Private sector can help improve infrastructure: IDB president

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Private sector can help improve infrastructure: IDB president

Star Business Report

Islamic Development Bank President Bandar Hajjar yesterday stressed the importance of the private sector to improve the basic infrastructure in its member countries and achieve the Sustainable Development Goals (SDGs).

Fifty-seven member countries of the IDB require $1 trillion per annum to achieve the SDGs and $700 billion to meet the growing demand for basic infrastructures, he said.

He said the multilateral development banks have a financing capacity of $147 billion per annum for the IDB’s members.

“How will we fill up the gap? A vibrant private sector can only fill up the vacuum,” he said at a press conference at the IDB Bhaban after the opening of the bank’s regional hub in Dhaka.

Earlier, Prime Minister Sheikh Hasina opened the regional hub of the bank. Bangladesh is the largest beneficiary of financing from the multilateral bank, with its total financing for the country being in excess of $21.7 billion.

Of the funds, 80 percent went to the private sector, Hajjar said. He said the IDB has adopted a new model to encourage the private sector which will play a vital role in developing the human capital of the member countries.

The member countries will have to extend support to give a boost to investment in the private sector, he said, adding that the MDBs should also help them transform their economies with market-oriented growth.

“We are transforming our bank not only for finance; we have focused on increasing the capacity of human capital and build the institutional capacity of our member countries,” he said. The IDB president said the volume of the global capital market has gone beyond $2 trillion and the private sector can get support from the window.

There is a requirement to develop an investment-friendly environment to use the fund of the capital market, he said. Speaking at the briefing, Finance Minister AMA Muhith said over the years, the IDB has gradually established itself as one of the leading multilateral development banks in the world.

The bank has embraced new ideas, come up with innovative financial instruments and expanded its remit substantially, he said. He said the scope for Bangladesh to get soft loans is gradually shrinking as it has become a lower-middle country from a low income nation.

The country has ability to take loans at higher interest rate than the rate entailed with soft loans offered by the MDBs, he said. The regional hub in Dhaka will cover 19 countries, including Singapore, Australia, Thailand and India.

Asked why the IDB chose Bangladesh to set up the regional hub, Hajjar said geographical location was one of the major reasons. Besides, a strong growth of Bangladesh and its skilled workforce, educated people, resources and leadership have also been considered, he said. “The IDB has long held a close relationship with Bangladesh as it continues to move towards a prosperous future.”

“Our regional hub will focus on partnering with local stakeholders to drive the socio-economic development in the country and provide a platform for Bangladesh’s people to build a prosperous future,” he said.

Fourteen people, including four foreign nationals will initially work at the regional office and the number will increase if required, Hajjar said.

No gain from going green

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No gain from going green

RMG exporters don’t get price benefit for environment-friendly production

Star Business Report

Bangladesh’s garment exporters are now regretting for establishing green factories as they are not getting the benefits of the huge investment they made to make their industrial units environment-friendly.

“The cost of setting up a garment unit went up by a third in case of a green factory,” said KM Rezaul Hasanat, CEO of Viyellatex Group, one of the leading Bangladeshi exporters with green factories.

“We could have invested the extra money to employ a one-third more workers.”

Per capita carbon emission in Bangladesh is 0.46 tonnes a year whereas in the US, the EU and Canada the figure ranges between 10 tonnes to 25 tonnes, he said.

So, Bangladesh’s factories do not even need to get green certification from other countries or companies, Hasanat opined.

“Bangladesh is naturally green and the products we make here are also naturally green.”

“I regret that I have set up green garment factories. The buyers do not want to pay even a single cent more for sourcing from a green garment factory,” he said, while speaking at a dialogue on green compliance at the Metropolitan Chamber of Commerce and Industry (MCCI) in Dhaka yesterday.

The MCCI, in collaboration with the Adam Smith International and the UKAID, Bangladesh organised the dialogue where retailers, exporters, executives of different garment factories and researchers spoke.

Currently, Bangladesh has the highest number of green garment factories along with top ranking units in the globe, said Shwapna Bhowmick, country head of Marks & Spencer.

Bangladesh has outperformed its competitor countries in green compliance for garment factories and the nation should highlight its success stories to the world, she said.

In Bangladesh, 67 green garment factories have already obtained the LEED (Leadership in Energy and Environmental Design) certification from the US Green Building Council (USGBC) and over 300 more are waiting to be certified.

“Bangladesh should market its great achievements with effective communication skills,” Bhowmick said. Marks & Spencer sources 40 percent of its garment items from Bangladesh, she said.

