The country's export sector has been gripped afresh with recession. And as a result, the export orders in the country's main export earning sector -- the readymade garment (RMG) industry -- are declining. The orders in the past six months decreased by 20 to 25 percent. The growth in the RMG sector declined to 28 percent in July 2011 from 42 percent in June the same year. The export sector of Bangladesh has started experiencing a negative impact, as a fresh recession hit the RMG buyer countries, including those in the United States and Europe.
Exporters said buying orders in the knit and woven sectors have decreased. If the trend continues, it will turnout to be bad for the industry. Work in most of the RMG units at this moment has reduced by 50 percent. If the recession is a fact, the government will have to activate the announced taskforce right now.
Sector's Real Export
It has been learned that the RMG sector is the highest export earner of the country. In the knit sector of this industry, the export growth is 46.25 percent. The sector's real export has stood at $9.482 billion against the target of $7.131 billion. That means the real growth is 32.96 percent higher than the target. The growth in the oven sector has been increased by 40.23 percent. The sector exported items worth $8.432billion against the target of $6.614billion. The real export in the sector has been increased by 27.48 percent against the target.
This sector is not getting their exact export orders due to the gas and electricity crises. Bangladesh has lost a goon number of buyers as orders could not be supplied on due time. Many entrepreneurs had to supply the consignment by planes spending more money to contain the buyers.
Portion of Export Orders
In addition, recession in economy of the United States, Europe, Greece and Canada is pushing the coming days toward a crisis. By this time a considerable portion of export orders has gone to our neighboring country. Export to the United States, the United Kingdom, France, Italy, the Netherlands and Japan been declined. Among the South Asian Association for Regional Cooperation (SAARC) countries, the exports to Afghanistan, Pakistan, Bhutan, Nepal and Sri Lanka have decreased.
About the state of exports, former BKMEA (Bangladesh Knitwear Manufacturers and Exporters Association) President Mohammad Fazlul Haque said our orders have reduced in comparison with the normal time. He said the orders started declining from two months back, which is 20 percent less than the expectation. He said the US economy has a definite impact on all over the world. The Europe is undergoing recession. We are apprehending a crisis in the coming days. Our economy is experiencing unrest in the export order. Things will not be clear before two or three months onward. He said it will be very difficult to contain the growth that achieved in the last fiscal (2010-2011).
Overcoming Recession
For maintaining the growth, he suggested taking initiatives in the private sector. He said we have to diversify our import basket. We have been confined to some items. We have to come out of that. He said we are unable to produce more diversified items and this is our failure. He said helps from the government is necessary to enter new markets. The governments of our competitors are giving that.
Exporters Association of Bangladesh President Abdus Salam Murshedy said it is true that our export orders are declining. Not only in the RMG sector, there is a fall in overall export. He said we could overcome the recession in the fiscal 2010-2011. But a new recession is approaching us. Our buying countries are also gripped with recession. The economy of Europe, America, Greece, Portugal and Denmark has been suffering from recession. Their purchasing power is also decreasing due to the recession.
He said our readymade garment has 90 percent export market in Europe and America. He said the export in July 2011 reduced to 27 percent from 50 percent in June 2010. The export is likely to reduce further in the coming days. He said the overall export order has been reduced by 20 to 25 percent.
Country's Economy
Murshedy said our export is about taka 240 billion. He said it is urgent to form the taskforce suggested by the Prime Minister. The activities of the taskforce should begin soon. He said we will have to increase the ability in completion to contain the growth rate. He said initiatives will have to be taken for solution of the present electricity and gas crises. He said the diesel and furnace oil based industries will have to be given duty-free facilities. He said capacity of the Chittagong Seaport will have to be increased. Mongla Seaport will have to be built as an alternative port. He suggested reducing the high rate interest on bank loan. He said we have been failing to survive in the race with our competitive countries due to these reasons. He also stressed the need for ensuring political stability in the country. He expressed the apprehension that the country's economy might suffer a lot in the recession set to recur before the passage of one-year time.
About the present state of export, Faruk Hasan, vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said that the orders in the export sector have been reducing for the last two months. Some of the RMG factories have already been closed down for lack of work orders. But the condition of sweater industry is good. The sweater industry has enough work. The recession is continuing in the cases of knitwear and oven garment orders. He said 50 percent work has reduced in factories of the said sectors. Faruk Hasan believes from August to October 2011 will be a very bad time. He said 50 percent of our export is going to Europe, 5 percent to Canada and 26 percent to the United States. We are taking preparations to fetch export markets in the neighboring countries. We will be able to increase our export to the neighboring countries by 10 percent in the next 5 years. The export decreased in July 2011 as against June 2010. The export stood at 28 percent in July 2011, which is higher than that of the previous year.
Foreign Exchange Reserve
Economist and Adviser to Former Caretaker Government Dr AB Mirza Azizul Islam said reduction of order in our export sector is not an unusual phenomenon. He said the US economy suffers from considerable uncertainty. The governments could overcome the recession in the fiscal 2008-2009 through bailout packages. But they have no such a scope this time. He said the condition of economy in Greece, Portugal and Spain is not good. Under the above circumstances, he said, the reduction in export order is not an unusual event.
