The country needs to create more jobs through diversification of its export basket – both in terms of products and destinations – to tackle the post-LDC graduation challenges and sustain the trend of poverty reduction, experts said at a webinar on Thursday.
They also highlighted technology adaptation, technology transfer, tariff rationalisation, skill development, investment in research and innovation, policy reforms, and competitive tax structure as important issues to facilitate export diversification.
Explaining the reasons behind Bangladesh's lagging behind in export diversification, Syed Manzur Elahi, chairman of the Apex Group, told the online seminar that no industry, except the readymade garment (RMG) sector, has received the desired attention from policymakers.
He referred to his own sector as an example.
The footwear industry started featuring both in Vietnam and Bangladesh in 1990 but, 31 years later, the two countries stand poles apart in terms of export earnings in the sector, he said, adding that Vietnam's annual export of footwear has already reached $17 billion while that of Bangladesh is languishing below the $1 billion mark.
Utilising equal opportunities for all industries, more than 3,000 footwear companies have been established in Vietnam over the years while the number remains below 300 in Bangladesh mainly because of lower emphasis on diversification of the export basket, he observed at the webinar styled "LDC graduation of Bangladesh: Transformation and preparedness", jointly organised by the Ministry of Commerce and the Dhaka chamber of commerce and industry (DCCI).
Syed Manzur Elahi said many from the government and the private sector are always talking about export diversification, but it is not happening in reality.
"We have to create jobs to help alleviate poverty. And it is the duty of the private sector to create jobs. For creating employment opportunities, the country needs industries. Due to the shortage of skilled workers in the country, thousands of foreign workers are working here and are remitting about $5 billion every year through official channels and another $5 billion through unofficial channels."
Addressing the event as chief guest, Dr Ahmad Kaikaus, principal secretary to the prime minister, said about 81% of the country's GDP comes from the private sector, which reflects the strength of its vibrancy.
"We have to facilitate the private sector and have to develop a strong bond between the public and private sectors as the private sector plays a major role in the economic transformation of a country," he said.
Tapan Kanti Ghosh, secretary to the Ministry of Commerce, said every graduating economy undergoes a transitional process with a deep aspiration of renewed economic journey.
Upon its graduation from the LDC (least developed country) status, Bangladesh will come across some key challenges including loss of duty free quota free access to major export destinations, increased tariff rates, technological adaptation, increased competition at both local and international market, standard and quality, stringent rules of origins, skills upgradation, and trade and industrial compliance issues.
The graduation will also generate ample opportunities in many respects including private sector development, enriched industrial base, investment and trade growth and local market expansion and so on.
DCCI President Rizwan Rahman said technology transfer is no longer a choice but a necessity now.
Mentioning that Bangladesh's economic condition is quite resilient and progressive, he expressed hope that after the graduation, the country will be able to make its position stronger.
"But before that the first and foremost thing is to ensure product diversification in the export basket and technology adaptation as well as domestic market development," he said.
Abul Kasem Khan, chairperson of the Business Initiative Leading Development (BUILD), stressed the importance of job creation, expanding economic freedom, policy reforms and building new areas of competitiveness.
Bangladesh needs to focus on improving ease of doing business, regional integration by signing FTA, domestic industry diversification before LDC graduation, he observed.
Yesim Baykal, programme management officer at UN Technology Bank for LDC, said Bangladesh requires to focus on technological adaptation, technology transfer, research and innovation and building human capacity.
Taufiqur Rahman, board member of the World Trade Organisation, said Bangladesh will enjoy preferences in the EU till 2029 but in the meantime the government and the private sector have to build negotiation capacity.
Dr Mostafa Abid Khan, former member of the Bangladesh Trade and Tariff Commission called for ensuring quality education and research. Diversification of products is more important to sustain after the country's graduation from the LDC status, he added.