Towards a brighter export-led Bangladesh Economy

An important pillar of growth saga of Bangladesh is the performance of Bangladesh’s export sector. While the export was only USD710 million in early 1980s, it became USD40 billion in 2018-19. Export industries of Bangladesh have generated employments for millions of people, a large part of them are women. The main export industry, ready-made garments (RMG) brings around 85 percent of Bangladesh’s export earnings is the source of formal job for most of the working women. In addition to RMG other export sector, which are progressing (though with ups and down) include leather and leather goods, plastic, light engineering, chemical products, frozen food, jute and jute goods etc. 

Steady growth of Bangladesh’s export is the evidence of competitiveness of the economy. Bangladesh's export grew at an average annual compound rate of 11.23 per cent during past 38 years 1980-81 to 2018-19. But the export sector of Bangladesh could perform even better if we could overcome the constraints relating to infrastructure, port and energy. 

Bangladesh has already started its journey to become a developing country and after graduation the export industries of Bangladesh will face stringent competition as zero or low tariff facilities enjoyed by Bangladesh as a least-developed country will no longer prevail and our products will face even stringent competition. As Bangladesh is a labour intensive economy, the 4th Industrial revolution is also posing challenges towards employment generation in industries. 

Rise of export industries in Bangladesh has generated resilience among the people involved and in the economy as a whole. Therefore, some preparation to face future challenges could enable the Bangladesh economy to continue with notable growth of export industries. Policies and supportive initiatives (like access to finance, skill training, economic diplomacy etc.) are needed for new initiatives. Special supports should be provided to innovative start-ups. Bangladesh needs to diversify export industries by reducing extreme dependency on the RMG sector. Diversification is needed even within the RMG items Bangladesh exports, as top 10 RMG products comprise around 75 percent of total RMG export. As youths comprises the major proportion of our population, we need to make them more skilled, so that they can contribute more to the economy. More training facilities should be established to generate effective manpower for our export industries.  

The main force behind the fascinating growth performance of Bangladesh economy is a bunch of energetic, innovative and enthusiastic entrepreneurs and numerous people working with them. We need to keep our confidence on people for facing all the challenges of export-led Bangladesh economy. 

Dr. Nazneen Ahmed, 

Senior Research Fellow 

Bangladesh Institute of Development Studies

(Dr. Nazneen Ahmed has specialization in conducting research in the areas of international trade and regional trade issues, value chain analysis, general equilibrium modeling, institutional, industrial, gender and labour issues. Dr. Nazneen holds a Ph.D. in Economics from the University of Wageningen, the Netherlands)