“The country produces a lot of value-added garment items although it was previously known as the producer of basic garment items only.”

“However, we [Bangladesh] have broken this barrier as the producer of the highest selling value-added garment items.”

For instance, Bhowmick said her company sources 90 percent of denim items from Bangladesh while local mills supply 70 percent of the fabrics needed to produce these denim items. However, Bangladesh needs to shorten its lead-time and improve the skills of the workers for higher productivity, she said.

The garment sector’s strong green initiative was also noticed in the survey of the Partnership for a Cleaner Textile (PaCT) of the International Finance Corporation.

Local suppliers are doing great work in saving water, energy and environment, said Nishat Shahid Chowdhury, programme manager of Bangladesh PaCT.

In Bangladesh, 250 textile factories have invested a total of $39 million to save 21 billion litres of water a year thanks to the use of modern technologies, said Chowdhury.

Time has come to adopt the green compliance voluntarily, said Fahmida Khatun, executive director of the Centre for Policy Dialogue, a think-tank. The whole green concept was largely implemented during the global financial crisis mainly to save food and fuel, she said. Currently, 1,700 factories are running effluent treatment plants (ETPs) in their factories to save the environment.

Although the factory managements of these units regularly report to the Department of Environment (DoE), they need to improve the performance of the ETPs, said Syed Nazmul Ahsan, director of the state agency.

The DoE will start monitoring of the operations of the ETPs online in 500 factories to obtain better results from the plants, Ahsan said.

He said the high-ups of the factories are interested in setting up and running of the ETPs whereas the mid- and lower-level managers are less keen.

The government should formulate policies to encourage private sector entrepreneurs to invest in green garment factories, said Shahpar Selim, a consultant of the Economic Dialogue on Green Growth, UKAID, while presenting the keynote paper on “Environmental compliance opportunities in Bangladesh’s readymade garments industry: lessons from the green high achievers”. Currently, two kinds of funds are available for setting up green factories but it is difficult to avail the fund, she said.

Of the funds, the green refinancing fund of the central bank is relatively easier to avail, she said.

Still, factory owners struggle to apply for this fund and the central bank should make the process easy, she said. Golam Mainuddin, MCCI vice-president; Miran Ali, managing director of Bitopi Group, and  Suvojit Chattopadhyay, country manager of the Adam Smith International, also spoke.

India’s rupee hits record low against dollar

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India’s rupee hits record low against dollar

Afp, Mumbai

India’s rupee hit a new record low of 72 to the dollar on Thursday as emerging market currencies suffered more losses.

The under-pressure currency of Asia’s third-largest economy slid to 72.12 to the greenback in afternoon trade.

The rupee has steadily fallen by about 10 percent throughout 2018, after starting the year at 63.67. Last month it crossed 70 for the first time as India was buffeted by the turbulence of the Turkish financial crisis.

The Turkish lira was sent into a tailspin in August by a bitter diplomatic spat with the United States over Turkey’s detention of an American pastor for almost two years on terror-related charges.

The currencies of other emerging economies heavily dependent on dollar-dominated foreign capital like Brazil, South Africa and Argentina also slipped in August.

The rupee slump is widening India’s current account deficit.

India is a massive net importer of oil, which is priced in dollars, securing more than two-thirds of its needs from abroad. High oil prices have been squeezing the rupee, making it less appealing to investors, analysts say. India’s central bank has raised interest rates this year in part to help increase the value of the rupee.

Bangladesh on way to be a gadget-making hub

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Bangladesh on way to be a gadget-making hub

Star Business Report

The availability of workforce at a competitive wage, growing domestic market demand and a favourable policy are some of the key factors that make Bangladesh an attractive hub for high-tech manufacturing, according to a survey.

In its report, International Data Corporation (IDC) found success stories of local and international manufacturing companies, such as Walton and Samsung.

Global tech leader Samsung has started producing mobile phones in Bangladesh following in the footsteps of three local firms—Walton, Aamra Companies and Symphony—and a China-Bangladesh joint venture, Transsion Holdings, it said in the report.

The Singapore-based firm also showed evidence of the support provided by the government in driving the growth of the high-tech industry in Bangladesh.

The government has reduced duties on import of raw materials for the tech industry, exempted 100 percent value added tax on rents along with providing cash incentives and 100 percent tax discounts, it said.

“Population is the main strength of Bangladesh, home to around 80 million people under 25 years of age,” according to the IDC report launched yesterday.

