Discussion Brief for the Export Strategy-Maker

1. Background

1.1. Background of the study
1.2. Objectives of the study
1.3. Scope of the study
1.4. Methodology followed for the study

2. General Overview – Trade Support Network

2.1. Trade Support Network – Creating a value network
2.2. Historical Perspective
2.3. Awareness about Trade Support Network (TSN) in Bangladesh

3. Trade Support Network (TSN) in Bangladesh

3.1. Existing Trade Support Services (TSS)
3.2. Profile of the Trade Support Service Organizations (TSSOs)

4. Findings of the Survey

4.1. Assessment of Level of Exporters’ Satisfaction about TSSOs
4.2. Views of the Service Receivers/ Exporters
4.3. Expectations of the Exporters
4.4. Views of the Service Providers
4.5. Expectations of the Service Providers

5. Consultant’s Assessment on Trade Support Network

5.1. Successful Areas of TSN
5.2. Unsuccessful or Less Successful Areas of TSN
5.3. Coordination and Cooperation within the TSSOs
5.4. Weaknesses of Trade Support Network
5.5. Constraints to Development of Trade Support Network
5.6. Strategic Actions to Ensure Efficient Operation of TSN
5.7. Viability of a Private Sector TSSO

6. Recommendations
7. Conclusions

The International Trade Centre (ITC) and the Swiss State Secretariat for Economic Affairs (SECO) plan to organize the annual Executive Forum 2001 on national export strategies in September 2001. The main focus of the Forum will be on a pre-selected idea that has direct relevance to the effectiveness of the export strategy-making and strategy management process at a national level towards enhancement of competitiveness of the exporters.

The theme selected for the Executive Forum 2001 is "Is your Trade Support Network Working"? The theme will be explored from the perspectives of i) individual exporters; ii) service providers and iii) national export strategy-makers.

This study has been commissioned by ITC in Bangladesh as a background paper to generate ideas for a fruitful debate by the national strategy making-teams on issues affecting export competitiveness enhancement. A field survey of some 70 (seventy) individual direct exporters, deemed exporters, potential/threshold exporters, and policy makers has been carried during the study to identify real issues and concerns relevant to export competitiveness enhancement as seen by the exporters and by the national strategy-makers for this study. The subsequent chapters present the findings.

The objectives of the study are:

• To identify the trade support network both in public and private sectors and their effectiveness for export competitiveness enhancement;
• To evaluate the existing trade support services and their level of contribution to the exporters and recommend on demand driven trade support services;
• To obtain objective opinions, remarks and suggestions of the exporters in order to draw a set of pragmatic conclusions and recommendations on possible improvements of trade support services and network operation;
• To identify the "successful" trade support services and organizations and to analyze the "success story"
• To identify and analyze weaknesses of the existing trade support service and organizations and to suggest possible remedies;
• To recommend innovative approach to provide better trade support services and to primarily assess the viability of the private sector trade support services organization that enhances export competitiveness of the exporters of Bangladesh in the context of globalization.

The study covers the perception of the national strategy-makers, different categories of exporters and the key service providers in Bangladesh for promotion and development of exports.

Exporters have been selected from a diverse group of industrial sectors including ready-made garments (RMG), knitwear, textile, pharmaceuticals, handicrafts, frozen food, sea food, data entry, software development, dry cell battery, leather and leather goods, footwear, vegetables, ceramics, agro-based industries, electrical and electronics sector, etc.

Service providers include trade associations, Chambers of Commerce and Industries, banks and financial institutions, the Central Bank, the Export Promotion Bureau, export management consultants, shipping lines, courier services, buying houses, etc. The national strategy-makers include key persons of exporters association, chambers and the high officials of the Export Promotion Bureau, Ministry of Commerce, Central Bank, etc.

The methodology included a field survey to obtain primary data, desk research and review of secondary sources of information, interviewing different categories of exporters, service providers, chamber and trade association representatives, policy makers, bankers and other knowledgeable people involved in export development.

Primary data has been collected from a field survey of some seventy respondents using a structured questionnaire (Attachment) and a non-directive interview technique. The sampling technique used in this study is non-probabilistic. The sample size has been selected with utmost care and consideration to avoid sampling error. The following is the summary of the sampling and sample size of this research.

