Despite impressive export performance in the apparel sector Bangladesh must look beyond apparels to diversify exports for attaining the next phase of growth and poverty reduction.This observation was made by Sanjay Kathuria, the lead economist at the World Bank (for South Asia) in the bank’s South Asia region blog. He said in the blog titled ‘How will Bangladesh reach higher levels of prosperity?’, that Bangladesh has already joined the rank of a lower middle-income country. But the next phase of growth and poverty reduction is harder, since the more obvious sources of growth have largely been exploited.The blog said that the country is now the world’s second largest apparel exporter, after China. “The apparel sector employs about 4.0 million workers, 75 per cent of whom are female,” it added.”But success in apparels has also meant an over-reliance on this sector, which forms over 80 per cent of total exports,” said Kathuria.”And this is accompanied by a lack of market diversification, the most notable ‘absentees’ being South Asia and East Asia, the two fastest growing regions in the world, with only around 2.0 and 9.0 per cent of exports, respectively, going to these regions,” he added.The World Bank economist was of the view that in order to go beyond garments Bangladesh needs to deepen trade and investment linkages with South and East Asian economies, accompanied by ‘a push to diversify to other promising sectors in manufacturing and services.’About the development success of Bangladesh, Kathuria said: “There is no doubt that Bangladesh is a modern day success story, a far cry from Henry Kissinger’s label of a ‘basket case.’ Its growth has been steady, even impressive in the context of feeble global growth, and it has now joined the ranks of a lower middle-income country.”An online medi version adds: For the next phase of jobs and export growth, he mentioned some key reform areas. These are: creating a neutral trade regime by reducing tariffs, ensuring the level-playing field for all exporters, attracting high quality Foreign Direct Investment (FDI) in goods and services and improving logistics and trade facilitation.Kathuria also mentioned that the agenda is clear. “Implementation will involve overcoming likely resistance from those who benefit from the status quo, and empowering those who will champion this forward-looking agenda.”He also mentioned that there would be winners and losers as consequences of reforms, but, it is important that a proactive approach is followed in taking care of potential losers (for example: labour market training programmes, creating a more business-friendly economic environment, etc).”It is also worthwhile to invest in a communications campaign with a positive vision of change, to help overcome resistance,” he added.”As many other countries have shown, the gain can be worth the short-term pain,” he concluded.
