The government has undertaken a research project on 12 potential sectors for exports diversity to boost the export capacity for overcoming the fresh challenges the country is likely to face after its graduation.
By 2026, Bangladesh will come out of the list of the least developed countries (LDC) and become a developing country.
With the change of this status some new challenges have to be faced.
As a LDC country, Bangladesh has been enjoying a number of benefits including duty free in terms of entering the world market.
Those benefits will disappear for Bangladesh after the change in its status. Export trade will then be extremely competitive.
On this ground reality, the government is bracing for the challenges that may crop up after the LDC transition.
The Bangladesh Foreign Trade Institute (BFTI) under the Ministry of Commerce has already undertaken research on 12 potential sectors to increase the capacity in the export sector.
BFTI has undertaken a project on “Roadmap for Overcoming the Challenge” to conduct research on 12 sectors.
The sectors are apparel, shipbuilding industry, agricultural products, processed food, fisheries and livestock, light engineering, plastic products, leather and leather products, non-leather footwear, IT, tourism, software, nursing and midwifery.
A meeting was held on Thursday at the BFTI conference room in Karwan Bazar in the capital to review how exports in these sectors can be further increased and how the obstacles can be removed.
An official of BFTI said, “We are doing sector-wise research to diversify the export products. A roadmap will be prepared and submitted to the government on how to raise export income in these sectors. It will have various recommendations which will be implemented in a phased manner.”
Meanwhile, the government will have to add more products to Bangladesh’s export basket to ensure the sustainable growth for the country, experts said.
Government has been providing cash incentive for different products to encourage traders to boost the export earnings, but this is not enough to protect local businesses to fight global competitors, they opined.
It is high time to focus on new and potential export items, like jute and jute goods, leather, agricultural products and pharmaceuticals, in order to get rid of overdependence on readymade garments.
To compete with other Asian countries, notably China, India, Indonesia, Malaysia, Sri Lanka, Thailand and Vietnam, it is necessary to come up with more diversified products, they said.
Existing policies to boost export earnings, undertaken by the government, appear to be very fruitful for several items. But more governmental support for other potential products can help export earnings rise to a great extent, they added.
Mahfuza Akter, Bangladesh Trade and Tariff Commission Chairman, said, “In order to face the challenges of LDC transition, the public and private sectors must work together. It is not possible for the government alone to do anything. The private sector should be taken forward, because the private sector is the main driving force of the economy.”
"There is no alternative to product diversification and market expansion to ensure export-oriented development and meet the challenges of LDC transition, Akter said, suggesting to identify the problems by holding separate meetings with potential entrepreneurs of all sectors.
She said, “The service sector should be given special importance to face the post-LDC challenges. Because the service sector has become promising in the context of Bangladesh. In recent times, the contribution of this sector to the economy is gradually increasing.”
There is bright potential to earn global currency through export of services, especially from the tourism, software, IT and nursing-midwifery sectors.
Dr Zahid Hussain, Former Lead Economist of the World Bank, told Bangladesh Post, “Exports diversification is very essential for boosting export earnings. The country needs to reform polices including tariff system for supporting exporters. Besides, the Central Bank should not intervene in the foreign exchange market.”
The contribution of exports of readymade garments was almost 83 percent of the total exports whereas the remaining eight percent has come from frozen foods, jute and jute goods, agriculture, plastics and leather and leather products.
The overall export earnings stood at $52.08 billion in the last fiscal year 2021-22, according to Export Promotion Bureau (EPB) data.
During July-October period in the current fiscal 2022-23, the country’s total export earnings stood at $16.85 billion, up by 7 percent over the corresponding period of the previous fiscal.
