Turkey emerges as a new export hub for Bangladesh

Amid all the turmoil and mayhem that threatened to wreck the economy last year, Bangladesh made a surprising gain in export of ready-made garments to Turkey, a country that is not a traditional market like the European Union or the United States.

Its export to Turkey jumped more than 60 percent in the first half of the last fiscal (July-December) to $435 million, of which RMG accounts for 77 percent of the total export.

Experts attribute the phenomenal surge to such factors as Turkey's growing economy and expansion of its local market for foreign products as well its decision to wind down RMG production at home.

“Turkey's economy has grown spectacularly for over a decade, which led to the rise in purchasing power of its people,” Mustafizur Rahman, executive director of the Centre for Policy Dialogue, told bdnews24.com.

“Bangladeshi exporters have taken full advantage of this phenomenon.”
AKM Selim Osman, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), agrees.

“Demand for our ready-made garments has surged progressively in Turkey over the past few years and we've capitalized on their growing economy,” he said, adding, “Until recently, Turkey used to export garments to Europe after meetings its own domestic demand.”

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Asked as to why Turkey has moved away from garment manufacturing, Osman said “Their rising production cost due to increased workers' wages made it difficult for them to compete with ours,” Osman said. “It gave us double benefits. On one hand, we were able to enter their market and on the other, we replaced them in Europe as the exporter for RMG products.”

In some cases, Turkish businessmen are buying garment products from us directly and selling them in the local market by just adding print or embroidery in their factories, Osman said.

Part of the reason in the surge of exports in garment products, especially knitwear, has been due to the stepped up efforts like holding road shows in countries like Japan and Russia in search of new markets.

And the efforts have paid off. Of the total export to Turkey in the last fiscal, 77 percent accounts for RMG products, of which the share of knitwear was over 40 percent.

“It's indeed a very significant development,” Rahman of CPD, said. “When our total export in the last fiscal grew only 16 percent, export to Turkey alone rose to over 60 percent, which is a very big jump,” he said.

“I believe this trend will continue in the coming years, especially when the free trade agreement (FTA) with Turkey will come into effect.”

Currently, all Least Developed Countries including Bangladesh must pay 17 percent duty for exporting to Turkey; the FTA will lead to lifting of that duty, he said.

Rahman further suggested “We should shift our focus away from Europe and America and concentrate more on south-south trade, which would further boost our exports to Turkey.”

According to a February 5 government press release, bilateral trade between Bangladesh and Turkey stood at $1.2 billion in 2013, of which Bangladesh's export was over $1 billion, hitting a milestone.

On the other hand, Bangladesh imported iron, steel, machineries and fabrics from Turkey. In 2012, bilateral trade stood at $980 million; of which Bangladesh exported goods worth $766 million and Turkey's share was $214 million.