Boost trade capacity to tackle post-LDC challenges: Stakeholders

Bangladesh needs to diversify products, develop human resources, increase the number of environmentally friendly factories and strengthen trade diplomacy to tackle post-Least Developed Countries (LDC) challenges, said stakeholders.

They also stressed the exchange of technologies and increasing negotiation skills at the Dhaka Apparel Summit 2022 Wednesday at the capital's International Convention City Bashundhara.

Ziaur Rahman, H&M regional country manager, production for Bangladesh, Pakistan and Ethiopia, said that Bangladesh needs to produce high-value products while ensuring no damage is done to the environment.  

He also said the supply chain must be made sustainable and waste management should be given importance.

"75% of RMG products made in Bangladesh are mainly on 5 basic items. So product diversification has to be done. From the production of cotton products, the country need to shift to man made fibre products," Ziaur Rahman said.

Addressing the gala night of Made in Bangladesh Week later in the day, Salman F Rahman, private industry and investment adviser to the prime minister, said, "Many of our competitor countries are importing garments waste from Bangladesh, then recycling it and re-exporting it to Bangladesh. We will ban exports of such waste from Bangladesh. We want to recycle our waste locally."

Also at the event, State Minister Nasrul Hamid said, "The government is trying to make a smoother supply of energy, despite the current global situation…The price is not a big issue in this case."

M Riaz Hamidullah, ambassador of Bangladesh to the Netherlands, has urged apparel manufacturers to be energy efficient and produce environmentally friendly products.

"We need to up our ante on agile, competitive market intelligence in order to stay ahead of the curve," he said.

Referring to the European Union's Green Deal, he emphasised on green manufacturing.

Hamidullah recommended that the interplay of technology, innovation and design thinking will help manufacturers work towards new norms, as well as to avoid conventional branding.

The key to a sustainable future for the apparel industry lies in digitalisation, innovation, and creativity, the ambassador highlighted.

Noting that "current production function and cost metrics won't do", he also stressed on product diversification for better market engagement.

As the chief guest of the opening session, Dr Ahmad Kaikaus, principal secretary to the prime minister said, "We have done better than all countries in the US market for denim products as our capacity is strong in the area."

He stressed that the sector needs to focus on energy efficiency, technology adaptation and industry-academia collaboration.

"We have some challenges on the LDC graduation. We have prepared six papers on the topic and are working with these," he said, adding, "The buyers and the suppliers are partners to each other and must work together."

Sharifa Khan Secretary Economic Relation Division Ministry of Finance said, "The RMG is very resilient through its journey of over 40 years. We can successfully adapt with the changes."

She said, "We have asked the EU countries for GSP+ facilities till 2029. We are working to increase our productivity. We are also working on developing trade facilities and a logistic support system. We hope we will be able to face the post-LDC challenges."

Dr Nazneen Ahmed, country economist of UNDP said, "Organisations should prioritise technology and innovation. Along with that, skilled workers should be created. If they can do this, Bangladesh will not fail the post LDC challenges."

Shwapna Bhowmick, regional head of British multinational retailer Marks and Spencer (M&S) said, "LDC graduates should focus on automation to meet the challenge, otherwise, it cannot keep up."

Bangladesh has already received the final recommendation to graduate from the LDC category and if everything goes well, Bangladesh will graduate from LDC in 2026.

Asif Ibrahim, director of BGMEA said, Bangladesh could lose some 14% or $5.73 billion worth of export earnings a year following graduation to LDC status. Possibly the most significant component for the country, Bangladesh continues to enjoy preferential market benefits known as the Generalized System of Preferences (GSP), which includes Duty-Free and Quota-Free (DFQF) access for exports to international development partners of the World Trade Organization (WTO).

"The country enjoys duty-free access to 38 countries under GSP including the UK and 27 EU countries, where the majority of our apparel exports is concentrated. Although Bangladesh stands to lose this access, reformation in human rights and labour rights regulations could renew the country's DFQF access under the Everything But Arms (EBA) initiative of the EU for smooth transition," said Asif Ibrahim.

"Bangladesh should continue its negotiation with its trade partners for concessions and trade preferences for some time even after graduation so that it can prepare well for the transition. There are examples of post-graduation support measures for other LDCs. So, Bangladesh should strengthen its economic diplomacy," he added.

On the final day of the two-day Dhaka Apparel Summit, which is being held in conjunction with the week-long "Made in Bangladesh Week", five sessions were held at the Bashundhara International Convention Centre.

The sessions were – Bangladesh's LDC Graduation impediments and way forward, Responsible Business Needs Global Alliance on Due Diligence-the perspective of Manufacturers and the Western Buyers, Ensuring Workers Well-being, Technology and How it can Shape the industry in Next 10 Years-addressing Skill Gaps and Altering the chronicle of Bangladesh RMG industry narrative.

Apparel buyers, brand representatives, representatives of development support organisations, teachers, researchers, and entrepreneurs spoke in these sessions.

Linda Kromjong president of amfori said, "Emphasis should be placed on product quality and energy efficient institutions should be created."

Dandeep Das, regional director, South Asia and MENAP Products, Intrtek, Said, "Both the buyers and factory owners should do their part in the development of the sector."

Jill Tucker, head of Labour Rights Programme Laudes Foundation said, "Not only the manufacturers, buyers should also take the responsibility to produce sustainable products."

Two expos of the Made in Bangladesh week – Bangladesh Denim Expo and Dhaka Apparel Expo – ended Wednesday with participation of representatives from China, Germany, India, Italy, Japan, Pakistan, San Marino, Singapore, Spain, Turkey, Vietnam, USA and Hong Kong.