Service export goes on disappointing
Staff Reporter :
In the last three fiscal years, Bangladesh has consistently fallen short of its service export targets, according to the Export Promotion Bureau (EPB).
The latest report reveals that in the first half of the current fiscal year (2023-24), Bangladesh’s service exports only achieved 69.36 percent of the set target, earning $3.3 billion compared to the aimed $4.76 billion from July to December.
This amount is also 18.28 percent lower year-on-year compared to FY23, where the country earned $4.04 billion in the same period.
Key sectors for potential growth in service exports include transport, tourism, banking and insurance, telecommunications, construction, computer and ICT, and intellectual property.
Despite this potential, Bangladesh’s service export turnover remains significantly below its full capacity, capturing only 0.115 percent of the global market worth nearly $6.0 trillion.
Experts attribute the challenges in boosting Bangladesh’s service sector to the absence of effective policies, inadequate planning, a lack of quality education, and limited investment inclination.
Despite having a large population and attractive tourist destinations, the country has struggled to capitalize on its potential. Service exports fluctuated over the past few fiscal years: from $6.34 billion in FY19 to $6.08 billion in FY20, then increasing to $6.61 billion in FY21. In FY22, exports rose substantially to $8.89 billion but still fell 6.0 percent below the target.
However, in FY22-23, service exports declined by 15.65 percent to $7.49 billion, missing the target by 16.69 percent.
Within the service sector, the transport industry experienced a significant 31.15 percent decline to $422.51 million in the first half of FY24, compared to $613.69 million in the same period of FY23.
In the first half of FY24, sea transport contributed $265.67 million, experiencing a 25.65 percent decline year-on-year, while air transport earnings dropped by 40.37 percent to $150.25 million.
However, the travel sector saw a positive trend with earnings increasing by 3.39 percent to $220.10 million compared to the same period in FY23.
Education-related travel earnings also surged by 17.54 percent to $34.18 million, and earnings from foreign tourists rose by 2.37 percent to $27.61 million in the first half of FY24.
Additionally, foreign missions importing goods and services from Bangladesh contributed significantly to government service exports, although earnings from this sector fell by 24.02 percent year-on-year to $882 million in the July-December period of FY24.
Commenting on the matter, Policy Research Institute (PRI) Executive Director Ahsan H Mansur highlighted the discrepancy, stating, “We buy a lot of services, but we cannot export as much.”
He noted that the export of services is underestimated, as significant amounts are spent on education, health, and remittances from foreign workers within the country.
