Bangladesh:BGMEA seeks stimulus to withstand crisis

The Bangladesh Garment Manufacturers and Exporters’ Association on Monday urged the government to immediately announce a stimulus for garment exporters, who, it says, are facing fierce competition on the recession-hit global market.
The current global financial crisis has been making the country’s readymade garment sector vulnerable and in urgent need of support and incentives from the government, said a BGMEA statement.
The country fetched around $12 billion in RMG export proceeds in 2008 and, if the government offers a stimulus package to withstand the global crisis, a $14 billion earning is possible this year, which also means creation of 3,50,000 more jobs, said BGMEA president Anwar-Ul-Alam Chowdhury Parvez.
‘It is high time the government takes a decision to protect the growing RMG sector which targets $25-billion exports by 2013,’ Anwar said. ‘The government should come out with a package of incentives to protect the RMG sector from the onslaught of the current global recession.’
The BGMEA statement mentioned that India allocated $10.5 billion through Technological Up-gradation Fund for her textile sector, $1.09 billion thorough Modified Revival Scheme, $90 million for setting up apparel parks, and $120 million for textile infrastructure. India also provides five per cent subsidy on bank term-loan to textile units there.
Pakistan offers the RMG sector a six per cent research and development subsidy of the export earnings, and 32 billion rupee in other budgetary supports, the statement went on.
The 24 pert cent devaluation of Indian currency against US dollar and 26 per cent of Pakistani one also benefits exporters there, while Bangladeshi exporters find their currency strong and unchanged, it observed.
According to the statement the effective bank interest rate for the RMG sector is around five per cent in India, three per cent in China, 6.5 per cent in Pakistan, while it is 14 per cent in Bangladesh.
China, it also said, has provided $29 billion assistance to the export sector and withdrawn 17 per cent value-added tax on garment exports.
Citing that 65 per cent of Bangladesh’s readymade garments are shipped to Europe, the BGMEA also said 45 per cent appreciation of pound sterling and 23 per cent of Euro against US dollar are adversely affecting Bangladeshi exporters.

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Source:Newage,Dhaka