Key challenges consist of
Entrepreneurs hunting for to diversify their export basket face 11 key challenges, equivalent to insufficient infrastructure, excessive logistics costs, a shortage of expert labour, and slack technology adoption, in accordance with the draft of the White Paper on the express of the Bangladesh financial system.
Other valuable challenges identified consist of restricted get entry to to finance, bureaucratic crimson tape, alternate fee instability, stringent regulatory compliance, lack of product diversification, and insufficient enhance for little and medium enterprises (SMEs) in marketing and marketing and branding.
At the the same time, the White Paper advises that the executive might maybe presumably also honest aloof undertake centered coverage interventions for the improvement of non-RMG sectors.
This is in a position to maybe presumably also honest possess lowering tariffs on imported capital items, offering tax incentives, and supporting technology upgrading efforts to raise productivity and competitiveness.
To give a snatch to the readymade garment (RMG) sector’s resilience, the paper suggests promoting diversification into non-cotton and man-made fibre (MMF) textiles and providing financial incentives for compliance with global standards.
It also requires investments in technology upgrades and the establishment of a green finance fund to enhance sustainable practices. Additionally, imposing labour standards and participating with global organisations to make certain ethical practices and make stronger purchaser self perception are suggested.
The White Paper, which became handed over to Chief Adviser Muhammad Yunus this day (1 December), elaborates on the challenges, alongside with unpleasant transportation, insufficient port facilities, and vitality shortages, which extend logistics costs and motive delays. Small shipping alternatives and excessive transportation costs lop competitiveness in the global market.
Additionally, entrepreneurs face difficulties in securing loans, excessive interest charges, restricted get entry to to financial devices, and heavy reliance on a number of sectors, making them inclined to market fluctuations and limiting development ability.
“Prolonged administrative processes, excessive bureaucracy, and delays in obtaining compulsory permits; little and medium enterprises battle with restricted resources, lack of incentives, and insufficient executive enhance; a shortage of expert labour in sure industries impacts production quality and effectivity; and compliance with global standards and laws is appealing and costly,” it said.
On the assorted hand, alternate fee mismanagement impacts export earnings, making it refined to region and rate products competitively. Small utilize of superior technology and innovation hinders productivity and effectivity, and express of affairs in establishing a stable global presence because of restricted branding and marketing and marketing capabilities stays a priority for non-RMG exporters, in accordance with the White Paper.
The paper additional talked about, “Despite initiatives to promote sectors luxuriate in leather-based fully mostly, agro-processing, and gentle-weight engineering, these industries possess confronted challenges and remained underdeveloped. The leather-based fully mostly alternate, contributing 3-4% of exports, struggled with environmental compliance and expert labour shortages.”
“Similarly, the agro-processing sector became hindered by offer chain inefficiencies, insufficient technology adoption, and excessive tariffs on capital equipment, proscribing development.”
The paper also renowned that, no topic diverse diversification initiatives undertaken previously decade, the outcomes possess largely remained unsatisfactory.
Other solutions for export diversification
The manager must eradicate the somewhat “anti-export bias” by reforming the recent excessive-tariff regime, in particular for raw materials and intermediate items.
Additionally, it’s a necessity to display that a more strategic in space of wholesale tariff liberalisation coverage might maybe presumably also honest aloof be promoted.
“The reinforcement of institutional skill in recordsdata accuracy requires additional coordination and integration of technology at the EPB and Bangladesh Financial institution to lop discrepancies in reporting related to exports,” the White Paper talked about.
“On this respect, digitalised mechanisms might maybe presumably even be implemented for valid-time monitoring of exports, alongside with training in recordsdata sequence and validation to give a snatch to accuracy and transparency.”
To prevent capital flight by diagram of reinforced alternate monitoring, the paper suggests strengthening alternate monitoring mechanisms to lop capital flight by diagram of alternate mis-invoicing.
This is in a position to maybe presumably also possess nearer collaboration between the Nationwide Board of Revenue (NBR), the Bangladesh Financial institution, and customs authorities to give a snatch to recordsdata validation processes, put in pressure superior digital monitoring methods, and progressively audit alternate transactions for accuracy.
The White Paper recommends that Bangladesh negotiate strategic free alternate agreements (FTAs) with its key trading partners in preparation for the doable loss of LDC alternate advantages in 2026.
These negotiations might maybe presumably also honest aloof be sectoral, focusing on comparative advantages, with the executive building negotiation skill and formula to valid in actual fact useful phrases of alternate.
To attract foreign convey investment (FDI), the executive might maybe presumably also honest aloof make stronger the investment local climate by addressing infrastructural impediments, lowering crimson tape, and offering acceptable incentives in excessive-ability sectors.
Additionally, providing financial zones for diverse industries, with the exception of the RMG sector, will make contributions to rising Bangladesh a more dazzling destination for FDI and spur sectoral diversification, the White Paper added.
