Diversify Export to Sustain Accelerated Economic Growth: IFC

The International Finance Corporation (IFC), a member of the World Bank Group, highlighted the need of diversifying Bangladesh’s export basket to sustain accelerated economic growth, increase investment opportunities, and create more jobs, particularly for women.

IFC made the suggestion in its report ‘Building Competitive Sectors for Export Diversification: Opportunities and Policy Priorities for Bangladesh’, released in January, reports UNB.

The report said a diversified export portfolio comprising competitive sectors, such as leather and footwear, plastics, and light engineering, will help create greater access to international markets for Bangladeshi products.

It also provided recommendations for policymakers on strategy development to integrate priority sectors with the global value chain.  

“To sustain its growth trajectory and reduce overdependence on any single item, Bangladesh needs to build a strong manufacturing ecosystem and develop new products, while paving the way for large scale job creation and poverty reduction,” said Wendy Werner, IFC Country Manager for Bangladesh, Bhutan and Nepal.

The IFC report also compared Bangladesh’s export performance to countries, including Vietnam, Cambodia, Malaysia, China and India.

Economic factors such as employment generation, women’s employment, growth of small and medium enterprises, and foreign direct investment needed in seven potential sectors for export diversification, said the report.

Attending the report launching programme in the capital as the chief guest, Prime Minister’s adviser for Economic Affairs, Dr Mashiur Rahman said Bangladesh’s economy is moving forward at a stable pace and the government has launched a concerted effort to diversify its exports.

“We sincerely hope this pioneering publication will help inform the policy discourse on sustainable export-led growth,” Rahman added.

Dr Mohammad Jafar Uddin, secretary, Ministry of Commerce, said: “We strongly believe that trade is a powerful engine for growth, not just for the world economy, but very much so for the developing economy of Bangladesh.”

IFC’s private sector specialist Hosna Ferdous Sumi and senior economist Dr Masrur Reaz co-authored the publication, supported by Bangladesh Investment Climate Fund II, an IFC advisory project implemented in partnership with the UK Department for International Development.

Dr Zaidi Sattar, chairman, Policy Research Institute (PRI), cautioned that most new products introduced by exporters are not sustained beyond the first year.

He also stressed the need to address export sustainability on priority basis as it is a critical challenge for maintaining diversification.

PRI co-operated the report launching event.