Countries that managed to boost their exports rapidly, such as Hong Kong, China and Vietnam, had strong support from foreign direct investment (FDI). Without FDI, access to foreign markets is difficult.
Take Vietnam that used to share the same position in export as Bangladesh in 1990. But the country now registers $260 billion export while Bangladesh still hovers around the $40 billion mark.
It is not only manufacturing but remaining connected to branding and supply chain too is most required. FDI makes it easier to exchange technology, increase efficiency as well as engage in branding and supply chains – which Vietnam has done successfully as Bangladesh falls behind.
If we cannot attract foreign investments, we will not be able to diversify our export basket that eventually will lead us to low export performances.
As the domestic market of Bangladesh grows day by day, the size of the local industry is also burgeoning. The industry is getting some sort of incentives by the government's high import duty. But incentives for exports are much less compared to the protective measures for domestic production. We need the tariff policies rationalised.
Besides, there are questions about the quality of the locally manufactured items. Products with such quality would not help increase the export volume. It is easy to sell a product abroad if it can maintain a standard in the domestic market. But we have differentiated the quality for local and international markets which is not the proper way to boost exports.
Besides, to enhance trade relations with other countries, emphasis should be laid on enhancing regional trade relations and facilitating trade within the country.
Dr MA Razzaque is the chairman of Research and Policy Integration for Development (RAPID)