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Bangladesh will face numerous challenges following the graduation from Least Developed Countries (LDCs) in 2026 and to tackle the crisis, export diversification by establishing new sectors, increasing domestic private, and foreign direct investment (FDI), and harmonisation of the policy gaps.
Experts made these remarks at a seminar titled ‘Bangladesh’s Export Readiness: Post-LDC Graduation Perspective’ organised by the Dhaka Chamber of Commerce and Industry (DCCI) at Motijheel on Saturday.
DCCI Senior Vice President Malik Talha Ismail Bari gave the inaugural speech and Selim Raihan, executive director of the South Asian Network on Economic Modeling (SANEM) presented the keynote presentation.
Malik Talha Ismail Bari gave an overview of the country’s economic scenario, saying, “The LDC graduation will certainly be a historic moment for Bangladesh.
He also said that it is quite clear that we are heavily reliant on the RMG sector.
“Overcoming the post-LDC crisis, our economy requires not only mobilising domestic revenue and modernising tax collection but also emphasising diversification in both product basket and market,” he added.
According to Harvard’s Atlas of Economic Complexity, Bangladesh added only 9 new products at 4-digit HS code during 2006–2021 which added $823 million in our total export earnings, whereas Vietnam added 41 new products which added $145,000 million in their export earnings.
Selim Raihan said, “We are doing well in RMG but we are not viewing at any other sectors. If this continues, we may get stuck in the middle-income trap. Bangladesh’s export concentration is remarkably high but our export basket is limited to some products.
“For Bangladesh, there is nothing but RMG in our export basket. Even in 1985, Vietnam and our export earnings were almost equal. But currently, our export earnings are getting lower than them, we have to look for other relative factors,” he added.
According to the World Bank’s Enterprise Survey 2022, an average of 50 per cent of export-oriented firms face obstacles in the price and availability of raw materials, customs and trade regulations, port facilities, tax system, and skilled labour.
“We need to address policy and regulatory issues and this should be harmonised. We have many exchange rates which create confusion among the businesses. Our currency has devalued. In this case, the performance of the regulatory authority is not satisfying,” Raihan added.
“Our NPLs have increased. As a result, the real exporters are facing challenges that have created difficulties in overall exports. The private sectors are not getting the benefits from the banking sector.”
“We do not have skilled manpower/labour. There are some serious skill gaps in our labours. This is because we are not able to save public expenditure in the education and health sectors. Because the tax-to-GDP ratio in our country is low. As a result, investment in the private sector is not increasing.”
“We need mega projects in health and education sectors. Political stability is also important to attract FDI. We have economic zones and we must utilise them to increase FDI flow.”
DCCI put forward some focused suggestions for improving the export readiness of Bangladesh like establishing new sectors for industry diversification, formulating long-term export plans, focusing on the service sector and exploring new destinations, and expediting negotiations with major export markets.
Government incentives for FinTech adoption by companies and banks to offer sector-specific export financing, simplify E-commerce and digital marketing processes, create a centralised platform for updated export information, and conduct a needs assessment post LDC graduation to leverage WTO's NAMA agreement for international trade.
