IFC says BD needs to diversify export basket
IFC (International Finance Corporation), a member of the World Bank Group, has launched a diagnostic report, which highlights the need to diversify Bangladesh's export basket in order to sustain accelerated economic growth, increase investment opportunities, and create more jobs, particularly for women.
Bangladesh's GDP has enjoyed an annual growth rate of 7.3 to 7.9 percent in the past two years (2018-19), with over two million new entrants joining the labor force every year.
However, the country's export earnings in the first five months of the current fiscal year (2019-20) stood at $15.77 billion, which was 12.59 percent less than the target and 7.6 percent lower year-on-year, said press release.
The report "Building Competitive Sectors for Export Diversification: Opportunities and Policy Priorities for Bangladesh", launched in the capital reveals that a diversified export portfolio comprising competitive sectors, such as leather and footwear, plastics, and light engineering, will help create greater access to international markets for Bangladeshi products.
It provides recommendations for policymakers on strategy development to integrate priority sectors with the global value chain.
Speaking on the occasion as the chief guest, PM's Economic Affairs Adviser Dr Mashiur Rahman said Bangladesh's economy is moving forward at a stable pace. "The government has launched a concerted effort to diversify its exports and we sincerely hope this pioneering publication will help inform the policy discourse on sustainable export-led growth," he added.
BSS adds: Commerce Secretary Dr. Mohammad Jafar Uddin spoke on the occasion as special guest.
He said, "Exporting is one pathway to leveraging the dynamic potentials of the global economy. We strongly believe that trade is a powerful engine of growth, not just for the world economy, but very much so for the developing economy of Bangladesh."
"To sustain its growth trajectory and reduce overdependence on any single tem, Bangladesh needs to build a strong manufacturing ecosystem and develop new products, while paving the way for large scale job creation and povertyreduction," said Wendy Werner, IFC Country Manager for Bangladesh, Bhutan and Nepal.
The IFC publication compares Bangladesh's export performance to several comparator countries, including Vietnam, Cambodia, Malaysia, China and India, to identify where Bangladesh can improve.
It considers economic factors like employment generation, women's employment, growth of small and medium enterprises, and foreign direct investment needed in seven potential sectors for export diversification.
This publication on export diversification, co-authored by Hosna Ferdous Sumi, IFC Private Sector Specialist, and Dr. Masrur Reaz, IFC Senior Economist, has been supported by Bangladesh Investment Climate Fund II, an IFC advisory project implemented in partnership with the UK Department for International Development.
At the launching event organized in cooperation with Policy Research Institute (PRI), Dr. Zaidi Sattar, Chairman of PRI, cautioned that most new products introduced by exporters do not sustain beyond the first year.
He stressed the need for addressing export sustainability on priority basis as it is a critical challenge for maintaining diversification.