Bangladesh can double its total export by 2021 if the country succeeds in grabbing 20 percent of China’s current apparel export by improving workers and consumers welfare and the capacity of ports, railways and roads, says a World Bank (WB) study. Once China’s market share is grabbed, the study estimated a further rise of Bangladesh’s apparel export by $29 billion, a quantum jump in total exports, and it will create 5.4 million new jobs and 13.5 million new indirect jobs. The study styled ‘Diagnostic Trade Integration Study’, which was released in Washington and Dhaka on Wednesday, said Bangladesh still has the prospect of grabbing 20 percent of China’s current apparel export basket, though Vietnam, Cambodia and India’s shares in global apparel exports are rising. “There is ample room to expand the RMG sector and to diversify to other exports. For example, if Bangladesh can capture 20 percent of China’s current garment exports, the country’s total exports would more than double,” said a press release issued by the WB. The study said international and regional trade, especially with South Asian and East Asian neighbours is critical for Bangladesh to create more and better jobs for the 2 million youths entering the labour force every year. The diagnostic provides a roadmap for strengthening Bangladesh’s trade competitiveness and developing a policy regime that takes full advantage of international markets. In 2014-15, Bangladesh’s total export stood at $31.2 billion, with apparel contributing $25.5 billion. The study said Bangladesh is well placed to take on some its strongest development challenges, provided it displays the right leadership. Its track record on growth and employment is strong. To grow faster, absorb more labour, and continue its pace of poverty reduction, the country will need to build on that record and improve on it. The good news is that a number of reforms are relatively low-hanging fruits, may be implemented in the short to medium term, and can bring large payoffs. The example of Vietnam shows that accelerated, export-oriented development is possible, even in the context of the current global environment. Vietnam moved from being one of the poorest countries in the world to a lower-middle income one in the space of 25 years, with FDI and trade playing a dominant role in the economy. Vietnam’s exports and imports each form 90 percent of GDP, and, with 88 million people compared with Bangladesh’s 150 million, Vietnam exports four times as much as Bangladesh today. The study said Bangladesh’s ambition is to build on its solid growth and poverty reduction achievements and accelerate growth to become a middle-income country by 2021, continue its high pace of poverty reduction, and share prosperity more widely among its citizens. It said Bangladesh will need strong leadership to support its multi-sector competitiveness agenda. In many cases, it will require taking on strong domestic interests that may not welcome competition, either through imports or FDI. In other cases, it will require cohesion and coordination between different ministries or departments, such as the National Board of Revenue; the Ministries of Commerce, Finance, and Industry; the Roads Division, and so on. “If the Sixth Plan and Vision 2021 goals are to be achieved, this leadership has to be exercised,” it said. The Diagnostic Trade Integration Study identifies the following actions centred around some strong pillars to sustain and accelerate export growth are better trade logistics to reduce delivery lags, to generate new sources of competitiveness and thereby enable market diversification, better exploitation of regional trading opportunities in nearby growing and dynamic markets, especially East and South Asia, more neutral and rational trade policy and taxation and bonded warehouse schemes, concerted efforts to spur domestic investment and attract foreign direct investment, to contribute to export promotion and diversification, improving worker and consumer welfare by developing skills and literacy, implementing labour and work safety guidelines, making safety nets more effective in dealing with trade shocks and strengthening the institutional capacity for strategic policy making aimed at the objective of international competitiveness to help bring focus and coherence to the government’s reform efforts. “Bangladesh needs a trade policy regime that is more neutral between exports and production for the domestic market and would support the development of new export sectors and small and medium firms,” said Sanjay Kathuria, Lead Economist, Trade and Competitiveness Global Practice, World Bank, and co-author of the report. The country also needs to prepare its youth with solid foundational education and vocational skills needed to be productive in export-oriented industry. Bangladesh needs to act urgently to tap into regional and global trade as well as FDI to boost its economy and reduce poverty.
