Bangladesh needs to focus on globally certified agro-processed foods and diversifying export basket as well as RMG items to boost exports to the European market, business leaders said on Wednesday.
But for that, the country will need foreign investment from the European countries to adopt new technology and skills, they observed.
The suggestions came at a webinar titled “Economic Tie of Bangladesh and Europe: New Regulatory Regime” held on the second day of the ongoing Bangladesh Trade & Investment Summit 2021.
Ministry of Commerce and Dhaka Chamber of Commerce & Industry (DCCI) have jointly organised the summit.
Momin Ud Dowlah, chairman & managing director of EON Group, said: “Bangladesh’s soil is very fertile. European investors have good potential here in the food processing industry,” mentioning that Bangladesh is the third-largest producer of vegetables, rice and telapia fish in the world.
But to be competitive, Bangladesh needs agro mechanization, automation and investment in research and development, he noted.
“Moreover, agro product waste management is an attractive sector where European investment or technology has huge potential,” he said, adding that Bangladesh can also be a big market of globally certified halal food items.
Former BGMEA president Dr Rubana Huq said although apparel is the highest export earning sector, 80 per cent of the exports is confined to five cotton-based basic items only.
Bangladesh can strengthen its position in the RMG market in Europe by diversifying its apparel items by shifting to non-cotton items and value-added products as global demand is changing, she said.
The light engineering sector can be a big option for Bangladesh to diversify the export basket, Dr Rubana Huq suggested.
She also expressed fear that the compliance issues mentioned in the draft proposal for GSP plus facility in the European market are going to pose threat to the country’s export-oriented RMG industry.
Commerce Minister Tipu Munshi said: “In the draft of the new GSP regulation, which was published last month, the European Union has proposed to remove the import-share criterion from the GSP+ eligibility. Bangladesh will be the direct beneficiary of this change.”
However, he urged all the public and private sectors to remain cautious to become compliant with all conventions before applying for GSP+ facility in the EU market.
Zaved Akhtar, CEO of Unilever Bangladesh, said Bangladesh is an emerging market with a huge young population and can be a lucrative destination for European investment.
Per capita FMCG consumption in Bangladesh is still only $23 whereas it is $44 in India and $100 in the Philippines, he informed.
Grameenphone CEO Yasir Azman said in 25 years, they have been able to become a success story in this market. “There is a win-win situation in this market. The youth of Bangladesh and technology and digitalization will lead Bangladesh to become a developed nation in 2041. Bangladesh gives ample opportunities to the foreign investors,” he said.
Naser Ejaj Bijoy, CEO, Standard Chartered Bank, said Bangladesh is a congenial market in terms of the financial sector. There are challenges in this sector but if all these challenges can be overcome, this market is a profitable one.
Bangladesh is one of the main trading partners of Europe, accounting for around 35 per cent of Bangladesh's total trade in 2020. After LDC graduation, Bangladesh will face strict Rules of Origin requirements in the EU market. DCCI president Rizwan Rahman recommended that Bangladesh should sign FTAs and PTAs with the EU and the UK, which will guarantee preferential market access for export to the European market. He invited European investors to invest in the pharmaceuticals and API sector as well as in the high-tech parks and SEZs.
“Scope of European technology transfer will usher our farming compliance and export-oriented agro-processed food industries,” he said. He thinks that a ‘Comprehensive Economic Partnership Agreement’ between Bangladesh and the EU for preferential market access to the EU can be fruitful to maintain present benefits after LDC graduation.