Two webinars held in the capital city last Saturday brought forward some important issues that require serious introspection and follow-up by policy makers of the country. The first was organized by the Financial Express (FE) on this year's budget priorities and emphasized a more serious and caring attitude of the micro and small enterprises that had evidently got truly little of the stimulus package announced in the wake of the onslaught of the pandemic. The second discussion, organized by the Dhaka Chamber of Commerce and Industry (DCCI), focused on what Bangladesh would have to do in the period leading up to 2026, the year the country sits in the comity of nations as a developing country. Indeed, the nation has been on a high in recent times after the United Nations cleared Bangladesh's graduation to a developing nation from the category of LDC. Bangladesh is still not there, but it is coming. On the positive side, the graduation brings in stature for the country. On the other hand, the country's export earnings stand on the face of some stark realities: a whole bunch of benefits received as an LDC will go away. The next five years are therefore crucial. This is the period of preparation for negotiation for a different reality, a reality under which the country must know that competition and quality would be the order of the day in the new situation. And therefore, all budget work done in this period must be attuned to preparing the country for a smooth graduation, as mentioned in the FE discussion.
It is heartening to note that the DCCI webinar stressed these points, and came up with a set of suggestions, including that of utmost care and prudence that must be shown in negotiating new terms of trade with possible destinations of export in the coming years. It is important to understand the significance of Vietnam's export package of 300bn USD compared to Bangladesh's 40bn USD, as mentioned in the said webinar, and arrive at necessary conclusions. This country's dependence on mostly a single item, the apparel, has repeatedly been discussed at all economic talk-shows and gatherings, but extraordinarily little progress seems to have been made on the issue of diversification. Well, there is a silver lining in the fact that the country's domestic market is big enough to absorb a reasonably high level of production, but without a big basket of export earnings, people's livelihood would not improve. And besides, the issue of Foreign Direct Investment (FDI) must be pursued more seriously, under a new scenario as would evolve in the year 2026 onwards. The government's big undertakings for export processing and economic zones are welcome steps, but these must be followed up by the creation of grade-one infrastructure and spotless good governance in every tier and office of the government.
All these mean business houses that have so far earned money through export under subsidized conditions from big buyers in the west would need to insert adjustments and shifts in their overall trajectory. The government agencies must come with fresh elan and throw new ideas that can carry forward the arduous task of foreign trade in the more difficult post-2026 days. As mentioned, diversification is one important panacea. However, an effective regime of negotiations in the coming months and years coupled with the creation of an elan and amiable set of conditions for business will be the call of the hour. Bangladesh must emerge as a winner from the coming challenges.