Two macroeconomic developments relating to strengthening of forex earning sources could not have come about at a better time. Set against the backdrop of foreign exchange crisis topped up by depreciating local currency with recession in the backdrop and in the foreground looming globally with a ripple effect, the increased inflow of remittance and augmented export earnings are quite reassuring. Bangladesh Bank data show that in November Bangladeshi expatriate workers remitted foreign currency worth US$ 1.59 billion --- up by 4.34 percentage points compared to the earnings in October. But the pre-August level has yet to be reached. Yet the break with the pattern is significant though the remittance figure in the essence lags behind. At any rate, it gives a respite to the foreign exchange market smarting under immense stress in recent months because of the reserve downturn. The remittance uptake is attributed to the depreciation of local currency and conversely appreciation in dollar value which together have prompted migrant workers to send more money home.
Simultaneously, Bangladesh posted the highest ever single month export earnings with an overall US$5.09 billion income, marking a 26 per cent year-on-year growth with apparel shipment rebounding. An element of sustainability in the rising RMG sector is embedded in the fact that Bangladesh was elevated to the second position in the global export market in 2021 having been pushed back in third position by Vietnam in 2020. A WTO statistical review pointed out that RMG exports from Bangladesh rebounded strongly in the last year posting a 24 per cent annual growth. All this, however, points to the dominant single item export basket requiring for a long time its diversification, a largely pending agenda.
Now how to maintain the tempo, in other words sustain the upbeat trends both on remittance and export fronts? For bolstering remittances new destinations will have to be added, minimizing the existing differences in exchange rates on introduction of innovative product lines on the money market. Incentivising the remitters like allowing them to retain a reasonable percentage of their sent money in dollar may be considered, depending on the size of remittance. In fact, emphasis needs to be laid on responsible and patriotic transactions getting the better of profit motive because after all welfare of the recipients and the country's economy should be uppermost in the minds of the overseas workers. They are doing a great job by investing their sweat and tears, the highest form of value addition to the country's future.
So far as diversifying exports is concerned, priority may be accorded to two areas as an overall strategic approach. First, the plethora of economic zones and FTAs that are in the horizon need to be geared to breaking new grounds in export markets. Secondly, the sectors lately demonstrating negative growth like jute and jute goods, agricultural items such as vegetables, fruits and dry foods, pharmaceuticals, frozen and live fishes need resuscitation. Last but not least, sectors doing well like leather and leather goods, plastic products should receive encouragement. Shipbuilding is another area requiring to incubate and churn in a positive mould.
