Bangladesh is backing the wrong horse in export, World Bank economist says

A World Bank lead economist has advised Bangladesh to diversify its export market along with products.

Readymade clothes is the main export product of Bangladesh and those mostly go to the European and North American market.

“Bangladesh is backing the wrong horse,” Sanjay Kathuria, Lead Economist on Trade and competitiveness Global Practices, said on Friday, pointing to the Bangladesh’s export.

He said those markets are not growing as fast as the neighbouring Asian markets.

“Growth is in the neighbourhood. Successful countries are all there,” he said, giving examples of India, China, South Korea and Japan.

He said Korea became the fifth largest exporter in the world and over 6O percent of its exports go to Asian markets.

On the contrary, Bangladesh’s trade is mostly with the European and North American countries. It (the export) is miniscule in the South Asia and the Asia as a whole, he said.

Kathuria came from Washington to attend Bangladesh Investment Development Authority’s (BIDA) two-day strategic workshop with all relevant government agencies and private stakeholders at a Bahubal resort in the north-eastern Habiganj district with the support of World Bank Group.

BIDA organsied the workshop to devise “action plans” on how to place Bangladesh among the top 100 countries in the World Bank’s 'ease of doing business' rankings in order to make it an attractive destination for global businesses.

BIDA Executive Chairman Kazi M Aminul Islam, Cabinet Secretary Mohammad Shafiul Alam, and Principal Secretary at the Prime Minister’s Office Kamal Abdul Naser Chowdhury are also attending the workshop along with their colleagues from the different ministries, and business leaders.

Emerging from the merger of the Privatisation Commission and the Board of Investment last year, BIDA is focused on massive investments in the next five years to achieve Bangladesh’s Vision 2O21, Vision 2O41 and Agenda 2030 for sustainable development.

Kathuria said India, China, Korea and Japan are the powerhouses of world economy now and Bangladesh has “insufficient engagement” both in trade and investment with those countries.

Both India and China make clothes which is the main export item of Bangladesh, but he said there are other products that Bangladesh can sell to those markets.

“People talk about issues of complementarities. It's not true anymore. Countries like India and China - they become very bigger and diversified. They can import a vast range of products.

"India imports more than $400 billion worth of goods. If Bangladesh gets one percent of that market then that will be $4 billion compared to today’s exports of only about $600 million,” he said.

He said Bangladesh can diversify its export basket by encouraging investments from those Asian powerhouses.

In his view, Bangladesh is an “attractive destination” for trade and investment due to its strategic location, regional connectivity and access because of gateway between SAARC and ASEAN countries.

This is also due to sustained growth that he said has decreased poverty dramatically. “FDI policies allow 100 percent foreign equity with unrestricted exit policy, easy remittance of royalty, and repatriation of profits and incomes.”

“Demographic dividend as two million youths are ready to be deployed every year that gives the scope to gain from China’s aging population and move away from low-cost manufacturing,” he said.

Kathuria, however, said it is not easy to change the direction of the market quickly.

“It takes time and trade also depends on relations. But the process should start now,” he said, adding that Asia is the rising star, and Bangladesh must focus on those markets.

The two-day workshop would end on Saturday with a call for action for the government officials and stakeholders to remove the bottlenecks and push the country up on the World Bank’s ease of doing of business ranking.