A recent study by the world bank proclaims that investment liberalization and Unilateral trade may have possible chances to uplift Bangladesh’s GDP, investment, exports by 14.8 percent, 20 percent, and 63.2 percent each order. Also, it can boost private consumption by 11.1 percent, imports by 44.3 percent, and have a massive impact of 8.3 percent on government consumption.
When it comes to trade competitiveness, Bangladesh is suffering due to its lack of a lower export base. Therefore, this initiative of unilateral reformation should be taken which will provide a quality boost for Bangladesh’s betterment by reducing trade costs and access to cheaper and better-quality imported inputs for a breakthrough in the competitiveness of domestic firms and their output.
On Friday, a report named “Bangladesh- Country Economic Memorandum: Change of fabric” from the World Bank stated that it is essential for Bangladesh to have a deeper and more integrated regional and international economic integration in order to increase export access which will increase Countries GDP between 1.4 percent and 14.3 percent.
Chapter 3 of this report, “Boosting Bangladesh’s Trade Competitiveness,” inspects the prospective obtained for Bangladesh from the regional and multinational combination with trade reformation. Moreover, this report has deep bilateral incorporation between India and the European Union, impacting a favorable trade agreement with India which will be higher with exporting grains which is more than double the advantage of the contract with the European Union.
Bangladesh has lower trade intensity than predicted for other countries speaking of per capita income, and the government is losing the gains from the trade looking regime.
To eliminate all those existing geopolitical tensions over several years, Bangladesh should focus on those strategies that might help for better outcomes like tariff modernization, joining existing regional groupings like ASEAN or the Regional Comprehensive Economic Partnership, which will give support in service and investment.
Regarding this study, Dr. Zahid Hossain, former chief economist of the World Bank in Dhaka, believes the same as what the study says. Still, the fact is, to achieve this development, some initiatives should be taken, like short-out tariffs and non-tariff policies in markets.
Bangladesh has the highest average tariffs of 18.8 percent, which is more than double in China – 7.4% percent, almost double the rate in Thailand and Vietnam of 9.6% percent but closer to India of 14.7 percent. Therefore, in this issue, modernization of tariffs can play a significant role like adopting a single rate for the same types of goods, making tariff structure consistent by para-tariff elimination and making it more consistent so that an upper-middle-income country can end the “anti-export” issue.
Bangladesh can take short term advantage of the current tariff war between US-China which by placing retaliatory tariffs constant.
Dr. MA Razzaque, research director of Policy Research Institute, said that China still holds 25 percent of the US RMG market and that this share will decrease further. Moreover, with the ongoing dollar crisis, the exchange rate left to the market that is reforming in export competitiveness.
However, if Bangladesh follows the suggestion stated in the World Bank report, it will be highly beneficial for the country’s economy. Unilateral trade and investment liberalization could boost Bangladesh’s GDP, investment, and exports, World Bank reports. Two facts that could boost Bangladesh’s GDP.