Gadgets and laptops worth around $1.5 billion are sold in the country every year; about 34 million mobile handsets worth $1.18 billion and laptops worth $300 million were sold last year, IDC found.

The youths are giving a boost to the sector, where the gadget and laptop market is growing at around 12-20 percent every year, said Zarif Munir, partner and managing director of the Boston Consulting Group.

The officials of the group presented the findings of the report as one of the partners of the survey, at a programme held in the ICT Division in Dhaka.

The IDC is a premier global provider of market intelligence, advisory services and events for the information technology, telecom and consumer technology markets.

Local companies are not lagging behind foreign peers. Walton has already completed production and shipment of laptops to Nepal, a major stride for a Bangladeshi company, the IDC report said.

Huawei Technologies, the largest telecom equipment maker based in China, has been investing to provide high-quality ICT infrastructure and network enhancement services in Bangladesh, the report reads. Another Chinese giant, Xiaomi, also plans to set up a plant in Bangladesh in the next two years, the IDC said.

“We have a huge local market and scopes are there to export tech products to the neighbouring countries like Nepal, Bhutan, Myanmar and even India’s seven-sister states,” Mustafa Jabbar, telecom and ICT minister, said at the report launching ceremony.

He said the government is developing 28 high-tech parks, all of which would be ready for use in the next two years.

“Some of the parks have already started manufacturing and exporting different ICT products.” Smartphone penetration in Bangladesh stands at about 30 percent now and will hit 80 percent in the next few years, he said.

The government is giving tax holiday and cash incentive to assemblers with high quality infrastructure support and now seeking global leaders’ investments, said Zuena Aziz, secretary to the ICT Division.

“Some developed nations, including China, are shutting down gadget plants due to the rising cost of production,” said Rezwanul Haque, CEO of Transsion Bangladesh and the former general secretary of Bangladesh Mobile Phone Importers Association.

The government has developed 79 economic zones spanning over 30,000 hectares and foreign companies will get all-out support if they want to invest in Bangladesh, said Kazi M Aminul Islam, executive chairman of Bangladesh Investment Development Authority.

GDP growth in FY18 to be near 8pc: minister

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GDP growth in FY18 to be near 8pc: minister

Inflation falls to 5.48pc in August
Star Business Report

The country’s economic growth could hit a record high of about 8 percent in the last fiscal year in the final count, Planning Minister AHM Mustafa Kamal said yesterday.

“Prime Minister Sheikh Hasina will announce the actual figure soon,” he told reporters at the auditorium of the National Economic Council.

As per the preliminary estimate, the gross domestic product growth was 7.65 percent in 2017-18, but in the final count it will be much higher, Kamal said.

He said he knew about the final GDP figure, but declined to disclose it. It will be something near 8 percent, he said.

In the current fiscal year, the growth will be 8.25 percent, he said.  The government has targeted to achieve 7.8 percent economic growth in 2018-19.

The planning minister said there will be no problem in implementing the annual development programme (ADP) in the current fiscal year.

Kamal said he had met with the secretaries of all ministries and issued a directive so that the ADP implementation is not hampered by the election, due in December.

The government has put in place a new rule that exempts files from coming to the finance minister or the planning minister for release of project funds in the first and second quarters of the fiscal year, he said.

“Funds will automatically be deposited to the accounts of the projects. So, the implementation of the ADP will not be hampered.” During the briefing, Kamal also released the inflation data.

Inflation fell slightly to 5.48 percent in August thanks to a fall in food prices. It was 5.51 percent in July.

Kamal said inflation did not increase as an adequate amount of imported goods was in stock. On the other hand, the government was active during the Eid period and the prices of essential items did not go up consequently.

In August, food inflation fell 21 basis points to 5.48 percent. In July, it rose 20 basis points to 6.18 percent.

Non-food inflation went up by 24 basis points to 4.73 percent last month. In July, it declined 62 basis points to 4.49 percent.

Zahid Hussain, lead economist of the World Bank’s Dhaka office, said, “The good news is the headline inflation has continued to fall driven entirely by the decline in food inflation.”  He said it appears that the drop in rice prices played a major role. 

In August, the average price of coarse rice in Dhaka was 0.2 percent lower than in July this year and 3.2 percent lower than in August 2017.

Hussain said, “The bad news is there is further increase in non-food inflation, which has been rising since reaching its low of 3.2 percent last January.”

“It has now surpassed 4.7 percent perhaps because of a sustained high domestic demand, resulting from increased remittances and private credit growth, as well as exchange rate depreciation and seasonal factors such as Eid in August.”