Necessary secondary data and information have been collected from various sources that include the Export Promotion Bureau, Chief Controller of Import and Export, banks and financial institutions, trade associations, and Chambers of Commerce and Industries. Data collected from the secondary sources were reviewed and analyzed for the purpose of this study. In the desk research phase, various policy papers, study reports, newsletters, newspaper articles, research findings on export promotion and development, evaluation reports, annual reports and publications of different trade support related organizations were also reviewed and analyzed.

With the advent of globalization, the need for better trade balances and exports among nations around the world has increased markedly. But, it has been felt that this wide range of activities related to international trade is a field where specialized services are required. From this realization, a new concept came into being which is now known as Trade Support Services (TSS). These TSS were (and are) responsible for generating specialized services to the exporters to attain competitive edge in the world market.

It has now been recognized that TSS services need to be integrated so that they can deliver more value by avoiding duplication and bringing more specialization into play. Thus, the Trade Support Network (TSN) became the new approach and has assumed a great importance in the export trade development activities.

A TSN can be defined as "the collection of entities that provide a wide assortment of services essential for an exporter from the beginning to the end point of the trade process." A successful network must posses two attributes in that respect:

• Needs assessment expertise
• Problem solving skills

An ideal network is, therefore, expected to have the information, human, financial and physical resources and the networking abilities to meet the needs and wants of enterprises.

The perspective of the enterprises and government with regard to trade is generally the same – both wish to increase export trade. However, the emphasis is different. The enterprise wishes to increase its profits and the government is interested in the broader issue of economic development, including employment generation and foreign exchange earnings, and sees support to export or potential export enterprises in that light, TSN works as a bridge between these two differing perspectives.

After independence in 1971, Bangladesh did not have an adequate infrastructure for rapid economic development. In terms of export performance, the country did not achieve much. However, the national export scenario has changed over the years showing steady export growth. Although, the national export has grown steadily the scope and number of Trade Support Service Organizations (TSSO) have not increased. This was due to:

• lack of perception on the part of the exporters
• a bureaucratic approach by the export-promoting departments of government,
• lack of required resources,
• absence of initiatives by government agencies,
• traditional attitudes among individual exporters,
• non-inclusion of trade-support aspects in the national development plans and objectives, etc.

The government has been initiating various policy interventions for export development and growth. Besides regulatory measures, the government has also been trying to extend support for finance and market information through the Export Promotion Bureau. But such support was inadequate both in terms of quality and the felt needs of the exporters.

In 1977, the Export Promotion Bureau (EPB) was established by the promulgation of a Presidential Ordinance as a semi-autonomous body with a view to promoting export and improving plans and policies helpful to the private sector. As of now, EPB is the country’s major public sector focal point and service-providing organization promoting exports.

In Bangladesh, the concept of a Trade Support Network (TSN) is quite new. Awareness of the TSN is low among existing exporters and service providers. The policy-makers, bureaucrats, academicians and exporters all feel the necessity of such networking within the trade support service organizations but do not know how to go about it.

The trade networking concept can be established only when the service-providing agencies, both public and private, can work in co-ordination and co-operation to offer the required support services. Awareness about co-operation and co-ordination is lacking.

In Bangladesh, there is no one point of contact or "One-Stop Trade-Support Service Provider" that provides all the information on the following sources of trade support services required by an exporting entrepreneur:

The entire flow of c-oordinated support services as mentioned above constitute what we call a "trade support network". This is almost non-existence in Bangladesh.

The subsequent pages explain in detail the existing Trade Support Network and its effectiveness, the prospects of the TSN and the viability of a private-sector export trade-support services network organization.

Although, a network does not exist in true sense of the word, there are some support services both in the public and private sector available to the exporters as offered by the trade associations, the chambers of commerce, donor funded projects, non-government organizations. Two common support services available and these are:

• Fee-based trade support services; and
• Non fee-based support services

The cost of fee-based support services is expected to be minimal, but in actuality public-sector services though supposed to be free always cost something, more than the officials admit, because of bribes, ‘speed money’, entertainment expenses, gifts, etc..

Very few support services are provided commercially. There are services such as supply of trade directories, yellow pages, news bulletins, web page visit statistics and statistical bulletins offered on a commercial basis by the private sector. A few more organizations claim to be providers of information services, information networks, etc., but these are still lacking a clear vision, mission and objectives. Before we look into the support services availability in Bangladesh, let us focus on the specific requirements of support services from the viewpoint of an individual exporter.

