Dec '11
Troubled with the declining orders from eurozone, the Asian garment exporters are hoping that their new strategy would help them withstand the ongoing debt crisis in Western markets.
After witnessing financial crisis in the region during the late 1990s, Asian countries have put their houses in order and they now enjoy low debt levels and have adequate foreign reserves. They have also introduced more rigid corporate governance and regulatory policies, experts aver.
On the other hand there is a possibility of disintegration of the 17-nation euro area, and experts foresee exit of Greece from the single currency in 2012, which is likely to be followed by Ireland and Portugal.
The nearly two-year old financial crisis in Europe has resulted in decline in export orders from worst-hit nations like Greece, Portugal, Spain and Italy, said Siddiqur Rahman, acting President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
He informed that buyers from those countries that are grappling with financial crisis have adopted different tactics. While some have cancelled their orders, others have preferred to delay them. Still some others have reduced order prices by 5-10 percent or chosen to defer the export payment.
In such a situation, the Asian Development Bank said a strategy of strengthening intra-regional trade and financial integration, as well as increasing ties with other emerging markets would help the Asian countries ride over the current phase of decline in orders from the European markets.
China, the second-largest economy in the world, is among the Asian nations trying to boost trade with emerging economies to soften the impact of the slowdown in Europe and the US.
Wang Shouwen, Director of the Chinese Commerce Ministry's Department of Foreign Trade, opined that he expects more challenges in exports next year. However, since some developing economies currently have strong economic performance, more emphasis will be laid on exports to these nations, he added.
Some Chinese apparel companies, which were so far supplying most of their products to the European market are now changing their strategy and targeting countries like Brazil and Russia.
These companies find that the orders from Russian and Brazilian companies are increasing, while European customers are postponing or canceling their orders.
Fibre2fashion News Desk - India
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