Dr Debapriya Bhattacharya, CPD Distinguished Fellow stresses diversification of export items and market, published in The Daily Star on Saturday, 21 December 2013.
Time for diversifying exports, markets
Advises Debapriya Bhattacharya
Staff Correspondent
Bangladesh needs to formulate its second generation trade policies to diversify export baskets and expand markets instead of relying on cheap garment items and a handful of destination countries, a top economist said yesterday.
Debapriya Bhattacharya, distinguished fellow at the Centre for Policy Dialogue (CPD), said Bangladesh had so far benefited from globalisation through expanding trade, attracting foreign investment, increasing remittances and official development assistance, with at least 55 percent of the economy connected to the global economy in some way.
“Now it is a major challenge for the country to find ways to maintain this linkage and expand it further,” he told a daylong conference styled “Globalisation and Trade: Prospects and Challenges for South Asia” at the capital’s Brac Centre Inn, organised by the department of economics and social sciences of Brac University.
“Given Bangladesh’s state of development and the structure and transformation we are aspiring for our economy, trade is going to play an important role. There is no doubt about that.
“We have benefited from trade. In the near future, we will have to think about the next generation of trade policies. The issue is that possibly we are ‘hitting the ceiling’ and how we really move on to the next stage,” he said.
The economist said Bangladesh would have to bring in changes in domestic policies and create adequate infrastructure and congenial environment for investment to advance the benefit of globalisation in the coming years.
Apart from diversifying export baskets instead of relying on garment items, which fetch up to 80 percent of the total export earnings, Debapriya stressed that within the garment sector, the country would have to concentrate on producing high-value products.
Bangladesh also needs to explore opportunities in emerging markets in Southeast Asia and Latin America as well as Malaysia, Russia, India and Turkey, as the country is too much dependent on North America and European Union, which currently together receive three-fourths of the exports, he said.
The noted economist also said regional cooperation could play a major role in helping Bangladesh diversify its export markets.
He said nowadays the process of producing quality products in line with international standards had become equally crucial like the quality of products.
“Ensuring rights of the workers and safe working conditions are important part of the new production standards the world is asking from Bangladesh.
“Bangladesh will have to improve roads, highways and ports for trade facilitation and ensuring smooth supply chain. We have to build up a modern working condition and infrastructure in the country under the second generation trade policy.”
Shamim Shakur, a senior lecturer at Massey University in New Zealand, said South Asian countries crossed ocean after ocean to trade with the US and Europe. “But we don’t do trade with our neighbours like we see among Asean countries.”
Mohammad Yunus, senior researcher fellow of the Bangladesh Institute of Development Studies (BIDS), said although South Asia was one of the fastest growing economic regions in the world, the intra-regional trade accounted for only 5.8 percent or $11 billion of their total trade against a potential of $40 billion.
He said the absence of transport connectivity among Bangladesh, Bhutan, Nepal and India resulted in losses for all countries in terms of opportunity costs, although these countries stood to gain substantially from cooperation in transport services.
Wahiduddin Mahmud, a former adviser to a caretaker government, ABM Azizul Islam, another former caretaker government adviser, and Mustafa K Mujeri, director general of BIDS, also spoke.