The planned economic zones are going to be a game changer for the country in wooing FDI which is crucial to its export diversification in facing LDC graduation challenges, economic analysts said on Sunday.
“We need FDI for export diversification in that case economic zones (EZs) will be game changer. We do not need 100 EZs right at this moment, implement at least five EZs now,” Dr Selim Raihan, executive director of SANEM urged the government.His view came at the 2nd Dialogue on “Challenges and Way forward on Export diversification of Bangladesh upon LDC graduation- A regulatory reform perspective” organised by Dhaka Chamber of Commerce & Industry (DCCI) in association with Export Promotion Bureau (EPB).
The noted economist said Bangladesh needs to develop its negotiation skills and do proper homework for identifying LDC graduation impacts.
“There are two types of challenges --one is policy induced challenge and the other is supply side challenge which are interlinked,” Raihan said.
“We have to eradicate this policy level bias for our betterment. policy reforms should target to be aligned with export and import policies,” he added.
He also stressed on access to finance, skill development and sector specific overall infrastructure development.
“We must have to be competitive,” said Md Tofazzel Hossain Miah, Secretary, Prime Minister’s Office, underscoring the need for human resource development, research and development, value chain, backward linkage.He believes that high value product, quality and stringent compliance will increase the country’s branding.
It is the right time to grow other potential export items alongside utilising country’s local market, he said also putting emphasis on FTA or RTA. Export Promotion Bureau (EPB) Vice Chairman AHM Ahsan cited that RMG’s share in total exports fell from 84 percent to 81 percent in FY20, showing that non-RMG export increased despite it is not in line with the faster pace of RMG sector.
He said policy reforms and policy support will expedite boosting non-RMG export. “End of the day, this is the world of business and government do not do business rather play a role of facilitator.”
In his keynote, DCCI president Rizwan Rahman highlighted that light engineering, jute and jute goods, IT & ITES, pharmaceutical, agro & agro-processing, leather & leather goods are some of the promising sectors other than RMG that should be facilitated before entering into the reign of middle income country status.
He termed limited access to finance, shortages of skilled human resources, high duty on import of raw materials, non-tariff barriers, lengthy customs and testing processes, lack of certification, low-cost bank loan, required policy reforms, delay in implementing API Park, weak backward linkage network, lesser agricultural productivity and limited negotiation capability are some of the major challenges of these sectors to be more competitive in the international market.
Shaikh Yusuf Harun, Executive Chairman of Bangladesh Economic Zones Authority (BEZA) said after LDC graduation Bangladesh will lose its preferential benefits, but it is a country of sustainable economy and with the help of resilient private sector it will be able to diversify products base.
To diversify products and market Bangladesh need to be engaged with different regional trade group, he suggested.
“We have a good advantage of demographic dividend, but we have to convert it into a skilled workforce. Corporate tax rate in Bangladesh is comparatively high, we need to balance it,” he suggested.
BEZA has already signed agreement with 400 investors which would add extra USD 7 million to export earning in next two years, he informed.
Md. Alamgir Hossain, Member (Tax Policy), National Board of Revenue said NBR is providing tax benefits, tax holiday and tax incentives in different sectors to minimize cost of doing business.
Dulal Krishna Saha, Executive Chairman of National Skills Development Authority (NSDA) put stress on technical education because its standard is not up to the mark. Md Habibur Rahman, Executive Director (Research), Bangladesh Bank said Bangladesh is successful in policy related initiatives and re-orientation of policy directives is now required focusing to specific sub-sectors.