Exporters of fabrics, readymade garments, jute and yarns, raw jute, leather and leather goods, and frozen foods have placed their demands for cash incentives, cut in bank interest rate, special exchange rates for exporters and other fiscal measures for them to offset the impact of the ongoing global recession.
The Bangladesh Textile Mills’ Association has demanded that cash incentive for textile millers should be increased to 10 per cent from the existing 5 per cent and a two-year moratorium on the repayment of long-term project loans.
The Bangladesh Garment Manufacturers and Exporters’ Association has demanded 10 per cent cash incentive on the export earning as performance bonus. ‘The government needs at least Tk 700 crore ($100m) a month to meet the demands of the Bangladesh Textile Mills’ Association and the Bangladesh Garment Manufacturers and Exporters’ Association,’ said a member of the task force working to recommend what the government should do to offset the impact of the global financial meltdown.
Exporters of raw jute, jute goods and frozen foods have demanded an increase in cash incentive to 20 per cent from the existing 7.5 per cent on the export earning. The frozen foods exporters have also demanded a five-year moratorium on 40 per cent of their bank loans.
The Bangladesh Finished Leather and Leather Goods Exporters’ Association has demanded 25 pert cent of cash incentive on the export earning. Only shoe exporters now enjoy 7.5 per cent of cash incentive. The association has also demanded a one-year moratorium on the loans of the tanners as most of their products remained unsold because of a marked decline in the flow of orders from buyers.
Earlier in mid-March, the Federation of Bangladesh Chambers of Commerce and Industry demanded a bailout package of around Tk 6,000 crore as support for export sectors. The federation demanded Tk 1,400 crore for spinners, Tk 3,300 crore for RMG manufacturers and Tk 1,500 crore for exporters of primary goods, including jute, frozen foods and vegetables. Private sector aviation companies have also demanded financial support or stimulus package for them.
In March, the Airline Operators’ Association of Bangladesh demanded a fund of Tk 1,000 crore. It said airline operators were incurring losses because of the high cost of flight operation and decline in traffic on domestic and international routes.
The businessmen said they were frustrated at the government inaction, when the country was losing market, as exporters of other countries were forcing them out of the global market price competition. Exporters of China, India, Indonesia and Pakistan, who have received various government supports such as devaluation of currencies, are set to compete against Bangladeshi suppliers on the global market, they said.
‘Lack of support has frustrated local exporters as many of their buyers have started showing reluctance to import Bangladeshi items because of a decline in price competitiveness,’ said Abdus Salam Murshedy, president of the Garment Manufacturers and Exporters’ Association. Ahmed Hossain, president of the Bangladesh Jute Spinners’ Association, said entrepreneurs would fail in a few weeks to keep their industries if the bailout package could not be immediately announced. ‘The price of jute yarns declined by 25 per cent and its export volume came down by more than 30 per cent in six months,’ he said.
Tauhidur Rahman, secretary general of the Bangladesh Frozen Food Exporters’ Association, said only 30 shrimp processing factories were in operation when 70 were in operation this time in 2008. ‘Shrimp export is about to collapse and many of our buyers are rushing to China and India as the weaker currency and cash incentive makes shrimp cheaper in the countries,’ he said.
In eight months of the current financial year till February, the frozen food export earning declined by 11 per cent, compared with its export the same period in the previous financial year. In the period, jute goods export earning declined by 18 per cent, raw jute by 19 per cent and finished leather by 33 per cent. Frozen food, raw jute, jute goods and finished leather exporters experienced a big decline in exports from the mid-2008.
Source: The Daily New Age, 11 April 2009