Making export diversification possible

For over two decades, policymakers in Bangladesh have been speaking of export diversification. That is also one of the takeaways from the just-concluded 'Bangladesh Trade and Investment Summit 2021', which reiterated the importance of policy and legal reforms for tapping untapped business potentials at home and abroad.

Practically, Bangladesh has been for years dependent on almost a single sector for its export earnings. Nobody knows when the share of the readymade garments - 84 per cent of exports now - will come down with a healthy growth of other industrial and manufacturing components.

Leather and footwear, pharmaceuticals, ceramics, IT and software, jute goods, light engineering products, assembling industry, handicrafts, frozen foods, agro-based items and a few more have been identified as sectors that could have increased Bangladesh's foreign exchange earnings by this time.

Hardly any meaningful review is made as to why the government's thrust sectors have not flourished up to the expected level and what kind of supports the entrepreneurs operating in sectors other than RMG need.

Two Asian nations started making footwear for export market in 1990s; but Vietnam's annual export earning from the sector has reached US$16-17 billion whereas Bangladesh's has remained stuck at around $1.0 billion. Why is the latter lagging behind?

We mainly highlight potential of different sectors despite infrastructure problem, policy discrepancy and governance deficiency, once there is a public forum especially involving international participants.

We can't be sure if only fervent appeals made during the conferences can really persuade foreigners to flock to Bangladesh for long-term business deals. Maybe, they will come "As long as I've got/ honey in my pot,/bees will come to it/ from Timbuktu...," as wrote celebrated Turkish poet Nâzim Hikmet.

The ideas generated and shared at seminars, workshops and conferences in Bangladesh are not generally tested by research projects at universities and government laboratories.

Policymakers, too, look more serious while dealing with issues and ideas during international conferences than showing flexibility to demands from the local stakeholders for bringing changes in the ground reality.

As a result, innumerable policies lose timeliness of implementation and appeal for adoption. In the meantime, newer issues arise and old ones remain unaddressed as well.

The authorities then embark on new policies and initiatives understandably to draw political dividends, just forgetting the records the businesspeople remember.

The idea of Special Economic Zone (SEZ) is an attractive one and the Bangladesh authorities have readied as many as 100 SEZs for attracting investments to use them as a game-changer for the economy.

The relevant agencies, however, do not take into account the facilities and environment that are necessary to make the investment decisions.

Japanese Ambassador to Bangladesh Ito Naoki was one of those present at a webinar of the investment summit. He underlined the need for reforms to enhance the country's global image that changes investors' perception. He mentioned point blank that Bangladesh needs to address its investment climate.

We love to pocket appreciations from foreigners when they praise our social sector progress and national ambition to become a middle-income country by 2031 and a developed country by 2041.

Unfortunately, the country is yet to do enough essential homework on how our government, businesses and citizens will face the economic challenges arising out of the graduation from the status of least developed country (LDC). A massive overhaul in tax regime, full convertibility of Taka, competitiveness in the export market, erosion in benefits of soft loans and higher debt servicing for mega projects will be required. Are we ready to meet all such requirements?

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