Bumpy road awaits exporters

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The rise of mega trading blocs, potential adverse consequences of LDC graduation, growing competition in key market segments and a weakened multilateral system can make Bangladesh's trade journey challenging through the eighth five-year plan period, a think-tank said yesterday.

Standard tariffs facing Bangladesh's export are actually set to go up by 9 %, and potential shipment damage is to the tune of 14 % following graduation to a growing nation in 2024, the Centre for Policy Dialogue (CPD) stated.

Pursuing graduation, Bangladesh will lose 1 per cent to 4 % of its total annual exports amounting to $7 billion, said Shamsul Alam, an associate of the overall Economics Division of the look Commission.

He spoke during a virtual conversation on "The Eighth Five 12 months Plan: Addressing Covid-19 Issues and Sustainable LDC Graduation", organised by the CPD.

The government will attempt to boost exports following the graduation through signing of preferential trade agreement, free trade agreements (FTAs) and comprehensive financial partnership agreement (CEPA), Prof Alam said.

While presenting the keynote paper, Fahmida Khatun, executive director of the CPD, said if the ills of the banking sector weren't cured, the economy wouldn't normally fare well in the foreseeable future.

"The banking sector needs to be strengthened by establishing good governance," she said.

The CPD paper said the increased loss of preferential industry access as an LDC in key export markets, particularly in the European Union, would have an adverse impact on the purchase price features of Bangladeshi products.

The possible fall in the export (around 5.7 % annually) might lead to a loss in employment, particularly in the garment sector.

An estimated 538,770 jobs could be lost because of preference erosion.

Sectors including the pharmaceuticals could lose the current flexibilities when it comes to patenting and licencing requirements, the think-tank said.

"Bangladesh will have to pursue proactive negotiations to enter CEPA with regional and crucial trading companions. This will require domestic insurance policy reforms in regions of trade, e-commerce, intellectual property privileges, non-tariff barriers, copyrights, documentation and standards."

The CPD said in spite of achievements in a few areas, the benchmark Seventh Five-Year Method (7FYP) scenario was below the targets set for FY2019-20 in several key areas.

"Indeed, oftentimes, the gaps possess widened over the years. The 8FYP should revisit those targets and arranged the brand new targets in an authentic manner."

The think-tank said the LDC graduation would require Bangladesh to take enough preparation in order that "we are able to graduate with momentum and graduation is sustainable".

"This will mean that the 8FYP foresees needed techniques found in anticipation of significant preference erosion and requirements about raising the competitive durability of the Bangladesh economy."

The 8FYP covers the midway journey towards attaining the goals and targets of the Sustainable Production Goals (SDGs) by 2030.

Accordingly, issues of inclusiveness and equity, and leaving no one behind, should be prioritised in the plan document, the CPD said.

Ahsan H Mansur, executive director of the Insurance plan Exploration Institute of Bangladesh, said the reforms in the personal sectors such as for example in the currency markets and banking institutions have not been manufactured in the fifth, 6th and seventh five-year strategies.

"So, I do not get the confidence that the reforms would be manufactured in the eighth five-year strategy."

"We need to take some fundamental methods in the eighth five-year arrange for addressing the issues," he said.

Preparing Minister M A Mannan said the government was attempting to carry out justice to the persons of low-income groups through ensuring fairness and justice and getting rid of inequality.

Occasionally, there is some inequality. "We regret it," Mannan said.

"However, our target is to enhance the amount of relief for the people."

Amir Khasru Mahmud Chowdhury, former commerce minister, said establishing monetary inclusiveness had not been possible without political inclusiveness, which is absent now found in Bangladesh.

He criticised the Bangladesh Securities and Exchange Commission, the central bank and Election Commission for poor governance.

"Investors are not getting confidence," he said, adding that the united states requires a credible election so that the people's confidence gets a good boost.

Saber Hossain Chowdhury, chairman of the parliamentary position committee on the ministry of environment, forest and weather change, said the federal government is planning green recovery from the fallouts of the Covid -19 over another two years.

He suggested preparing a good scorecard of the 7FYP to identify the mistakes in order that implementation could be better in the event of the 8FYP.

"Otherwise, the same problems will take place found in the ninth five-year method."

Nihad Kabir, president of the Metropolitan Chamber of Commerce and Sector, stated if the business enterprise climate will not change, a lot of non-public sector investment would not take place.

The CPD said delays in forming a commission might lead to worsening of the state of governance in the banking sector.

As a result of excessive regulatory forbearance due to the Covid-19, the overall performance of weak and poorly governed banks may get worse, it said.

Prof Rehman Sobhan, chairman of the CPD, said there have been people in the country who had graduated from the poverty line but fall below it every time they face shocks. Among the teams is informal sector workers.

There is absolutely no agenda for coping with the large group of men and women who constitute the informal sector, he said.

He urged the policymakers to address the issues faced by the informal sector.

He called the inability to integrate the SMEs in to the supply chain an essential one.

"There is absolutely no coherent agenda for SMEs although they generate a sizable number of careers," Prof Sobhan said, adding that the 8FYP must address the big sector.

Zahid Hussain, a past lead economist of the Environment Bank's Dhaka office, said the country needs relief from the virus and the monetary distress in the next two years.

The support actions unveiled by the federal government have to be applied properly, he said.

Along with financial support, the purpose of fiscal policies should be strengthened simply because the former by itself can't help the united states ride away the crisis, Zahid Hussain stated. 

Shaheen Anam, executive director of Manusher Jonno Base, said the new five-year strategy was explained to be business as regular and the challenges it brought up had been heading on for some time.

One of the issues is weak income collection.

"Everybody knows that those that don't pay taxes usually look for a loophole to dodge it, whereas those that fork out taxes regularly are created to pay larger taxes. It has been going on for many years," she said.

The five-year plan is closely linked to obtaining the SDGs by leaving none behind, she said.

"I do have no doubt about the government's determination towards the goals. But I doubt whether we would be able to achieve them."

While moderating the debate, Mustafizur Rahman, a distinguished fellow of the CPD, said a whole lot of risks in the economy have widened, and the overall economy was getting weak because of the pandemic.

He called for introducing a general pension scheme to have social back-up programmes to a lot more beneficiaries.

Razequzzaman Ratan, president of the Socialist Labour Entrance, said the government should ensure everlasting jobs for a huge number of people who were still out of the formal sector.

A differently able Harun Ur Rashid said the brand new plan should properly include persons like him.

Source: https://www.thedailystar.net

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