Facilitating shipbuilding industries

Bangladesh, over the last thirty-nine years of its existence, has been able to develop only a few export-oriented industries of any significance, the readymade garments (RMG) industries being the main one of them. This alone shows up the imperative of diversifying export activities both to substantially increase export earnings as a whole and to be able to withstand any decline in the fortunes of the existing few well-established sectors.
Shipbuilding has been in focus for the last couple of years. The optimism about this industry arose from the success attained by a number of entrepreneurs. They brought name and fame to Bangladesh as a country with great potentials in shipbuilding by building and handing over to overseas buyers of European origin well in time a few ocean-going vessels. These were found to be well-built and elegant in all respects. Like success fetching more success, the shipbuilders in Bangladesh did not have to look back. The country''s nine shipbuilding companies have reportedly their hands full with export orders of 38 small and larger vessels worth US$600 million with a December 31, 2013 deadline. They could have acquired more orders if only they had capacities to make more ships. Thus, the present shipbuilding companies have the potential of further expansion if they get the necessary support from the government. The extension of such support is likely to interest new entrepreneurs to enter this promising field.
Bangladesh can turn itself into a hub of shipbuilding in the global context for small and medium-sized vessels. Competitive wage costs and easily trainable workers provide this country with a decisive edge over other prospective countries in this industry. The size of the global ship export market now stands at US$ 400 billion annually, on average. And Bangladesh can, in a short period of time, position itself to earn one per cent of this global earnings from shipbuilding. In that case, it can, fairly soon, have export income from this sector equivalent to US$ 4.0 billion annually. And this would be only a beginning with swift additions to such earnings as the local capacities in this sector would rise enabling the taking of more orders progressively.
The shipbuilders here are seeking 30 per cent cash incentives from the government. Their demand merits a careful examination. Reportedly, Bangladesh''s next-door neighbour, India, is providing such incentives to their shipbuilders. With some incentives provided to the ship-building sector, Bangladesh, according to the concerned industry circle, would be in a position to be more competitive than India, China and Vietnam, particularly in the less sophisticated segment of the industry. If such competitiveness can be achieved, this would lead to greater health and vitality of the existing shipbuilding companies. It will, in turn, motivate new entrepreneurs to try out their hands in this growingly lucrative sector.
Apart from opening up a major new source of export earnings, the growth of backward linkages of this industry, opportunities for employment expansion, higher revenue earnings, etc., should make this sector deserving for appropriate government support.