Light engineering to greatly help diversify export basket

19 Sep 2020 1:20 PM
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Over-reliance on garment industry is Bangladesh’s main weakness, said Salman F Rahman, private industry and investment adviser to the prime minister.

“We must diversify our export basket and products, where light engineering sector will play an essential role,” he said yesterday at the inaugural ceremony of the two-day ‘Light engineering trade fair’ organised by Brac at Bangabandhu International Conference Centre in Dhaka.

The public-private partnership is probably the reasons light engineering sector is flourishing in Bangladesh, he said.

The veteran businessman also lauded the gender-inclusive strategy of Brac and the steps the world’s largest non-governmental organisation has taken to give a boost to the light engineering sector.

At the function, Manfred Fernholz, head of the meals and nutrition security and sustainable development section of the European Union Delegation in Bangladesh, urged the federal government and the finance institutions to extend their support to the small engineering sector.

The contribution of the light engineering sector measures up to 2.2 % of Bangladesh’s GDP, Fernholz said.

“Yet, the sector has been experiencing lack of tech and financial support, skills development, infrastructure, which in turn, makes the sector less competitive.”

Capital machinery has only 1 1 % import duty and no value-added tax, said Abdur Razzak, president of the Bangladesh Engineering Industry Owners Association.

“But 15 % VAT on local production of the same capital machinery has been imposed to be effective from July 1 this year. We wish the VAT to be entirely lifted.”

They spoke on the sidelines of the fair being held under Brac’s ‘Pro-poor growth of rural enterprises through sustainable skills-development’ (PROGRESS) project funded by the European Union.

Some 58 businesses from 41 districts showcased their products at the showcase.

The three-year PROGRESS project commenced in February 2017 to aid the growth of the country’s light engineering sector by developing dynamic and competitive micro and cottage enterprises.

Diversification of light engineering sector depends upon effective policy support, public-private partnerships, technical and business information, innovation and sustainable development of technology and related products, experts said at the inaugural ceremony. Capacity development of industries, research and development facilities and removal of other barriers are also needed to flourish the sector, they said.

“We, as an organisation, continue steadily to give attention to skills development in our 2020-2025 strategy as a committed development partner of the Bangladesh government,” said Asif Saleh, chair of the function and executive director of Brac.

To effectively grow the skills development sector, Bangladesh must change its conventional perception about degree-based education and take away the stigma attached to vocational education, he further said.

Currently, 47 % of university graduates in Bangladesh are unemployed and the perfect solution is lies in skills-based education concentrating on the contemporary and future market needs, he said.

“Bangladesh government does the proper thing by prioritising the light engineering sector in the Mujib Barsha of 2020.”

A study by the project implies that the business enterprise productivity of light engineering workshop owners increased by 29 % after the intervention of the project.

Around 500 persons received training and support facilities to begin their own businesses. Of these, 223 were female.

Approximately 9,865 youth received apprenticeship-based training, 98.65 % of them were placed in jobs.

Some 5,182 light engineering workshop owners received technical upgrade training. Besides, 5,289 workshop owners received training on fair work conditions and health insurance and safety at work.

Around 700 market committees received gender awareness and usage of finance training beneath the Brac project.