To boost exports, we must remove barriers to their diversification
It's disheartening that only 11 percent work of an important commerce ministry project, intended to help expand the export capacity of certain sectors and consequently the country's export basket, has been completed despite a one-year extension to the original three-year deadline. The extremely slow pace of work has been attributed to a number of reasons including a weak feasibility study, frequent replacement of project directors, lack of manpower, the outbreak of Covid-19, etc. There has been a clear disconnect between the vision behind the project and the approach of the implementing authorities, who allowed familiar barriers to get in the way of its completion.
Project delays are common in Bangladesh, but the same happening to an export diversification project is quite unfortunate because of the potential it holds for us to earn foreign currency at a time when it is in short supply.
Experts say that diversification, besides improving the capacity of local industries, can open up many overseas markets where our traditional and non-traditional products can enjoy good business. The Tk 9.95 crore project of the commerce ministry was meant to do that for the sectors of garments, food-processing and active pharmaceutical ingredients, while also reducing their import dependency. But nothing seems to happen as planned in Bangladesh. During the last four years of the project, its director has been changed six times. Its feasibility study was also found to be weak, which raises the question: why would the commerce ministry allow such an important project to be derailed by poor preparations? As a result, not only did they miss the deadline twice, they also made only marginal (read: ridiculous) progress in work and potentially squandered public money, which makes the project's future very uncertain.
This is also the latest example of how costly project revisions have become a norm, rather than the exception, in the public sector. We have repeatedly seen this over the past decade, thanks to systematic mismanagement, inefficiency and corruption. The same happening to an export diversification project is particularly unfortunate because of the potential it holds for the country to earn foreign currency which is in short supply at the moment. Experts say that when a country's exports increase, its earnings also increase proportionately while dependency on imports comes down as well. Export diversification is thus vital. It's all the more important to expand our export basket beyond the garments sector, which accounts for about 82 percent of total exports. Bangladesh faces a number of challenges in this respect, including unfriendly tariff regime for exports, capacity and reliability issues, lack of enabling environment for trade, lack of modernisation and diversification of products, etc.
These issues must be addressed to increase the export capacity of various sectors. As for the commerce ministry project, the authorities must fast-track its implementation by addressing the problems it has been facing.