When the export target has become a non-target, I wonder how a person can be so dumb to keep on claiming a $5 trillion GDP by 2050? I can expect a little more than $1 trillion by middle of this century at best.
Untargeted export target
Wasi Ahmed
Due to an unexpected slump in the country's exports in recent months, the government is reportedly contemplating to revising the current year's export target, downscaling it from US$ 26.5 billion to US$ 22.20 billion. The fall in the export earnings has been found to be rather consistent during the past months, and reasons for poor performance are being largely attributed to the prevailing situation in the crisis-prone Eurozone-the country's number one export destination. An FE news story says a decision to review the progress and re-fix the export target will be taken by the ministry of commerce shortly.
The commerce minister while talking to the FE recently was quite candid in saying that the incentive packages currently being offered by the government to the exporters are not adequate enough to help them tide over the prevailing situation. He also termed the country's narrow export base-- undiversified and concentrated on only a few products and markets-- as responsible for not being able to make up for the less than expected growth in major sectors like RMG and knitwear.
The picture no doubt looks unpleasant, if not gloomy. The country's export fell by 1.31 per cent in January, 7.70 per cent in February, 15.38 per cent in March and 14.23 per cent in April compared to that of the preceding year.
To further examine what the minister meant by narrow export base, it can be seen that about 88 per cent of the country's exports is confined to only six products (knitwear 41.36 per cent, oven 36.38 per cent, jute goods 4.86 per cent, home textile 3.44 per cent, frozen foods 2.37 per cent and leather products 1.54 per cent). Similarly, export destinations (87.93 per cent) are also limited to six countries (EU 53 per cent, USA 23.37 per cent, Canada 4.38 per cent, Turkey 3.16 per cent, India 2.23 per cent and Japan 1.89 per cent).
Given the situation there is a definite need to re-fix the target. But observers often find it intriguing that in Bangladesh export targets are targeted more as a source of foreign remittance than as part of a realistic plan of action. A target is essentially a destination where one can, in a realistic situation, aspire to reach. Far from being an ambition, it is a practical path one can get along with conviction and hard work.
A target is meant to be achievable notwithstanding the usual hazards that may impede the journey in a literal or figurative sense. The outcome may not be an unmixed success all the time. For, hitting the bull's eye with utmost precision and skill is essentially a business of the sharp shooter.
In Bangladesh targets are in most cases a misnomer. We tend to confuse targets or goals with ambitions. We set targets for a variety of our activities disregarding the practicalities involved in the achievement. Fixing targets for export is no exception. It is indeed difficult to perceive the mechanism the government adopts while setting targets every year.
Do we take stock of the likely exportable surplus every year in a near-approximate manner? Is there a mechanism in place to do so? Do we assess the overseas market conditions, business practices, changing consumer tastes and preferences, procurement trends, and not but the least product-wise market requirements that can be met by Bangladesh exporters at competitive prices? In all probability, the answer is 'no'.
As part of a traditional practice, the government while setting export target, sits with the key stakeholders-the business leaders in general and the exporters in particular, and exchange opinions on the expectations of the coming year. But not all business leaders or the exporters are manufacturers themselves. Even in the RMG sector only a part of the production chain is done by the exporting factories.
The vital question one may thus be tempted to raise is how often does the government sit with the manufacturers to discuss their production targets and business plans for the markets at home and abroad? This is where the lacuna persists. Assumptions, however thoughtfully done, may run the risk of being a happy hunting ground. An ironic reversal in a positive sense may also happen. A country-specific target of say US$ 200 million may shoot as high as double the target because the realities on the ground were much favourable than what was speculated at the time of setting the target. So, a mechanism has to be in place to do away with the speculative practices. It is only then that targets for exports can be expected to match actual performances. It is high time the government devised a mechanism to be able to do the job aptly and professionally.
. Looks like you are enriched enough to seek a position in La-Hasina's cabinet.
