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 Bangladesh’s light electrical sector is a
bit of an anomaly compared to the other sectors JOBS works with.
While the raw materials needed for floor coverings, footwear,
handmade paper, etc., are abundant, inexpensive, and available
locally, 90% of the components used by this sector are imported and
subject to duties ranging from 50 to 75% and a 15% VAT. While many
of JOBS other sectors operate in rural areas of the country, the
light electrical industry is located almost exclusively in the two
large urban areas of Dhaka and Chittagong. And while sectors such as
floor coverings and handmade paper employ techniques that may be
centuries old, this sector’s hundreds of different products are
produced using cutting edge technology to meet thousands of
specifications for use in modern appliances.
What then, makes the light electrical
sector one that holds so much promise for the country? For starters,
the potential market is huge, both locally and internationally.
While the major buyers at present are large corporate bodies,
especially in the public sector, the market among individual
consumers is growing. The domestic market in particular is expected
to increase gradually but dramatically as more people come out of
poverty, but there is also ample scope for export. Moreover, the
quality of many of the local products already meets international
standards. In fact, some imported products are inferior to locally
produced products. Perhaps most importantly, the sector promises
employment opportunities for the educated youth of Bangladesh, many
of whom have the technical background needed by the industry.
If government policy regarding import
taxes and the VAT can be changed, more entrepreneurs will enter the
field with the ability, technology, and labor power needed to
produce high quality products, establish recognized brands, and
advertise them internationally. This will initiate healthy
competition and allow the large export market, both in economically
developing and economically advanced countries, to be tapped. The
government of Bangladesh can also be induced, through appropriate
lobbying and public opinion formation, to make purchases from local
manufacturers.
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