Originally posted in The Financial Express on 24 September 2022
On 24 September 2022, in an interview with the Financial Express, Dr Debapriya Bhattacharya said that the government needs to take a phasing-out programme on cash incentives/subsidies in tune with the country’s LDC graduation prospect. Notably, Bangladesh would not be able to continue these incentives/subsidies as its eligibility at the World Trade Organisation (WTO) will go after LDC graduation as well as the county’s fiscal sustainability will require this. The phase-out programme should target productivity growth, product and market diversification, and administrative efficiency improvement, he suggested.
Dr Deb also maintained, “The question is why Bangladesh failed to achieve diversification of its export basket notwithstanding the incentives. One may argue that the overconcentration of policy attention on the garment sector may have been one of the major impediments.”
He noted, “At the first stage the incentives were concentrated only on the garment sector and other export outputs were not equally encouraged. Now, finally, some of the other non-garment export sectors have been included and also support to new export markets has been given.”
“But one may say there is an incentive addiction in the export sector,” he observed. “We will have to think of a phasing-out approach but with a focus on new products and new markets,” he reiterated.
To read the full report, “A final reckoning on trade subsidy outcome” follow the link: https://thefinancialexpress.com.bd/trade/a-final-reckoning-on-trade-subsidy-outcome-1663985898