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Bangladesh needs strong reform agenda to sustain economic progress: WB

  • Staff Correspondent
  • 30 September, 2022 12:00 AM
  • Print news
Bangladesh needs strong reform agenda to sustain economic progress: WB

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Bangladesh needs a strong reform agenda to sustain its economic and development progress made in the last five decades and further accelerate the growth rate in the long term, says a new World Bank report

The report titled  “Country Economic Memorandum – Change of Fabric” unveiled on Thursday identifies key barriers to higher growth and proposes actionable reforms to maintain rapid growth.

 The report urges strong policy reforms in three areas critical to sustain growth: stem the erosion of trade competitiveness, address vulnerabilities in the financial sector, and ensure orderly urbanisation process.

The report also explores the implications of digital development and climate change as cross-cutting themes in these reform areas, said a World Bank release.

 “Over the past decade, Bangladesh has been among the top 10 fastest growing economies,” said Dandan Chen, World Bank Acting Country Director for Bangladesh and Bhutan.

 “But there is no room for complacency. New and emerging challenges—including, advances in technology and climate change—demand new policy and institutional innovations to cater to the changing needs of a growing economy,” he added.

 “To achieve its vision of an upper middle-income country by 2031, Bangladesh will need strong and transformative policy actions,” Chen said. The report envisages export diversification to reduce the risk of export volatility, create new sources of growth, and increase foreign exchange earnings in the long term.

The heavy reliance on ready-made garments and Bangladesh’s protective tariff regime inhibits diversified export growth.

Further, with trade competitiveness based on low wages and trade preferences eroding, the country can increase the resilience of economic growth by diversifying its export basket.  The report says average tariffs in Bangladesh are higher than its comparator countries. The average tariff rate on intermediate goods in Bangladesh is 18.8 percent, which is about twice the rate as in China, Thailand, and Vietnam.