Top down model is very much relevant with export policy

Top down model is very much relevant with export policy.

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Top-down management is the most common form of policy management. It is hierarchical, with a chief executive officer (CEO) who sets the motion for the entire organization. Then, their leadership is put in effect through a succession of executives, middle management, and finally down to the totem pole. In top-down management, everything from the workplace to the business systems is all determined by upper management, and then it’s passed down the chain of command. Each role is responsible for pursuing the mission as stated by the higher-ups, without much room for comment or criticism. While some lower-level managers might join the decision-making process, in the end, the final decision rests with the C-level executives.

While forming export policies in Bangladesh, these characteristics of top-down management can be seen. Export Promotion Bureau (EPB), Bangladesh under the Ministry of Commerce is a government agency of the country, entrusted with the responsibilities of promoting export of the country. EPB also assists the ministry of commerce in formulating policies related to the export of the country. With a view to formulating export policy, EPB invites proposals from different chambers of commerce, trade associations, and export-related organization. EPB in consultation with the private sector sends a proposal to the Ministry of Commerce for the formulation of the export policy.

The effectiveness of this policy:

The EPB has performed several performances in exporting products abroad regarding several goals. The EPB has been established for implementing the following goals:

  1. Formulating proper planning and determining policy with a view to improving the export of the country and getting them implemented.
  2. Giving suggestions to the government in case of formulation and determination of export policies and helping in their implementation.
  3. Analyzing the prospects of exportable goods in the country, creating and finding a market for the products in other countries.
  4. Establishing supportive institutions for export development both in the country and abroad.
  5. Inaugurating wide promotional and circulating activities of the products in the foreign markets.
  6. Helping other institutions for the overall betterment of export.

Though the Government of Bangladesh acknowledges that export-led growth and a broadening of the export structure are pivotal to the country’s growth ambitions. But according to Export Promotion Bureau data, export earnings in the first half (July-December) of the current financial year 20201-21 fell by 0.36 percent to $19.23 billion from $19.30 billion in the same period of FY 2019-20.

Overcoming an unprecedented supply chain disruption in March-May of 2020, export earnings began to increase from June but the second wave of COVID-19 started taking its toll on the earnings from October. The country’s export business faced a miserable situation in the first half as global buyers halted and canceled their import orders for readymade garment products due to the coronavirus pandemic.

Export Policy

The EPB data showed that the export earnings in December 2020 fell by 6.11 percent to $3.31 billion from $3.52 billion in the same month of the previous year. The RMG witnessed a down downturn in export in December with a 9.64 percent fall, which wrapped up the annual performance for 2020 with an unprecedented fall of 16.94 percent.

As the uncertainties and impacts caused by the second wave still persist coupled with the relatively poor administration and unavailability of vaccines, and the impact on the global economy it would leave, this downtrend in export continued till April of this year.

After being severely affected by the COVID 19 pandemic-which slowed growth and for the first time in two decades reversed the countries exporting growth trend- the export is recovering gradually.

Recommendations:

To meet the needs of its growing economy band boost export growth, Bangladesh needs to promote its logistics system. Some measures should be taken to ensure export growth:

Increasing the availability of credit:

The availability of short and long-term credit is crucial to exporters. This is decisive for small and medium enterprises (SMEs). For which the credit confinements are more binding than for large firms. Since SMEs make up the majority of firms in developing countries like Bangladesh, improvements in this domain are necessary to favor export growth.

Simplifying regulation:

The government should facilitate regulation related to exports; long bureaucracy procedures negatively affect especially new exporters. At the same time, governments should improve information and dissemination about foreign markets and requirements for exporting. Performances in this category should also consider products standard and other technical requirements imposed for exporting to developed country markets.

Promoting cooperation among economic actors:

Besides traditional policy instruments, export growth could be favored by improving cooperation among exporters and between the government and business actors. For example, there is increasing awareness about the possibility of using export consortia to help SMEs access the international market.

Combining short-term and long-term export growth policies:

The stimulation of export growth requires a combination of short-term and long-term policies. In this context, it is crucial to also exploit the complementary between EPPs and other domestic policies.

For Bangladesh, improving its logistics performance provides an opportunity to increase its world market share in garments and textile, which the maximum percent of its total exports, expand into new markets, and diversify its manufacturing and agriculture into high-value products. But the solution to logistics is not just to invest more but to invest better, by concentrating on the service gap and creating the incentives for high quality and competitive logistics services.

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