"Bangladesh is now the most protectionist economy in South Asia, so opening up of economy would benefit it" he told the Ficci (Foreign Investors' Chamber of Commerce and Industry) luncheon meeting yesterday.

The WB official said in today's highly competitive post-MFA world, there is no option but to strengthen export competitiveness through phase-wise and transparent liberalisation of trade regime.

Prolonged high protection breeds inefficiency, inhibits competition, and stifles productivity growth, Zhu said, making a remark that such protection brings no good for export competitiveness or for economic growth over a long term.

Held at a city hotel, the Ficci meet was chaired by Rafi Omar, the chamber's acting president, and attended, among others, by Hua Du, country director of Asian Development Bank (ADB), and representatives of the foreign investors in Bangladesh.

Referring to a recent World Bank report, Zhu said to join the ranks of middle-income countries by 2016 or soon thereafter, Bangladesh requires raising GDP growth to an ambitious 7.5 percent or more.

And to achieve such a growth, the country should increase its investment rate by more than five percentage points to 30percent of GDP, against the current 25percent and also employ its resources (labour and capital) more productively, and the bulk has to come from private sector, including FDI (Foreign Direct Investment), he suggested.

The WB official also pointed to the need for improving Bangladesh's attractiveness to FDI.

Zhu said FDI has recently picked up in extractive industries like coal and gas, telecommunications and energy production raising FDI's share in GDP to about 1 percent, but not yet in manufacturing, where the potential for productivity gains is significant.

Citing another survey result of the World Bank he said that firms with any level of foreign ownership are 10 percent more productive on an average than firms that are wholly domestically owned.

Some have argued that Bangladesh should first respond to the demand of its own domestic market before thinking about opening up and relying on exports. The benefits of having a large domestic market are clear, but that should not detract from the tremendous opportunities that access to global market offers, he said.

To win the fight against poverty and reduce the number of poor people, Bangladesh must grow stronger and faster, Zhu said.

"The world is moving quickly; so are countries in the region and Bangladesh needs to move faster just to stay in the same place and to catch up. Concrete, coherent and immediate actions to improve the investment climate are urgently needed," he went on.