The economist said demand pressures are likely to deepen in the run up to elections. 

“Continued vigilance on the part of the Bangladesh Bank particularly in maintaining prudential control over domestic credit growth will be very important in the days ahead.”

Call for ensuring safe food production

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Call for ensuring safe food production

Three-day BAPA FoodPro International Expo 2018 concludes

FE Report

 

Speakers at a function on Saturday laid emphasis on ensuring safe food production to compete and tap the local and international markets.

They also made a call to promote exports and the food processing sector for giving an impetus to the country’s economy.

They made the call at the concluding ceremony of the sixth BAPA FoodPro International Expo 2018 at Bangabandhu International Conference Centre (BICC).

The Bangladesh Agro-Processors Association (BAPA) and the Extreme Exhibition and Event Management Solution Limited, an event management company, organised the three-day international fair.

Bangladesh Food Safety Authority Mohammad Mahfuzul Hoque was present as the chief guest with BAPA President A F M Fakhrul Islam Munshi in the chair.

BAPA General Secretary Md Iqtadul Hoque, among others, was present at the function.

A total of 147 organisations from home and abroad showcased various types of agro and food processing technology, and packaged foods such as snacks, frozen meat, frozen vegetables, soft drinks, juice, sauce, dairy products, sweet and species.

Some 117 foreign entrepreneurs from 15 countries put agro and food processing machinery on display.

A huge number of visitors visited the show with much enthusiasm on the last day of the exhibition as the stall owners offered discounts on various products, said the organisers.

Besides, the visitors were seen visiting at the two other concurrent events ‘5th Rice and Grain Tech Expo Bangladesh’ and ‘8th Agro Bangladesh Expo’ at the same venue.

Technical and business sessions also took place on the sidelines of the fair.

 

WB approves $515m for three projects

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WB approves $515m for three projects

FE Report

The World Bank has approved $515 million for three projects in Bangladesh to aid improvement in the areas of coastal and marine fisheries, forest management, and rural roads.

The financing will benefit rural people by reducing poverty and creating new livelihood opportunities, including for local communities in Cox’s Bazar district hosting Rohingya people who fled violence in Myanmar.

“These three projects will create opportunities for the rural population and especially help the vulnerable people come out of poverty,” said Qimiao Fan, World Bank Country Director for Bangladesh, Bhutan and Nepal. “At the same time, they will improve the country’s resilience to climate change.”

The $175 million Sustainable Forests and Livelihoods Project will help improve forest cover through a collaborative forest management approach involving local communities.

Under the project trees will be planted on about 79,000 hectares of forest, including a coastal green belt that will also help increase climate change resilience, said the WB on Saturday.

“The project will support increasing income through alternative income generation activities for about 40,000 households in the coastal, hill and central districts of the country,” said Madhavi Pillai, World Bank Senior Natural Resources Management Specialist and Task Team Leader for the project.

This will include Cox’s Bazar where nearly one million Rohingyas took shelter.

The project will particularly help the host communities through its income generation activities, improving the availability of wood for fuel in a sustainable way and reducing human-wild elephant conflict which has affected parts of the district.

The project will develop and implement Protected Area management plans for about 10 Protected Forest Areas with involvement of community members.

The $240 million Sustainable Coastal and Marine Fisheries Project will help improve fisheries management, expand mariculture and strengthen aquaculture biosecurity and productivity.

In 10 coastal districts, the project will set up community co-management associations with the fishing communities, enabling them to adopt supplementary and alternative livelihoods.

It will also empower female workers through alternative livelihoods support, skills development, and nutrition awareness.

“Fisheries are vital to the country’s food security and the sector employs more than 18 million people. After garments, fishery is the country’s second largest export earning sector,” said Milen Dyoulgerov, World Bank Senior Environment Specialist and Task Team Leader for the project.

“The project will help improve fisheries management systems, infrastructure, and other value chain investments. This will result in better productivity and availability of fish.”

The project will also help expand the current fisher ID card system, which will be linked with the geographic information system platform.

It will also improve vessel registration and licensing for fishing.

The $100 million additional financing to the Second Rural Transport Improvement Project will help rehabilitate rural roads in 26 districts that were damaged from last year’s heavy rainfall and floods.

The ongoing project has improved and repaired more than 5,000 km rural roads that helped millions of people access markets, hospitals, and schools.

The financing will factor in climate-resilience in planning, technical design, implementation and maintenance of the roads.

