According to a report by Standard Chartered Bank, Bangladesh is expected to rebound faster from the Covid-19 fallout than its Asian peers by boosting exports, rising domestic demand, and remittance inflows. The economy will recover in fiscal 2020-21, driven by increasing exports and remittances, which will also raise demand, it added.
Anubhuti Sahay, head of South Asia economics research of Standard Chartered Singapore, presented the findings of the study titled “2021 Outlook: The Road to Redemption” at a virtual discussion organized by the Bangladesh-German Chamber of Commerce and Industry (BGCCI). In 2021, she added, the bank expects global growth to recover to 4.8 percent. Global trade has rebounded, but Sahay said exports have yet to hit pre-pandemic peaks. In the Asian region, Bangladesh is expected to be an outperformer, according to her. A large number of businesses are moving their production facilities from China to Bangladesh, she added. Following its graduation from the category of a least developed country (LDC) by 2027, Bangladesh will face some long-term challenges if developed and emerging countries do not continue to expand LDC facilities to it, Sahay said.
For example, 136 different forms of foreign assistance mechanisms are enjoyed by the LDCs, but all those measures will be removed if the country is graduated. As a result of economic graduation, Bangladesh is expected to lose between 5.5 and 7.5 percent of its exports, she said in the presentation. In the discussion moderated by Shahed Akhtar, Executive Advisor to the BGCCI, ministers, ambassadors, businessmen from Bangladesh and Germany, representatives of trade bodies and exporters took part. A high-powered trade delegation will visit Germany this year to increase bilateral trade and investment, Trade Minister Tipu Munshi said.
The Minister invited German companies to invest in the Special Economic Zones of Bangladesh, as the government is establishing 100 economic zones across the world. Rubana Huq, president of the Bangladesh Textile Manufacturers and Exporters Association, said that Germany was the only country where Bangladesh’s exports increased after June 2020 and the majority of shipments were focused on manmade fiber goods. She encouraged German firms to invest in the local manmade fabric, staple fiber polyester, and light engineering sectors, as they are rapidly growing in Bangladesh. In 2021 and 2022, the German economy is set to recover, said Mustafizur Rahman, a respected fellow at the Centre for Policy Dialogue. “Bangladesh will also see a rise in export to Germany.”German investment in Bangladesh is tiny, he said, adding that there is still a big opportunity for Western European countries here and that measures should be taken to allow proper use of the privileged entry that Bangladesh enjoys in the EU. He also referred to the creation of country-specific economic zones in Bangladesh, which would help increase the country’s foreign direct investment. As purchasing slows down in Germany, because Europe as a whole buy, it affects the buying activity of customers in other countries, said Syed Nasim Manzur, Managing Director of Apex Footwear.
He also claimed that thanks to the courageous leadership of the government and the determination of Bangladeshi workers, Bangladesh will surely outperform and is already outperforming. He urged German small and medium-sized companies, on the other hand, to rely more on Bangladesh’s markets because they are losing a massive trade opportunity.
Source: The Daily Star
Tahani Tahmid Elma