As of now, local exporters are more dependent on their own limited individual resources and initiative to enhance competitiveness and less on the TSSOs’ services.

Only a few firms in the private sector like banks, chambers of commerce, trade and sector associations, buying houses, shipping lines, courier service providers, C& F agents, insurance companies, etc. provide some elements of quality services to exporters.

In Bangladesh, the main problem for TSSOs is a lack of understanding and appreciation of what it takes to enhance export competitiveness. People working in the public sector TSSOs are superficially concerned about global competitiveness. They need to develop a deeper understanding of what that competitiveness really implies. They should develop their own knowledge and institutional capabilities in this regard before they can provide meaningful services to the exporters.

Broadly, there are four different types of TSSOs involved. These are:

• Ministry of Commerce
• Ministry of Finance
• CCI & E
• Export Promotion Bureau (EPB)
• Port Authorities
• Customs Authorities
• Bangladesh Bank
• Board of Investment (BOI)
• Bangladesh Standard and Testing Institution (BSTI)
• Utility Services Providers
• Ministry of Industries
• Banks and financial institutions

• Banks and financial institutions
• Buying houses
• Shipping lines
• C & F (clearing and forwarding) agents
• Suppliers, importers and manufacturers of raw materials
• Courier services
• Trade directories
• Product design centers
• ISO certification agencies
• Export management consulting firms

• Ecota Forum
• Job Opportunities and Business Support (JOBS)
• Agro-based Industries and Technology Development Project (ATDP)
• Hortex Foundation
• HEED
• Other donor funded projects

The following presentation highlights the level of exporters’ satisfaction with TSSOs as revealed by the survey:

It is evident from the above table that the satisfaction level regarding the existing TSSOs is extremely varied.

Almost all the individual TSSO in the ‘satisfactory’ category are the private-sector organizations that are assisting exporters and other service receivers. Among them, the Banks (mostly private) and the C & F Agents are the most highly appreciated organizations. Both received high marks in the survey.

In the "moderately satisfactory’ category, most of the organizations belong to the public sector. Interestingly, some trade associations, which are weak, are also in this group. What it implies is that government organizations are poor in providing trade support services.

Finally, it has been found that all the organizations in the ‘unsatisfactory’ category belong to the public sector. Though a few people have made some positive comments about EPB, more than 55% of the respondents were strongly critical.

Exactly (50%) half of the responding exporters feel that the needed services are not fully available. Their view is that, either all the services are not offered, or services may be there but various time-consuming procedures make it almost a unavailable. Nevertheless, a reasonable number of respondents (26%) felt that services are fully available but take a lot more time than they should. The hidden costs in money and mental stress are major issues. They put up with them because there are no alternatives.

About 8% of respondents felt that individual services were ‘available but not reachable’. In their view, the cumbersome procedures, delivery system and the associated administration put the services out of reach. But, there are a few respondents (3%) who had no idea of the services and availability.

Of the 26% who say that the services are fully available, requirements are extremely diversified. Some respond to specific service-based expectations. Some are systems-based requirements.

On the requirements’ list, market information is a crying need for exporters. This is the single most important requirement.

Exporters have great difficulty in identifying the specific market for their products and they do not have a reliable source of information about foreign markets.

The next service the exporters recommend is support for human resources development and quality verification and standard testing.

At present, only EPB, DCCI and some private consulting houses provide training on various subjects relating to export and export management. There is no formal training institute that provides the specific training and human resources development support required for export development.

As foreign markets insist on quality and standards guarantees for products, exporters felt this area needs immediate attention. Because, Bangladeshi exporters fear they risk being rejected because of incompatible standards, so an appropriate institutional service is cited as another important need by entrepreneurs.

The next requirement is for an efficient delivery system by the TSN services. Exporters argue that the services that exist are not reachable or only partially available because of poor delivery mechanism. They have called for a systems overhaul to deliver the available services in an effective and efficient manner. They suggest the TSN should do a better PR job of promoting its services after improving its delivery capacity.

These requests are followed by other requirements such as research and development for new products and building an IT infrastructure on the supply side.

