Resurgent Bangladesh, an economic recovery imitative put together by MCCI, DCCI, Chittagong Stock Exchange Ltd., BUILD, and Policy Exchange held its 5th Dialogue on “International Trade in Covid Times: Impact and Way Forward for Bangladesh” on 25th July, 2020. Tofail Ahmed, MP, Chairman, Parliamentary Standing Committee on Ministry of Commerce joined as the chief guest.
Abul Kasem Khan, Chairperson, BUILD in his welcome remarks said the worldwide impact of Covid is severe. According to an estimate of UNCTAD international trade may experience a loss of about USD 2.6 to 6 trillion. And in Bangladesh, trade loss may reach from USD 9-21 billion. Due to Covid situation, window of opportunity will be opened for Bangladesh but we need to be competitive in terms of trade especially in the ease of doing business index. If we fail to be competitive, the window of opportunity will not be open for a long time for us, he said. He also emphasized for strengthening our backward linkage industries. He also urged for establishing a global bonded warehouse system. He said, considering covid crisis, Bangladesh needs to reform its export, import, industrial, foreign exchange, investment, taxation, FDI policies. He also urges the government to initiate economic diplomacy with a view to enter into ASEAN region. He also called upon the government to announce Warehouse and logistic a thrust sector.
Shams Mahmud, President, DCCI presented the keynote paper. He highlighted that IMF projects global economy would contract by 3% in 2020 while the World Bank projects decline by 2.1%-3.9%. ADB derives that the global economy could lose between $5.8 trillion and $8.8 trillion of the global GDP. WTO estimated that world merchandise trade may fall between 13% and 32% this year and whereas UNCTAD estimated it as 20%. In Bangladesh total export was USD33.67 billion which is 25.99% less than the target and 16.93% less than FY2018-19. Import during July-May of FY2019-20 fell by 10.81%. WB projects GDP growth of Bangladesh will be reduced to 2%-3%. In future, for LDCs GSP and DFQF facility in developed countries may be limited. Moreover, Trade diversification may be limited, trade contribution to GDP may be lower, tariff barriers may be imposed by the importing countries to limit the import and trade imbalance may grow larger. Many global retailers want to shift their orders and investments from China which is a big opportunity for Bangladesh. He suggested to negotiate with export destinations to avoid restrictions on export goods. Port infrastructure like container terminals and Bay terminal needs to be expedited. Stimulus package needs to be increased and disbursed with flexible terms and conditions. To do better in international trade he suggested to expedite economic diplomacy, focus on FTA, PTA, TICFA’s implementation. He urges the government to accelerate the procedure of getting the observer status of ASEAN. He called upon to address the issues of Para-Tariff and NTBs with India and other SAARC countries.
Tofail Ahmed, Chairman, Parliamentary Standing Committee on Ministry of Commerce said that the export target was hit hard by Covid pandemic. Export earning was USD 45 billion last fiscal and this year the export target is fixed at USD 63 billion including service sector, he informed. He also said 8256 products got duty free access in the Chinese market and it will give us USD 2.5 billion more export earnings. At present the poverty level increased due to Covid, he informed, but with the help of vibrant private sector we will be able to recover the condition soon. In the last budget we projected 8.2% GDP growth. We gave cash incentives to IT sector and other service sector as well.
Prof. Dr. Mustafizur Rahman, Distinguished Fellow, CPD said after LDC graduation Bangladesh will have to export its products giving 12% duty whereas Vietnam will enjoy zero tariff. Vietnam exported USD262 billion last year whereas Bangladesh’s export earning was only USD40 billion. We need to turn comparative advantage into competitive advantage. He urged for coordination between industrial strategy and trade strategy. Emphasizing on export diversification he stressed on grabbing regional market, effective implementation of BBIN, one belt, one road initiative. We need to transform multimodal transport corridor into an economic corridor. Bangladesh should focus on bilateral FTA but in the form of economic partnership agreement. Regarding Bangladesh’s LDC graduation, he said government may think the issue seriously. He said government may think of deferring the graduation or seeking international support measures for 3-4 years after the graduation.
Syed Nasim Manzur, Managing Director, Apex Footwear Ltd. said in Bangladesh service sector contributes 52% of our economy so we cannot ignore this sector. He said our export was not so good before Covid situation as well. He underscored the importance of reducing export time and cost of doing business for competitiveness. He also said that value of export is more important rather than the quantity of export. In terms of getting advantage in international trade he urged on strong economic diplomacy. He also said that our payment rules are outdated. Export credit guaranty is needed, he added. He suggested for establishing “Free Trade Warehousing Zone”.
Wahidur Rahman Sharif, Managing Director, Digicon Technologies Ltd. and President, BACCO said in the IT and ITES sector 80% to 90% of businesses internationally have come down and locally it is hovering between 50%-60%. Due to Covid situation e-commerce sees a remarkable growth recently. But we feel mid-level management crisis and lack of skilled resource, RnD, technology and innovation. We need to nurture the startups and policy support will facilitate their financial need as well. He said 175 IT and ITES companies out of 800 are in operation now which is not a good sign. He also urged to solve problems of access to finance.
Humayun Rashid, Managing Director, Energypac Group said employment generation and skill development will create opportunity for us. He called upon to implement need-based education system. Surplus availability of power will attract FDI, he said. But we need to build up capacity. He urges for faster implementation of One Stop Service of BIDA. He also stressed on policy reforms, access to fund and capital market development.
Nayeemur Rahman, Head of Business Planning, Uttara Motors Ltd. said congestion in the port is a concern and it increases cost of doing business. He informed, one third of sales in the automobile sector have been declined in the covid time. He said we have shortages of skilled manpower in the light engineering sector. He also urged for relaxed tariff structure.
Dr. M. Masrur Reaz, Chairman, Policy Exchange said that first of all we need to identify the risk factors. Bangladesh has to exploit of global demand in a post-covid time, he added. To attract FDI, comprehensive trade and investment policies will play a key role, he added. Bonded warehouse facility to non-RMG sector will help other sectors to be more competitive in terms of export, he said. He also said that technology adaptation and upgradation strategy needs to be streamlined.
Barrister Nihad Kabir, President, MCCI said if the honourable Prime Minister along with stakeholders from business community and concerned Ministers sit regularly in every two or three months it will help to streamline necessary measures and solve all problems faced by the businesses.
Asif Ibrahim, Chairman, CSE urges to diversify Bangladesh’s export destinations. Regarding hard infrastructure, he suggested to complete the projects soon. He said bureaucratic tangles should be removed for faster implementation. He also urges to emphasize Look east Policy. He further stressed on country branding as very important for our positive image. Our foreign missions abroad should work to promote our export items. Despite we improved in the ease of doing business index, but we need to work hard to improve more, he informed.
Dr. Zaidi Sattar, Chairman, PRI said Bangladesh’s growth is export-led. He said post-Covid policy formulation or reforms need to be synchronized. He also said that the RMG success model needs to be replicated in non-RMG sectors as well. Each year several products are being added to our export basket but we need to incentivize those products to make those sustainable.
NKA Mobin, FCA, FCS, Senior Vice President, DCCI, Waqar Ahmad Choudhury, Director and Former Senior Vice President, DCCI and former Director, DCCI Barrister Sameer Sattar also spoke on the occasion.
Published on: 2020-07-25