“The financing will continue a road safety programme to ensure traffic safety as the rural roads are facing increased motorized traffic,” said Dung Anh Hoang, World Bank Senior Transport Specialist and Task Team Leader for the project.

 

BD to miss SDG target at present pace of housing

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BD to miss SDG target at present pace of housing

Experts for social housing to address the problem

FE Report

The overall housing situation of the country is poor compared to the pace of development with 6.0 million housing shortages, according to experts.

They spoke of the government’s lack of interest to take realistic measures to formalise and augment the housing supply process.

The government’s contribution is only 1.0 per cent of the total demand for housing, the experts observed.

Bangladesh will not be able to achieve the sustainable development goals’ 11th target of housing for all by 2030 if the current trend continues, they said.

All the ad hoc basis initiatives have been failing due to corruption, lack of monitoring and coordination among ministries, the experts mentioned.

They suggested social housing either by public or private or by the both.

Their main objective will be to ensure housing for all through a master plan, not to make a profit.

They made the views at a seminar on ‘Housing for All’ hosted by the Bangladesh Institute of Planners (BIP) in the capital, marking World Habitat Day 2018.

Urban Development Directorate (UDD) director Khurshid Zabin Toufique was present as the chief guest.

Four presentations were made on various issues of housing at the seminar held in the BIP conference hall.

BIP general secretary Adil Muhammed Khan made a presentation on ‘Social Housing Concept and Housing for Low-income People in Bangladesh’.

He said the SDG target 11 stresses access for all to adequate, safe and affordable housing and basic services and upgrade slums by 2030.

About housing deficit in Dhaka city, he spoke of an imbalance between the total number of households and the total housing stock.

The floor area per person is as small as 1.2 square metres, he mentioned.

Mr Khan identified the scarcity of land and high building cost as major constraints for housing development in Dhaka.

High land price also excludes poor from land and home ownership, he added.

Experts said there is neither cost recovery nor cross subsidisation approach here by which housing can be ensured as it is a basic right.

According to the Bangladesh Bureau of Statistics (BBS), there was a housing shortfall of 4.6 million units for 43.43 million people in 2010. The shortage is projected to reach 8.5 million units for 60 million urban people by 2021, it revealed.

In her presentation, Arc planner Salma A Shafi said the total urban population will reach 100 million by 2050.

The government even does not supply 1.0 per cent of the total housing demand, she added. A minimum of 0.1 million housing units should be supplied in the market every year, Ms Shafi said.

The government talks about only 10,000 units supplied by them, she noted.

Ms Shafi said the limited number of pilot projects will not be effective in solving housing crisis. Housing finance is a major part of the issue.

She suggested approval of an urban sector policy, an implementable housing policy and redevelopment of old areas like Shahjahanpur and the old town.

Meanwhile, Mr Toufique said the government has a gazette on social housing, but according to the housing policy 2016, it will not provide housing for all.

Rather it will work as a facilitator, he mentioned.

Only people from river erosion areas, destitute women left by husbands and the elderly will be eligible for housing, he added.

Housing has been recognised as an industry which means lots of incentives can be provided in the sector, said the noted planner.

About exorbitant land prices, he said the prices of land in Dhaka are close to that of New York or Tokyo which is a bubble.

If this cannot be controlled, Mr Toufique said, people will continue to grab rivers and other water bodies.

Speakers said urban financing cannot be ensured by the government only. It can be make a strategic alliance of public, private and community to solve housing problem.

Housing is a priority issue in all the countries as social instability will be there if housing problem is not resolved.

But housing has become a lucrative business for the realtors which provide housing for the better-off.

There is hardly any trend among developers for low-cost housing. It is the government which should engage the developers in doing so, they stated. Rajuk and other agencies undertake housing projects mostly for professional groups and other affluent sections, they observed.

The speakers said privatisation happens in the open economy, but there is no equilibrium in society now.

Housing is not a business opportunity rather it should be recognised as a right, the speakers went on.

For that, political will is the main issue, they said.

Bangladesh should have 4cr taxpayers

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Bangladesh should have 4cr taxpayers

Muhith says as tax fair begins

Star Business Report

Bangladesh now has around one crore taxpayers and the number should increase to four crore to help the government provide better public services and widen the tax net, Finance Minister AMA Muhith said yesterday.

“The government creates opportunities for us to get education and make livelihoods. And you pay tax as the state creates the scope.”

“This is a virtuous cycle where we pay tax and the government spends the money to provide services. Through this cycle, all make progress,” the minister said.

Muhith’s remark came at the opening of a weeklong income tax fair at Officers Club Dhaka.