The survey shows that the exporters are willing to pay for services they require, particularly for the services like market information, marketing assistance, product design and development, human resources development, and upgradating and privatization of the Port Authority. They are also willing to pay for export promotion support and good communication and transport facilities.

The bar chart following shows that the requirements of exporters for which they are willing to pay.

Other services as expected by the exporters from the TSN are product design and development, raw material sourcing, business networking, export training, brokerage services, export capacity development, etc.

In the earlier section, we have identified the basic needs of the exporters. In this section, we present below the trade support services demanded by the number of exporters in our survey:

Marketing is of prime importance to the respondents. They suggested there should be separate institutions for providing market information, market exploration, fee-based marketing outsourcing (for example, salesmanship, advertising etc.), HRD of marketing teams and most importantly, marketing research and development. But, all these services would cost them significant amounts, for which the respondents asked for required financial support.

Respondents felt that the right people are not in the right places in their organizations, and in many instances the exactly suitable person is hard to find for a specific task. As a response, most respondents inclined towards establishing formal institutions for human resource development, for which they would also need financial supports.

Respondents felt that consulting and advisory services are a crying need for exporters and these sectors need real development to offer assistance in areas such as planning, documentation and quality certification. Institutional human resource development requires initial adequate funds before any productive output from that human force. That is why, the exporters asked for financial support from the concerned elements of the proposed TSN.

The latest business axiom: Information is money. Our exporters are also well aware of this. That is why they have put non-financial assistance such as information in the first place. There should be schemes for R&D on applying information technology, which also need financial support.

Fixed and capital assets require bulk investment. That is why the priority had been given by respondents to establishment of appropriate institutions for managing available resources and disbursing them properly. Moreover, they said, more information and advisory services should be in operation for proper administration and control of those funds by exporters.

Promotional activities take place in potentially world-wide markets. The job carries a lot of risk (in terms of investment) but, if successful, brings in a high return (in terms of market share). This risky venture requires an initial budget. There should be a provision for financial support to exporters including investment for feasibility studies and other research. An institutional set-up is required in the private sector for organizing market promotional events and activities both within and outside the country.

We should establish matchmaking institutions in the private sector that provide information on technology advancement, technology sourcing, etc.

Product development is a research-oriented output that requires integrated effort of specialized resources and skills. The primary requirements of exporters are non-financial services such as consumer information, R&D etc., for which a formal organization needs to be created that will be responsible for all sorts of idea generation from prototype development to final testing of products. Financial support is also needed to bear the costs of extended research and development.

Market information, logistical support for raw-materials supply and other operational management are basic needs of the exporting enterprises.

Mostly local exporters are in a dilemma about how to ensure quality and get recognized certification as expected nowadays in the world market. Therefore, they need advisory and other linking services to operate their activities in a way that enables them to maintain world-class quality and to earn an established certificate from standards agencies. The respondents criticized BSTI in this respect. So, a better institution for delivering such services is required. But ensuring quality has its costs too.

At each stage from order processing to final delivery and receipt of payment, there is a need for documentation. This creates extra work for the exporters. Therefore, setting up an institution that delivers these services and maintains communications is also a demand of the responding exporters.

Electronic commerce has yet to come in Bangladesh. The export sector has therefore been unable to reap the potential benefits so far. Awareness of e-commerce and making services available through proper channels is therefore another priority need of exporters.

At every step, regulatory barriers sometimes protect exporters and on other occasions hinder their activities. Respondents felt there is scope for reform and expressed the need for institutional support in this area to create an environment where exporters can operate easily.

Most respondents manage their own raw material supplies. Hardly any network exists for efficient supply-chain management. Therefore, a proper organizational infrastructure, where these needs of the exporters are met, is considered a major necessity in the TSN.

This topic includes all the communication required for getting an order, processing it, sourcing what it takes to fill the order, shipment, and finally, obtaining a receipt. This whole chain of related communications can be made efficient if it is administered by institutions particularly concerned with this job. So, the responding exporters strongly recommended setting up institutions that will administer and satisfy the need of supply-chain management.

There is a wide gap between the policy of the government and its implementation, as pointed out by almost every respondent. On the other hand, a high official in the government agency commented that implementation does not take place on time due to the bureaucratic attitude of every individual in the government agencies and to some extent in the private sector as well.

Poor follow-up and poor co-ordination of policy directives constrain networking.

