Low wage benefit would not last in RMG sector
Bangladesh will enjoy low-cost wage regime in the foreseeable future but businessmen should not depend on this critical factor, says economist Wahiduddin Mahmud.
Compliance failures can imperil RMG sector: WB
“The main challenge of export would be how to become competitive by improving other economic factors, including logistics and skill development, and how labours can increase their productivity,” he said at the release programme of a World Bank report, titled ‘Consolidating and Accelerating Exports in Bangladesh’, at its office Wednesday.
He termed factors like power, energy and corruption as obstacles in running a business and said the country needed to address these issues.
The economist pointed out Bangladesh exported products in 300 categories, and readymade garments, leather goods, frozen foods and jute constituted the major export items.
“But the combined growth of miscellaneous exportables is highest and the government should provide level playing field to all sectors.”
According to the World Bank report, the country needs to improve its trade logistics and infrastructure, skilled manpower and ensure compliance to accelerate growth of exports.
Bangladesh exports over 300 non-traditional items, each exceeding $100,000 earning, which would create a scope for labour-intensive manufacturing base in the country.
The report, however, cautioned that it would not be a natural process as competitors like Indonesia, Vietnam and Myanmar were all competing for attracting investment.
Despite all the challenges, Bangladesh had opportunities including location advantage, China-plus-one strategy, and duty- and quota-free access to India, the report said.
“Export growth can sustain and even accelerate, because new opportunities like China and India are coming up, but it should not be taken for granted,” it added.
Policy-makers needed to encourage diversification that would help guard against shocks and sustain export in the long run, the report said.