Facilitate export diversification and expansion

Experts believe that efforts should be undertaken– both at the government and at the private level– to explore new markets and also to consolidate positions in markets where Bangladesh already has a presence in export volumes.

Product diversification becomes especially important following the shrinking of the US and EU markets hit by economic slump. It is well known that fo long, the EU and the US absorbs a major portion of Bangladesh’s total annual exports and remain the main suppliers of capital goods.

However, with the changing zeitgeist of the global economy, product diversification must be a crucial component in the economic state of affairs.

It is unfortunate to note that Bangladesh’s export income is highly dependent on a limited number of products and the share of dominating exportable, ready-made garments/apparel, Bangladesh’s total exports is 81.82 per cent.

The contribution of the garment sector to the export income is 81.16 per cent and the contribution of the non-textile sector is 18.84 per cent. As the export of Bangladesh is highly dependent on apparel, it is indispensable to take initiatives to increase the participation of other potential products through product diversification.

So far several initiatives have been undertaken by the government to diversify export products. The Business Promotion Council (BPC) has been created to implement the product diversification plan of the government. Seven Business Promotion Councils have been created by the Ministry of Commerce to develop, promote and explore the international market for ICT, Leather and Leather Goods, Fishery, Agro Products, Light Engineering Products, Medicinal Plants and Herbal Products, and Plastic Products through capacity building of those selected sectors players.

The six Year Long Export Competitiveness for Jobs (EC4J) project has been in progress right now by the Ministry of Commerce with the finance of the World Bank to help build the capacity and explore the international market for Leather and Leather Goods, Footwear, Plastic, and Light Engineering Sector. The Prime Objective of the project is to ensure the product diversification plan of the government through generating employment. To accelerate export growth under EC4JProject, in line with the export policy (2021-24) and the 8th Five year Plan of the government, the sector-wise export framework has been formulated through government policy support and a comprehensive plan to achieve export-led growth

Bangladesh can think of reducing the customs and other taxes in ports so the different industries can import raw materials at the minimal rate of customs duty without bond license.

This reform in tax will make many unknown local products competitive in the global market.

Bangladesh should not rely only on the RMG industry for sustainable growth of Bangladesh's economy in the long run. To reduce dependence on RMG, Bangladesh may try to focus on medium technology products such as electrical, electronic equipment, furniture, toys, engineering products and pharmaceutical, etc.

The ideas generated and shared at seminars, workshops and conferences in Bangladesh are not generally tested by research projects at universities and government laboratories. Policymakers, too, look more serious while dealing with issues and ideas during international conferences than showing flexibility to demands from the local stakeholders for bringing changes in the ground reality.

Bangladesh should go for trade facilitation agreed upon as a member of WTO and also go for FTAs on an urgent basis to diversify the export products. Bangladesh has no other choice but to enter into the global supply chain with the signing of FTAs . FTAs will make hundreds of local products competitive in the global market.