Although the government invites representatives from the private sector to participate in its executive body, in reality the decisions in the meeting and dialogue are mostly dominated by government officials, resulting in total discouragement of private sector participation.

In fact, there are no proper initiatives to develop networks and campaign to explain networking and its possible benefits to the exporters.

There is no proper infrastructural set-up or necessary support for development of an effective network. Absence of a national information technology infrastructure is one of the major constraints to developing the network.

The systems and technology being applied by different TSSOs lack homogeneity. This is a major hindrance to creating a network for providing trade support services.

Policy and initiatives exist, but these policies lack real life applicability. So, a pragmatic approach should be applied while formulating the policy. Participation of the private sector should start in policy the formulation and introduction process.

The private sector should be empowered, as strongly mentioned by most respondents. Particularly, empowerment is essential to create "One Stop Service Center" in the private sector.

Human resources involved in trade support services delivery should be trained properly.

People involved in the TSN, irrespective of the sectors, should show a positive attitude while delivering services.

Trade support services should be provided at a competitive price. Measures might be taken to encourage multiple service-providers in order to bring competition as well as quality.

From the survey, interviews and research, the following conclusion can be drawn:

Some financial and non-financial support service providers are regarded as reasonably successful and others are not. Given below are the levels of success and failure regarded by the exporters.

The survey shows that individual exporters are reasonably satisfied with banking services, particularly with the services of the private and foreign banks in export trade activities. Some private and foreign banks offer dynamic, quality and excellent clientele services.

However, the commercial banks in the public sector have still to win approval from clients. Interestingly, speed money and ‘gratification’ have become a common practice in the section of banks dealing exports. Bank credit for export is very difficult to come by, mainly because of collateral security requirements and corruption.

Chambers of Commerce and industries make a continual effort to strengthen their capacity to provide better services. Dhaka Chamber of Commerce and industries (DCCI) is doing a reasonable job as service providers.

Other chambers are not strong in infrastructure, qualified manpower, an efficient system or the human resources to provide effective services.

Every sector has its own association. Individual exporters are more or less satisfied with their routine services. But most of the associations, except the mature sector associations like BGMEA, etc. are weak in institutional capacity and resources to meet the actual needs of clients.

The trade services of the buying houses/agents have been satisfactory, but they cut into exporters’ profits. Exporters tend to prefer dealing directly with customers abroad, but in the absence of information services they are forced to deal with buying houses and agents.

Courier service providers (DHL, FedEx, UPS, etc.) offer efficient services and the clients are satisfied.

Services of the C & F agents are reasonably good. But, they could be more effective space booking and quick transport of goods and services.

Private shipping lines offer good services. But, due to problems with the Port Authorities, their performance is somewhat hampered.

The ongoing donor-funded projects namely Job Opportunities and Business Support (JOBS), Agro-based Industries and Technology Development Project (ATDP) and Matching Grant Facility (MGF) Programme, Intermediate Technology Development (ITDG), etc. have been providing trade support services to ocal exporters successfully.

Non-government organizations such as Ecota Forum, HEED, HORTEX Foundation, Grameen Bank, BRAC, Proshika, CARITAS, Bangla Craft, etc. have also been providing support services to the small and medium-size enterprises in exporting handicrafts, vegetables, cut flowers, gift items, home textiles, etc.

Serious dissatisfaction exists regarding the quality and efficiency of services being provided by the public sector. These are regarded as inefficient and unsuccessful providers of services. Summarized below are the areas that need significant improvement to be of full service to the exporters:

The exporters face tremendous problems when they approach the utility services: electricity, water, gas, telephone, etc. It normally entails long delay even with speed money. Moreover, the delivery process itself is lengthy and cumbersome.

Although the private shipping lines render good services, due to problems with the Port Authority, the shipment of exportable items often face problems with scheduling, space and timely delivery.

Customs procedure act as a hindrance to the release of imported raw materials as well as processing of export formalities. Exporters mentioned that this is one of the prime areas where the service cannot be used without speed money.

From the study we found more than 50% of the respondents expressed strong dissatisfaction about the overall services of the EPB. Despite various support services offered by EPB, exporters still strongly recommend a private institution should take over its functions.

