As the country’s export-oriented industries are in deep trouble due to the global spread of the deadly coronavirus, it will also affect the domestics industries negatively, observed a business leader.
“There is a strong link in between domestic and export–oriented sectors through supply and value chains,” said Fazlul Haque, former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).
“Even many small businesses depend on consumption of millions of workers of readymade garments and other export-oriented units,” he continued.
“Thus, providing incentive or stimulus to export-oriented industries has multiple effects,” he added.
Mr Haque said this while taking to The Financial Express regarding the impact of the coronavirus disease and the on-going ‘lockdown’ on the economy. He is the founder and managing director of Narayanganj-based Plummy Fashions Ltd, the greenest knit garment factory in the world.
The business leader, however, expressed disappointment over the Tk 50-billion incentive package announced by the government.
“The amount is insufficient to offset the potential loss of the clothing industry,” he said, adding that the sector may face a loss of $6.0 billion in the current year in the form of order cancellations and decline in exports.
Annual export of RMG stood at $34.13 billion in the past fiscal year (FY19) recording 11.54 per cent growth.
“Again, in this critical time incentive or stimulus should be a kind of grant,” he added. “But the finance ministry circular said that it is a loan at 2.0 per cent interest and applicable to only the units exporting at least 80.0 per cent of their products.”
Mr Haque said that the United States (US) and Europe, the major destinations of the woven and knit garments, have already been affected by the coronavirus disease COVID-19 heavily.
Mr Haque also said that even if Bangladesh is able to contain the spread of the coronavirus to a modest level and if normalcy comes back soon, export-oriented factories would not be able to continue operation in full swing unless the situation in the US and Europe improves.
“These two big economies are already in recession and so is the global economy,” he said. “No one knows when they will recover. So our exports are also becoming uncertain. Without revival of these economies, how can we expect our exports to continue?”
The leader also expressed concern over the country’s capacity to deal with the virus situation effectively.
“Though the government is trying its utmost, the main problem is that almost everything is Dhaka-centric,” he added. “Immediate steps should be taken to introduce testing facilities at district levels so that village people can also get some access to a nearby facility.”
Mr Haque also said that panic is growing and any patient is now suspected of being affected with coronavirus, which is alarming.
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