Against the backdrop of the pandemic, economists and business leaders have advised the government to reconsider graduating from the Least Developed Country (LDC) status as that will result in losing the duty-free global market accesses.
They said Bangladesh currently has duty-free access to two big markets – China and India – apart from the European Union (EU) and other countries, and the LDC graduation deferral for three to six years will help seize facilities lasting for the next 12-15 years.
They said this on Thursday at a virtual workshop on "Covid-19 and Bangladesh Economy," organised by the Economic Reporters' Forum (ERF) in association with RAPID Bangladesh and The Asia Foundation.
RAPID Bangladesh Chairman Dr Mohammad Abdur Razzaque presented the keynote paper titled "Covid-19 and International Trade Issue: Policy Options for Promoting Bangladesh's Exports."
Dr Razzaque said, "China, at this moment, gives Bangladesh a big opportunity – a golden chance for us. If we graduate from LDC, that facility may continue for the next three years only."
Officially, Bangladesh will become a developing country in 2024 and three more years will be given as a grace period for preparation.
The RAPID Bangladesh chairman explained that China now has the most attractive market for all as everyone races for it. The current $16 trillion Chinese market with 5 percent annual growth will be $30 trillion within the next 14 years.
He advised that Bangladesh may take this opportunity for 12 to 15 years, and then may initiate a meaningful Free Trade Agreement (FTA) with China.
"The government should exploit this opportunity with deferred LDC graduation. The deferral will also bring more foreign direct investment (FDI) to Bangladesh, including Indian investment as its Chinese market access duty ranges from 15 percent to 25 percent," said Dr Razzaque, a former economics department faculty member of Dhaka University.
Dr Razzaque also advocated for developing time befitting FDI guidelines.
Business Initiative Leading Development (BUILD) Chairman Abul Kasem Khan said, "Investors will relocate businesses from China in the post-pandemic world to reduce dependency on Chinese goods and raw materials. Therefore, Bangladesh needs to rethink its policies to adjust post Covid-19 trade and economic issues. We have to create a supply base for raw materials."
He believes attracting FDI in supply chain is very crucial and this should be done without any delay. "If we miss the opportunity, other competitors will snatch it," he added.
DCCI President Shams Mahmud said FDIs could be helpful to small and medium-sized enterprises (SMEs) and employment generation, and the government should bring changes in policies to attract those.
He also called for initiating measures to sign FTAs with the UK after Brexit.
Commerce Minister Tipu Munshi, who was the chief guest of the event, said the government is working to tap the opportunity.
"During the Covid-19 pandemic, the US-China trade war has become more crucial. Japan and the European Union are also thinking about reducing dependency on China. We have to take the advantages," said the minister.
"We are focusing on things that will help to increase export and employment generation," said Tipu Munshi. The minister said they formed a taskforce to find out internal problems and resolve those for quick economic recovery.
"The task force of the ministry holds meetings regularly and communicates with other ministries. We are also working with 42 countries to improve export volume. We are emphasising the economic zones, specially the one in Mirsarai to attract FDIs," he added.
SM Rashidul Islam, general secretary of the ERF moderated the event while its President Sarif Islam Dilal chaired the virtual workshop.
Kazi Faisal Bin Seraj, country representative of The Asia Foundation and Dr M Abu Eusuf, executive director of RAPID, also spoke at the event.