The Central Bank monitors the country’s foreign trade and formulates policy relating to banking issues in export activities. It also controls the financial support programmes for exporters. Credits to exporters, credit guarantee schemes, long-term project loans to exporters, cash incentives and other financial aspects are also managed by the Central Bank. Respondents expressed dissatisfaction about the exporter support services offered. Around 55% were not at all satisfied while 35% said they were moderately satisfied.

Strong dissatisfaction is found regarding the services of the Ministry of Industries. The main reasons are the lengthy procedures and delays in bureaucratic decision. There is always a gap between policy and implementation.

Dissatisfaction is also recorded for the support services of the Ministry of Commerce. Policy formulation and implementation take too long.

The Ministry of Finance extends support to the exporters through financial policies, but the decision-making process as well as fund-channelling process is very slow.

Duty drawback and other fiscal measures are monitored by the NBR. Procedures relating to tax holidays, value-added tax, income tax, etc. are all too cumbersome for the taste of exporters .

Performance of the BSTI is not satisfactory. It is felt that a private, modern institution with qualified people and an international standards laboratory is required to offer credible services and certification.

Respondents felt that there is no formal co-ordination and co-operation within the existing TSSOs. One hand does not know what the other is doing.

The service providers, however, spoke of a degree of co-ordination and co-operation, which can be defined as "informal, weak and poor". But such informal co-ordination and co-operation is mainly issue-based. Alliances within the TSSOs take place when some important policy issues need to be pursued or resolved with the government agencies.

There is implicit co-operation and co-ordination within the Chambers of Commerce and Trade Associations. But it is a rare case when public and private sector trade-support institutions truly co-ordinate and co-operate with each other to offer services to exporters. As a result, the gap between plan and implementation is always wide. And there are instances of duplication: the same trade support services are offered by several organizations.

Inter-departmental co-ordination within the trade support institutions is a must, since it plays a vital role in the smooth functioning of support services for exporters.

Among the existing trade support institutions, private sector institutions such as banks, insurance companies, courier services, shipping lines, buying houses and C & F Agents, etc. work in integrated manner to an extent, which a certain degree of networking between them.

It seems that when the support services network is free of participation by any public sector support institutions, networks work better. To ensure effective co-ordination and co-operation, the following steps were suggested:

• Holding dialogues, meetings, seminars, workshops, etc. on a regular basis highlighting the benefit of networking
• Creating appropriate infrastructures and an enabling environment for co-ordination and co-operation within the key TSSOs.
• A system of exchanging information, views and experience should be established.
• Some services should be supported and delivered by the government agencies in cooperation with the private sector.

• Lack of awareness about networking: Lack of awareness about networking among different sector exporters is one of the constraints to development of a trade support network.
• Lack of internal networking: Individual exporters do not co-operate with each other within different sectors that hinder development of network.
• Negative attitudes: Individual exporters’ attitudes towards networking is not positive, which creates obstacles to athe development of a network.
• Corruption: Corruption is one of the major weaknesses that hinder development of a trade support network.
• Bureaucracy and complicated procedures: Bureaucracy and complicated procedures in the public sector among trade-support providers mean that a network cannot be developed.
• Ineffective co-ordination and communication between public and private sector: Exporters complained there is no communication, or weak and ineffective communication, between private and public sector trade-support service organizations on available services.

The following constraints were identified by the service providers for development of a TSN:

• Non-co-operative attitude of the private sector
• Lack of professionalism within the private sector
• Absence of quality personnel working in private sector institutions
• Training and advisory services are treated as "expenses", rather than an added benefit
• Lack of networking within the exporting enterprises in same sector
• Lack of transparency in business transactions
• No proper delegation of authority

The following strategic actions may help in establishing an effective and efficient Trade Support Network:

• The trade body should enjoy full autonomy and able to function independently. The public sector should also have the scope to work with full autonomy.
• The trade body/chamber should take the lead in developing or organizing the trade support network.
• A competitive environment might be created between similar export support institutions.
• A pragmatic policy could be formulated on the basis of the exporters’ needs.
• The trade associations and chambers should be empowered to provide services and strengthen them with efficient staff and modern facilities.
• Initiate actions to start developing awareness of the Trade Support Network.
• Trade support institutions should be supportive rather than authoritarian.
• The TSN should be operated entirely by the private sector.

To date no single organization provides trade support services in a systematic manner that benefits exporters. In a country where the concept of network has still to develop, setting up a trade support services organization on a commercially sustainable basis in the private sector will be a difficult task.

