Ride out threat of protectionism
Top trade analysts in Bangladesh have expressed mixed feelings about the outcome of the G20 summit that begins in London today.
They hope global leaders will be able to avoid increasingly adopted protectionist measures, saving the rest of the world from a looming threat.
Fears about protectionism run deep as global exports may collapse in newfound trade barriers.
“I hope they (G20) would not go for protectionism because of its high cost,” said Ahsan H Mansur, a former senior official of the International Monetary Fund.
Prof MA Taslim, chief executive officer of Bangladesh Foreign Trade Institute, fears that any move to adopt protectionist policies would add woes to the already sliding global economy.
“If they adopt restrictive policies, the same will be followed by other countries to protect their own industries,” said Taslim.
“The loss will be cumulative."
Zaid Bakht, research director at the Bangladesh Institute of Development Studies, echoed the views. He said protectionism would push the costs of production up for the developed world.
However, the experts are nearly unanimous that differences among the members of G20 are wide -- a fact that hurts optimism over the London summit.
World leaders who gathered in London are struggling to reach a consensus on how to tackle the downturn in the global economy, which is likely to fall by 3 percent to 5 percent this year.
Nineteen developed and developing countries, including China and India, and the European Union constitute the G20, the most powerful group in the world.
“Bangladesh's exports will be badly affected if they (G20 countries) adopt protectionist policies,” said Taslim.
Other trade analysts play down the fear as they say Bangladeshi exports do not compete with products from the US or EU.
Mansur attributed the threat of protectionism to significant differences between the EU and the US.
“I hope they will strike a balance and reiterate their commitment to the global economy,” he said.
Like analysts, Bakht hoped the western nations would continue to follow open-door policies rather than protectionism.
Bakht said the developed world should provide support packages to the developing and poor countries where income has fallen significantly due to the economic slowdown.
“At the least, we expect suggestions from them on how countries like Bangladesh can deal with the situation,” he said.
The conditions placed for official development assistance should not be stringent as earlier, he added.
International and national organisations have already expressed concerns over the growing threat of protectionism.
The organisations want an outcome and help the poor economies to salvage their economies.
Leaders of the G20 countries must coordinate their national policies to end the global recession, support a monitoring system to honour previous promises to reject protectionism, and restore trade financing to more normal levels, the International Chamber of Commerce (ICC), based in Paris, said in a statement yesterday.
"Trade is the livelihood of the global economy and the world needs more of it at this critical moment, not less," said ICC Chairman Victor K Fung.
SUPRO, a nongovernmental organisation that campaigns for good governance, has demanded a waiver of loans that Bangladesh took from the international community.
SUPRO also asked the developed world to provide their pledged assistance worth 0.7 percent of their economies to the developing countries.
The 19 developed and developing countries and the EU that officially make up the G20 accounts for close to 90 percent of world GDP, 80 percent of global trade and roughly two-thirds of the planet's population.