Commerce Adviser of the interim government Sheikh Bashir Uddin on Monday said that the previous Awami League-led government made the country’s economy systematically corrupt, while also referring to its widespread corruption in the banking sector and money laundering in infrastructure development.
He made these remarks at “Recommendations by the Taskforce on Re-strategizing the Economy," in its inaugural session titled “Strategic Policy Realignment to Boost Investment and Achieve Export Diversification,” organized by the Centre for Policy Dialogue (CPD).
The commerce adviser further said that unnecessary projects and money laundering had put significant pressure on the macroeconomy.
“Most of our raw materials are imported. We need to take initiatives to increase exports by increasing labor productivity, reducing production costs, and improving skills. To strengthen the economy, we need to diversify our exports and improve the skills of our workers.”
He added that the main challenges now are ensuring continuous energy supply at fair prices, improving labor productivity, and enhancing logistics efficiency.
CPD Chairman Rehman Sobhan said: “If you have 175 million people and this domestic market is growing at 6% per year, it is a very attractive market. Those who have brought FDI to Bangladesh have also targeted that market. We have to think whether this market has been adequately utilized or not, and whether any qualitative improvements can be made.”
“After the domestic market matures, they can be sent for export. For example, many industries, including bicycles, electronics, and other products, have attained maturity and are growing in exports,” he explained.
Giving an example, he said: “All the automobile manufacturers came to China, making China the largest manufacturer of automobiles, surpassing the United States. China's domestic market was its main attraction. China has emerged as one of the world's largest exporters of electronic vehicles.”
At the event, former commerce minister Amir Khasru Mahmud Chowdhury said: “Revenue should come from large-scale businesses in a developed private sector, not from VAT and other regulatory duties.”
He emphasized that a major recalibration of the economy was necessary.
He pointed out that the government had pursued many wrong policies for a long time, focusing only on revenue.
He also warned that without import liberalization, export incentives would not push exports beyond a certain limit.
Import liberalization
By highlighting two contrasting examples of import liberalization in Singapore and Haiti, CPD's Distinguished Fellow Dr Mustafizur Rahman said: “While Singapore has strong export and institutional capacity, making liberal imports beneficial to its economy, Haiti presents the opposite scenario.”
“Bangladesh faces significant institutional capacity gaps in revenue collection, policy formulation, and implementation. Without addressing these weaknesses, import liberalization could be risky,” he points out.
Import liberalization refers to a government policy of reducing or eliminating barriers to importing goods from other countries, typically achieved by lowering tariffs, removing quotas, and simplifying customs procedures, thereby allowing for greater competition in the domestic market from foreign products.
Dr Selim Raihan, executive director of the South Asian Network on Economic Modelling (Sanem), and Dr Abdur Razzaq, chairman of the Research and Policy Integration for Development (Rapid), delivered the keynote presentation.
Razzaq said: “The readymade garment (RMG) sector in Bangladesh has benefited from duty-free access to global markets, but this will no longer be available after LDC graduation. We urgently need to negotiate with the European Union to maintain this benefit even after December 2027.”
The economist also said that 75% of Bangladesh's total exports currently depend on LDC benefits, which will no longer be available after graduation. Subsidies for exports will no longer be possible post-graduation.
“We need to rethink exports and remittances. Currently, 30-40% of the government's incentives are going to companies producing goods for the local market. Moreover, 30% of revenue comes from high tariffs on imports,” he added.
He noted that among countries with a demographic dividend of 18-20-year-olds, only Ethiopia and Pakistan have lower exports than Bangladesh.