June 17, 2024

Bangladesh Hardly Utilising Regional Export Trade Potential

Bangladesh is hardly utilising its regional trade potential as less than 5 percent of its total exports go to India and China, countries that are members of the Association of Southeast Asian Nations (ASEAN).

“Bangladeshi exports to China and India stood at $4.05 billion in 2020, but even in 2022 Bangladesh could export only $2.64 billion worth of goods and services to the two countries,” a study said.

“India and China accounted for only 4.5 percent of Bangladesh’s total exports in 2022, indicating poor trade flow to the regional economic giants,” the study added.

Atiur Rahman, a former Governor of the Bangladesh Bank, conducted the study, titled ‘Post-LDC graduation: Opportunities, Challenges, and the Way Forward.’

In the study, he cited Bangladesh’s low exports to Asian countries like India, China, South Korea and Japan.

Rahman, also an emeritus professor at the University of Dhaka, said around 40-60 percent of Bangladesh’s export potential to Southeast Asia and ASEAN nations remains untapped.

In November 2026, Bangladesh will graduate from least developed country (LDC) status and lose its most-favoured nation (MFN) tariffs and duty-free market access to partner countries.

According to the study, post-LDC, the country’s baseline exports may reduce by 7-14 percent.

He suggested continuation of incentives on exports for as long as possible, saying that different export sectors need time to make preparations and stabilise given the volatile global economic situation.

“Rahman also recommended the government increase the incentive if possible,” the Daily Star reported.

He also urged the government to take steps to stabilise the exchange rate, contain inflation, promote export diversification in terms of both products and destinations and bolster remittance.

Consistency should be ensured in the capital market and priority should be given to human capital development through stronger private sector participation, he said.

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