Ship-breaking sector and tariff burden
Nowadays almost 80 per cent of the global breaking and recycling market for ocean-going vessels is in three countries namely- Bangladesh, India and Pakistan. The biggest ship breaking zone is situated at Sitakund (Bhatiary to Barwala), Chittagong of our country. Here, ship breaking has become a lucrative business with few risks for the yard owners, investors and money lenders. Hundreds of thousands of people working in ship breaking sector are often poor rural migrants. They pump millions of dollars into local economies. Along with recycling up to 200 vessels a year, few companies also works on a separate venture of stainless steel distribution.
In Bangladesh, old imported ships become precious because of materials they are made of. There are migrants workers coming from some of the poorest regions like the poverty stricken northern region of Bangladesh. Again, the annual revenue earning from the industry is more than US$ 130 million. Along with recycling up to 200 vessels a year, few enterprises also works on separate venture of stainless steel distribution and so on. Here, more than 60 per cent materials and machineries for local shipbuilding come from local ship breaking/recycling industry. Ship breaking provides about 35000 tons of processed wood and furniture annually and henceforth preventing de-forestation.
Despite the huge contribution to national economy, sustainable shipping economy is not yet well developed in our country. According to recent report of a TV-news channel, where per year more than 200 hundreds ships had been recycled in previous years with the given data of continuing month showing, only one ship has been imported with previously imported 18 ships within July and August in 2019. Not surprisingly, a total of 26 ships were imported from January to June 2019 on average. Thus import has been lessen to 35 per cent because of massive economic burden.
Ship breakers argue that doubling of tariff duties in last budget has negatively affected this industry. In the budget of 2018-19 fiscal year, for ship breaking and recycling sector per ton tariff duty was 2600 Tk. But in 2019-20 fiscal year it has been increased to 5000 Tk. Entrepreneur thinks that as a huge impediment to their business. According to the concerns, business of this sector might be grabbed by neighbouring countries if tariff duty is not redefined. It is also worth mentioning that from 2004-2009, whole ship breaking sector of the world had been led by Bangladesh. In the meantime, this sector has invigorated after many ups and down. Notably, Bangladesh had also been the top ship breaking country in 2018.
Finally, it's not Aladdin's lamp miracle that make Bangladesh as a paradise of ship recycling industry. It's Almighty and nature makes so. The overall contribution of local ship breaking industry to the national economy is about $ 2 billion. If local ship breaking/recycling industry collapses, then estimated three million people and entire national economy will suffer severely which will reduce the GDP and will hinder entire national development process.
According to the Draft Bangladesh Ship Recycling Act 2015, the government has authority to maintain Bangladesh Ship Recycling Board (BSRB) within the Ministry of Industries. This board is in charge of providing oversight for the ship breaking industry, guiding and advising all aspects of ship breaking from approving Ship Recycling Facility Plan to ensuring workplace safety. In this context, it is recommended that concerned ministry and policy makers take supportive initiatives to readdress economic challenges in ship breaking and recycling sector and reconsider present tariff tax amount with a view to ensuring sustainable ship-breaking economy.
The writer is a student of Peace and Conflict Studies, University of Dhaka