Promising export sectors other than RMG should be facilitated before entering into the reign of middle-income country status, they say
Bangladesh needs to reform its export policies and implement them faster to be competitive in the global market in other export-oriented industries apart from the ready-made garment (RMG) sector after LDC graduation, experts said on Sunday.
Aligned policies with the WTO directives, fiscal and non-fiscal benefits, domestic measures, equal treatment to the potential export-oriented sectors, competitiveness, skill development, and technological advancement would be crucial in overcoming challenges of LDC graduation.
They made the remarks during the second round of dialogues on “Challenges and Way forward on Export diversification of Bangladesh upon LDC graduation - A regulatory reform perspective.”
Dhaka Chamber of Commerce and Industry (DCCI) organized the dialogue in association with the Export Promotion Bureau (EPB).
“We will lose a lot of waivers after graduation. But now is the right time to grow other potential export items. We have to be competitive and go for more trade agreements. High-value product quality and stringent compliance will also increase our branding in the global market,” said Md Tofazzel Hossain Miah, secretary to the Prime Minister’s Office (PMO).
Speaking as the chief guest, he also underscored the importance of human resource development, research and development, and bolstering the value chain and backward linkage industries.
Additionally, promising export sectors other than RMG should be facilitated before entering into the reign of middle-income country status, he further said.
DCCI President Rizwan Rahman, while presenting the keynote paper, highlighted light engineering, jute and jute goods, IT and ITES, pharmaceutical, agro and agro-processing, and leather and leather goods as potential sectors.
However, limited access to finance, shortages of skilled human resources, high duty on import of raw materials, non-tariff barriers, lengthy customs and testing processes, lack of certification, low-cost bank loan, required policy reforms, delay in implementing API Park, weak backward linkage network, lesser agricultural productivity, and limited negotiation capability are some of the major challenges in being competitive, said the DCCI president.
According to the EPB Vice-Chairman and CEO of AHM Ahsan, many experts had estimated that due to the pandemic, export of Bangladesh might fall to $4-6 billion.
However, he pointed out, last year’s export earnings were $38.75 billion, of which the RMG sector alone constituted 81%, but it was 84% the year before.
This means non-RMG exports increased despite lacking pace in growth.
Ahsan said policy reforms and policy support will expedite boosting non-RMG exports.
“At the end of the day, this is the world of business and the government does not do business — it plays the role of a facilitator,” he added.
Shaikh Yusuf Harun, executive chairman of the Bangladesh Economic Zones Authority (BEZA), said to diversify products and markets, Bangladesh needs to be engaged with the different regional trade groups.
“We have a good advantage of demographic dividend, but we have to convert it into a skilled workforce,” he added.
Md Alamgir Hossain, member of the National Board of Revenue, said the private sector will have to play the leading role in product diversification.
Dr Selim Raihan, executive director of South Asian Network on Economic Modeling (SANEM) said policy reforms should be aligned with export and import policies.
“We have to ensure access to finance, skill development, and sector-specific overall infrastructure development. Bond facilities are not equally enjoyed by the RMG and leather sectors. We need FDI for export diversification — in that case, economic zones will be a game-changer. We do not need 100 zones right at this moment, implement at least five for now,” Raihan added.
Among others, Md Habibur Rahman, executive director of Bangladesh Bank; Md Abdur Rahim Khan, joint secretary of the Ministry of Commerce; Andalib Elias, director general of the Economic Affairs Wing at the Ministry of Foreign Affairs; and Dr Md Khairuzzaman Mozumder, additional secretary of the Finance Division, were present at the dialogue.