‘Bangladesh hardly utilising regional trade potential’
Bangladesh is hardly utilising its regional trade potential as less than 5 percent of the country's total exports go to India and China -- two major economies of Asia -- and countries that are members of the Association of Southeast Asian Nations (ASEAN), a study found.
Global exports to China and India stood at $4,050 billion in 2020, but even in 2022 Bangladesh could export only $2.64 billion worth of goods and services to the two countries, the study said.
Bangladesh's total exports in 2022 stood at nearly $60 billion, of which India and China accounted for only 4.5 percent, indicating poor trade flow to the regional economic giants, it added.
Atiur Rahman, a former governor of the Bangladesh Bank, conducted the study, titled "Post-LDC graduation: Opportunities, Challenges, and the Way Forward".
In the study, he cited Bangladesh's low exports to Asian countries like India, China, South Korea and Japan.
Rahman, also an emeritus professor at the University of Dhaka, said around 40-60 percent of Bangladesh's export potential to Southeast Asia and ASEAN nations remains untapped.
He presented the findings of the study at a regular luncheon meeting of the American Chamber of Commerce (AmCham) in Bangladesh at the Sheraton Dhaka Hotel.
In November 2026, Bangladesh will graduate from the category of least developed countries (LDCs) and lose its most-favoured nation (MFN) tariffs and duty-free market access to partner countries, which may cut the country's baseline exports by 7-14 percent, he said.
Moreover, Bangladesh will also face stringent 'Rules of Origin' for exports and the pharmaceutical sector, for example, will have to comply with trade-related intellectual property rights (TRIPS) obligations, he said in the study.
He suggested the continuation of cash incentives on export receipts for as long as possible, saying that different export sectors need time to make preparations and stabilise given the volatile global economic situation.
Rahman also recommended the government increase the incentive if possible.
He also urged the government to take steps to stabilise the exchange rate, contain inflation, promote export diversification in terms of both products and destinations and bolster remittance.
Consistency should be ensured in the capital market and priority should be given to human capital development through stronger private sector participation, he said.
At the AmCham event, Md Humayun Kabir, additional labour secretary, presented the findings of a research on the "Development of labour conditions in Bangladesh for sustainable growth" in a panel discussion.
Bangladesh has ratified 36 International Labour Organisation (ILO) conventions, including 8 of 10 fundamental conventions, and protocol 29 on forced labour, Kabir said.
In 2022, Bangladesh ratified ILO convention 138, which concerns the minimum age for entry into the workforce and protocol 2014, a convention on forced labour, he said.
A roadmap on labour rights for 2021 to 2026 is also being implemented, he said.
In line with the ratified conventions, Bangladesh is making significant efforts for enforcement, which includes legal and administrative reforms and promotional activities, the additional secretary said.
Since 2013, Bangladesh has made remarkable progress in ensuring labour rights and workplace safety, which has been recognised globally, he said.
Bangladesh will have to apply to the US government for reinstatement of the generalised system of preferences (GSP) as the status was suspended after the Rana Plaza building collapse in June 2013, said Leena Khan, labour attache of the US embassy in Dhaka.
At present, the GSP status is inactive as the US Congress has not revived the programme since December 2020, she said.
Neeran Ramjuthan, programme manager of the ILO Labour Administration and Working Conditions Cluster, expects Bangladesh will amend its labour law to make it in tune with international standards as per commitments to the ILO.
It is imperative for the government, policymakers and the banking watchdog to work together to implement effective measures to control inflation and mitigate its impact, said Syed Ershad Ahmed, AmCham president.
Other key challenges are declining foreign exchange reserves, the balance of payment deficit, imbalances in the demand and supply of energy, supply chain disruptions, and the struggling banking sector, Ahmed also said.
John Fay, commercial counsellor of the US embassy in Dhaka, also spoke at the luncheon.
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