Gone is the golden period when the country's exports posted an annual growth between 20 and 25 per cent. But, one single sector, the readymade garments (RMG), was behind the spectacular growth. The overwhelming dependence, more than 80 per cent, on that has not changed to any notable extent until now, but the pace of export growth has slowed down to a single digit, mainly because of external factors. Squeeze in demand for apparel items from the traditional markets, entry of a few more apparel exporting countries into the global market and some major industrial accidents at home slowed down the pace of apparel export growth in particular. The performance of other major export items, including frozen foods, jute and jute goods and leather and leather goods has not been particularly consistent.
Against the backdrop of a not-so-bright prospect, the setting of a moderate export growth target at 7.14 per cent for the next financial year (FY), 2018-19, looks logical notwithstanding the fact that the country has all the potential to record a better performance. When Bangladesh overtook many major exporting countries in apparel exports and became the second largest exporter after giant China, local industry owners had promised to earn $50 billion from RMG export alone by 2021. However, they would surely earn that revenue, but not within that targeted period. External factors, undeniably, are largely responsible for making the target a bit distant. But some failures on the part of local exporters cannot be overlooked. One big failure has been the slow progress in moving into the production of high-value apparels.
No matter how modest the target will be for the upcoming fiscal year and thereafter, the export prospects, particularly in terms of global trade environment, look somewhat uncertain. The turnaround of the developed economies---destinations of Bangladesh exports in particular--- has been slower than anticipated. Lately, the looming threat of a trade war involving the major global economies, including the USA, China and a number of European countries, has made the situation even more complicated. Such a war if unleashed is likely to cause enough damage to exports from countries like Bangladesh.
A projection made by the United Nations Conference on Trade and Development (UNCTAD), holds that in the event of a full-scale global trade war, Bangladesh exporters may face an average tariff as high as 40 per cent. If that really happens, it would be a disaster for the country's economy. Bangladesh now enjoys an average tariff rate of 3.0 per cent. However, there could be skirmishes and the possibility of any full-scale trade war appears remote right at this moment and Bangladesh would continue to enjoy the duty and quota benefit as a least developed country (LDC) in developed markets until it attains the status of a middle-income country, officially. But this should not refrain itself from expanding both its export basket and its reach in the global market. Volumes have been said and written in support of export diversification. In the global market, two factors--- price and quality--- are given the top-most priority. Bangladesh must ensure that it survives the fierce completion.