Bangladesh should defer the LDC graduation process considering the adverse impact of COVID-19 pandemic that has already turned the economy upside down, economists and business leaders said on Saturday.
They said the policymakers should instead engage in the ongoing lobbying for further extension of the existing trade benefits that Bangladesh now enjoys as a least-developed country.
The suggestions came at a virtual dialogue on "International Trade in COVID Times: Impact and Way Forward for Bangladesh,"
The Dhaka Chamber of Commerce and Industry (DCCI), the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI), Policy Exchange, Chittagong Stock Exchange (CSE), BUILD (Business Initiative Leading Development) jointly organised the discussion.
Speaking at the event, distinguished fellow of the Centre for Policy Dialogue (CPD) Prof Mustafizur Rahman said Vietnam now pays 12 per cent of duty for exporting garment products in the European Union, where Bangladesh enjoys zero-tariff as an LDC.
Over the next several years, Bangladesh will lose such benefits after the graduation while Vietnam will get zero-tariff facility taking the advantage of the Vietnam-EU free trade area (FTA) accord, he said.
"A huge paradigm shift is to be happening and it will be difficult for us. So, we need to translate comparative advantages into competitive edges immediately," he said.
He said a global movement has been launched for the deferment of the LDC graduation process due to the economic setbacks caused by the pandemic.
Dr Rahman said the World Trade Organisation (WTO) on behalf of LDCs raised the demand for extending the existing trade benefits for a certain period for the nations, which will achieve the developing country status.
"We should seriously consider these two options," he noted.
Former president of the MCCI Syed Nasim Manzur said COVID-related health management is directly impacting the economic recovery.
"If it is not proper, overseas investment, international trade and movement of business people will be affected," he said.
Mr Manzur, managing director of Apex Footwear, said the country's export sectors were in trouble even before the pandemic pummelled the country due mainly to higher time and costs of conducting trade with rest of the world.
"We have long been talking about the lead time, but it has not been discussed much. The cost of doing business is directly linked with the ease of doing business," he said.
He also laid emphasis on reforming the foreign exchange rules and devaluing the local currency.
Chairman of Policy Exchange Dr M Masrur Reaz said the country needs to give more focus on the FTA, which will give the much-needed impetus to the economy in the challenging years ahead.
He highlighted a national level of framework for controlling the quality of products, which will be recognised globally.
Moderating the discussion, DCCI president Shams Mahmud said the pandemic has created opportunities alongside business hurdles.
He said many global retailers want to shift their orders and investment from China while the Chinese government has recently offered zero-duty benefits to 8,256 Bangladeshi products.
"We can gain immensely through the proper use of such opportunities," he added.
Talking about trade policy, Dr Zaidi Sattar, chairman of the Policy Research Institute of Bangladesh (PRI), said a significant number of products are included in the export basket each year, but most of those do not sustain after a few years.
"This is because the export incentive that the garment sector enjoys is not given to the non-garment industries. In the post-COVID, you have to do it. Otherwise, export will not go up," he added.
MCCI president Nihad Kabir suggested the periodic follow-up meetings between businesses and the Prime Minister for much better outcomes in the coming days.
Wahidur Rahman Sharif, president of the Bangladesh Association of Call Center & Outsourcing (BACCO) said local companies should rely on the local IT firms to automate their setups.
"This mutual trust will help develop local innovations that can be exported later," he said.
Speaking as the chief guest, parliamentary standing committee on the Ministry of Commerce Tofail Ahmed said the business-friendly government is well aware of the post-Covid challenges.
Talking about the zero-trade benefits offered by the Chinese government to 97 per cent of Bangladeshi products, he said the country can earn at least US$ 2.5 billion a year through using this offer.
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