Tue, Nov 20, 2001 page24

• Agriculture gives Bangladesh some hope

  FRAGILE ECONOMY With the garment industry laying off tens of thousands, many are looking to farming to pick up the slack, yet few expect it to create so many jobs

  • REUTERS
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  Agriculture is the only ray of hope that pierces the gloom enshrouding Bangladesh's fragile economy.

  Bangladesh's exports have dropped sharply since the Sept. 11 attacks on the US, foreign exchange reserves are low and falling and there is no agreement with the IMF on a proposed aid package.

  But agriculture, which employs an estimated 64 percent of Bangladesh's 60 million workforce and makes up 27 percent of GDP, is growing steadily, officials and economists said last Tuesday.

  They forecast increased food-grain production in the fiscal year ending June 30 next year, thanks to favorable weather conditions and efficient crop management.

  Problems for the rest of Bangladesh's economy have become more acute since the Sept. 11 attacks on the US. Foreign exchange reserves dropped to US$1.04 billion at the end of October from US$1.42 billion a year earlier, central bank officials said. Business groups say Bangladesh's main export earner, its garments, faces barriers entering the US and stiffer competition in European markets.

  The US buys 40 percent of Bangladesh's annual US$4.86 billion garment exports or more than 75 percent of the country's total annual exports, commerce officials said.

  Export orders fell further in the wake of America's war against Afghanistan and the overall global economic slowdown.

  More than 1,200 of Bangladesh's 3,200 garment factories have already closed, most after the US started bombing Afghanistan on Oct. 7. When the US launched its campaign against terrorism, Bangladesh offered Washington the use of its airspace, ports and other facilities, hoping America in return would lift quotas and duty on its garments exports.

  So far there have been no concessions from the US, despite the efforts of Foreign Minister Badruddoza Chowdhury during a visit last week to Washington.

  "The garment industry, which employs some two million workers, 90 percent of them women, now faces even more uncertainty," said Quazi Muniruzzaman, vice president of Bangladesh Garment Manufacturers and Exporters Association.

  The Association plans a follow-up visit with Commerce Minister Amir Khasru Mahmud Chowdhury to Washington. "We are trying to break the ice and save the industry," said Muniruzzaman. "We have already laid off tens of thousands of workers after export orders have been cut or frozen, pushing them to the verge of starvation," he said.

  Exports of frozen food -- mainly fish -- which fetch Bangladesh more than US$360 million annually, are also declining, exporters said.

  The value of total exports in September was down about 35 percent in comparison to the same month last year, according to Tajul Islam, director general of the Export Promotion Bureau.

  "The overall export picture for October is likely to be grimmer," Islam said.

  "The only sector so far looking bright is agriculture with yield of foodgrains likely to rise to 27.9 million tonnes this fiscal year," said A.K.M. Nurul Afsar, the head of the Directorate General of Food.

  He said Bangladesh produced 24.8 million tonnes of rice and 1.9 million tonnes of wheat in last year and this year combined, leaving a surplus of more than 4 million tonnes. Afsar said production targets for the year ending June 30 next year (25.95 million tonnes of rice and 1.95 million tonnes of wheat) "look achievable as weather conditions have been favorable."

  Bangladesh has had no major flooding or drought over the last three or four years, Afsar added.

  Most farms are owned by landlords who keep most of the crop yield and use the rest to pay farm laborers and landless share croppers, says Quazi Kholiquzzaman Ahmed, a leading economist.

  "This means the surplus production is also held by the land owners while others working in their fields remain poor for generations," Kholiquzzaman said.

  Farm workers' incomes could soon face pressure from a return to the land by jobless industrial workers, he predicts. "More competition for limited work in the fields would result in less pay and less buying power. And it is unlikely that agriculture can absorb all the newcomers, leaving many, particularly the women, to seek alternative ways of earning money," he added.
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