Snapshots of Bangladesh’s major export challenges


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Uploaded on Jan 20, 2025

Bangladesh's economy is significantly dependent on its export earnings. The export sector has faced several challenges under the interim government. Business insiders opine that the recent political upheaval has created an uncertain environment for businesses. The interim government's efforts to restore stability are becoming visible, but the situation has led many international buyers in the garment sector to reconsider placing orders in Bangladesh, anticipating potential disruptions. The garment sector accounts for over 80 percent of Bangladesh's export earnings and has experienced significant obstacles due to worker protests demanding higher wages and better working conditions. These protests have led to the closure of many medium-scale factories as well as production delays, causing concerns among international buyers about the continuity of Bangladeshi suppliers. Rising temperatures due to climate change have increased heat stress among garment factory workers, potentially affecting productivity, lead times, and timely shipments. Global brands are legally required to address these conditions in their suppliers' factories under new EU regulations, exerting pressure on Bangladeshi exporters to improve working conditions. In July 2024, discrepancies were identified between export figures reported by the Export Promotion Bureau (EPB) and the National Board of Revenue (NBR). The EPB acknowledged a $3.16 billion mismatch in export data for the July-September period of the previous fiscal year, causing a temporary suspension of regular export data publication. This has confused stakeholders and may affect trade decisions in the future. The government reduced export incentives across various sectors in July 2024, aiming to encourage exporters to raise competitiveness ahead of the country's graduation from the least developed country (LDC) status in 2026. Business leaders have expressed concerns that curtailing incentives could adversely impact industries already struggling with increased production costs and global competition. The snowball effect of political turmoil, labour unrest, and reduced incentives has strained the economy. The interim government is seeking international assistance to rebuild the economy, but challenges persist in restoring investors' confidence and ensuring sustainable growth. To address the major export challenges, the interim government has adopted the following strategies: * Restoring law and order, which is crucial to regain the confidence of international buyers. The interim government has been working on industrial security and anti-corruption reforms to achieve this.https://www.thedailystar.net/opinion/views/news/snapshots-bangladeshs-major-export-challenges-3801791

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