The potential export sectors other than RMG should get equal treatment like apparel industry to diversify the country’s export basket and make them competitive after LDC graduation.
Economic analysts and business leaders came up with the observation at a virtual dialogue on Wednesday.Dhaka Chamber of Commerce & Industry (DCCI) organised the dialogue on “Challenges and way forward on export diversification of Bangladesh upon LDC graduation.”
They insisted that these non-RMG export sectors should get easy access to low-cost and long-term finance and adequate policy support, including fiscal and non-fiscal incentives
Besides, they also put emphasis on policy reforms, skill development to intensify export diversification in the country, much needed after LDC graduation when Bangladesh won’t get any preference in global trade.
Bangladesh has 1,750 goods in its export basket of which 81 percent are RMG item, DCCI President Rizwan Rahman said, highlighting LDC graduation challenges.
“To compete in the international export market after graduation, our small and medium scale industries like jute, agro processing, leather goods, footwear, pharmaceuticals, light engineering, ICT, RMG and other emerging sectors will have to face various competitions,” he pointed out.
Besides, Bangladesh will face a challenge of international competition, maintaining products’ quality, adopting changed consumer behavior, cost of research and innovation, he added.“We have five years more as a breathing time and by this time we need to make our industries ready to face the challenges of post-LDC period,” DCCI president said.
Vice-Chairman of Export Promotion Bureau (EPB) AHM Ahsan said: “LDC graduation is a pride for Bangladesh as well as it will create some challenges for us.”
But he assured that the government is taking necessary strategies for smooth and sustainable LDC graduation.
“Not only products diversification, we have to focus on geographical diversification as well,” he said.
He stressed on expanding export market to Latin America, Africa, Asian and Middle Eastern countries other than EU and USA alongside improving service sector that contributes nearly 60 percent to GDP.
“It is high time we need work on how to reduce cost of production, develop skills, enhancing marketing policy, product promotion,” he noted.
Prof Mustafizur Rahman, Distinguished Fellow, Centre for Policy Dialogue (CPD) said RMG is a success model for the country, but now time has come to focus on other potential non-RMG sectors like agriculture, pharmaceuticals, light engineering, ICT, leather goods and jute sector.
At present 70 percent of the country’s export are under preferential market access. After LDC graduation compliance will be a major issue, he reminded.
“We have to make domestic regulations WTO compliant. In that case, industry readiness is more important. Our labour may be cheap but we do not export labour. So, we have to make our labours productive,” he emphasised.
He also stressed on innovative finance, completion of API park for pharmaceutical industry, service sector export competitiveness and improving standard of BSTI. The economist thinks that mutual recognition agreement or comprehensive economic partnership with potential partners can benefit Bangladesh.
Md Saiful Islam, president, Leather goods and Footwear Manufacturers & Exporters Association of Bangladesh added that LDC graduation will enhance the country’s negotiating capacity.
“To gain at least 70 percent productivity, we need to analyze skill gap and create skilled labour force. We have to go for energy saving, raw materials saving and cost saving mechanism,” he stated.
Mohammed Mahbubur Rahman Patwari, Managing Director, Sonali Aansh Industries Ltd hoped that export earning from jute can be raised to $5-$10billion from existing $1 billion in view of global climate change and sustainable development commitment.
“The government should give same facilities to all export oriented industries like RMG so that in the transition period these sectors can make them competitive,” he said, stressing on value addition in this sector to be competitive after graduation.
He emphasized on local market penetration, cost competitiveness and duty benefits at the time of import of capital machineries.
For diversifying agriculture sector, Bangladesh needs to increase technology adaptation, R&D in private sector, follow good practices, post harvest capacity development and positive country branding, according to Dr FH Ansarey, managing director and CEO of ACI Mobility, Plastic and Agribusinesses.
Syed Almas Kabir, President, Bangladesh Association of Software & Information Services (BASIS) sought cash incentives for the ICT exporters.
He hoped that after graduation Bangladesh will no longer be known as a country of cheap labour rather it will have negotiating ability. But he sees access to finance is the biggest challenge in the ICT sector.
Md Abdur Razzaque, President, Bangladesh Engineering Industry Owners Association said light engineering needs a separate Industrial park to make it compliant and raise its performance to the expected level.
Naimul Huda, General Manager, Incepta Pharmaceuticals Ltd. said 80 percent drugs exported from Bangladesh are off patent and 20 percent are patented. “So, after the LDC graduation, we have to be compliant.”
He emphasised on API park for basic raw materials production and technology transfer through collaboration and extensive research & innovation.