World Economy

Bangladesh Export Fears as EU Slaps Security Checks

Exporters fear any slowdown might prompt retailers to divert orders  to other nations.Exporters fear any slowdown might prompt retailers to divert orders  to other nations.

The EU’s security screening of Bangladesh exports could damage the country’s multibillion dollar textile industry, garment manufacturers alleged on Thursday.

Tensions have been running high in recent months following a resurgence of extremist attacks in Bangladesh claimed by Al-Qaeda and Daesh, AFP reported.

Last week the EU, which accounts for more than 60% of Dhaka’s $34 billion annual shipments, asked carriers transporting mail and cargo from the South Asian nation to provide an additional layer of screening to check for explosives.

“The screening can be performed either at the point of origin (Bangladesh) or at transit prior to the entry into the EU. The implementation will be the responsibility of the carriers/airlines,” the EU delegation to Bangladesh said in a statement.

The country annually ships nearly $19 billion worth of goods, mostly garments, to the EU’s 28 member nations. Its 4,500 textile factories are an economic mainstay, creating jobs for around four million workers. But it lacks explosive detection equipment, meaning goods for export may have to be scanned by a third country.

“The cost is not only the price but the time as well. It is a slap in the face of our image,” Abdus Salam Murshedy, owner of Envoy Group, a leading garment exporter, told AFP. Exporters fear any slowdown might prompt retailers such as H&M to divert orders to other nations, he added.

“We may have to send some products by air instead of regular sea cargo to meet shipment schedules,” said Shahidul Islam, owner of Rupa Knitwear, which sells products to Zara and Lidl.

Last year Australia, Germany and the UK banned direct cargo shipments from Dhaka’s international airport over security fears. The country’s Civil Aviation Minister Rashed Khan Menon said the EU made the announcement “suddenly”, with authorities taking steps to prevent any fallout.

“The installation of equipment (for explosive screening) may take another two months. Meanwhile, the delivery process may slow down a little bit,” he said.

Bangladesh’s economy has been expanding at a fast clip, clocking growth rates of over 7% two years in a row.

Meanwhile, foreign direct investment inflows to Bangladesh rose by 4.38% to $2.33 billion in 2016 from $2.2 billion in 2015, while the inflows to developing Asia shrank by 15% to $443 billion during the same year, according to a new report of the United Nations Conference on Trade and Development published on Thursday.


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