The New Nation - Internet Edition

UNB, Dhaka

After a slowdown in two-way trade between Bangladesh and Germany last year, the volume of export and import between the two countries has marked an increase since the end of December-January as buyers started getting back confidence.

"I think some kind of confidence has started returning among German buyers and companies, and the business is picking up," German Deputy head of Mission Holger Fraider told a group of reporters at a local hotel yesterday.

In reply to a question, Fraider said because of unrest in the garment sector here, some buyers have shifted their orders from here to other countries. "The situation has now started improving with export increasing," he said.

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The bilateral trade developed well from 2002 to 2006 registering 88% increase in just 4 years. In 2006, the bilateral trade increased by 29%. Bangladesh exports to Germany increased by 33 % and imports from Germany increased by 18 %.

However, in 2007 the bilateral trade has declined. The two-way trade amounted to 1.71 bil Euro compared to 1.88 bil Euro of 2006, showing a decrease of about 8.8%.

Bangladesh export to Germany in 2007 amounted to 1.50 bil Euro, showing a decrease of 4.8% and Bangladesh import from Germany amounted to 215 mil Euro, showing a decrease of more than 29% during the above period.

Boris Alex, a correspondent for German Office for Foreign Trade who is in the city to explore business and investment potentials here and exchange views with chamber leaders said German companies will be interested to put their money in textile, infrastructure, energy and other sectors.

Alex, however, stressed the need for political stability and continuity to attract overseas investments to Bangladesh.

He said German companies might be waiting to see political developments in the next few months and the election schedule to establish an elected government in the country.

Alex noted that any investor looks at the long-term policy of a government, stability and continuity before making any investment.

In reply to a question, Alex said he would report his observation on

business and investment prospects in Bangladesh to the German Foreign office.

To another question, he said cheap labour is not always a point to attract foreign investment. It is important for labour intensive industries but skilled manpower is vital for high-tech modern industries. He thinks Bangladesh needs to strengthen its education system to produce high skilled manpower for IT and other sectors.

Alex said Germany companies might come up in a big way in the next two years if political stability and continuity of policy persist.

Germany continues to be the biggest market for Bangladesh goods in Europe and the second biggest export market for Bangladesh worldwide.

Among German goods sold in Bangladesh, the largest single product group is machineries for textile, leather and other industries amounting to one third of German exports to Bangladesh in 2007.

Telecommunications equipment amount to 12 % followed by electronic equipment with 11 %. The chemical product accounts for 7% and medical equipment for 5%. The remaining part is spread over a large number of product groups.

Regarding import from Bangladesh, 96% of Bangladesh exports to Germany consisted of RMG articles, seafood only achieved 1.5 % and jute and jute products less than 1 %.