The following issues were raised during the survey with regard to viability of a private sector TSSO:

Almost every respondent agreed on the necessity for a trade support services organization in the private sector. At present, no organization exists that can provide ‘one point of contact’ for trade, promotion and market development. New organizations have to be created or old ones to be converted after proper planning. All will need their capacity built up.

Every single respondent is willing to pay for the services they will receive. So, there is a market for the services if the price is right.

The viability of the TSSO in the private sector depends on the service mix it is going to offer the exporters. The ways of delivering the services are also important. At present, it has been found, there is a large gap between demand and supply of quality export-related support services. Ideally, the TSSO should develop the capability to offer market-driven trade support services. And ‘selling’ their services will require a tremendous drive to make exporters aware of the availability of the services.

In order to facilitate proper and effective trade support services and networking, the concept of a "One Stop Service" was discussed by respondents. There was a mixed reaction to the idea of one point of contact. Some 73% of respondents agreed there is no true one-stop service provider at the moment. As to the probability of its effective operation, 85% respondents replied positively. The rest, who answered negatively, cited the example of the ‘One-Stop Service’ of the Board of Investment that failed. However, when private sector involvement was proposed, 90% of respondents favoured the idea. Location of such one-stop services, it was suggested, should be Dhaka in the first place, and afterwards Chittagong.

For sponsorship of such a ‘single-window service’ respondents suggested a sources of funds: government assistance, donors, trade bodies, prospective beneficiaries and foreign organizations.

The following lists the recommendations and suggestions for an effective TSN:

a) Communication and cooperation within the trade support service organizations must be achieved through dialogue and exchange of views and experience of various organizations.

b) Regulatory bodies such as CCI&E, EPB, Bangladesh Bank, MOC, MOI, should be reformed and reshaped on a realistic basis to act as a facilitator rather than controller.

c) Effective steps should be taken to reduce the gap between planning and implementation through a central monitoring unit within the Ministry of Commerce. It should be a true facilitator.

d) Export diversification programmes and activities should be expanded to encourage not-so-mature sectors to achieve export competitiveness.

e) The Export Promotion Bureau (EPB)’s functions should be privatized with proper infrastructure facilities, qualified personnel, modern technology, etc. It could act as a "One-Stop Service Provider".

f) The chambers, trade and sector associations must initiate effective steps to develop a "quality data base" on export markets with a system to update it on a regular basis.

g) The port should be privatized and/or operated under private management to offer better services.

h) Product development for the export market should be given maximum emphasis by creating a specialized centre including design.

i) A quality control laboratory should be established in the private sector with a modern laboratory and qualified personnel and should serve the quality certifying authority.

j) A specialized bank or window in the Central Bank should be created for export financing and other financial support.

l) Adequate institutional and other financial support must be made available for technology improvement and product development including facilitation for bank finance.

m) Technical know-how about product development and research for the export market should be offered through the creation of a specialized institute.

o) The government and the private sector should create more facilities for human resources development for export management and other related training by strengthening present institutions and by creating a new specialized institution.

p) An initiative should be launched for capacity-building of potential exporters. The government and private institutions should encourage adequate facilities for technology sourcing, technology improvement and innovations in new technology.

q) An independent unit for product-based support such as a Commodity Board should be created to promote the main exportable commodities.

r) The National Export Council headed by the Prime Minister is mainly meeting oriented. An action plan to reduce the gap between policy and implementation is lacking.

s) The private sector should be involved in formulating the National Export Strategy.

t) Exporters should be strongly encouraged to be more quality conscious. The quality of products exported should be improved. Special TSSO services are required for this objective.

u) The embassies of Bangladesh abroad should be more active. They should open a "foreign trade wing" using executives qualified to promote exports.

v) People involved in service delivery should be trained and motivated to meet high standards.

w) A frequent cross-sectional dialogue should be organized on trade support networking including both the private and public sector.

In order to offer meaningful trade support services to local exporters, Bangladesh has to go a long way to institutionalize the whole process.

But by implementing the recommendations, the TSSOs and TSN services in Bangladesh would attain mature status as a provider of services for export competitiveness enhancement.

[Link here to Questionnaire[bdquestionnaire[]

Top of page

Posted 02 September 2008