Introduction: 

Shipbuilding craft is an ancient craft that has been around as transportation via ship has been around for thousand years. The shipbuilding industry is accountable for the design and the construction of both oceangoing and river plying vessels all around the globe. Modification of ships and construction operations are carried out in specialized facilities which are known as “Shipyards”.[1] The shipbuilding industry is one of the very few industries that stimulate the development of other backward linkage industries accelerating industrial output at a phenomenal rate as it generates massive employment opportunities. The infrastructural advancement required for quality shipbuilding strides an economy at a great scale. 

Global Shipbuilding Industry Overview:

The Global Shipbuilding market is valued at 121.42 Billion US$ in 2020 and is projected to grow to a staggering 179.75 Billion US$ by the end of 2026 with a growth rate of 5.7% during 2021-2026.[2] The key driving catalysts for the growth of the shipping industry can be contributed to increasing GDP growth around the world, the rise of global seaborne trade, improved socio-economic growth, rising urbanization, fossil fuel price and increase in global steel production and consumption, aggressive annual development project implementation by developing countries with major foreign donors, and global demand of raw material.[3]

Since the Shipbuilding industry is an intensive investment-oriented industry it largely depends on labor cost or government policy support for its growth and thriving. After World War II, Japan used shipbuilding in the 1950s and 1960s to rebuild its obliterated industrial infrastructure that was destroyed by the world war; then South Korea initiated plans to make shipbuilding a strategic industry in the 1970s, and China is now in the process of repeating these models with large state-supported investments in this industry and with highly supportive policies and incentives in place.[4] The rise and fall of global shipbuilding leader States and major causes are given below:[5]

Prospects & Plights of Shipbuilding Industry for Bangladesh:

The Bay of Bengal was the Centre of building ocean-going vessels in Asia between the 15th and 17th century which was documented by Moroccan traveler IbneBatuta and European traveler Caesar Frederick.[6] As a riverine country, Bangladesh has one of the largest and complicated waterways in the world. The inland waterway of the country has a navigable network varying from 5968 km during the monsoon to 3865 km during the dry season.[7] Inland ports and other facilities include 11 major inland ports, 23 coastal island ports, 133 launch stations, and more than 1,000 minor landing points located in rural areas.  

In Bangladesh, almost 90% of fuels, 70% of cargos, and 35% of passengers are transported by waterways creating a huge domestic demand for vessels and their maintenance.[8] The locally registered number of vessels has increased with an average annual growth rate of 5.39% average, owing to steady economic and trade developments, and activated infrastructure projects.[9] The domestic vessel market has two segments viz. one is for inland waters vessels, and the other one is for ocean-going vessels. Apart from domestic market the transport method dubbed a ‘life blood of Economy” is carried out through large ocean-going ships. Transport through  2 major sea ports is found to be a total of 9.47 crore tones of goods during fiscal year 2017-18.[10]The domestic demand of the country is met wholly by domestic producers with little or no government policy. The once prominent shipbuilding industry failed to modernize with time and is now being revived with the initiative of a few businessmen[11] 

Bangladesh’s introduction to the global shipbuilding market was back in the late 2000s with exporting of a few small boats to Mozambique and a few others to the Maldives. But the major pivotal point came to the Bangladeshi shipyards when it started receiving orders from Europe. From 2008, through exporting of ships to Europe, Bangladesh was recognized as a shipbuilding nation by leading countries and Corporations. The fundamental nature of shipbuilding is different from other industries as it is built upon pay first and product later policy, where the buyer pays for the ship at first then gets the product after construction. Such policy requires a credible image to aspire the buyers’ confidence. The Asian market leaders of the Shipbuilding industry China, S. Korea, Japan are focusing their resources towards making larger ships that create a vacuum for small ships lower than with a capacity of 25,000 DWT. Considering the geographiical position of Bangladesh this is an excellent opportunity for the shipbuilders of the country. 

However, this great opportunity is being muddled with hefty responses from the government. If the history of previous market leaders’ data teaches us anything it’s the fact that no market leader emerged without government patronization. India as a rising shipbuilder country has been promoting the export of ships with a 30% incentive for more than 5 years. Other major maritime States like the Philippines, Indonesia, Vietnam are also patronizing their shipbuilding industries with various incentives while our shipbuilders are left high and dry with no major administrative or policy decisions. Such a hefty response is contemplated with the country’s largest and renowned shipbuilder Western Marine being sued by prospective Dubai buyers.[12]   

Recommendation:

Bangladesh is set to graduate from LDC to a Developing nation by 2026 as per the recommendation of the UN Committee for Development Policy (CDP).[13]With the graduation, the country’s apparel sector which is a major export of the country will be taxed heavily and will not enjoy low-cost benefit anymore. The shipbuilding industry can be a thrust sector for pursuing the country’s dream of “Sonar Bangla” by 2030 if the country comes up with a major policy decision to boost its shipbuilding industry following some of the successful Asian countries.   

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[1]Khandakar Akhter and NM Golam Zakaria, ‘A Study on Global Shipbuilding Growth , Trend and Future Forecast’ (2017) 194 Procedia Engineering 247 <http://dx.doi.org/10.1016/j.proeng.2017.08.142>.

[2] “GLOBAL SHIPBUILDING MARKET RESEARCH REPORT 2020”. <https://www.360marketupdates.com/global-shipbuilding-market-14858275>, accessed on 8^th March 2021.

[3] supra note, 1.

[4] Michael Dillon, 2010. China: A modern history, I B Tauris and Co Ltd, London, UK, 2010.

[5] Rima Mickeviciene, 2011. “Global Shipbuilding Competition: Trends and Challenges for Europe,” Chapters, in: Piotr Pachura (ed.), The Economic Geography of Globalization, IntechOpen.

[6] M. M. Rahman, An Outlook of Development of Shipbuilding in Bangladesh, Military Institute of Science and Technology, Dhaka, Seminar Keynote Paper, 2016, pp 9-19.

[7]supranote1.

[8] Mapping Of, Superior Sector and Its Developing Industry, ‘Shipbuilding Industry’.

[9] Ibid.

[10]Md. Rezaul Karim, Seaborne trade in Bangladesh: Future challenges, The Independent,

<https://www.theindependentbd.com/printversion/details/172342>, accessed on 11th March 2021.

[11] PMK Hassan Siddique, Wahidul Sheikh and Dewan Mazharul Islam, ‘Shipbuilding : A Gateway for Bangladesh to Achieve Economic Solvency’ 4 71.

[12] Western Marine fails to build ship, now sued by Dubai co, < https://tbsnews.net/economy/industry/western-marine-fails-build-ship-now-sued-dubai-co-197566>, accessed on 10th March 2021.

[13]Bangladesh to receive final recommendation on graduation from LDC, < https://thefinancialexpress.com.bd/economy/bangladesh-to-receive-final-recommendation-on-graduation-from-ldc-1614335721#:~:text=Bangladesh%20has%20met%20the%20criteria,EVI)%20of%2032%20or%20below>, accessed on 10th March, 2021.