JANUARY 12, 2016:Â Â FINANCIAL EXPRESS
The economy of Bangladesh is highly dependent on readymade garment (RMG) export and inward remittance. More than 9 million Bangladeshi nationals are now living all over the world. They are mostly labourers and sending billions of dollars to the country each year. Similarly, almost three million workers, mostly women, are contributing to buoyant growth of the RMG industry through their hard labour. It is also a fact that huge population of the country has made it possible to earn billions of dollars from these two sources. Consequently the problem of overpopulation is largely being mitigated.
But it is not wise to keep all the eggs in a single basket for a long period as these two sectors are vulnerable. Geopolitics and high competitiveness could bring overnight collapse of these sectors. Moreover, almost 80 per cent remittances are used in non-productive investment. Therefore, we have to look for many other alternate sources of income. Through diversified industrialisation and giving preference to the thrust and promising sectors, the government should patronise and all financial institutions must make investment in SME and some other selected big projects on a priority basis.
The contribution of RMG to the GDP of Bangladesh is more than 70 per cent. The industry started in the late 1970s. Within a few years, it became one of the major economic strengths of Bangladesh. The sector has contributed to foreign exchange earnings, balancing export and import (BOT and Payment), reduction of huge unemployment problem of the country and upgrading of empowerment of woman along with giving them financial benefits.
Inward remittance is the life-line of the economy which also contributed a lot to balance of payment. According to the Bangladesh Bank, remittance averaged 1.21 billion dollar per month from 2012 until October 2015. In a few years’ time inward remittance would enter the country through informal channel. But strict enforcement of anti-money laundering laws, wide branch network of scheduled banks, availability of exchange houses and consciousness of the beneficiaries have made it possible to receive remittance through formal channel. Moreover, expansion of European, Australian and American manpower markets and the UN peace keeping mission have also contributed to the growth.
Once one of the poorest countries of the world Bangladesh has now become a lower middle income country. Density of population is one of the highest in the world. Overpopulation was considered as the main obstacle to the economic growth during the 80s and the 90s. But now population is no more a problem. Rate of literacy is increasing day by day. A significant number of young people is now highly educated and capable of rendering services anywhere in the world. In today’s world, it is being acknowledged that population is not a problem when it is turned into skilled human resource. Therefore, our country has huge opportunities to create multiple sources of our national income through utilisation of the most valuable human resource.
Entrepreneurs in Bangladesh are very innovative. Therefore, we are observing the beginning of diversity in industrial production. Companies now produce goods ranging from food, agriculture, pharmaceuticals, electronics, and medical services to outsourcing.
We have a huge growth in the backward linkage industries related to RMG industry. This might be a huge alternate source of income through reducing import and expanding export. Even a decade ago, almost all the fabrics and accessories used in RMG industry were to be imported from abroad, especially from China. But today Bangladeshi entrepreneurs and investors have gained the capability to produce huge volume of global standard fabrics and to set up billion-dollar projects. It is also expected that within the next few years, the RMG and composite industry could procure most of their fabrics, accessories and yarn from local markets.
Export of medicine could be one of the largest sources of national income. The growth of local pharmaceutical industries is rising by double digit each year. Recent extension of waiver on drug patent for LDCs up to 2033 will make this growth steadier. Our entrepreneurs, pharmacists and technicians can now compete with any overseas multinational pharmaceutical company.
Bangladesh has a huge opportunity to become an attractive destination of medical tourism and could earn and save huge volume of foreign currency being spent as medical expenses. In the healthcare services, our country is achieving global standard in quality and service. Once many people were going to India, Thailand and Singapore for open heart surgery, kidney, liver and bone marrow transplantation. But now many people are availing all these treatments confidently in the local hospitals because of the satisfactory rate of success.
Outsourcing is a multi-billion dollar market all over the world. Our neighbouring countries have already captured a big market share in this industry. Bangladesh has also a huge number of qualified IT personnel who are ready for rendering all sorts of outsourcing services. In the last financial year, Bangladesh earned $1,000 million from outsourcing and this sector is growing by double digit each year. The government should prioritise and institutionalise this promising sector through necessary infrastructural development like high speed, uninterruptible internet connection, providing young generation with quality IT education and strong IT security.
Local and foreign investment in the tourism industry could attract a huge number of foreign tourists in the county as we have the longest sea beach of the world, the world’s largest mangrove forests and heavenly beauty of Chittagong hill tracts and many more. Moreover, we have a huge reputation worldwide as a hospitable nation.
In order to create better business opportunities in all of these sectors, Bangladesh must come forward in line with global goals for sustainable development which is known as Sustainable Development Goals (SDG) that include quality education, gender equality, good health, renewable energy, innovation and infrastructure, reduced inequalities, responsible consumption, climate action, peace and justice and partnerships. Only then the country would be able to gain the status of a middle income country very shortly and could be able to shift from labour-intensive industrialisation to service- oriented industry or tech-based heavy industrialisation.
For development of entrepreneurship and maximum utilisation of human resources, the government and the policy-makers must provide them with sufficient infrastructure, various incentives, good governance, and hassle-free process of starting business. Bangladesh should focus on these key issues in order to diversify the sources of income as well as for reducing dependency on RMG export and inward remittance for growth of national income.
© Copyright: Reserved by the writer (Noore Alam Siddiqui)
