ASIA: NEXT TOP EXPORT DESTINATION


ASIA: NEXT TOP EXPORT DESTINATION

HSBC’s global head of trade says Bangladesh has potential of reaching higher growth trajectory by excelling in exports to burgeoning middle-class

KGNVHMBJMd Fazlur Rahman

Bangladesh’s exports to Asia will double to 15 percent of total shipments by 2020, as China and India are set to become key markets for the country, a top banker said yesterday.

James Emmett, global head of trade and receivables finance of HSBC, said India would be the third largest market for Bangladesh’s exports by 2030, meeting the demands of the country’s growing middle-class.

“Bangladesh will also significantly benefit from a rise of the middle-class in China,” he told The Daily Star in an interview at Radisson Hotel in Dhaka yesterday.

In the next two decades, Vietnam and Malaysia would be among the fastest growing export destinations for Bangladesh, he said.

Exports grew to $29.1 billion, the highest in the country’s history in 2013, up 16 percent from the previous year’s record of $25.1 billion, according to data from the Export Promotion Bureau.

Europe and North America together account for over 85 percent of the country’s exports, with Asia accounting for about 8 percent.

Emmett, who joined HSBC 17 years ago, said the Chinese economy’s shift towards higher value-added goods would create opportunities for economies such as Bangladesh with ample supply of low-cost labour.

Export growth from these economies is expected to average 10 to 12 percent a year until 2030, with a concentration on lower value-added sectors of apparel products.

Emmett said the economy has grown significantly from what he saw 10 years ago during his first visit to Bangladesh.

“The market has become sophisticated, not just in the environment we operate in and the billboards, but also in discussions that say the business environment has changed.”

“For example, one decade ago, HSBC was talking about how it can boost trade and sales in Bangladesh. Now the discussion is on how we can make sure we support the supply chain from Bangladesh.”

Emmett said the intra-Asia trade corridor is now the fastest growing areas of trade worldwide, accounting for around 25 percent of the continent’s total annual exports of $6 trillion. “It is predicted to rise strongly.”

He said there is a change in how the global supply chain is operated; development of the middle-class is critical and relevant here in Bangladesh, China and India.

“Ten years ago, the story was simple — Asia exporting to Europe and North America. The supply chain story has changed. We see a migration of manufacturing to other markets such as Bangladesh from China.”

There is three-way movement in global trade: Asia exporting to developed nations, developing markets exporting to Asia and emerging markets exporting to emerging markets both in Asia and outside of Asia, he said.

“So, I think Bangladesh will take a key position in the global evolution of the supply chain and will benefit from Southern China moving out of the value chain and moving up on its own value chain.”

Emmett sees Bangladesh’s pharmaceuticals and light manufacturing sectors as potential industries that would drive economic growth in the coming years.

Bangladesh is dependent on its export earnings from the US and Europe, prompting calls for product and market diversification.

“All three [the US, Europe and Asia] markets are necessary. The EU and North America have been important markets for Bangladesh and would continue to be so for many years to come.”

He said about three billion people would join the global middle-class by 2050, which will be 40 percent of the world’s population.

“In 5 to 10 years, China will become an important consumer market and Bangladesh will play a key role in terms of prices. Bangladesh should not forget the significant opportunity in its own market of 160 million people.”

He said world-class safety standards at factories have become imperative to continued growth of exports.

On meeting the bank’s clients in Dhaka, he said, “I have been pleasantly surprised by the optimism of the clients.”

A sense of stability and clarity on which direction things are going is important, he said.

Bangladesh would require improvements in roads, bridges and infrastructure to cater to exports and local markets, Emmett added.

HSBC Bangladesh is actively supporting Bangladesh’s infrastructure development, as it arranged a $60 million credit facility for Power Grid Company and another $420 million for Ashuganj Power Station Company.

Recently, HSBC expanded its network with a new business development office in Uttara Export Processing Zone in Nilphamari, becoming the only international bank to be present in all the eight export processing zones in Bangladesh. It also opened a full-fledged branch in Mymensingh.

“Our focus is to make sure we have full coverage, so we can help our clients with new products that can help them remain competitive in the global economy.”

With assets of $2,645 billion as of June 2013, the HSBC Group is one of the world’s largest banking and financial services organisations.

About Ehsan Abdullah

An aware citizen..
This entry was posted in ACHIEVEMENTS - SUCCESS, CURRENT ISSUES, ECONOMY. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s