Dhaka, 06 October 2024: Domestic industries in Bangladesh need ‘big push’ from the government to reach their full potentials—according to a study conducted by ERD.
At the same time, the government and business associations should place utmost priority to attract foreign direct investment—said the research.
The initial findings of the study were shared during a validation workshop held at the NEC 2 Conference Room of the capital on 06 October 2024.
Support to Sustainable Graduation Project (SSGP) of the Economic Relations Division (ERD) organized the event.
Senior Secretary of the Ministry of Industries Ms. Zakia Sultana attended the event as chief guest. Director General of Bangladesh Institute of Development Studies (BIDS) Dr. Binayak Sen attended the event as special guest. ERD Secretary Mr. Md. Shahriar Kader Siddiky chaired the workshop.
‘It is important to bear in mind that no country in history has ever industrialized without the help from the government’, said the study titled ‘Enhancing Industrial Production in the Context of LDC Graduation’.
‘All the developed countries and high middle income countries still provide support to their strategically important industries in some form or another, let alone in their early infant stages’, it added.
Citing the examples of the support provided by the US government for domestic chip manufacturing under the ‘Chips and Science Act 2022’ or the Inovar Auto program designed by Brazil to support its automobile manufacturing—the study said that Bangladesh needs such big pushes from the government in sectors such as light and heavy engineering, electronics, chemical industries, etc.
‘All the developed countries and high middle-income countries still provide support to their industries in some form or another, let alone in their early infant stages.
It is notable that the government is attaching highest priority to ensure a smooth and sustainable LDC graduation of the country. As such, several in-depth sectoral studies are being carried out by the SSGP under the guidance of the National Committee on LDC Graduation to assess the impact of LDC graduation and to formulate the relevant strategies accordingly.
As part of that process, a study is being carried out on ‘Enhancing Industrial Production in the Context of LDC Graduation’ with support from Bangladesh Institute of Development Studies (BIDS).
Speaking on the occasion, Senior Secretary of the Ministry of Industries Ms. Zakia Sultana stressed on enhancing the labour productivity. She said that a separate study could be conducted by the government on enhancing the labour productivity in line with the National Productivity Master Plan.
She also put emphasis on changing the mindset of the employers for ensuring increased focus on training and skill development.
ERD Secretary Mr. Md. Shahriar Kader Siddiky, in his speech, opined that creating new facilities for the industries would require changes in the existing rules and regulations. The ERD Secretary also accentuated the need for diversification of both skills and products.
Director General of BIDS Dr. Binayak Sen put emphasis on bilateral trade negotiation, tariff rationalization and enhancing competitiveness in the context of LDC graduation.
Noting that the RMG industries had already been benefitted by the devaluation of Taka, he said that the export-oriented industries should gradually reduce their dependence on cash incentives.
Additional Secretary of ERD and the Project Director of SSGP Mr. A.H.M. Jahangir delivered the welcome remarks of the event.
Research Director of BIDS Dr. Kazi Iqbal delivered a keynote presentation highlighting the major findings of the study.
Reflecting on the findings of the study, Dr. Kazi Iqbal said that in the current global context, it had become next to impossible to diversify products and move up to the product ladder without FDI.
‘FDI brings in new technology and knowledge which helps the host country to expand its product basket and increase its productivity directly’, he said.
In this context, Dr. Iqbal said that the government and business associations should place utmost priority to attract FDI. He also suggested that the government could hire international firms specialized in such businesses to look for foreign equity.
Director General of Bangladesh Investment Development Authority (BIDA) Mr. Md. Ariful Haque, Director of National Skills Development Authority (NSDA) Dr. Zahangir Hossain and Chief Executive Officer (CEO) of BUILD Ms. Ferdaus Ara Begum also spoke during the event as panellists.
Officials from ERD as well as the relevant ministries and agencies of the government as well as representatives from the private sector and civil society organizations participated in the workshop.
