Bangladesh can enable many of its potential industries to compete to grab huge trade on global market through replicating successful RMG model, businesspeople said at an investment-promotion meet Thursday.
The replication will help the fast-growing economy overcome many of the post-LDC (least developed countries) graduation challenges through creating many decent jobs, expanding export basket and attracting potential overseas investors here, according to them.
They also laid emphasis on capacity building at the negotiating stage along with tariff-rationalisation initiative at a level that will encourage both local and foreign investors.
At the same time, they suggested paying more attention to research, innovation and human capital where the country lags behind many of its competitors.
The suggestions and observations came at a webinar on 'LDC Graduation of Bangladesh: Transformation and Preparedness' jointly organized by the Ministry of Commerce and Dhaka Chamber of Commerce & Industry (DCCI) on the 3rd day of Bangladesh Trade and Investment Summit.
DCCI President Rizwan Rahman chaired and moderated the session.
Speaking at the event, country's noted businessman and chairman of Apex Group, Syed Manzur Elahi, said many of them have long been talking about export diversification, but it is not happening in reality.
He said the country needs industries to create more jobs that will help alleviate poverty.
Citing an example of Vietnam in the leather footwear industry, he said Bangladesh and Vietnam stepped into this sector at the same time but Vietnam is now exporting footwear worth of around US$17 billion whereas Bangladesh is stuck around US$1.0 billion.
"I think the facilities that the RMG sector is now enjoying should be extended to other industries. It (leather and footwear) can be a fantastic export-diversification area," he said.
He said there should be separate economic zone for leather and footwear sector because it is a highly labour-intensive sector that has a huge scope of technology adaptation.
Terming human capital a weakness of the economy, Mr Elahi, also former adviser of a caretaker government, said thousands of foreigners are working here and remit about US$5 billion every year. Unofficially, they remit another US$4 to US$5 billion.
"Any country cannot afford this outflow of hard-earned foreign exchange," he told the investment-promotion meet.
Talking about the potential of the footwear industry, he said its global market size is US$365 billion and it is estimated by the world footwear association that the market will reach US$500 billion by 2040.
"Even if we catch only 1.0 per cent of that export market, it is more than US$4.0 billion. If we capture 2.0 per cent, there will be a lot of money. So we need export diversification," he added.
Speaking as the chief guest, principal secretary to the Prime Minister Dr Ahmad Kaikaus said 81 per cent of the GDP comes from the private sector that reflects the strength of its vibrancy.
"We have to facilitate private sector and have to make a strong bond between the public and private sector as private sector plays the major role in the economic transformation in the country," he said.
He cited an example that in the power sector of Bangladesh most of the entrepreneurs are local. He also said that government is always willing to listen to the problems private sector is facing and very much accommodative to solve those.
Moderating the virtual discussion, DCCI president Rizwan Rahman said technology transfer is no longer a choice but a necessity now.
He said Bangladesh's economic condition is quite resilient and progressive so, after the graduation, the country will be able to make its position stronger. "But before that the first and foremost thing is to ensure product diversification in the export basket and technology adaptation as well as domestic market development."
And for product diversification he suggests providing all facilities to the export-oriented industries that the RMG sector is availing now.
Former DCCI president and chairperson of BUILD (Business Initiative Leading Development) Abul Kasem Khan underscored the importance of job creation, expanding economic freedom, policy reforms and building new areas of competitiveness.
He said widening tax net is more important for a good shape of tax-to-GDP ratio. Bangladesh needs to focus on improving ease-of-doing-business index, regional integration by signing FTA, domestic industry diversification before LDC graduation.
"We need to make at least 10 SEZs (special economic zones) ready for investment," he said with a call for a national logistics policy to become competitive on the world market.
Secretary at the Ministry of Commerce Tapan Kanti Ghosh said every graduating economy undergoes a transitional process with a deep aspiration of renewed economic journey.
Upon graduation, he predicts, Bangladesh will come across some key challenges, including loss of duty-free, quota-free facility, increased tariff rates, technological adaptation and increased competition on both local and international market.
Alongside, the graduation will also generate ample of opportunities in many respects, including private-sector development, enriched industrial base, investment and trade growth and local market expansion and so on.
Programme management officer at UN Technology Bank for LDC Yesim Baykal told her audience that they have been assessing the areas where Bangladesh needs technological cooperation.
She said Bangladesh performed well in producing 'Knowledge and technology outputs' and ranked 92 among 132 countries but it has to work more in 'human capital and research' where the country's score is not so good.
Board member at the World Trade Organization Taufiqur Rahman hailed Bangladesh's economic progress even in the time when the Covid-19 pandemic badly affected the global economy.
"The central question for Bangladesh is how to maintain the LDC-type preferences after the graduation. The answer is not simple because there is not any perfect substitute. But the strategy has to be different depending on the market," he said.
He suggested building the negotiation capacity that will help in reaching bilateral trade agreements like FTA and PTA.
Former Member of Bangladesh Tariff and Trade Commission Dr Mostafa Abid Khan urged quality education and research.
Diversification of products is more important to sustain after graduation, he said, highlighting the importance of tariff rationalisation, industry competitiveness for early preparation of graduating from LDC.
