” Mansur said. That’s the inestimable question facing everyone.
As of Thursday, Bangladesh had reported more than 342,000 confirmed coronavirus infections and 4,823 deaths. The country confirmed its first positive case on March 8.
Some experts say that the actual number of infections is higher than the official count. The garment industry says few workers in its factories have fallen ill thanks to precautions such as employing fewer people on the production lines and imposing safety guidelines. The government imposed a nationwide lockdown on March 26, and the garments sector was closed for nearly three months, reopening only gradually.
The country director for the ADB, Manmohan Parkash, said that the government has managed the crisis well, “with appropriate economic stimulus and social protection measures.”
“We are encouraged by the increase in exports and remittances, and hope the recovery will be sustained, which will help in achieving the projected growth rate,” Parkash said.


Britain, EU tell each other to move on trade

Updated 20 October 2020

Britain, EU tell each other to move on trade

  • Both sides call on each other to protect billions of dollars of trade between the neighbors

BRUSSELS: Britain and the EU said on Monday the door was still open for a deal on their post-Brexit relationship, calling on each other to compromise to find a way to protect billions of dollars of trade between the neighbors.

With just over two months before Britain ends a status quo transition arrangement with the EU, talks on a trade deal are deadlocked, with neither wanting to move first to offer concessions.

A no-deal finale to Britain’s five-year Brexit drama would disrupt the operations of manufacturers, retailers, farmers and nearly every other sector — just as the economic hit from the coronavirus pandemic worsens.

European Commission Vice President Maros Sefcovic repeated on Monday that the EU still wanted a trade deal but not “at any cost” after British Prime Minister Boris Johnson said on Friday there was no point in continuing talks.

“It has to be a fair agreement for both sides — we are not going to sign an agreement at any cost,” Sefcovic told reporters after meeting Michael Gove, Britain’s point man on the existing divorce agreement, in London.

“The EU is ready to work until the last minute for a good agreement for both parties,” Sefcovic said.

Britain, increasingly frustrated by the EU’s refusal to start text-based talks, called on the bloc to make the first move, with its housing minister saying that Brussels only had to make “some relatively small but important changes.”

Housing Secretary Robert Jenrick called on the EU to “go that extra mile, to come closer to us on the points that remain for discussion.”

A spokesman for Johnson again ruled out prolonging any negotiation beyond the end of this year, when the transition period runs out, saying the EU “must be ready to discuss the detailed legal text of a treaty in all areas with a genuine wish to respect UK sovereignty and independence.”

EU chief negotiator Michel Barnier had been due in London for talks with British counterpart David Frost this week. Instead, they will now speak by telephone on Monday to discuss the structure of future talks, Barnier’s spokesman said.

Negotiations broke down on Thursday, when the EU demanded Britain give ground. Issues still to be resolved include fair competition rules, including state aid and fisheries. EU diplomats and officials cast Johnson’s move as a frantic bid to secure concessions before a last-minute deal was done, and European leaders have asked Barnier to continue talks.

British officials have repeatedly said any deal has to honor Britain’s new status as a sovereign country and not try to tie it to EU rules and regulations.

German Chancellor Angela Merkel said compromises on both sides would be needed. French President Emmanuel Macron said Britain needed a deal more than the 27-nation EU.

Britain is launching a campaign this week urging businesses to step up preparations for a no-deal departure. In a statement accompanying the launch, Gove says: “Make no mistake, there are changes coming in just 75 days and time is running out for businesses to act.”

More than 70 British business groups representing over 7 million workers on Sunday urged politicians to get back to the negotiating table next week and strike a deal.