Trade liberalisation 'needs to be backed by good governance'

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FE Report
When the government and the donors are in favour of further trade liberalisation, economists feel that the emphasis should be on good governance to ensure equitable share of people from all classes in economic growth benefits.
The World Bank in its recent document titled "Strategy for Sustained Growth" says Bangladesh could become an middle-income country (MIC) by 2016 if it raises per-capita growth to six per cent, implying GDP growth at 7.5 per cent, which it thinks challenging, but not impossible.
The Bank feels that to diversify its trade base, Bangladesh needs to give a continued emphasis on unilateral trade liberalisation matched by caution in pursuing the current fashion of regional and bilateral trade agreements.
Noted economist Dr. Qazi Kholiquzzaman Ahmad said "our experience of trade liberalisation shows that it only encourages import of luxury and consumer items, not machineries to support the export base."
Dr. Ahmad, chairman of Bangladesh Unnayan Parishad, a private research organisation, said the country cannot sustain growth by giving emphasis only on trade liberalisation. Development strategies should be participatory, he added.
Leading banker Mamun Rashid felt that a well-thought out liberalisation policy would help generation of wealth in an organised and uninterrupted process that again would have a trickle-down effect in the country.
Citing example of Vietnam, Mamun Rashid, Managing Director of Citi Bank N.A. in Bangladesh said, despite having huge population and extreme poverty, Vietnam's progress is faster than Bangladesh. The country is becoming an important Asian economy with 35 per cent growth in exports, he added.
Mamun said one of the strategies for trade liberalisation is to establish a low and uniform tariff rate following interim reform steps that would further simplify import tax regime and reduce dispersion and average level of nominal protection.
Both Dr. Qazi Kholiquzzaman Ahmad and Mamun Rashid said liberalisation of trade should aimed at spurring export competitiveness. Dr. Ahmed said at this moment attention should be given to raising people's income and giving them work to cope with the rising prices of essentials.
Mamun Rashid said it is important to improve marketing infrastructure for promoting growth of non-crop agriculture and the rural non-farm sector to raise people's income. He supported the WB stand to create a favourable environment for private investment to reduce storage losses and price risk of highly perishable food items.
Stressing on governance, Mamun said Bangladesh needs to tackle these challenges with deeper political commitment.