He said: “We have to see whether quantity or value is declining.” He said the growth in RMG export in the last year increased export by 15 percent. And the value was increased by 35 percent. He said more abnormal situations might be created in the coming days. Our remittance is declining. The foreign exchange reserve is on the wane. He said the price of oil in the Middle East will fall if the recession strikes. And as a result, this will leave a negative impact on the Bangladeshis working in the Middle East countries.
Exporters said buying orders in the knit and woven sectors have decreased. If the trend continues, it will turnout to be bad for the industry. Work in most of the RMG units at this moment has reduced by 50 percent. If the recession is a fact, the government will have to activate the announced taskforce right now.
Sector's Real Export
It has been learned that the RMG sector is the highest export earner of the country. In the knit sector of this industry, the export growth is 46.25 percent. The sector's real export has stood at $9.482 billion against the target of $7.131 billion. That means the real growth is 32.96 percent higher than the target. The growth in the oven sector has been increased by 40.23 percent. The sector exported items worth $8.432billion against the target of $6.614billion. The real export in the sector has been increased by 27.48 percent against the target.
This sector is not getting their exact export orders due to the gas and electricity crises. Bangladesh has lost a goon number of buyers as orders could not be supplied on due time. Many entrepreneurs had to supply the consignment by planes spending more money to contain the buyers.
Portion of Export Orders
In addition, recession in economy of the United States, Europe, Greece and Canada is pushing the coming days toward a crisis. By this time a considerable portion of export orders has gone to our neighboring country. Export to the United States, the United Kingdom, France, Italy, the Netherlands and Japan been declined. Among the South Asian Association for Regional Cooperation (SAARC) countries, the exports to Afghanistan, Pakistan, Bhutan, Nepal and Sri Lanka have decreased.
About the state of exports, former BKMEA (Bangladesh Knitwear Manufacturers and Exporters Association) President Mohammad Fazlul Haque said our orders have reduced in comparison with the normal time. He said the orders started declining from two months back, which is 20 percent less than the expectation. He said the US economy has a definite impact on all over the world. The Europe is undergoing recession. We are apprehending a crisis in the coming days. Our economy is experiencing unrest in the export order. Things will not be clear before two or three months onward. He said it will be very difficult to contain the growth that achieved in the last fiscal (2010-2011).
Overcoming Recession
For maintaining the growth, he suggested taking initiatives in the private sector. He said we have to diversify our import basket. We have been confined to some items. We have to come out of that. He said we are unable to produce more diversified items and this is our failure. He said helps from the government is necessary to enter new markets. The governments of our competitors are giving that.
Exporters Association of Bangladesh President Abdus Salam Murshedy said it is true that our export orders are declining. Not only in the RMG sector, there is a fall in overall export. He said we could overcome the recession in the fiscal 2010-2011. But a new recession is approaching us. Our buying countries are also gripped with recession. The economy of Europe, America, Greece, Portugal and Denmark has been suffering from recession. Their purchasing power is also decreasing due to the recession.
He said our readymade garment has 90 percent export market in Europe and America. He said the export in July 2011 reduced to 27 percent from 50 percent in June 2010. The export is likely to reduce further in the coming days. He said the overall export order has been reduced by 20 to 25 percent.
Country's Economy
Murshedy said our export is about taka 240 billion. He said it is urgent to form the taskforce suggested by the Prime Minister. The activities of the taskforce should begin soon. He said we will have to increase the ability in completion to contain the growth rate. He said initiatives will have to be taken for solution of the present electricity and gas crises. He said the diesel and furnace oil based industries will have to be given duty-free facilities. He said capacity of the Chittagong Seaport will have to be increased. Mongla Seaport will have to be built as an alternative port. He suggested reducing the high rate interest on bank loan. He said we have been failing to survive in the race with our competitive countries due to these reasons. He also stressed the need for ensuring political stability in the country. He expressed the apprehension that the country's economy might suffer a lot in the recession set to recur before the passage of one-year time.
About the present state of export, Faruk Hasan, vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said that the orders in the export sector have been reducing for the last two months. Some of the RMG factories have already been closed down for lack of work orders. But the condition of sweater industry is good. The sweater industry has enough work. The recession is continuing in the cases of knitwear and oven garment orders. He said 50 percent work has reduced in factories of the said sectors. Faruk Hasan believes from August to October 2011 will be a very bad time. He said 50 percent of our export is going to Europe, 5 percent to Canada and 26 percent to the United States. We are taking preparations to fetch export markets in the neighboring countries. We will be able to increase our export to the neighboring countries by 10 percent in the next 5 years. The export decreased in July 2011 as against June 2010. The export stood at 28 percent in July 2011, which is higher than that of the previous year.
Foreign Exchange Reserve
Economist and Adviser to Former Caretaker Government Dr AB Mirza Azizul Islam said reduction of order in our export sector is not an unusual phenomenon. He said the US economy suffers from considerable uncertainty. The governments could overcome the recession in the fiscal 2008-2009 through bailout packages. But they have no such a scope this time. He said the condition of economy in Greece, Portugal and Spain is not good. Under the above circumstances, he said, the reduction in export order is not an unusual event.
He said: “We have to see whether quantity or value is declining.” He said the growth in RMG export in the last year increased export by 15 percent. And the value was increased by 35 percent. He said more abnormal situations might be created in the coming days. Our remittance is declining. The foreign exchange reserve is on the wane. He said the price of oil in the Middle East will fall if the recession strikes. And as a result, this will leave a negative impact on the Bangladeshis working in the Middle East countries.
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