Global recession starts affecting Bangladesh's economy

Special Report:Global Financial Crisis

by Wang Xuemei

DHAKA, Feb. 9 (Chinese media) -- Bangladesh began to feel the pinch of the ongoing global economic downturn as the country's export sectors and overseas employment have been affected lately, though officials termed it "temporary."

Bangladesh's Finance Minister AMA Muhith on Sunday admitted that there has been a negative impact of the global recession on the country's sectors of jute, jute goods, knitwear and woven clothing, frozen food and many other sectors.

"The impact of recession is becoming visible gradually...It's slowly affecting all the sectors," the finance minister told reporters here after a meeting with a delegation of knitwear manufacturers and exporters.

This is the first time that a high-ranked government functionary has admitted that there has been a knock-on effect of global economic recession on the country's major export sectors, leading English-language daily The Financial Express said on Monday.

According to the statistics of the Export Promotion Bureau (EPB), Bangladesh's export earning in December 2008 dropped by over 10 percent due to declining demand and prices in global markets.

The export orders from the country's main export markets -- Europe and the United States -- have declined modestly due to the global economic meltdown, EPB officials said.

President of the Bangladesh Knitwear Manufactures and Exporters Association (BKMEA) Fazlul Hoque said exports from knitwear, the country's largest exporting item that witnessed robust growth for years, went down by 2.5 percent in December 2008.

But he said the shipment slumped by 25 percent in real term in the month while the trend of export orders shows no sign of bouncing back for at least the next three months.

Besides, the raw jute and jute goods exports in Bangladesh, the largest exporter of raw jute and jute products in the world, declined by 6.84 percent and 12.47 percent respectively in the first five months of the current 2008-2009 fiscal year (July 2008-June 2009).

Meanwhile, the country also experienced a sharp fall of 45 percent in manpower export in January due to declining demand in some Middle East countries which downsized their development activities amid the financial slowdown.

The country's inflow of remittance, which plays a significant role in the economy, is mostly contributed by the country's millions of overseas workers.

However, the finance minister made an optimistic observation that the impact of the global recession will be "temporary" and the government is gearing up its efforts to face the challenge.

He said a committee to counter the fallout is being formed and the first meeting of the proposed public-private body would be held by the end of this month or early next month.

The government earlier also asked the garments and textiles manufacturers to give proposals to recommend measures to tackle the impacts of the global economic crisis on the sectors.

Finance Minister AMA Muhith said the government will evaluate the proposals including the demand of increasing cash incentive for the apparel export.

Meanwhile, Bangladesh's Textile and Jute Minister Abdul Latif Biswas on Sunday said the government will soon adopt a coordinated strategy to safeguard the textile and garments industry from the shocks of financial meltdown.

The government will move fast to address the problems, he said at an inaugural ceremony of a textile and garment machinery exhibition here.