As Bangladesh will see a sharp decline in export earnings following the suspension of all trade activities across the globe amid the coronavirus onslaught, economists have underscored need for devising proper strategies and an effective economic diplomacy to tackle the situation in the coming days.
They said the possible fall in export earnings as well as remittance inflow and revenue collection will greatly affect the country’s fast-growing economy and growth, reports UNB.
The experts urged exporters to look for new markets across countries that are somewhat stable or were affected less by the coronavirus.
They thanked Prime Minister Sheikh Hasina for announcing a total of Tk 727.50 billion in stimulus packages to overcome the possible economic shock from the ongoing shutdown enforced due to the deadly COVID-19 outbreak and recommended quick and proper distribution of the amount to offset the impacts.
According to the data released by Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on April 9, 1,123 factories reported that orders for 967.01 million pieces of clothes worth $3.11 billion export were either cancelled or held up affecting 2.24 million workers.
BGMEA President Rubana Huq said they lost the orders due to the impact of coronavirus on global markets. “We’re under huge pressure due to cancellation of orders one after another by foreign buyers. However, we thank our Prime Minister for announcing a stimulus package of Tk 50 billion for us,” she said.
Similarly, export earnings from other sector remained halted amid the existing situation.
Bangladesh’s export earnings dropped by 4.79 per cent in the first eight months of 2019-2020 fiscal year compared to the corresponding period of the previous financial year, according to the Export Promotion Bureau (EPB).
The EPB data showed the export earnings dropped by $26.24 billion during July-February period against $27.56 billion in the same period of the last fiscal year.
The data also mentioned that the earnings fell short of the target by 12.72 per cent estimated for the period.
For the month of February, the country’s exports earnings declined by 1.8 per cent to $3.32 billion from $3.38 billion earned in the same period last year.
The export earnings from the apparel sector declined to $21.84 billion in July-February period against $23.12 billion during the last year. Of them, earnings from woven garments dropped by 5.88 per cent, knitwear exports fell by 5.17 per cent and earnings from home textile declined by 7.47 per cent, the data showed.
The EPB data show export earnings from leather and leather goods fell by 9.04 per cent to $631.89 million during the period against $694.72 billion during the corresponding period of the last fiscal.
However, country’s export earnings from jute and jute goods during the period increased by 24.45 per cent to $697.63 million from $560.56 million and agricultural products like vegetable, fruits, spices and tea exports went up by 3.83 per cent to $667.36 million from $642.73 million in the last fiscal year, as per the data.
Contacted, Research Director of the Centre for Policy Dialogue (CPD) Dr Dr Khondaker Golam Moazzem said the existing negative trend in the country’s export earnings would further widen following the coronavirus pandemic.
“Our export earnings saw a nosedive for decline in global demand following the trade war. Amid the negative trend, it would further widen since various problems have arisen in local and international markets following the coronavirus pandemic,” he said.
He said Bangladesh has to take an effective economic diplomacy. “We have to look for new markets in African, European or American continents that are somewhat stable or affected less by the coronavirus,” he added.
Dr Mohammad Mahfuz Kabir, research director at Bangladesh Institute of International and Strategic Studies (BIISS), said the demand of new products will increase in global markets during the coronavirus crisis. “These markets must be tapped to overcome the negative trend of export earnings.”
He also thanked the Prime Minister for announcing stimulus packages, saying: “We need to extend support to backward linkage companies who help boost the export earnings. The government should distribute the fund quickly and properly so that there’s no vast impact here,” he said.
Economist Mohammad Shahjahan Siddiqui said there will be a serious impact of coronavirus in the country’s export earnings if the situation persists for long. “If coronavirus situation takes a serious turn and persists for long, we can’t tackle it and there’ll be economic fallout,” he added.