This is the ninth edition of the show, which also kicked off in other divisional cities to facilitate taxpayers in completing tax related formalities for 2018-19.

The fair will also take place for four days in all districts, two days in 32 upazilas and for one day through mobile trucks in 70 upazilas between November 13 and November 19. “The enthusiasm of people has really turned the event as a fair,” he said, referring to the queue of taxpayers who were waiting for the show to open.

Muhith said the number of taxpayers, which was once 7 lakh, is over 30 lakh now.

“And I saw somewhere yesterday (Monday) that nearly one crore people pay tax through various ways where various types of tax are taken into account. This is a good achievement,” he said.

“But we are not satisfied with the number in view of the pace of development of our country. More people should join and pay tax,” said Muhith.

He said once many were reluctant to pay tax. “That mentality no more prevails as many youths pay tax spontaneously. This is a remarkable achievement for us as a nation,” said Muhith.

Citing development of the country’s road network, he said the connectivity has integrated all economic activities.

“It has created a single economy and increased the pace of the economy,” he said, adding that disparity among people is reducing fast owing to economic advancement.

“Disparity still remains but it is falling,” said Muhith, citing the declining rate of poverty, which now stands at 22 percent, down from 70 percent a couple of decades ago.

“This means that still 3 crore of the population live in poverty. We have to lift them out of poverty,” he said.

The tax fair has been gaining popularity since 2010, said National Board of Revenue Chairman Md Mosharraf Hossain Bhuiyan.

Apart from Dhaka, the tax fair opened at Mohammad Ali Gymnasium in Sylhet.

Tax officials at the field office in the region said they were working to attain a target of issuing 18,000 new taxpayers identification numbers to expand the tax net.

The amount of tax submitted on the first day of the fair around the country was 5 percent or Tk 218 crore higher compared to that collected on the same day the previous year.

Moreover, the NBR received 46,401 returns, up 49 percent year-on-year.

In the port city, the tax fair was inaugurated at GEN Convention Centre.

The weeklong fair began on the premises of the office of Khulna tax zone at Boyra of the city.

Some 1,036 returns were submitted at the Khulna fair.

In Rajshahi, the tax fair began at the income tax building, which saw a high turnout of taxpayers on the first day yesterday, according to correspondents.

The NBR organised the same kind of events in Barishal city and Cumilla.

Exploit finished leather, treble export earnings

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Exploit finished leather, treble export earnings

Industry players call for more compliance

Jagaran Chakma

Bangladesh can earn three times more from leather goods exports if all the finished leather produced in the country in a year is utilised, industry players said.

Last fiscal year, the country exported $1.1 billion worth of footwear and other leather goods — using only 30 percent of finished leather.

The remaining 70 percent finished leather was exported, mostly to China, said Saiful Islam, president of leather goods and footwear manufacturers and exporters association of Bangladesh (LFMEAB).

Finished leather exports fetch less than one-third of footwear: one square feet of finished leather fetches only $0.60, whereas footwear made from three square feet of finished leather brings $5.

Bangladesh produces 400 million square feet of finished leather annually, according to industry players.

The country has massive export potential of leather goods and footwear for its raw leather supply, said Syed Nasim Monzur, managing director of Apex Footwear, a leading shoe manufacturer and exporter from Bangladesh.

Presently, Bangladesh has 165 footwear and leather factories, which could fetch up to $5 billion in exports receipts were they compliant and used modern technologies.

In addition, the country has 161 tanneries that process raw hides into finished leather; and 98 percent of the tanneries are not compliant to global standards, said Dipankar Tripura, a finished leather exporter.

“The tannery owners are least bothered about quality,” he added. Foreign buyers of footwear and leather goods do not source from non-certified and non-compliant factories, said industry players.

Maruf Akter Mannan, director of OMC Group, a quality support and technology provider for the sector, also pointed out that many tanneries do not have proper water treatment and affluent plants.

Receipts from leather goods, footwear and finished leather exports have been crossing the $1 billion-mark for the past five years, but they are not growing further.

R. Baskaran, president of the Association of Footwear Components, Accessories and Machinery Manufacturers of India, vouched for Bangladesh’s export potential.

“Now, Bangladesh needs efficient manpower and technology to earn more from exports,” said Baskaran, who took part in a leather tech and leather goods sourcing show that concluded yesterday.

Compliance and quality are the major factors to attracting foreign buyers and not cheap labour, he said.

Bangladesh’s main export markets are: the EU, the US, Australia, Japan, Singapore and South Korea.