BD needs to diversify export basket: Experts

Bangladesh needs to diversify its export basket and comply with the rules of the World Trade Organisation (WTO) to overcome challenges that would emerge after the country's graduation from the group of Least Developed Countries (LDCs), experts said on Sunday.

They also called for providing policy support towards creating a more business-friendly environment and improving competitiveness and for better negotiation with trading partners in order to achieve sustainable growth in export.

The experts made the observations at a discussion session marking the launching of the 'Bangladesh Trade Policy and Negotiation Capacity Building Support Project', organised by the Policy Research Institute of Bangladesh (PRI) at a city hotel.

Funded by the Trade and Advocacy Fund (TAF2+) of UKaid, the project aims to build capacity of the government officials.

The Ministry of Commerce (MoC), the Overseas Development Institute (ODI) of the UK and Policy Research Institute (PRI) will jointly implement the project.

Bangladesh Tariff Commission Member Dr Mostofa Abid Khan, PRI Chairman Dr Zaidi Sattar, ODI Senior Research Fellow Dr Maximiliano Mendez-Parra and PRI research director Dr Abdur Razzaque spoke at the discussion, with Additional Secretary of MoC Sharifa Khan in the chair.

Giving a presentation on 'Addressing policy challenges and identifying products for export diversification and promoting their competitiveness', Dr Zaidi Sattar said Bangladesh requires increased volume of export in coming days to create more jobs and maintain its high economic growth.

Noting that the country's high economic growth at over 8.0 per cent is mostly possible due to its expanding domestic market, he said there is no alternative to enlarging the export market for future economic sustainability and fulfilling the target of becoming a middle-income country by 2030.

Following the country's graduation from the LDC group, the businesses may have to pay higher duties for their products exported to developed countries such as the USA, Australia, Canada and the countries in European Union (EU), he said.

Dr Zaidi Sattar also stressed the need for product diversification to reduce dependency on the ready-made garment sector, which accounts for over 80 per cent of the country's total exports, in order to ensure sustainable export growth.

Referring to the exchange rate appreciation in the last five to six years, he said, "The management of real effective exchange rate should be flexible, as further appreciation may make the export non-competitive in the global market."

Terming direct subsidy to exportable products contradictory to WTO rules, he said a balance in the policies for export and the domestic market should be ensured.

It has been observed that the subsidy to exportable products other than RMG items hasn't been effective; so there are scopes for rethinking the issue, he added.