The country’s export sector is grappling with mounting concerns over a potential collapse, as traders warn that the interim government’s target of $57 billion in export revenue for the current fiscal year could be unattainable.
The target includes $50 billion from goods exports, but industry leaders are increasingly pessimistic due to a combination of economic pressures. These include an ongoing energy crisis, rising gas and electricity prices, high inflation, a credit crunch in the private sector, and worsening law and order conditions.
Traders fear these challenges could lead to a dramatic decline in export earnings. In response, they have held urgent meetings with the National Board of Revenue (NBR) and Bangladesh Bank, seeking immediate solutions to avert a further downturn.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) warned in a recent letter to the NBR that over 100 garment factories have already shut down due to an inability to import essential raw materials. With more closures expected, the sector’s outlook remains bleak.
On the other hand, the Bangladesh Chamber of Industry (BCI) has informed the central bank that the production of industrial factories has decreased by 30 to 40 percent due to various crises. Those concerned say that the export sector is one of the country's main sources of foreign exchange earnings. Businessmen are now worried about this sector due to various crises. Of this, 24.53 billion US dollars in export earnings have been earned in the first half of the fiscal year (July-December). To meet the government's target, more than 25 billion dollars in export earnings will have to be earned in the goods sector alone in the next six months.
The areas of concern for industrial owners are-
(1)Many factories are closed due to labor dissatisfaction and capital shortage; (2) Businessmen are unable to take loans from banks due to high interest rates; (3) Industries are unable to go into full production due to insufficient supply of gas and electricity. In addition, entrepreneurs are not getting encouragement to expand investment due to the increase in gas prices in new industries; (4) Sales of many industries have decreased due to high inflation; again, due to the decrease in demand for products, industries like rods and cement are not able to survive even by reducing product prices; (5) Many industries, including the garment industry, are in crisis due to complications in importing raw materials for industries; Many factories are forced to stop production due to not being able to import raw materials.
The concerned parties fear that the country's overall export sector is under threat due to these reasons. In a recent meeting with the Governor of the Central Bank, Dr Ahsan H Mansur, businessmen and entrepreneurs of various industries that are in crisis highlighted the above problems.
They said that due to high interest rates on loans, increase in electricity and gas prices, no institution is able to operate at its full capacity; LCs cannot be opened as per demand; gas prices are being increased for new gas connections, and taxes and VAT on various products have been increased on the recommendation of the IMF. The governor was informed in the meeting that the survival of industrial establishments in the current situation has become a big challenge.
BCI President Anwar-ul Alam Chowdhury said that without taking into account the depreciation of the taka, the bank's single loan exposure has been reduced from 25 percent to 15 percent funded and 10 percent unfunded; it takes nine months to a year after the application for cash assistance for export-oriented industries.
When asked about all the issues, BKMEA President Mohammad Hatem said, "Many factories have closed. More factories will close. Exporters are bringing various crises and complaints to us. There is no solution.
The exporter of ready-made garments said, "Our main challenges are the energy sector, the deterioration of law and order, the banking sector, customs-related conditions - if these problems are not resolved, export earnings will definitely decrease."
(Translated by Tanvir Raihan)
