A poor decision

"Nurse the baby, protect the child and free the adult" the famous adage is rightly applicable to backward linkage industries of textile sector in our country which is still at a nascent stage and deserves both tariff and non-tariff protection. Past experience reveals that no belt tightening measure at land ports could stop unauthorised entry of cotton yarn when even the built up trucks are smuggled inside the country without problems. A simple non-tariff protection did help flourish both cotton spinning, woven and knit fabrics industries during the last four years creating more than a million jobs which was unprecedented in the history of our nation. On the other hand, the distinct advantage that the local users have been enjoying with delivery of cotton yarn in their factory premises by the manufacturers promptly on receipt of order without any additional cost involvement has totally been ignored; rather importance was attached to import through land route at the expense of foreign currency. The phenomenal growth in the sector during the last four years led to denial of our textile products' duty free access to US market in the latest Hong Kong meet of WTO as the move was blocked by the US representative followed by objections of Pakistan and Sri Lanka. It needs to be evaluated seriously. Secondly, the protection in the form of cash incentive introduced a few years ago is threatened to be withdrawn from the next fiscal year and if it is implemented then the sector will start limping with negative growth. The competitive countries in Asia have been providing huge subsidies on export and even at the grower level of raw cotton although in our case every item is import based. The Honourable Finance Minister, a few days ago, admitted having witnessed a number of industries under construction in the rural areas, a major part of which belong to the textile sector meant for creating further employment opportunities. It is destined to bounce back for lack of domestic market demand and therefore a bleak future awaits us.

It would have been most suitable and befitting if a survey is conducted by national think tanks or a committee is formed under the auspices of Bangladesh Bank with members from FBCCI, BTMA, BGMEA and BKMEA to study the rationale behind demand of both the sectors and a guideline by them could serve the purpose. The country has been reeling under severe foreign currency shortage for the last few months culminating in the exchange rate of one USD for Tk. 67/68. The rising interest rate tends to increase inflation which is not desirable. So withdrawing barriers to import of cotton yarn through land ports coupled with stoppage of cash subsidies shall push the present situation of foreign currency shortage into further crisis and there will be no way to counter balance it.