Be competitive, stop relying on duty-free regime

Bangladesh has expertise in textile industry and as the major destinations are the US and Europe, textile companies can also invest in the Dominican Republic and take advantage of its free trade zones and FTAs

Bangladesh should abandon the mentality of having a duty-free regime, cheap loans or foreign aid and focus instead on making products competitive by improving management efficiency, logistics and business environment as the country approaches graduation from the grouping of the least-developed countries (LDCs) in 2026.

That was the key suggestion from David Puig, ambassador of the Dominican Republic, in Dhaka.

"As an LDC, you rely on quota, cheap loan and aid. Now, you need to change that mentality and become competitive," he said in an interview with The Daily Star in Dhaka on March 23.

On the same day, he presented credentials to President Md Abdul Hamid to become the first envoy from the country to Bangladesh since the two nations established diplomatic relations in 2012.

"As Bangladesh is growing, it seeks to boost the relations," said Puig, who is based in Delhi as he is the ambassador of the Dominican Republic to India.

He is also the ambassador of the country to Bangladesh and other South Asian countries.

Over the past 25 years, the Dominican Republic, now a developing country, has experienced robust economic growth.

In 2008, the Dominican Republic became an upper-middle-income country from a lower-middle-income one as per the criteria of the World Bank. The Caribbean island is now aspiring to become a developed nation by 2030.

Bangladesh achieved the lower-middle-income status in 2015 and has targeted to become a higher-middle-income country in 2031 and a developed one in 2041.

"My first suggestion for you is: do not wait. Plan it now. It is not only for the LDC graduation but also for the latter stages," Puig said.

The Dominican Republic has signed free trade agreements with the US and Europe, established free trade zones to attract foreign investors and provided incentives.

It went for manufacturing high-end products such as electronic devices and medical devices and became the third-largest manufacturer for medical devices in Latin America.

The country has upgraded its traditional tourism sector and become a major tourist destination, drawing more than six million tourists a year before the coronavirus pandemic hit the hospitality industry and five million last year.

"Improving the business environment and making it enabling for investors is crucial," said Puig, who joined the Dominican Foreign Service in 2004.

He says Bangladesh has expertise in the textile industry and as the major destinations are the US and Europe, textile companies can also invest in the Dominican Republic and take advantage of the free trade zones and FTAs with the American and European markets.

"We also have skilled workers."

"You will be close to the main consumer market. So, we see synergies. We are already seeing many companies coming to our country. Two Sri Lankan garment companies have already invested."

The envoy applauds Bangladesh's competitive advantage, quality products and affordable price of pharmaceuticals, saying there are huge potentials for the country to export medicines to the Dominican Republic.

The Dominican Republic exports mainly scrap metal, leather machinery and tobacco to Bangladesh.

Bilateral trade stood at $20 million in 2021, with Bangladesh exporting products worth $17 million, mostly pharmaceuticals and textile, according to the diplomat.

"The trade between the two countries can be increased to a large extent."

During his week-long stay in Dhaka, he met with the officials of the Bangladesh Bank, commerce and foreign ministries, leaders of business chambers, including the Bangladesh Garment Manufacturers and Exporters Association, and cultural personalities.

"We need to understand the tax regime for import and exchange our mutual prospects of relations," Puig said.

Bangladesh and the Dominican Republic also collaborate at the United Nations in the areas of peace and climate change.

"We are an island country and Bangladesh is a low-lying country. We need to cooperate and coordinate in order to push for more climate assistance. We have been victims of climate change, so the responsibility lies more on the developed countries."

He says arts and culture are at the heart of Bengali people.

"You have some amazing artists who are already representing Bangladesh abroad. We would like to learn and then connect our artists to your ones. That's how we can learn and grow."