Bangladesh’s garment exports would more than double if the country could capture 20 percent of China’s share in a year, as China has been shifting its manufacturing base to other sectors, according to a World Bank study.China has been shifting from garments to other sectors due to a shortage of skilled workers and higher costs of production. As a result, an opportunity has been created for Bangladesh as the country is also a strong player in the global apparel trade.Capturing 20 percent of China’s apparel business will help Bangladesh fetch an additional $29 billion in garment exports a year and will create 5.4 million new jobs and 13.5 million indirect jobs, the study added.In 2014-15, Bangladesh’s total export stood at $31.2 billion, with apparel contributing $25.5 billion.“There is ample room to expand the RMG sector and to diversify into other export sectors,” according to the study. Bangladesh’s exports have doubled their world market share between 1995 and 2012, largely due to the strong export performance of the apparel sector, said the study.China is currently the largest garment supplier worldwide, grabbing nearly 40 percent of the $450 billion market. Since 2009, Bangladesh is the second largest apparel exporter after China, capturing a little over five percent of the global apparel market. “To accelerate GDP growth, Bangladesh needs higher volumes of exports to larger and richer markets, beyond its relatively smaller domestic market,” said Johannes Zutt, country director of WB in Bangladesh.“Bangladeshi firms have succeeded in garments, and they can also succeed in other industries with demonstrative competitiveness such as jute-based industries, footwear, information and communication technology, shipbuilding, pharmaceuticals, and light industry such as bicycles.”The study on ‘Diagnostic Trade Integration Study’ also 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 study provides a roadmap to strengthen Bangladesh’s trade competitiveness and develop a policy regime that takes full advantage of international markets, said the study, which was jointly launched by the WB and the commerce ministry at Westin Dhaka yesterday.The study identified a number of reform initiatives in high priority areas to enhance the country’s trade capacity and competitiveness. The report also calls for establishing an inter-ministerial committee to help Bangladeshi exporters succeed in a globally competitive environment.To accelerating export growth, Bangladesh needs to focus on diversifying regional and global markets, building a wider export base, improving worker and consumer welfare, and strengthening institutional capacity while sustaining sound economic fundamentals, said the study.It also found that foreign direct investment (FDI) can play a much larger role in many sectors, especially those with technology upgradation needs, such as pharmaceuticals, bicycles, and shipbuilding.Bangladesh will need to expand its linkages with neighboring countries, such as China and India as well as other Asian countries like Japan and South Korea, to access underexploited markets and attract greater FDI, the study found.To attract higher FDI, Bangladesh needs to address critical bottlenecks such as the availability of serviced land, uninterrupted power supply, congestion at Chittagong Port, the Dhaka-Chittagong road and rail corridor, customs clearance at land and sea borders, and ease of access to finance, said the study.“A trade policy regime that is more neutral between exports and production for the domestic market would support the development of new export sectors and small and medium firms,” said Sanjay Kathuria, lead economist of the WB.Kathuria, who is a specialist on trade and competitiveness of global practice with the WB, is also a co-author of the report.The country needs to prepare its youth with solid foundational education and vocational skills needed to be productive in export-oriented industries, according to the report.Bangladesh needs to act urgently to tap into regional and global trade as well as FDI, to boost its economy and reduce poverty, Kathuria added, while he was presenting the keynote paper at the function.Commerce Minister Tofail Ahmed said Bangladesh has targeted two important achievements — making the country digital and a middle income country by the end of 2021.“If we can implement the seventh five-year plan, Bangladesh will not only be a middle-income country, but also an amazing country at the end of 2021,” the minister added.“I do not mind the huge trade gap with India and China, as Bangladesh imports a lot of raw materials and food items from both the countries.”Bangladesh currently has a trade gap with India at more than $6 billion and with China at $8 billion a year. Bangladesh export goods worth $550 million to India and nearly $800 million to China in a year.
