Economists have also advised that once Bangladesh graduates out of the least developed countries category, it will be hard hit in sustaining the export-led growth unless it specifically addresses the high import duties it has been facing.
While the promises of import liberalization are evident enough, they advised that this should not be done prior to the development of the country’s institutional capacity. As Bangladesh nears graduation from the Least Developed Countries category, they concur that a strategic transformation with good policy reforms and a stronger institutional framework will be crucial for the economic development of the country. Their observations during a session with the title of “Conference on Recommendations by the Taskforce on Reshaping the Economy” and organized by the Centre for Policy Dialogue (CPD) on Monday CPD’s Distinguished Fellow Dr. Mustafizur Rahman explained the differing experiences of import liberalization in Haiti and Singapore with the aid of illustrations. “Singapore, with a good import and institutional capacity, has been a recipient of liberal importation, and Haiti has never had such a capacity and has been exposed to economic hardships,” explained. He emphasized that Bangladesh has an acute shortage of institutions in the field of collecting the revenues, making the policies, and carrying them out. “Without addressing the shortages,” Dr. Mustafizur cautioned, “import liberalization will be a threat. “He also added that US and EU countries’ import duties stand at an average margin of less than 4 percent and that they charge 11-18 percent duties on importers of apparel. Since Bangladesh exports lower-value goods mostly, he has concluded that the nation has to build a stronger export strategy instead of banking on the convenience of foreigners’ relaxation of the tariffs. Dr. Selim Raihan of the South Asian Network on Economic Modelling (SANEM) opined that Bangladesh does not possess any planned strategy of industrialization and has been failing to attract large investments. He noted that the country’s fragmented policies have hindered its ability to capitalize on its economic potential. Former commerce minister Amir Khasru Mahmud Chowdhury also opined that Bangladesh needs an economic realignment. The government has at times prioritized income generation at the expense of long-term development, he added further. “Revenue should not be obtained solely from VAT and regulations’ duty, but from a mature private sector and large businesses. “He also reiterated that unless import liberalization happens, the export incentives will take exports only so far and not further future growth. Commerce Adviser SK Bashir Uddin explained the macroeconomy of Bangladesh and the corruption problem of the banking system and money laundering during the last government’s five years of rule. He stressed the need for continued improvements in energy supply, Laboure productivity, and logistics to strengthen the economy and move forward.
Dr. Mohammad Abdur Razzaque of the Research and Policy Integration for Development (RAPID) expressed dismay at the graduation of the least developed countries and the impact this will leave on the traditionally duty-free facilities-based ready-made garment sector of the world at large. “After 2027, this will be accomplished with,” he added. So it is urgent that we enter into a dialogue with the European Union so that we keep such privileges. “He also blamed Bangladesh for not trying at the free trade agreements at the bilateral level and urged them to immediately try at the free trade agreement with Japan. Dr. Razzaque further added that 75 percent of Bangladesh’s exports at the moment use the concessions of the LDC and that they will be discontinued once they graduate and also subsidies of exports will be discontinued. He emphasized the need for trade policy reforms and stated that a sudden development in the sector has not been seen after the 1990s.”Urgent reforms and interventions will be required in order to steer the future,” he added. Foreign Investors’ Chamber of Commerce and Industry Chairman and Unilever Bangladesh Chairman and Managing Director Mohammad Zavad Akhtar pinpointed a critical problem confronting investors based on Unilever’s aspiration at a global scale of net-zero emissions. “However, the power generation of Bangladesh does not allow this target, and companies such as ours will be required to devise an alternate solution that will enhance our costs ,”He also claimed that although Bangladesh has such an issue, the business of such countries with government support to tackle such issues is gaining a competitive advantage. Zaved noted that a battered economy like Myanmar remains of interest to multinational companies because it has an entrée into the Association of Southeast Asian Nations (ASEAN) market. Abdullah Hil Rakib of the Team Group ended the session with the observation that Bangladesh needs a grand strategy that reconciles the world with the aspirations of Bangladesh exports. “Top exporters like us will certainly follow such a route, of course, but the government has to prepare the ground for private sector investment,” he added further.
Source: The Financial Express
