Cost of export diversification project goes up

Hasibul Aman

25 June, 2019 12:00 AM printer

Cost of ‘Export Competitiveness for Job’ project undertaken to diversity exports and creating jobs in targeted sectors is likely to go through a revision to hike project cost to accommodate new components. 

The cost of the project was originally estimated at Tk 941 crore, which has been proposed to be raised by Tk 71 crore to Tk 1,012 crore, said sources at the planning commission.

Commerce ministry, the implementing agency, has sent a project revision proposal to the planning commission, which may be placed at the next Ecnec meeting for approval, said the sources. 

On 28 August 2014, the project was undertaken in line with Prime Minister Sheikh Hasina’s instruction for taking initiatives to diversify export basket. Later, it was approved by the Ecnec on august 09, 2017.

As reasons behind the revision, commerce ministry argued that the cost of procuring equipment and machinery and logistics supports were not involved in earlier estimate.

But now in revised proposal, three new components are being included to accommodate cost of electrical and mechanical machinery, office equipment and furniture and providing logistic facility for technology centres.  Once it is approved, commerce ministry will implement the scheme by June 2023.

The 7th five-year plan eyes to enhance exports to create more jobs to cut poverty. For this, the government has taken a strategy to diversify exports, both in terms of export basket and export markets.  

Currently, nearly 82 percent of the country’s total export earning comes from apparel sector and export destinations are limited to US, EU and some few other markets.

Any global unrest may severely damage the country’s exports because of this heavily concentrated export situation.

To offset this shock, commerce ministry had requested the World Bank through Economic Relations Division (ERD) to undertake a project after identifying other potential export sectors on the country.

The main project activity includes sector-wise technical training, formulating ESQ reference guide book, workshop, capacity building of industries and BPC, ESQ compliance assessment, awareness building about export markets and work on market intelligence and market branding.

Under productivity enhancement programme, productivity of three potential sectors will be increased for improving technology four technology centres will be set up.

In these sectors, technological facility will be provided and a trained up manpower will be created for product design facility, improving products’ quality, modern moulds, tools, dice, testing and certification. 

Under public investment facility for infrastructure constraints component, recycling facility, special general technology centre and cold storage road infrastructure will be set up between the industrial clusters and technology centres. 

With the initiative, leather and leather goods, footwear, light engineering and plastic industry will be developed with removing existing bottlenecks, a planning commission high-up said.