Bangladesh hopes to achieve a 15% growth in export earnings this fiscal, with the economy showing resilience to come out of the economic downturn caused by the pandemic and the government hinting at another stimulus package in view of a second wave of Covid that has already hit Europe.
In the last financial year, the country's export earnings suffered a whopping 17% negative growth, despite the government lowering the target than that of the previous fiscal for the first time since 1971.
According to an official document in possession with UNB, the government has set an export growth target of 10.8% and 11% in 2021-22 and 2022-23 fiscals, respectively. The export growth in 2018-19 was 10.5%, while it was estimated at 12% in the last fiscal, but Covid and its aftermath forced the government to revise it to a negative growth of 10%.
According to Export Promotion Bureau (EPB) data, the export earnings in 2019-20 was USD 33,674.09 million, which was USD 40,535.04 million in the previous fiscal. This means the export earnings in the last fiscal saw a 16.93% negative growth. If compared with the actual target of USD 45,500 million, export earnings registered a negative growth of 25.99%.
According to the official data, the export earnings started to slow down in the first half of the 2019-20 fiscal, while it took a serious turn due to the pandemic. In fact, in July-April, exports decreased a whopping 13.09% as compared to the corresponding period of the previous fiscal. In the same period, exports in the US and the EU slipped to the negative zone, at 3.4% and 6.3%, respectively.
For revamping the export sector as well as the economy as a whole, as per the document, the Bangladesh government had announced stimulus packages worth Tk 121,000 crore -- equivalent to 4.3% of the country's GDP. The aim was to minimise the impact of Covid on businesses, employment and productivity.
A total of 18 economic sectors, including export-oriented industries, small, medium and cottage industries, agriculture, fish farming, poultry and livestock, have been brought under the ambit of these incentive packages.
For the export-oriented industries, the stimulus packages are special funds worth Tk 5,000 crore, expanding the facilities of the Export Development Fund (EDF) of Bangladesh Bank with Tk 12,750 crore, giving an extra 2% interest as subsidy, and Pre-Shipment Credit Refinance Scheme worth Tk 5,000 crore.
Besides, the government has chalked out various strategies like diversification of export items, new market searching, new Free Trade Agreement and enhancement of productivity of the export sector. The government has also taken several other initiatives to help the economy tide over the Covid crisis.
Apart from this, setting up special economic zones and providing incentives to potential industries will improve the exports, as per the document. The government is implementing Export Policy 2018-21, where some 15 sectors have been identified as potential segments, it says..
It may also be mentioned here that Prime Minister Sheikh Hasina had on Wednesday asked the Finance and other ministries to formulate another financial stimulus package keeping in mind the "second wave" of Covid-19, which has already hit many European countries.