The European Union has listed Bangladesh as a “high-risk” business partner, requiring that all air and sea shipments from the South Asian country be screened for explosives – a costly and time-consuming regime which could damage the country’s multi-billion dollar textile industry and exports, 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. The government has blamed the attacks on home-grown extremists bent on establishing Islamic rule in the secular nation.
Last week the EU, which accounts for more than 60 percent 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 according to BE2C2.
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.
Some air shipments from Bangladesh are already being routed through Dubai, Istanbul or Doha for screening, and some sea shipments are going through Colombo or Singapore.
Siddiqur Rahman, president of the Bangladesh Garments Manufacturers and Exporters’ Association, representing 70 percent of the textiles industry, described the move as “disastrous.” During fiscal 2015-16, the garment industry exported $17.15 billion in goods to the EU.
Apparels account for Bangladesh’s over 80 percent exports. It maintained an average growth of 13 percent over the last 10 years.
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 pace, clocking growth rates of over seven percent two years in a row. However, the World Banks said in a statement that employment growth in the RMG sector, which accounts over 80 percent of Bangladesh exports, has been stalled, while other sectors have been generating about 300,000 jobs annually.
The World Bank said it will give Bangladesh $100 million for diversifying exports in labor-oriented industries beyond the ready-made garment sector.
The Washington-based organization said the fund would help create more than 90,000 jobs and improve competitiveness in export sectors like leather, footwear, plastics and light engineering.
The fund comes under the global lender’s Export Competitiveness for Jobs Project, according to BE2C2 Report.