Despite a global increase in demand for software and data processing in the post-pandemic era, the shortage of skilled labor has seen the Ministry of Commerce set an export target of just $470 million from the sector to the United States. during the current fiscal year 2022-23, which is 13.31% higher than the previous fiscal year.
The ICT Division has set a goal to increase export revenue to $5 billion by 2025, but industry stakeholders say even $1 billion exports are not possible without a skilled workforce.
The government is also unable to expect additional export revenue from tourism, although the sector is booming worldwide following the lifting of Covid-induced travel restrictions.
The Ministry of Commerce pegged tourism sector export growth at around 9%, mainly due to a lack of brand image and weak systems and services.
The Export Promotion Bureau (EPB) has set export targets by item for goods and services after setting an export target of $58 billion in goods and $9 billion in services this exercise.
Of the $1 billion export target that has been increased for the services sector, approximately $300 million will come from the value of various goods and services provided by the government to diplomatic and international missions and organizations of various countries located in Bangladesh.
The EPB has set a revenue target of $2.8 billion for the current fiscal year for the value of various goods and services provided by the government to diplomatic and international missions and organizations of various countries located in Bangladesh. Of this amount, $1.3 billion will come from office management and $1.2 billion from the cost of establishing the offices.
Their exports generated $2.5 billion in the last fiscal year.
In addition, there is a target of additional export revenue of $200 million from sea and air transport in the form of various service and charter fees.
Bangladesh earned $904 million in export earnings from air transport last year, which is expected to exceed $1 billion this year. The shipping export revenue target was increased by 10.30% to $830 million.
If the service quality of airports and seaports in Bangladesh can be improved, stakeholders believe that there is an opportunity to derive a lot of revenue from it due to the geographical location of the country.
According to EPB data, export revenue from ICT or IT services – software, data processing, hosting services and IT consulting services – was estimated at $414 million in the last fiscal year. Revenue for the segment in the prior fiscal year was $303 million.
AKM Fahim Masroor, Chairman of Bangladesh Association of Software and Information Services (BASIS), told The Business Standard that there is a growing opportunity and huge demand to export ICT services to the global market post Covid. . But due to lack of skilled manpower, we are not able to use it.
He said the growth expected by the Department of Commerce might be achievable, but it wouldn’t be possible to earn even $1 billion by 2025 from it.
“Over the past few years, the government has organized a lot of training and spent a lot of money to create a skilled workforce in the ICT sector. If skilled labor can be secured through proper training, export earnings of $5 billion are possible within the next three years,” he said.
In terms of tourism, Bangladesh’s revenue from foreign travelers and students is $321 million while this year’s target has been set at $350 million.
Shiblul Azam Koreshi, chairman of the Bangladesh Tour Operators Association, told TBS that the money foreigners spend in Bangladesh on various activities, including travel and accommodation, is considered export income.
He said there is an opportunity to earn more foreign currency in the tourism sector by promoting Bangladesh abroad.
In addition, e-Visa should be introduced for citizens of 41 countries with visa on arrival, he said, adding that it was often found that foreigners do not receive visas after having landed at Dhaka airport.
He said this created a negative impression and such a situation would persist unless e-Visas were introduced.
In order to earn more foreign currency from tourism, the quality of various services in the country must be improved, he said, adding, “Foreigners will lose interest in traveling if they do not get adequate service. “.
For research and development services, professional and management services, and exports of technical, trade-related and other business services, the target was set at $1.16 billion for the current fiscal year, ie 10.53% more than the previous year.
The Policy Research Institute’s senior researcher, Dr. Mostafa Abid Khan, told TBS that both professionals and freelancers earn from these sectors, adding that the fees earned by a Bangladeshi researcher doing consultancy work at the are paid in dollars and presented as exports.
He said there are plenty of opportunities for freelancers to earn this way, but the focus should be on improving professional quality.
Of Bangladesh’s service sector export earnings, some $1 billion comes from the construction services sector, the majority of which is exported within the country.
For example, various companies including Abdul Monem Limited, BSRM and Bashundhara Group have provided various products and services to foreign contractors in projects such as Padma Bridge, Rooppur Nuclear Power Plant or Karnaphuli Tunnel.
Foreign entrepreneurs pay the price for these goods and services in dollars, which the government considers export earnings.
EPB has also set a revenue target of $1.16 billion for this fiscal year, 15% higher than the previous year.
As the capacity of domestic enterprises increases, the amount of revenue will also increase.
Affected people say that due to the weak service sector in Bangladesh, the desired level of export earnings is not possible in this region.
As a result, Bangladesh has to depend mainly on the export of goods. But even there, the picture is not quite rosy.
Despite the diversification of export products for many years, of the export target of $58 billion in the commodity sector, $46.8 billion will be exported from the ready-to-use industry. porter, about 81% of total exports and 9.83% more than the previous year.
Although the pharmaceutical sector has been identified as the most promising export sector after ready-to-wear, the export target for this sector is only $230 million, or about 22% more than the previous year.
Furthermore, ignoring the negative growth of exports of jute and jute products during the last fiscal year, the EPB estimated a growth of 13.51% in exports this fiscal year. The agency believes that India’s existing anti-dumping duties on jute products could be withdrawn, pushing jute products towards a positive trend from the prevailing negative trend.
In the last financial year, there was a negative growth of 12.67% in the export of jute yarn, but this year a positive growth of 14.65% is expected this year, and in the export of bags and jute bags, a negative growth of 14% was observed last year, but a growth of 9% was estimated this year.
The EPB also expects export earnings from the home textiles sector to increase 22% this year to about $2 billion. The goal of earning $410 million this year from cap exports alone was $364 million last year.
It remains to be seen whether these objectives will be achieved.