Use of ICT by Bangladeshi firms is “very low”, says a World Bank Group report, projecting Bangladesh as a global export powerhouse if business competitiveness is attained.
However, the report pointed out, a lack of readily available land with adequate access to infrastructure services has constrained foreign investment in the country.
The report titled “South Asia’s Turn: Policies to Boost Competitiveness and Create the Next Export Powerhouse” was launched jointly by the WB Group and Policy Research Institute in Dhaka on Monday.
It underlined the importance of boosting productivity of Bangladeshi firms and becoming more competitive globally.
For that to happen, the report identified four areas — improving the business environment, connecting firms to global value chain, maximising agglomeration benefits, and strengthening firm capabilities.
The report found that firms aged 25 years or more in Bangladesh are only 50-90 per cent larger than startups, compared to two-five times in China or Vietnam.
“The focus should be on further efforts to foster the general adoption of internet and computers, which will require overcoming infrastructure challenges as well, improving the provision of complementary skills-such as technology and human capital,” recommended the report.
“With rising labour costs in East Asian countries, investors and buyers are now turning to South Asia, including Bangladesh,” said Vincent Palmade, one of the authors of the report.
He mentioned that with over two million youths entering the labour market every year, Bangladesh needs to act now to seize the opportunity and create more jobs.
Bangladesh’s exports saw 13 per cent per rise a year in the past decade but 80 per cent of its exports remained concentrated in apparels, mostly low value products.
So, the report underlined the need for growing its export by improving the mix and quality of its apparel products as well as for diversifying into new labour and skill intensive industries such as footwear, light engineering, and electronics.
Dwelling on the constraints of foreign investment, the report cited example that Samsung’s large intended investment in Bangladesh’s electronics sector in in 2011 fell through largely because adequate land was not available in an export processing zone.
“To realise Bangladesh’s competitiveness potential, the country needs to start by focusing on improving its trade policy regime and the business environment, and address the acute shortage of industrial land,” said WB country director Qimiao Fan.
“With the right set of policies and enabling environment, there is no reason why Bangladesh cannot become the next Asian export powerhouse.”
Wendy Jo Werner, country manager of International Finance Corporation (IFC), said increasing private investment is the key to creation of more and better jobs, an important development objective for Bangladesh.
“Critical for private sector growth will be enhanced competiveness that require policy support to improve the investment climate and to increase integration with global and regional markets”, she added.
Source: Prothom Alo