Bangladesh basks on middle-income country status

With Bangladesh upgrading several steps on economic development ladder, there is new hope in India that the performing field could be more level regarding trade. But such optimism could be out of place

The UN recently confirmed that Bangladesh has in concrete conditions made its long-awaited transition to a middle-income country status, years prior to the scheduled time in 2026. There has been some welcome reactions from unexpected quarters such as for example Indian garments exporters and a few Pakistan -established observers, for contrasting reasons.

Among Pakistani garments makers, it used to be the typical argument that Bangladesh as an aspiring least produced country (LDC) enjoyed distinctive concessions from the EU, China and other important importing countries, which gave a built-in advantage to Dhaka when it came to winning export orders in the garments sector. The so-called ‘economical miracle’ was therefore partially subsidised by world trade authorities, proceeded to go the argument.

In recent times, Pakistani industrialists have already been outsourcing part of their export orders with their Bangladeshi counterparts or setting up latest units in its former Eastern province. Higher productivity, lower labour costs and a steadier power acted as beautiful incentives.

For Indian garment manufacturers, the substantial tariff duty pain relief given to Bangladeshi goods by Delhi made it tough to contend with Dhaka actually in India’s domestic markets, especially for the economical varieties enjoying bulk revenue. They made countless representations to the federal government to handle their needs.

The GoI time ago pressed Bangladesh authorities to reduce their tariff on Indian imports, in a bid to make sure a way of measuring parity. Presently, there is new trust that with Bangladesh moving up several actions on the economic creation ladder, the playing field will be more level.

However, such optimism should be tempered with caution. Present indications advise that having graduated from an LDC position to an increased level, Bangladesh isn't about to abandon its hard-earned identification as an export powerhouse in South Asia any time in the future. If anything, its appeal among major international buyers has increased many to the shock of its regional neighbours.

Reportedly, 40 Japanese-owned commercial units from mainland China and around 20 South Korean enterprises mostly located in Myanmar, have either /or are along the way of --shifted/ relocating their businesses to Bangladesh. And not all are garment producing units either. The reasons: the prospect of reduced overhead costs, a trained workforce, good connectivity, an agreeable government and political balance. It needs adding that Bangladesh presently competes with Cambodia and Vietnam as the brand new favoured vacation spot in Asia for foreign investment.

Its new status as a middle-income country can make it necessary for Dhaka to make sure major monetary adjustments involving cost and structural overhauling. Observers think this could for a time slowdown the country’s magnificent performance in the development of relatively low priced garments.

Key Western importers of Bangladeshi garments on the EU or US/Canada will now be more insistent on ensuring that child labour and operating conditions get better. The Garments Producers’ body BGMEA, economists and Dhaka-based policymakers have previously begun addressing problems the garments trade may need to face from around 2030 roughly, as the special relief provided before for LDCs arrive to an end.

Working conditions in most of Bangladeshi garment generating factories - estimates range between 4500 to 5000 of these -- are far from comfortable, regarding space per worker, normal water facilities/ fire prevention methods and so forth. The high decibel sound produced is another concern. Countless important accidents have claimed a huge selection of lives, leading to inquiries and suspension of abroad orders every once in awhile.

Yet, the value of garments exports to Bangladesh economy cannot be above emphasized, nor its much larger socio-economic effects denied. Of the nearly 30,00,000 persons working in the sector (including children occasionally, it is alleged), more than 80% are women/small girls. This directly contributes to women of all ages empowerment and gender collateral.

At the moment the sector makes around 7% of the full total world production and earns over 44% of the aggregate gross annual export earnings of over $34 billion. THE FEDERAL GOVERNMENT has a aim for of raising its total exports up to $50 billion in a couple of years by strengthening the garments sector. There are strategies to diversify development by introducing greater assortment and produce more high end stuff.

Nevertheless, the ongoing Covid 19 pandemic and the accompanying shutdowns have slowed down such programs for the time being. How Bangladesh copes using its new position and wards off regional competition will end up being viewed keenly by its neighbours

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