Bangladesh stands to gain from US-China trade conflict, says ADB chief economist

The chief economist of the Asian Development Bank (ADB) has termed Bangladesh’s economic growth “miracle” and said the country appears to gain from the trade conflict between the US and China.

 Yasuyuki Sawada calculated that the gain could be 0.19 percent of the GDP or $0.4 billion as China’s exports will decline following the US tariff measures and there will be relocations of productions.
He, however, said that this gain would not be automatic – Bangladesh will “need to compete with others”.

“Some of these effects may take a while to play out,” he said while speaking in Dhaka on the impact of emerging international trade relations on Bangladesh in the context of the US-China trade row.

Commerce Minister Tipu Munshi, who was chief guest, said Bangladesh would benefit from the trade row.

“We will gain from the reduction of China’s exports because a lot of things will be relocated to Bangladesh and other countries,” he said, adding that the government was closely watching the situation.

The US is the largest export market for Bangladesh and China is the main competitor of Bangladesh’s main export item – ready-made garments.

Sawada, the ADB chief economist, said for Bangladesh the targeted sectors can be ready-made garments, leather, IT and other services.

“Bangladesh can also gain from regional and sub-regional trade arrangements,” he said.

“Other Asian countries may gain out of the trade row with US as Chinese exports will slow down and other countries can replace China’s exports by expanding their exports.”

The chief economist also highlighted some of the potential risks on the downside.

Technological unemployment is one of them. “New technologies often automate only some tasks of jobs and technical feasibility does not guarantee economic feasibility.”

“Government has an important role to play in leveraging technological advances for inclusive growth,” he said. Those include response to technology by education and training, favourable labour regulation, social protection and tax policies, facilitating skills development and job-matching and investments in ICT infrastructure.

ADB Country Director for Bangladesh Manmohan Parkash said the emerging trade relations could offer opportunity for Bangladesh to increase its exports and capture greater space in global value chain.

“Given the demographic dividend Bangladesh enjoys, this could be a win-win as it could emerge as a sustained contributor towards creating new job opportunities for the youth,” he said.
Source: https://bdnews24.com

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